President Jacob Zuma has signed into law the Broad-Based Black Economic Empowerment (B-BBEE) Amendment Bill of 2013 which ushers in a newish era of economic transformation.
The amendment comes amid rising dissatisfaction about the pace of economic transformation 20 years after South Africa was declared a democracy. It is widely believed that the 1994 transition is yet to deliver meaningful economic dividend. The ruling party, the ANC, has in the past few years raised rhetoric around B-BBEE while the masses can be said to be losing patience.
The amended B-BBEE law represents a tightening of economic transformation measures which were first adopted in 2003. Key changes include a framework for the BBBEE Commission, a statutory body with some powers to monitor and police the empowerment space. This may be felt more on the market of deals which purport to empower black people. Faulty deals will be subjected to scrutiny and possibly ‘excommunication’.
The Minister of Trade and Industry, Rob Davies said the signing of this Bill into law is significant, as this will streamline the monitoring and evaluation of empowerment and will significantly enhance the objectives of the B-BBEE Act No 53 of 2003.
Davies added that “The amendments to the B-BBEE Act intend to achieve key strategic objectives, amongst others, to align the B-BBEE Act with other legislation impacting on B-BBEE and with the Codes; establishment of the B-BBEE Commission; provide for the regulation of the verification industry by the Independent Regulatory Board of Auditors; and deal with non-compliance and circumvention by, inter alia, introducing offences and penalties.”
Davies said that fronting as defined in the Act is now a statutory offence and those who are involved in fronting and convicted may be imprisoned for 10 years. “We have introduced offences of the following acts of fronting, which include misrepresenting or attempting to misrepresent the B-BBEE status of an enterprise; and providing false information or misrepresenting information to the verification personnel in order to secure a particular B-BBEE status, among others. Yes any person convicted of an offence, in terms of the Act, is liable to a fine or to imprisonment for a period not exceeding 10 years or to both a fine and imprisonment.”
Davies added that the B-BBEE Commission will play a critical role in overseeing, supervising and promoting adherence with the B-BBEE Act and Codes of Good Practice, in the interest of the public.
“The B-BBEE Commission will be given the task of acting without fear or favour independently. It will also strengthen and foster collaboration between the public and private sector in order to promote and safeguard the objectives of B-BBEE. Over and above the Commission will ensure that BEE activities in the country are aligned,” said Davies.
The BBBEE Act comes in after the B-BBEE Codes of Good Practice were amended and launched in October last year with a 12 months transition period. From October next year, enterprises will have to apply the new and stringent codes.