Super private sector lobby group, Business Unity SA (BUSA) has welcomed the proposed amendments to the broad based black economic empowerment (BBBEE) framework.
The BBBEE framework has been under reconstruction over the past few months at the hands of the Department of Trade and Industry (DTI) and has been released to the public for comment. The reconstruction was designed to close loopholes in the regulation with fronting emerging as the key concern for the DTI.
BUSA said in a statement “the transformation of the economy, where the majority of the citizens play a meaningful role in the country’s economy, is crucial to the sustainability of our democracy. We acknowledge as BUSA the importance of BBBEE policy as an imperative in promoting economic transformation and growth in the country”.
“We have long called for the criminalizing of fronting. It said decisively dealing with fronting will go a long way in speeding up the implementation of transformation in the country”.
BUSA said the introduction of penalties against people found guilty of fronting was cautiously welcomed. “We have to guard against unintended consequences. We propose that a Rehabilitation Mechanism for persons and entities who served their sentences and who wants to re-enter the system be provided for. There is also a need to ensure that the individual or entity being investigated is not prejudiced while the investigations are taking place”.
BUSA said it welcomes the proposal of establishing a Verification Professional Regulator but said the role of the South African National Accreditation System (SANAS) which has been a de facto regulator must be clarified.
“We support this development (B-BBEE Verification Professional Regulator) as it will ensure that the verification industry complies with more consistent and objective standards which will ensure benchmarking and standardisation of the methodologies in the industry”.
“We are further of the view that this positive development will open the market and smooth entry of new players and as such bring the much needed capacity to allow as many companies as possible to be verified”.
BUSA said the proposal to extend the BBBEE codes of good practice to all organs of state and public entities was a positive development
The organisation added that the proposed introduction of a BEE Commission, with teeth, is an excellent development and is long overdue. “The monitoring of any national project is crucial and transformation cannot be an exception. There is a need for a comprehensive B-BBEE status report which encompasses all the elements that could give the country and potential foreign investors a feel of where the country is in terms of economic transformation”.
“We support the objective of specifically facilitating the benefits to include start-ups, micro and medium enterprises and black entrepreneurs as well as informal black business sector”.