Proposed amendments to the B-BBEE Act

Original publish date – Fri, 25 Nov 2011 06:55:37 +0000, Keith

Proposed amendments to the Broad-Based Black Economic Empowerment Act (B- BBEE)

Cabinet approved the publication of the Broad-Based Black Economic Empowerment Act (B-BEE) Amendment Bill for public comment.

The proposed amendments to the Act intend to achieve the following objectives:

(a) Align the Act with other legislation impacting on the B-BBEE and with the codes

(b) Establish the B-BBEE Commission to establish an institutional environment for monitoring and evaluation broad-base black economic empowerment

(c) Provide for the regulation of the verification industry by the Independent Regulatory Board of Auditors

(d) Deal with non-compliance and circumvention by introducing offences and penalties

The proposed changes to the B-BBEE codes of good practice:

(a) Enterprise Development (ED) and Procurement to be elevated with each requiring sub-minimum and enhanced recognition for ED targeted at key sectors in IPAP and the New Growth Path

(b) Penalty provision for non-compliance with Enterprise Development and Procurement elements of the B-BBEE scorecard, and discount from overall score

(c) The points of ownership element should be broadened to include designated groups in the main points, creating greater incentives for genuine broad-based ownership such as employee share ownership, co-operatives and community ownership

(d) Setting sub-minimums/threshold for each element of the scorecard save for the adjusted ownership element

(e) The Qualifying Small Enterprises scorecard will be adjusted and certain elements made mandatory.The thresholds for Exempted Micro Enterprises will be reviewed

(F) The Employment Equity element to receive adjusted recognition and to be aligned to the Employment Equity Act (targets, Reporting and Definitions).

(g) Skills Development Element to be aligned to the New Skills development Strategy and the New Growth Path and

(h) Targets in the Ownership Skills Development Procurement and Enterprise Development will be adjusted.

In general, EconoBEE welcomes the proposed changes. We need to see the actual bill to analyse it in more detail, but in general, all the recommendations we have sent to the dti and BEE Council have been addressed.

We like that B-BBEE is being aligned with other acts, in particular the PPPFA which comes into effect on 7th December 2011.

More than a year ago we recommended to the minister that he establish an office of the BEE Ombudsman, to handle issues of interpretations, valid certificates, fronting, disputes. This is now being done via the establishment of a commission.

We also welcome IRBA as the overall regulatory body for verification. The verification industry has always had problems, starting with ABVA, and subsequently SANAS has struggled to handle our volume of enquiries and sort out various issues. We hope that IRBA will be fully staffed to handle the increased workload.

We were one of the first companies to raise the issue of invalid certificates, fronting and other non-conformances. We therefore welcome the approach that fronting will be penalised, and that the B-BBEE Commission will be tasked to investigate this.

In principle,we also welcome any proposed adjustments to the weightings and targets of the elements or the definitions. We have always like the fact that B-BBEE stands for “broad-based” implying it affects all aspects of the economy, and not necessarily only narrow based ownership.

We look forward to seeing the proposed bill and will make representations


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