The Broad-Based Black Economic Empowerment Bill (B-BBEE) 2012 that is being Tabled today enhances and amends the Broad Based Black Economic Empowerment Act No 53 of 2003 (B-BBEE Act). The B-BBEE Amendment Bill 2012, seeks to address the following strategic objectives:
The B-BBEE Amendment Bill
The amendment Bill builds on the current legislation, but introduces a number of new measures. The new measures seek to:
- Establish a B-BBEE Commission to play an oversight and advocacy role
- Development of a Monitoring, Evaluation and Reporting framework(consistent application across all spheres of Government and sectors)
- Establishment of a regulatory framework for measuring impact
- Introduction of penalties and offences
- Alignment and harmonization of the B-BBEE to other key pieces of legislation and policy instruments
- Elevation of the generic scorecard principles to the primary legislation.
The establishment of the B-BBEE Commission:
- oversee, supervise and promote adherence with the B-BBEE Act and codes in the interest of the public
- strengthen and foster collaboration between the public and private sector in order to promote and safeguard the objectives of B-BBEE
- receive and investigate complaints relating to B-BBEE
- promote advocacy, access to opportunities, and educational programmes and initiatives of B-BBEE
- maintain a registry of major B-BBEE transactions
- receive and analyse reports as prescribed concerning B-BBEE compliance from organs of state, public entities and private sector enterprises
- promote good governance and accountability by creating an effective and efficient environment for the promotion and implementation of B-BBEE.
Legislative alignment and consistency to mitigate conflicting provisions, and application across:
- The Act’s status as the primary B-BBEE legislation is clarified by providing that if there is a conflict between any law (excluding the Constitution) which was in effect before the B-BBEE Amendment, the B-BBEE Act prevails in so far as provisions that were enacted before this amendment.
- The effect of this provision is that if there is another statute that regulates an aspect of B-BBEE that may be enacted in the future, then that will take precedence.
- The clause will therefore prevent inconsistency being introduced by legislation applicable to specific sectors that adopts conflicting approach to B-BBEE.
- The clause has no impact on legislation regulating other issues.
- The will be a one year delay with regards the trumping provision.
Introduction of offences and penalties
The Amendment Bill introduces offences for the following:
- misrepresenting or attempting to misrepresent the B-BBEE status of an enterprise
- providing false information or misrepresenting information to the Verification Personnel in order to secure a particular B-BBEE status;
- providing false information or misrepresenting information relevant to assessing the B-BBEE status of an enterprise to any organ of state or public entity; and
- Failure by a B-BBEE Verification Professional or any procurement officer or other official of an organ of state or public entity to report offences to an appropriate law enforcement agency.
- The minimum penalty that can be imposed on an enterprise for an offence involving a deliberate misrepresentation of its B-BBEE status is 10% of its turnover, and further for a minimum term of 10 years imprisonment if it’s a natural person.
Monitoring, evaluation and reporting
The core obligations of organs of state, public entities (including SETAs), sector councils and listed public companies to provide B-BBEE information to the
B-BBEE Commission are specified, in order to ensure integrated reporting on the impact of B-BBEE.
Regulation of verification agencies
The Independent Regulatory Board of Auditors (“IRBA”) will function as the verification agency regulator, as opposed to establishing a new regulatory body. IRBA will have a primary focus as a BEE verification regulator, mandated with the responsibility of protecting the interests of the public and strictly regulating individual registered BEE verification professionals. The Audit Professions Act 26 of 2005 is in the process of being amended in order to empower IRBA to regulate the BEE verification professionals.
Elevation of the generic scorecard principles into the primary legislation:
- In order to give expression to the broad based approach of the scorecard the 5 elements of the scorecard are encapsulated in the amendment Act.
- The status of the sector codes is further clarified by providing that an enterprise in a sector in respect of which the Minister has issued a sector code may only be measured for B-BBEE compliance in accordance with that sector Code.(no forum shopping).
