Those in the BEE advisory or consulting industry would agree that up to date, Broad-Based Black Economic Empowerment (B-BBEE) has not achieved what was originally intended. Fronting is one of the most unfortunate consequences, so the Minister of Trade and Industry gazetted the Broad-based Black Empowerment Act. In terms of this Act the B-BBEE Commission was established.
The need aroused for a B-BBEE Referee to monitor and investigate cases of fronting, fraud and other B-BBEE transgressions. The B-BBEE Commission was also established to provide a regulating body that is accessible to everybody. The Commission started to operate in April 2016 and was mandated to investigate any complaint lodge with them. They have also been assisting entities in obtaining opinions regarding any uncertainties in the application of the Amended Codes of Good Practise.
Other functions of the Commission includes the supervising and promoting of adhering to B-BBEE rules, maintaining a registry of major BEE transactions, and receiving and analysing reports on B-BBEE compliance, submitted by state organs, public entities and enterprises in the private sector.
Business owners engaging in activities that do not comply with the regulations of the B-BBEE Codes, will under the watchful eye of the B-BBEE Commission be prosecuted. If found guilty they might be issued with fines as well as imprisonment depending on the nature of the violation. An entity guilty of such contraventions will also be disbarred from doing business with state-owned organs or public entities for up to 10 years.
All entities are urged to engage with their B-BBEE legal advisors to ensure that whatever practices they want to implement, are in line with the revised code, to prevent any conduct in contradiction with the B-BBEE Act or Codes.
Dominique van Deventer has been a SEESA BEE Legal Advisor for the past 17 months. She obtained her LLB degree from the University of the Free State.