National Assembly passes B-BBEE bill

2013-06-21

Department of Trade and Industry

The Broad-Based Black Economic Empowerment (B-BBEE) Amendment Bill has been passed by the National Assembly and sent to the National Council of Provinces for concurrence.

The Bill was tabled in Parliament at the end of November last year. Cabinet approved the bill for tabling early in August 2012.

Public hearings on the Bill were held in March 2013.

Highlights of the proposed legislation include:

•    Align the Codes of Good Practice and the Act – elevate the generic scorecard into the Act
•    Setting up of the B-BBEE Commission – monitor and evaluate the implementation of B-BBEE
•    Introduction of offences, penalties and prohibitions to address non-compliance and circumvention
•    Introduction of the concept of B-BBEE verification professional
•    Extend the Minister’s powers to make regulations in particular, the rules governing how the Commission conducts investigations

In terms of the alignment of the Codes and the Act, the bBill seeks to empower the Minister to define, interpret and establish indicators to measure local production and content.

Another notable proposal is that organs of state and public entities will be able to set criteria for procurement that exceed those set out in the Codes.

Sector Codes will continue to take precedence in terms of B-BBEE compliance.

Tighter reporting requirements are proposed. All businesses will have to report to their sector councils on an annual basis regarding compliance.

The envisaged Commission will operate as an independent entity located within the DTI’s premises. It is perceived as a viable enforcement mechanism.

The Minister will be able to issue directives to the Commission indicating how the Commission is to perform its functions.

The commission will also be tasked with fostering sound working relationships between the public and private sectors in the interests of promoting the B-BBEE objectives.

It will also be able to investigate any B-BBEE related matter.

The proposed legislation will clamp down hard on misrepresentation with regard to the verification process.

It proposes a maximum penalty for misrepresentation of B-BBEE status of ten years in prison and/or a fine. Companies can be fined 10% of annual turnover.

Failure to submit a report could result in a one year jail term.

All convicted persons will be prevented from conducting business with the State.

According to SA news, trade and industry Minister, Rob Davies, emphasised during a media briefing on the Bill yesterday that a sunset clause could not be considered at this stage as more progress on the Bill’s objectives was needed.

He was responding to a question on whether a timeframe for BEE could now be set.

The Minister added that another university has been commissioned to undertake a follow up survey on the overall level of BEE in South Africa.

Davies also indicated that the amended Codes of Good Practice would likely be released in August.

It was hoped that the Bill could be signed into law around the same time.

Courtesy of: Sabinet Cape Town Office

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