B-BBEE Amendment Bill Gazetted - EconoBEE Newsletter - 12 December 2011
Monday, 12 December 2011 21:52
The minister has gazetted the B-BBEE Amendment Bill. It gives the public 60 days to comment before going to parliament.
Salient features of the proposed act:
In many instances the act expands on issues that were already included, but issues clarifications.
- The definition of Broad-Based Black Economic Empowerment has been expanded to mean the sustainable economic empowerment of all black people - in particular women, workers, youth, people with disabilities and people living in rural areas, through diverse but integrated socio-economic strategies. Note the use of the word “sustainable”.
- There is more emphasis on local content, as there is in the new regulations of the PPPFA.
- Fronting is clearly defined and fronting practices are now punishable by penalties of up to 10 years in prison, or up to 10% of an enterprise’s annual turnover. Some of the areas around fronting practice include setting up B-BBEE transactions that do not benefit black people. It could involve an agreement with another enterprise where there are significant limitations on what the company can do.
- The act establishes a BEE Commission whose job is to monitor compliance, fronting, interpretations, as well as promote adherence to the act and advocacy of BEE.
- The act defines a B-BBEE Verification Professional as being a person registered by the verification agency regulator or SANAS. This implies that verification analysts will themselves be accredited in some way. Recently the minister announced details of BEE Management course offered by Wits University and UNISA.
- In a clarification the act states that enterprises in a sector in which sector codes have been gazetted may only be measured for compliance in accordance with that sector code.
Monitoring, Evaluation and Reporting:
- Listed companies are required to submit reports on their compliance to the BEE Commission.
- The SETAS must report on skills development spend and programmes to the BEE Commission.
- An area that was previously neglected: government’s own compliance with the codes, has been addressed.
- All organs of state, state owned enterprises and all spheres of government must report on their compliance with B-BBEE in their audited annual reports and financial statements. Section 10 of the old act has been expanded to require all organs of state to take into account and apply the codes for all dealings with private enterprise. Previously the act stated “where possible, apply the codes”. Now every sphere of government has to apply the codes. This has already started with the reconciliation of the PPPFA with B-BBEE. It does mean that every organisation that wishes to do business with government, or obtain licenses or other concessions must submit details of the compliance, ie a valid B-BBEE certificate.
- What is interesting is that the mining charter of the mining act is now in conflict with the B-BBEE Act.
- Interestingly section 23 of the proposed act states that other than the constitution, this act will prevail in any conflict with any other act which could imply that the mining act is about to change. However section 12 allows the minister to permit organs of state to determine their own transformation policies if they meet the requirements of the B-BBEE strategy.
- Regarding verification, IRBA (Independent Regulatory Body for Auditors) will regulate B-BBEE Verification Professionals.
- The act gives the minister the opportunity of issuing regulations, guidelines and practice notes. This will help in giving guidance for compliance and interpretations and various aspects of the codes.
Gavin and the EconoBEE Team
Econoserv SA cc - A Proudly SA Company
Tel: 011 483 1190