​State owned entities must implement B-BBEE

Minister of Trade and Industry Rob Davies called on state-owned entities to play a more robust role in implementing the Broad-Based Black Economic Empowerment (B-BBEE) Act.

“A public entity is not exempt to implement the act, everyone in the public space must implement the BBBEE legislation”, he said speaking at the broad-based black economic commission’s annual conference on Thursday.

Previously in the 2003 version of the Act, it said that all organs of state must implement the act, as far as possible. But the new amendments make it mandatory for all organs of state to implement the new act, he added.

This comes on the back of a compliance report submitted by the Broad-based Black Economic commission, revealed that out of 195 compliance reports submitted to the commission, only nine came from public entities and both government departments and sector education and training authorities (Setas) failed to submit.

These compliance reports assess the levels at which empowerment legislation is being implemented in government. The department of trade and industry (dti) as result is in discussion with various stakeholder to have public entities’ empowerment participation evaluated.

Minister Davies said that the state should play a more prudent role in changing the patterns of ownership in South Africa, and this includes ensuring that the empowerment legislation and regulation is used as a tool for black economic empowerment and radical economic transformation.

“We need to understand that in order for us to achieve what is intended by the act, government, private sector and civil society must play their role,” said Zodwa Ntuli B-BBEE Commissioner.

Adding to Davies’ lament on the increase in cases of fronting, Ntuli said that government is also inconsistent in implementing the empowerment act in that it continues award tender contracts to companies that are not in fact transformed.

“A number of manufacturers that are not transformed enter into a partnership with a black company and gets them to bid for a government tender but they do not manufacture or package the product and all the money goes for the other company…that black person has been used”, said Ntuli giving one of many examples of how fronting can work.

“Some of the cases that we saw in state capture and corruption had involved fronting and the commission has been looking at that and we now need to move from investigations to actual consequences,” she said.


READ MORE: DA to come after Gupta-linked companies with fraudulent BBBEE certificates

Davies told the Mail & Guardian recent amendments to the B-BBEE Act have classified fronting as an offence and tasked the commission with monitoring the instance of fronting. Consequences for fronting include penalties, fines and exclusion in participating in government tenders.

He also said that one of the measures the department of trade and industry and the commission identified in order to address fronting, was through supplier development where large companies contract to small companies for a service.

“This is part of broadening … and deconcentrating the economy and brings… black industrialists … into the supply chain”.

READ MORE: BEE commission to probe Gupta-linked firms for allegedly faking certificates

The commission, as the implementing agency of the act, has powers to evaluate transactions and the performance of public entities.

Government is currently assessing how empowerment incentives can ensure that beneficiaries contribute to the productive capability of the country, add to employment and help drive broad-based economic empowerment.

Mlungisi Manci, a member of the president’s broad-based black economic empowerment advisory council, said that government should seek to leverage on the original intentions of the act.

The act was aimed at empowering black people, workers, women, youth, people with disabilities and those living in rural areas.

He acknowledged that there has been notable progress in the empowerment legislation,as well as recent changes to the Preferential Procurement Bill by the national treasury, there “still were weaknesses in the system”, he said.

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever. But it comes at a cost. Advertisers are cancelling campaigns, and our live events have come to an abrupt halt. Our income has been slashed.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years. We’ve survived thanks to the support of our readers, we will need you to help us get through this.

To help us ensure another 35 future years of fiercely independent journalism, please subscribe.

Thulebona Mhlanga
Guest Author
Advertising

ConCourt settles the law on the public protector and interim...

The Constitutional Court said it welcomed robust debate but criticised the populist rhetoric in the battle between Busisiwe Mkhwebane and Minister Pravin Gordhan

Small towns not ready for level 3

Officials in Beaufort West, which is on a route that links the Cape with the rest of the country, are worried relaxed lockdown regulations mean residents are now at risk of contracting Covid-19
Advertising

Press Releases

Covid-19 and Back to School Webinar

If our educators can take care of themselves, they can take care of the children they teach

5G technology is the future

Besides a healthcare problem Covid-19 is also a data issue and 5G technology, with its lightning speed, can help to curb its spread

JTI off to court for tobacco ban: Government not listening to industry or consumers

The tobacco ban places 109 000 jobs and 179 000 wholesalers and retailers at risk — including the livelihood of emerging farmers

Holistic Financial Planning for Professionals Webinar

Our lives are constantly in flux, so it makes sense that your financial planning must be reviewed frequently — preferably on an annual basis

Undeterred by Covid-19 pandemic, China and Africa hold hands, building a community of a shared future for mankind

It is clear that building a community with a shared future for all mankind has become a more pressing task than ever before

Wills, Estate Administration and Succession Planning Webinar

Capital Legacy has had no slowdown in lockdown regarding turnaround with clients, in storing or retrieving wills and in answering their questions

Call for Expression of Interest: Training supply and needs assessment to support the energy transition in South Africa

GIZ invites eligible and professional companies with local presence in South Africa to participate in this tender to support the energy transition

Obituary: Mohammed Tikly

His legacy will live on in the vision he shared for a brighter more socially just future, in which racism and discrimination are things of the past

The best local and international journalism

handpicked and in your inbox every weekday