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
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
strengthen the monitoring, evaluation and reporting obligations
of organs of state, public entities and listed public
establish a B-BBEE Commission with investigative powers to
monitor compliance with the B-BBEE Act; and promote and evaluate
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.
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: email@example.com.
The closing date for submissions is 1 March 2013.
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