Amazon’s black-only business programme in South Africa to be referred to the United States authorities

Amazon Web Services’ (AWS) Equity Equivalent Investment Program, which only accepts 100% black-owned businesses, has come under fire.

The Freedom Front Plus (VF Plus) is the latest party which promised action against Amazon, promising to bring it to the attention of American authorities.

AWS’s Equity Equivalent Investment Program only accepts 100% black-owned businesses and disqualifies any company where a white person is a shareholder.

The company launched its AWS Equity Equivalent Investment Program (EEIP) in 2019 as part of a R365 million investment to develop 100% black-owned businesses.

There is a focus on small businesses in information and communications technology (ICT) and the digital economy.

Amazon said it fosters diversity and inclusion globally and seeks to amplify underrepresented voices and empower diverse communities.

As such, the Amazon Web Services’ Equity Equivalent Investment Program has strict minimum eligibility criteria, including a prohibition on white businesses.

“You must be 100% black-owned as defined in the ICT Sector B-BBEE Codes of Good Practice,” Amazon explained.

“100% Black South African, as the term ‘black people’ is a generic term which means Africans, Coloureds, and Indians.”

Trade union Solidarity said that it will investigate Amazon for excluding companies from a business development programme in South Africa based on the race of their owners.

It said that there is “nothing diverse or inclusive about a programme where an owner’s race determines whether their business has access to economic opportunities”.

“Should it emerge that the programme does indeed amount to absolute racial exclusion, Solidarity will take decisive action,” it said.

“Exclusion based solely on race is precisely the kind of practice that Solidarity opposes both locally and internationally.”

Solidarity said that Amazon cannot promote one set of values on equality and non-discrimination to the world while applying a different standard in South Africa.

Freedom Front Plus to take action

The Freedom Front Plus said that it would bring Amazon Web Services’ (AWS’s) requirement of having to ne 100% black-owned to the attention of American authorities.

“AWS confirmed that full black ownership is a minimum entry requirement for the program,” the party’s Jaco Mulder said.

Mulder is a member of the Gauteng Provincial Legislature and the Freedom Front Plus’s spokesperson on Trade, Industry and Competition.

He said that the Amazon programme’s minimum requirements mean a business loses access if one shareholder is not black.

“We will formally approach the US Ambassador to South Africa, L. Brent Bozell III, requesting that the matter be referred to the appropriate US authorities,” he said.

He said that this requirement raises questions about Amazon, a multinational company, applying an absolute race requirement outside the United States.

This may not be compatible with the US government’s current policy on race-based discrimination in contracting and program participation.

President Donald Trump’s Executive Order stipulates that federal contractors may not engage in race-discriminatory Diversity, Equity, and Inclusion (DEI) activities.

“This includes differential treatment based on race in contracting and program participation,” Mulder said.

“This policy framework, therefore, provides a relevant context within which the matter can be investigated.”

The party has also asked AWS and the Department of Trade, Industry and Competition where the 100% requirement originates.

It wants to know whether it is a direct requirement of South African B-BBEE regulations, a government condition, or a decision by AWS itself.

“This distinction is important because transformation and empowerment should not permanently classify people by race and grant or deny opportunities on that basis,” he said.

Amazon responds

Newsday asked Amazon about its decision to exclude white businesses from the programme on the basis of race, but it did not answer.

Instead, an Amazon Web Services (AWS) spokesperson said that the EEIP is one of the ways the company meets its legal obligations under South Africa’s B-BBEE Act.

“South Africa’s B-BBEE Act is legislation every company operating in the country must comply with,” the spokesperson said.

“The EEIP does not limit who we can engage with, and any business in South Africa can work with AWS.”