The Parliamentary Portfolio Committee on Trade and Industry (the Portfolio Committee) has called for comments from interested and affected parties on the Broad-Based Black Economic Empowerment (B-BBEE) Amendment Bill, 2012 (Bill), which was published on 28 November 2012.

The Bill proposes a number of detailed amendments to the B-BBEE Act, 2003 (the B-BBEE Act), which are intended to:

  • align the B-BBEE Act with the Codes of Good Practice;
  • clarify the interpretation and application of the B-BBEE Act;
  • strengthen the monitoring, evaluation and reporting obligations of organs of state, public entities and listed public companies;
  • establish a B-BBEE Commission with investigative powers to monitor compliance with the B-BBEE Act; and promote and evaluate B-BBEE;
  • provide for a number of offences and penalties for non-compliance and circumvention; and
  • include the creation of incentive schemes to support black owned and managed enterprises in the strategy for B-BBEE.

While the Bill aims to clarify and expand on issues that were already included in the B-BBEE Act, it also deals with issues of ''fronting'', which often take the guise of schemes that undermine true B-BBEE. The Bill criminalises the practice of fronting by introducing severe penalties of up to 10 years in prison or up to 10% of an enterprise's annual turnover. In addition, it contemplates the cancellation of any contract or authorisation awarded by an organ of state or public entity. A person and/ or entity convicted of fronting may also be blacklisted and prohibited from contracting or transacting with any organ of state and/ or public entity. The Bill further introduces an obligation on B-BBEE Verification Professionals, procurement officers and officials of organs of state and public entities to report instances of fronting, failing which they could be liable to a fine or imprisonment.

To access the Bill, click here.

Webber Wentzel is currently formulating comments on the Bill for submission to the Portfolio Committee. Comments on the Bill can also be sent directly to the Portfolio Committee, for the attention of Mr A Hermans, Committee Secretary via email on: The closing date for submissions is 1 March 2013.

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