Social justice is described by Neier (2013) as being about the distribution or redistribution of wealth and resources. Saiz and Yamin (2013) postulated that the concept is a broad framework that incorporates the principles of human rights, equity and participation. Watson (2019) asserts that social justice is an undimensional term that appears to equate with equality or equal opportunity and contends that individuals and organisations must ensure social justice through recognising and upholding diversity and inclusion, as well as showing empathy for the enormity of trauma that people had been subjected to.

In South Africa, social justice is often linked to economic exclusion, mainly because of the country’s past and the present realities it faces (Davis 2020). South Africa is one of the few countries in the world which enshrines social justice in its constitution. The 1996 Constitution in its preamble states that the Constitution was intended to, amongst other things, ensure ‘social justice and fundamental human rights’. The equality clause in Section 9 states that ‘everyone is equal before the law and has the right to equal protection and benefit of the law’. The section goes on to describe equality as including ‘full and equal enjoyment of all rights and freedoms’ and permits legislative and other measures to be taken to advance or protect persons who were disadvantaged by unfair discrimination (South African Government 1996).

The role of South African corporates in sustaining the apartheid regime is well-documented. Tshitereke and Crush (2001) catalogued how mining companies benefitted from the draconian labour laws of the apartheid regime. Babarinde (2009) similarly contended that South African businesses contributed to and benefitted from apartheid rule; therefore, it is only fitting that they also assist in ‘righting the wrongs of the past’ as well as ensuring a sustainable business environment that would provide jobs for the unemployed youth and contribute to ensuring social justice and socio-economic development for the South African people.

The ANC government, in its quest to empower the majority black population who were excluded from participating in the country’s economy by the apartheid government, launched various economic and industrial policies when it came into power in 1994. The first of these was the Reconstruction and Development Plan (RDP) of 1994, followed by the Growth, Employment, and Redistribution (GEAR) initiative in 1996. The Accelerated and Shared Growth Initiative for South Africa (ASGISA) was launched in 2006 with the aim of halving poverty and unemployment (The Presidency 2007). These policies were primarily aimed at ensuring sustainable economic growth for the country, providing a platform for diversity in business ownership and more importantly helping to steer private capital towards investment in social issues such as the HIV pandemic, education and skills development as well as ensuring social justice through private sector involvement in the socio-economic development of the previously disadvantaged population (Ramlall 2012; Reddy 2016; Tshishonga 2019).

An assessment of these policies 25 years after the demise of apartheid observes that most of these policies have regrettably failed in their quest to ensure social justice and socio-economic development in South Africa (Anwana 2018). Reasons canvassed for their failures range from the slow rate of national economic growth, lack of growth of employment in the agricultural sector because of the failed ‘willing buyer willing seller’ land reform initiatives, poor service delivery in provision of water, electricity, education and health facilities to the impoverished areas of South Africa as well as lack of meritocracy amongst those holding political powers within the ANC government (Karriem & Hoskins 2016). According to Davis (2020), embracing social justice within the South African context means ‘the ability of all South Africans to live a dignified life through fair and reasonable participation in the economic intercourse of the country’. The author maintains that without economic inclusion, social justice in South Africa cannot be achieved.

In its attempt to ensure the economic inclusion of previously disadvantaged people and redress past injustices, the South African government embarked on more legislative and economic reform policies aimed at ensuring that businesses play a significant role in the socio-economic development of the country (Babarinde 2009). The government set about creating corporate social investment (CSI) obligations for businesses. Such obligations included increasing the participation of black people in the ownership of businesses, creating social and ethical obligations for companies to comply with; and creating preferential jobs and business opportunities for black people through measures such as affirmative action and preferential procurement (Chikulo 2013; Madlanga 2019; Reddy 2016). The Broad-Based Black Economic Empowerment (BBBEE) Act of 2013, the Companies Act of 2008, the King IV Report on Corporate Governance 2016, the Employment Equity Act (EEA) 1998 and the Preferential Procurement Act 2000 are generally regarded as the government’s flagship initiatives for social justice and CSR in South Africa (Reddy 2016). These legislative measures are discussed in the next segment of the article as they relate to social justice and CSR implementation.

Mariri (2012) identified the Black Economic Empowerment policy (BEE) as a strategic initiative of the ANC government aimed at promoting economic transformation through ensuring meaningful participation of previously disadvantaged people in the South African economy. The broad aim of the Act as noted by Reddy (2016) was to remedy the organisational inequalities of the apartheid rule by steadily and legally redistributing equities to the previously disadvantaged black population. The Act also aimed at diversifying the workplace through development of skills and generally promoting the development of black people in all spheres of life (Akinsomi et al. 2016; Babarinde 2009).

The Act created not only legal but social perceptions that compliant BBBEE firms were socially responsible firms, thus granting such firms access to government tenders and other financial incentives for implementing the BBBEE policy (Akinsomi et al. 2016; Alessandri, Black & Jackson 2011). Compliant companies could gain access to new markets and opportunities in both the public and private sectors, as well as benefit from favourable media coverage and increased corporate reputation, particularly amongst the newly economically empowered black South Africans who now had the resources to impact a company’s profit margin (Thomas 2014).

However, 25 years and after various amendments to the BBBEE Act, scholars, business managers and critics have judged the Act as having failed to advance the plight of the previously disadvantaged people nor helped to right the wrongs of the apartheid government against the black population (Anwana 2018). The Act has rather been criticised for, creating ‘black elites’ and promoting corrupt practices by companies through ‘fronting’ and other corrupt practices. Black people themselves have criticised the Act as simply a disguise to pacify an impatient black populace (Babarinde 2009; Reddy 2016). According to Alessandri et al. (2011), although many positives can be ascribed to BBBEE in relation to a firm’s financial performance when seen to be compliant, there are arguments that suggest that the BBBEE Act did not create the anticipated values, but may have destroyed the corporate values for participating organisations. Therefore, the extent to which the BBBEE has impacted on social justice and the socio-economic development of South Africa is still debatable.

The Companies Act No. 71 of 2008, as amended by the Companies Amendment Act No. 3 of 2011 and the Companies Regulations (2011), introduced fundamental changes to South African company laws and corporate actions (KPMG 2017a). The objective of the Act aimed at broadening stakeholder engagement in company actions and providing for improved regulation of corporate activities, particularly in the areas of accountability and transparency (Ramlall 2012). With regard to social justice and socio-economic development, the Act introduced the imperative for the establishment of a Social and Ethics Committee (SEC) to enable companies manage their social responsibility and stakeholder issues in a more responsible manner (KPMG 2017a). The most significant function of the Companies Act is to provide the legal platform for the King Report on Corporate Governance, which without the Act creates no legally binding obligations on South African businesses.

King IV became operational in April 2017. According to PWC (2016), King IV is an acknowledgement that an organisation does not operate in a vacuum, but as an integral part of society and should, therefore, be accountable towards its present and future stakeholders (PWC 2016). King IV focuses extensively on the accountability and transparency of companies towards a broader stakeholder base within a wider society and embeds the philosophy of ‘integrated thinking’ throughout the Code, with recommendations that a company should present the company’s material information in an integrated manner by issuing reports annually (Deloitte 2017). The Report recommends that company boards should ensure that the organisation is seen to be a responsible corporate citizen. To achieve this, the board or governing body is to set policies for good corporate citizenship, which would include compliance with laws, standards and the company’s own policies and procedures. Corporations are required to monitor and manage the organisation’s standing as a good corporate citizen and divulge how corporate citizenship is managed (KPMG 2017b).

One of the most distinguishing features of King IV that significantly impacts on CSR and social justice is its abandonment of the ‘Apply or Explain’ approach of King III in favour of the ‘Apply and Explain’ approach (KPMG 2017b). Hence, with regard to CSR implementation and compliance with CSR legislation, organisations no longer have the option of explaining non-compliance with the recommended principles, and they are now required to apply the recommendations of the Report in all its material ramifications.

Principle 13 of the King IV Report provides that an organisation’s governing body is required to ensure that their organisation complies with applicable laws adopt rules, codes and standards that ensure that the organisation is ethical and a good corporate citizen. An organisation is seen as a good corporate citizen when, according to Rahim and Alam (2014), the organisation incorporates issues such as social justice, human rights, workers’ rights, environmental protection as well as democratic values into its corporate governance strategies. In the context of South Africa’s historical antecedents and the socio-economic realities, there is a growing need for business directors to ensure that their companies act as responsible corporate citizens by promoting social justice and investing in the socio-economic development of the communities in which they operate (Reddy 2015, 2016; Rossouw 2016). As observed by Babarinde (2009), if South African businesses do not conform to these recommendations, South Africa may not have a sustainable business environment for continued economic growth, which it requires so badly (Skinner & Mersham 2008).

To ensure that the reform initiatives transcended corporate ownership and participation and flowed into the realm of employment, the EEA was legislated in 1998. The EEA serves as the main legislative attempt by the South African government to prevent unfair and discriminatory practices in the workplace against a previously disadvantaged, largely black impoverished population (Horwitz & Jain 2011). The main aim of the Act is to remove all barriers to employment experienced by members of the previously disadvantaged groups, referred to by the Act as ‘designated groups’. Section 1(b) of the 2013 Amendment Act defines ‘designated groups’ as black people, women and people with disabilities who are citizens of the Republic and who were excluded by apartheid policies (Department of Labour 2017).

The EEA sought to create a representative workforce as well as transform the South African workplace into one that is more balanced and representative of the country’s demography. It aimed to ensure a workplace governed by principles of equality through the application of affirmative action measures (Mushariwa & Papacostantis 2016). Section 15 defines affirmative action measures as (Department of Labour 2017):

Like the BBBEE, the EEA has received its fair share of criticisms from scholars and business managers alike. Louw (2015) criticised the affirmative action provisions of the Act as discriminatory, unconstitutional and in direct contradiction to Section 9 of the Bill of Rights, which guarantees everyone’s equality before the law and prevents discrimination of any kind (Currie & De Waal 2013). According to Louw (2015), employers who implement affirmative action policies stand the risk of being subjected to unfair discrimination claims. Hence, he calls for its abolishment.

South Africa is one of the few countries in which preferential procurement is provided for in the Constitution (Watermeyer 2003). Section 217(3) of the 1996 Constitution, provides that ‘national legislation must prescribe a framework within which preferential procurement policy may be implemented’ (South African Government 2019). In response to this provision, the Preferential Procurement Policy Framework Act (PPPFA; Act 5 of 2000) was enacted by the national legislators (Madlanga 2019).

The Preferential Procurement Policy was established to provide ‘historically disadvantaged individuals’ the opportunity to participate in the nation’s economy through State procurement processes (Hlakudi 2015). The policy creates a set number of preference points based on a contractor’s BBBEE status level. The regulations provide for the procurement of locally produced goods, services and works, as well as locally manufactured goods within designated sectors (Bolton 2011).

Scholars and business managers alike have noted that although many positives can be derived from the preferential procurement policy, many unintended consequences may also arise. For example, Watermeyer (2003) noted that it is always concerning when procurement is used as an instrument of social policy, as it could undermine primary procurement objectives and give room to inefficiency in procurement. It could result in the exclusion of eligible tenderers from competing for tenders, a reduction in competition and failure to achieve the socio-economic objectives through procurement. According to Madlanga (2019), Parliament missed an opportunity to bring about true equality in passing the PPPFA. The author contends that even the name of the Act – PPPFA – is a misnomer as the preference envisaged in Section 217(2) of the Constitution is simply non-existent. Madlanga (2019) contended that there are only five factors at the heart of Section 217(1) of the Constitution for which an organ of state must procure goods and services, and they are fairness, equity, transparency, competitiveness and cost-effectiveness, and not the colour of one’s skin.

In very poor communities, high stakeholder expectations may overwhelm companies, thereby affecting their CSR policies (Preuss et al. 2016). In South Africa, apartheid policies of preventing the majority black population from participation in the nation’s economy left the country and the majority black population with high levels of poverty, illiteracy and other forms of social and economic inequality (Reddy 2015), hence aggravating levels of unemployment and poverty and by implication, elevated levels of dependency on grants and charities leading to overwhelming expectations for companies operating in local areas and government departments alike (Chikulo 2013).

Apart from poverty, the HIV/AIDS pandemic became a serious challenge to the South African workforce. Many South African companies had to report on the impact of HIV/AIDS in their annual reporting, as well as develop and implement policies to manage the effect of the epidemic on their operations (Rampersad 2010). Foreign investors and South African companies alike are often overwhelmed by the complex social dynamics of their host country and its communities. According to Preuss et al. (2016), sometimes these complexities may be competing, thus not permitting companies to perform well within the social justice and CSR dimensions.

According to Waweru (2014), developing countries are often confronted by a myriad of problems, including ineffective legislative policies that look great on paper, but are difficult to implement and enforce. Others include weak legal controls and frequent government interventions. Although South Africa is highly rated in terms of corporate governance structures, businesses in the country still suffer in terms of frequent government interference in their internal affairs. Examples of such interference are the BBBEE policies, the various labour policies and other legal regulatory frameworks. According to Hinson and Ndhlovu (2011), most business involvement in socio-economic developmental projects is influenced mainly as a result of government regulation and interventions through legislative measures. Reddy (2016) cautioned against using legislative measures to force the private sector to adopt socially responsible measures, as this could erode foreign confidence and investment in the country (Ramlall 2012; Reddy 2016).

Availability of skills constitutes a fundamental operational problem for many South African companies (Kraak 2008; Mxunyelwa & Vallabh 2017; Radipere & Van Scheers 2014). According to Radipere and Van Scheers (2014), many businesses in South Africa fail as a result of a lack of managerial and corporate leadership skills. As noted by Waweru (2014), ‘most developing economies suffer from a lack of skilled human resources, and experience difficulties attracting people with accounting or financial knowledge to their organisations’. This will in turn affect the ability of companies to implement CSR projects, which will impact the socio-economic demands of their communities (Preuss et al. 2016). Without the required skills, particularly in accounting and finance, the involvement of businesses in CSR and social justice implementation will be very difficult to achieve (Waweru 2014).

Corruption is a devastating, harmful and destructive phenomenon that can stunt the economic growth of a country, corrode the social structure of a nation and distort economies (Arafa 2011). Corruption in South Africa has been described as pervasive. According to Luiz and Stewart (2014), where corruption is pervasive, companies face an operational paradox that involves cost, erodes corporate ethics and in some cases promotes fraud and illegality. This adversely affects a company’s investment in socio-economic development projects. Therefore, for companies to participate in social justice and socio-economic development, putting an end to corruption must be an urgent priority, without which it would be impossible for South African corporates to invest in the socio-economic development of their communities, people or environment (Arafa 2011; Madlanga 2019).

This article followed all ethical standards for research without direct contact with human or animal subjects.

South African companies need to move from the present short-term reactive investment in social issues to a more consistent long-term corporate interest in social justice and socio-economic development of communities in which they carry out their operations (Michelon, Boesso & Kumar 2013). According to Mersham and Skinner (2016), South African businesses need to play a more proactive and involved role in issues of social justice and socio-economic development if they themselves are to realise a sustainable business environment within which to operate (Babarinde 2009; Reddy 2016). Babarinde (2009) emphasised that it is time for South African companies to eschew the ‘hand-out’ or giving ‘something back’ approach in dealing with socio-economic issues. Rather, they should adopt a long-term approach where they can be seen not only as investing in local communities but also as partnering with the communities.

Flores-Araoz (2011) maintains that corporations should invest in social justice and socio-economic developmental needs and demands of their host communities, particularly those communities that were dehumanised, neglected and exploited by the apartheid regime. The author, however, cautions against a ‘hands-off/once-off’ approach and advocates for a more informed and involved initiative, one that attracts constant modification and development for such investments to remain relevant to the changing dynamics of the communities.

Principle 5 of the King IV Report and the listing requirements of the Johannesburg Stock Exchange (JSE) advocate for companies to adopt an integrated reporting framework (Bhasin 2017). According to Adams (2015) integrated reporting has the ‘potential to change the thinking of corporate actors, leading to further integration of sustainability actions that impact corporate strategic planning and decision-making’. Trialogue (2014) maintained that corporations need to move away from the sharing of happy stories about their social investment in their reporting to showing demonstrable, provable and verifiable results of the impact of social investment on their company’s triple bottom line. A company’s investment in CSR implementation and social justice will only be successful when businesses begin reporting on their social investment as being vital to their past or future performances (Carroll 2008).

CSR scholars and researchers have called for the need to measure, monitor and evaluate CSR and social spending (Prasad & Kumar 2011; Rampersad 2015; Rossouw 2016). Businesses need to develop indicators to help in measuring and evaluating the achievements and contributions of their social investment to their fiscal performance, as well as on their target population (Archer 2015; Mersham & Skinner 2016). According to Carroll (2008), a company’s socio-economic investment can only be successful if it adds to the company’s bottom line and is specifically delineated as having made such an impact. The monitoring and evaluation (M&E) of developmental programmes affords companies a more effective technique for learning from previous experiences, improving their service delivery system, developing more methodical planning and optimising of resource allocation as well as demonstrating outcomes as part of their accountability to key stakeholders (Prasad & Kumar 2011; Trialogue 2014).