The Broad-Based Black Economic Empowerment Commission ("the B-BBEE Commission") has faced criticism from various divisions of the High Court who has reviewed and set aside the Commission's decisions in a number of matters on the basis that it did not comply with regulation 15(4) of the B-BBEE Regulations.

Regulation 15(4) prescribes the process that must be followed when a complaint is lodged with the B-BBEE Commission.

In terms of this regulation, the Commission is required, within one year of receipt of the complaint, to:

  1. Conduct an assessment of the merit of the complaint;
  2. Request further information from the complainant;
  3. Investigate the complaint if it is justifiable to do so;
  4. Notify the respondent of the complaint;
  5. Issue summons as may be necessary;
  6. Hold a formal hearing as contemplated by the B-BBEE Act; and
  7. Make a finding, with or without recommendations.

A number of entities have instituted proceedings against the B-BBEE Commission where the applicants sought to review and set aside the Commission's adverse findings. In these proceedings, one of the grounds relied upon by the applicants was that the Commission failed to make a finding within one year of receipt of the complaint.

Consequently, the Commission's conduct fell foul of regulation 15(4). As a result:

  • The Gauteng Division of the High Court, Pretoria in Sasol Oil Limited v The B-BEE Commission and Others found that the B-BBEE Commission's findings, which were issued more than a year after the complaint was lodged, were reviewable in terms of the Promotion of Access to Justice Act ("PAJA"). The Court held that the Commission failed to comply with a mandatory and material condition prescribed by an empowering provision and consequently, section 6(2)(b) of PAJA was not complied with.
  • The Pretoria High Court, in Interwaste (Pty) Ltd and others v Broad-Based Black Economic Empowerment Commission and others emphasized that the time bar contemplated in Regulation 15(4) is absolute. The Court held that the reading of the B-BBEE Regulations does not suggest that the legislature intended for non-compliance with Regulation 15(4) to be condonable. The Commission was found to have acted beyond its powers when it issued its findings in breach of Regulation 15(4).
  • In the case of Hatch Africa (Pty) Ltd v B-BBEE Commission and others, Hatch Africa sought to review and set aside the decision of the B-BBEE Commission on the ground that the Commission acted ultra vires in issuing its final findings after the one year period prescribed in Regulation 15(4). During the hearing of the matter, the Court directed that the Interwaste judgment be brought to the Commission's attention. After considering the Interwaste judgment, the Commission consented to an order reviewing and setting aside its decision and paying the costs of Hatch Africa, including the costs of two counsel.
  • In M Schutte Contractors CC and Another v Broad-Based Black Economic Empowerment Commission and Another, the Free State Division of the High Court, Bloemfontein held that the conduct of the Commission is reviewable for inter alia failing to adhere to Regulation 15(4).
  • In Sand Shifters Africa (Pty) Ltd and Others v Commissioner: Broad-Based Black Economic Empowerment Commission and Another, the High Court held that Regulation 15(4) is a procedural time bar. The Court commented that the Commission's delay of delivering its findings a year late "is not only unreasonable but also borders on the dereliction of duty". Consequently, the Commission's decision was reviewed and set aside.

Conclusion

Based on the judgments set out above, the Commission is required to comply with Regulation 15(4) and issue its findings on a complaint within the prescribed period of one year. If the Commission fails to do so, a court will be entitled to review and set aside its findings.

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