Comments on the B-BBEE Amendment Bill can be sent to the following persons:
Lindiwe Madonsela LCMadonsela@thedti.gov.za or Xolisile Zondo XZondo@thedti.gov.za
Issued: The Department of Trade and Industry
Sidwell Medupe (Departmental Spokesperson)
Tel: (012) 394 1650 (012) 394 1650
Mobile: 079 492 1774
E-mail: MSMedupe@thedti.gov.za
The gazetted bill has no email addresses on it. If you're planning to submit by email - look no further than this post.
Posted at 03:24 PM | Permalink | Comments (0) | TrackBack (0)
Minister Rob Davies tells Engineering News that the DTI is elevating the concept of a balanced scorecard from the Codes of Good Conduct to the current Act.
The DTI states that enterprise development (ED) is one of the significant elements that can contribute towards the broader aims of government to support the growth of small enterprises and job creation. In the light of a new drive towards creating effective black-owned and black-female-owned and -controlled enterprises, the department has elevated ED to also focus on key sectors of the economy.
“With regard to the points system, we have ensured that entities cannot score a certain level without doing some work on ED. Preferential procurement has also been elevated in terms of the points system, with [greater] emphasis being placed on black-owned and female-owned enterprises,” he says.
The Employee Share Option Plan (Esop) will also become part of the scorecard. “When correctly applied, Esops have the potential to drive wealth and capacitate employees, as seen with iron-ore giant Kumba’s model,” he explains
Rob hints at what is to come and it's scary, but the real fright will come when the codes that were presented to a bunch of DTI patsies last year (and some not-so patsy people) are published. This presentation was a strange thing because it was very closed - I'm aware of two verification agencies that asked to attend and were informed that they weren't welcome. It does appear that the people who were welcome were those who were going to shower both Vuyo Jack and Polo Radebe with praise for their most amazing work.
Judging from the above quote from Rob we know that business people now have to get actively involved in the ED project otherwise no points. That's ED (and the horse's mouth) but wait 'til you hear the second hand information. Contributions now must be recoverable and non-recoverable.
It would appear that the number of points for skills development is increasing but so is the target. Some say that it is going up to 6% of payroll. Then you have to report on the training in terms of the economically active population and points are awarded in that fashion. I would imagine that employment equity is going to be similar.
They are going to do something with QSEs and insist that they adhere to all 7 elements.
However this is second hand information - but it wouldn't surprise me if this is the case. I think Rob is waiting for the BEE Bill to go a little further down the line and then he's going to throw this at us.
We shiver in antici....................................................................................pation
Posted at 11:14 AM in Codes of Good Practice | Permalink | Comments (0) | TrackBack (0)
Technorati Tags: B-BBEE, DTI, Enterprise Development, Rob Davies
It has been brought to my notice that a certain verification agency in KZN is insisting that an ED contribution must be spent within the period that it is made. I don't agree and have written an opinion on this which you can download here. For those who don't download, read on below.
Caird Holdings has been requested to publish an opinion as to whether a contribution made for Enterprise Development (ED) purposes needs to be completely consumed within the measurement period in order to fulfil the requirements to be awarded points under code series 600, statement 600 of the DTI's B-BBEE codes of good practice (gazette number 29617).
This opinion takes it as understood that a measured entity may outsource their ED requirements to a third party for fulfilment of their ED obligations. It is also assumed that all other requirements for an ED contribution are adhered to. The issue that this opinion addresses is that of whether the measured entity may attract the full number of points by making the contribution, be it monetary or non-monetary, during the measurement period, but that contribution is not consumed in that same period.
In addressing this question we were drawn to paragraph 3.2 of code series 600 - Recognition of Enterprise Development Contributions. This paragraph states,
3.2.1 Enterprise Development Contributions consist of monetary or non-monetary, recoverable or non-recoverable contributions actually initiated and implemented in favour of beneficiary entities by a Measured Entity
The pertinent phrase here is "actually initiated and implemented". Our reading of this statement is that the contribution must be initiated and at the very least implemented during that period. It does not state that the contribution needs to be consumed during the same period. We believe that the rationale behind this paragraph is to allow beneficiaries to continue benefiting from the contribution on a longer-term basis because this will ultimately contribute to the development, sustainability and financial and operational independence of those beneficiaries.
Our view is confirmed by Vuyo Jack and Kyle Harris in their book "Broad-based BEE: the complete guide". Jack and Harris write on page 327
Section (3.2.1) includes the words "actually initiated and implemented", which is further addressed in the statement by confirming that initiatives may not be included in the measurement unless the expenditure has already been incurred. Future commitments may not be included in the measurement. Funds set aside for initiatives not yet implemented are also not measurable as part of the contribution.
We concur with this opinion and would like to add that the measured entity will not be permitted to use the outstanding amounts that have not been consumed within the measurement period as future enterprise development contributions.
It is therefore our considered opinion that measured entity will have fulfilled their ED obligations by initiating the contribution and that there is no requirement under gazette number 29617 that the contribution has to be consumed within the measurement period.
Posted at 12:19 PM in Enterprise Development | Permalink | Comments (0) | TrackBack (0)
Technorati Tags: B-BBEE, Black Economic Empowerment, Enterprise Development, Vuyo Jack
All in all the revisions to the Act are a welcome strengthing to the process of implementing B-BBEE in the country, and I believe if quickly implemented can only improve the current state of affairs.
Bullshit Robin. These regulations are designed to over-regulate an industry that copes very well on its own. They are certainly not welcome, the only definite thing about them is that they are poorly drafted and vague.
Posted at 02:46 PM | Permalink | Comments (0) | TrackBack (0)
The debate continues. This is a response to the first reader's comments from yesterday.
I seem to recall, but may be mistaken, that the PFMA is an instrument of the Constitution – it is one of those pieces of national legislation that was required to be enacted by mandate included in the constitution – this implies that an effort to trump it without amending it may present some interesting jurisprudential challenges. Nice thing about this current government, they seem committed to developing our constitutional jurisprudence, even if they are doing so passively without insight. Suggest you discuss this with your mate, the constitutional lawyer.
The guy to speak to is Pierre de Vos. It's hard to get him to respond to BEE issues – I don't think they loom large in his outlook.
As regards 'black listing', there is a provision of the Bill of Rights that guarantees fair administrative process. A piece of national legislation, similarly mandated by the Constitution, was enacted to give effect to this right, namely the Promotion of Administrative Justices Act (PAJA). Where national legislation or regulation in a particular area fails to provide a fair administrative process (right to due process, audi alteram, appeals etc), it has an override process, and even where such legislation/regulation does prescribe an administrative process, rights of reviews and appeal to the ordinary courts are prescribed under PAJA. This was the legislation used by Mittal and Kumba to take ICT and the DMR out recently. I wish my friends at the DTI much luck – with their cavalier attitude, they are going to need it. (It's a pity they'll never know who you are to count you as a friend – I suspect that other than Zungrabber, they have very few friends)
I suppose the better question to ask is why they are so hectic about blacklisting when companies and directors of companies with proven criminal violations prejudicial to the interests of the state continue to render services to that state.
The same reader from yesterday had more time to reflect on their post and sent me this
What if a director misrepresents in terms of the proposed section 20(1)(a) and the enterprise gets a lesser score. In other words, had the director not misrepresent, the score would have been higher. The proposed Bill is very unclear in this regard – it says only in (b) "in order to secure a particular B-BBEE status or any benefit associated with the compliance with this Act." What if the BEE status is less than reality? Does the director still go to jail? It reminds me of the Income Tax Act, and maybe the DTI can learn from the IT Act. Section 104 of the IT Act specifies that the offence is to evade tax. The BEE Bill should state that the offence is to increase i's BEE score above reality.
I think the words "in order to secure a particular B-BBEE status or any benefit associated with the compliance with this Act" have this covered. It seems ludicrous that a benefit could be given to a person for a BEE score lower than another bidder.
Posted at 02:10 PM in BEE Bill | Permalink | Comments (0) | TrackBack (0)
There is a lot wrong with this bill. If you would like your comments aired please send them to me and I'll post them up on the blog. As with almost all comments or emails I receive I can assure that your details will not be disclosed. Comments are due by the 7th of Feb this year.
This reader has provided us with a very valuable insight into aspects of the bill that us non-accountants or lawyers would miss, notably constitutional and PFMA (accounting) aspects. My comments are italicised.
Section 23: Basically states that the BEE Act will prevail / be stronger than the PFMA. (and a variety of other acts like the PPPFA, EE Act and most likely the Companies' Act)
23 Interpretation of this Act
1) If any conflict relating to the matters dealt with in this Act arises between this Act and the provisions of any other law save the Constitution and/or any Act expressly amending this Act, the provisions of this Act will prevail.
2) Any person who is measuring B-BBEE compliance in terms of this Act must do so in a manner in which substance takes precedence over legal form. (Surely this is problematic, it gives the Act the right to ignore binding contracts and other types of legal arrangements – this should not be part of the act, because it gives the Act too much power to negate almost any arrangement at will).
The PFMA (Finance) states in section 3 (3): "In the event of any inconsistency between this Act and any other legislation, this Act prevails."
This clash is infinitely worse than that (the ignorance goes even further).
Bill (DTI): Section 21: "all spheres of government, public entities, and organs of state must report on their compliance with B-BBEE in their audited annual financial statements..."
PFMA Section 89:
"Functions of Board.—(1) The Accounting Standards Board (ASB) must—
(Id est every entity that is legally bound by the PPPFA and BEE Act)
(b) prepare and publish directives and guidelines concerning the standards set in terms of paragraph (a);
(c) recommend to the Minister effective dates of implementation of these standards for the different categories of institutions to which these standards apply; and
(d) perform any other function incidental to advancing financial reporting in the public sector.
(2) In setting standards the Board must take into account all relevant factors, including—
(3) The Board may set different standards for different categories of institutions to which these standards apply.
(4) The standards set by the Board must promote transparency in and effective management of revenue, expenditure, assets and liabilities of the institutions to which these standards apply."
The way I read this is that the DTI has now usurped the function of standard setting, and they are telling departments, public entities, constitutional institutions and other government departments/entities what to put on their financials. So everyone at the ASB can pack their bags and leave because the DTI is competent enough and has enough time on their hands to dictate what should be on the financials.
I reckon that's right – you should read the various charters that have been gazetted by both Mpahlwa and Davies and you'll realise that neither of them either read the documents or understand the basics of our constitution (and I am being VERY polite here).
The annual report includes financials, but it is wider (King III and the world-wide trend of integrated reporting). The ASB is working with the IPSASB on standards of integrated reporting. The integrated report is not part of the financials, it may form part of the annual report.
I get the feeling that the BEE Bill was drafted by someone who has no clue what financial statements are and has no clue about SA legislation.
(Couldn't agree with you more).
Now, get this:
Constitution of the Republic of South Africa 1996
Chapter 3 - Co-operative Government
41. Principles of co-operative government and intergovernmental relations
1) All spheres of government and all organs of state within each sphere must :
Am I missing something or is the DTI just doing whatever the hell the want? Constitution? What constitution? (I think this might be the Constitution that the ANC refers to which is very different to the one they agreed to in 1994. The one that Zoomer uses to justify his existence – and the one that the courts seem not to be that interested in).
What about fronting
Furthermore, on the fronting, penalties and "black listing".... Scenario: Company A is found "guilty" of fronting. How? Civil – balance of probabilities? Criminal – beyond reasonable doubt? Based on evidence? High court ruling? Or is it going to be like a credit bureau listing – the poor company who gets listed one-sidedly must just sit with the beans... Furthermore, let's say the company did front. It was management who was responsible for Company A's fronting practices. The directors. They could get nice bonuses because of the business obtained from the fronting practises. Now the proposed BEE Bill states that the company gets listed and cannot do business with government ever! The poor black shareholders can now just throw their share certificates down the toilet because of something the directors did. Justice is served.
I'm glad you raised this point. It is well documented (by me and a few journalists) that the BEE Council is a joke and run by political appointees (again I am holding my tongue here), perhaps this is why they are going to pay this council now so that they can send them on a world-wide fact-finding mission and lug their spouses, girlfriends etc along with them. They'll stay in the best hotels and fly in chartered aircraft and be paid for the privilege. It's fucking disgusting.
On this last point (fucking disgusting), Peter Sullivan's article in Moneyweb today hits out hard at the Zumocracy
Be careful mon President, be very careful: you and your princes are pissing off ordinary people.
Your bloated nephew's indifference to poverty and starvation among his employees is becoming a symbol of degenerate living, his senseless justification that he keeps his businesses separate rivalling Marie Antoinette's infamous cake suggestion. Staggering corruption by your cronies upsets poor people just as much as it upsets the rich, possibly more. You desperately need to show some leadership. Your 100th birthday speech asked for contributions to the debate, here's mine:
Cut ministerial perks, move Parliament, live in an appropriate manner, not in lavish luxury which shows scorn for the poor.
I remain optimistic for our country, but warning bells are beginning to go off, and it would be dreadful if they signalled the first falls of the guillotine.
Posted at 01:15 PM in BEE Bill | Permalink | Comments (0) | TrackBack (0)
Technorati Tags: BEE Bill, BEE. B-BBEE Bill, Constitution of the Republic of South Africa, PFMA, PPPFA, Rob Davies
Or twenty twelve as we South Africans would say. Happy new year - I certainly hope that it's a good one for everyone. It's taken a while to get find my feet this year but I am now officially open for business.
We were dumped with a surprise at the end of last year when EMEX announced that they were closed. Their website carries the very simple
Which is then followed by an explanation which says that they are sad and they've gone. You can click on the link for now but I doubt whether the site will be up much longer. This is sad but it does seem to send a message that you really don't want to mess with SANAS at all. So that then leaves 68 agencies to pick up the flak (Leila that page needs updating). And IRBA does not seem to be any closer to accrediting anyone.
What's in store for this year then?
Don't forget to comment freely on the blog and if you want an opinion on something send me an email and I'll write about it.
Posted at 02:37 PM in 2012 | Permalink | Comments (0) | TrackBack (0)
Technorati Tags: 2012, ABVA, B-BBEE, BBBEE, DTI, EMEX, IRBA, NEEEF, Rob Davies
Paul JanischThursday, 12 Jan 2012
The average BEE commentator’s starting point is to criticise the slow uptake of BEE and to suggest greater state intervention to enforce compliance across the board. The first observation is flawed, rendering the suggested remedy unnecessary.
via www.fm.co.za
Posted at 03:23 PM in BEE Bill | Permalink | Comments (0) | TrackBack (0)
Commenting on a bill like the new BEE bill could either be knee-jerk as an immediate response or knee-jerk after much deliberation. I chose the latter route. The first thing I realised was that you can't look at the amendments without looking at the original act. And so I was going to laboriously combine the two and then comment; but what with the babysitting and all sorts of other responsibilities that accompany being a new parent, I hadn't done it. I was saved at the last minute by Sakkie O'Neil who had gone through the painstaking process of combining the two together and compiling a series of comments and quotes in the same document. I suppose I have Sakkie to thank for this post – and I have included the entire bill (without Sakkie's permission) below my comments.
The DTI's press release on the gazetting of the bill told us that the gazetting of the Amendment Bill is the culmination of the recommendations done by the Presidential B-BBEE Advisory Council. This made me take a deep breath because I know that this so-called council is incapable of understanding anything as simple as the empowerment of people. The majority of the people sitting on the council have never run a business but are business people by virtue of BEE benevolence. Oh yes and they are now going to be paid to continue their useless work (section 8). It's therefore completely understandable that the main focus of this bill is going to be on fronting – because that's all this lot have debated over the last two years. They've also appointed subcommittees who are manned by people like (the now very disgraced) Andile Tlhoaéle, who is a member of the Presidential BEE Advisory Council Sub-committee on Instruments to Promote BEE, Verification and Charters. So then why not start with fronting.
Fronting
Blah, blah, blah. Like fronting is the scourge that they claim it is, have you ever tried to alert the DTI about fronting. They do nothing. But I digress.
It appears from the definition that fronting might include any misrepresentation on a scorecard, but then the specifics tend towards BEE transactions. I believe that fronting is broader than mere transactions when read within the context of the entire act.
There are penalties for fronting
Broadened ambit of the bill
The allocation of licences, concessions, incentives etc. must take any relevant code of good practice into account. It's broader than the previous act.
Sectoral charters
There is a greater emphasis on sectoral charters (section 10). In fact it's now clear that if your company falls within the scope of a charter you have to apply it. This practice has been in operation for a while now, but at least there's clarity. BUT if you operate in a sector where there is a sectoral code the you have to report annually on your compliance to the sector council (assuming that they've actually instituted one). Understand that a failure to comply with this requirement now renders you in breach of the act and you could find yourself facing 12 months imprisonment or a fine of 10% of turnover (section 20 see below). This begs two questions:
Transformation policy
Section 12A allows an organ of state (subject to probably very lax conditions) to develop their own transformation policies that will take precedence of codes gazetted under section 9. The effect of this is that it gives the Mining Charter the same status as a code. In other words the Mining Charter and other charters that are gazetted under acts different to the BEE Act are given full code status in terms of the Act. It's a clever provision but very worrying. What this means is that each organ of state can create its own procurement policy (as per section10.1.b) and then require a verification in terms of this code. So if you are doing business with say the DPW, Transnet and Tshwane Municipality you could find yourself complying with three different scorecards to placate these procurement policies. Again – this will push up the cost of compliance to unimaginable levels.
B-BBEE Act über alles
Go to section 23 and take a look at how the BEE Act effectively places itself over and above any other act where there might be a discrepancy. What we have here is the DTI saying fuck you to Treasury, because the one act that this bill seriously compromises is the PPPFA and other PPPFA-related policies. I don't know enough about constitutional law but I am quite sure that the constitution would not allow one piece of legislation to run roughshod over other pieces of legislation. I would suggest that at least this section is fundamentally unconstitutional – and if were Treasury I would block this section.
That's it
There's a bit more in the bill and you can read it below. It's not a good piece of legislation – it pushes up the cost of compliance substantially. As it stands BEE is not in fact broken – it's working very well but it would seem that this news is not filtering to either the DTI or the BEE Council. The bill is an agenda not an attempt to assist in the overall transformation of the economy.
--------------------------------------------------------------------------------------------------------------------
9 January 2004
It is hereby notified that the President has assented to the following Act, which is hereby published for general information:–
No. 53 of 2003:
Broad-Based Black Economic Empowerment Act, 2003
To establish a legislative framework for the promotion of black economic empowerment; to empower the Minister to issue codes of good practice and to publish transformation charters; to establish the Black Economic Empowerment Advisory Council; and to provide for matters connected therewith.
PREAMBLE
WHEREAS under apartheid race was used to control access to South Africa's productive resources and access to skills;
WHEREAS South Africa's economy still excludes the vast majority of its people from ownership of productive assets and the possession of advanced skills;
WHEREAS South Africa's economy performs below its potential because of the low level of income earned and generated by the majority of its people;
AND WHEREAS, unless further steps are taken to increase the effective participation of the majority of South Africans in the economy, the stability and prosperity of the economy in the future may be undermined to the detriment of all South Africans, irrespective of race;
AND IN ORDER TO-
promote the achievement of the constitutional right to equality, increase broad-based and effective participation of black people in the economy and promote a higher growth rate, increased employment and more equitable income distribution; and
establish a national policy on broad-based black economic empowerment so as to promote the economic unity of the nation, protect the common market, and promote equal opportunity and equal access to government services.
1. Definitions
In this Act, unless the context indicates otherwise-
"B-BBEE transaction"
means any transaction, practice, scheme or other initiative which affects, or may affect, the B-BBEE compliance of any person;
"black people"
is a generic term which means Africans, Coloureds and Indians who are citizens of the Republic of South Africa by birth or descent or who became citizens of the Republic of South Africa by naturalisation –
"broad-based black economic empowerment"
means the sustainable economic empowerment of all black people, including in particular women, workers, youth, people with disabilities and people living in rural areas through diverse but integrated socio-economic strategies that include, but are not limited to-
a) increasing the number of black people that manage, own and control enterprises and productive assets;
b) facilitating ownership and management of enterprises and productive assets by communities, workers, co-operatives and other collective enterprises;
c) human resource and skills development;
d) achieving equitable representation in all occupational categories and levels in the workforce;
e) preferential procurement, including the promotion of local content procurement; and
f) investment in enterprises that are owned or managed by black people;
"B-BBEE Verification Professional"
means a person registered by the verification agency regulator and/or the South African National Accreditation System to conduct B-BBEE verification;
"Codes"
means the codes of good practice issued by the Minister in terms of Section 9 of the Act;
"Commission"
means the B-BBEE Commission established in terms of section 15 of the Act;
"Council"
means the Black Economic Empowerment Advisory Council established by section 4;
"Department"
means the Department of Trade and Industry
"Fronting B-BBEE Practice"
means a transaction, arrangement or conduct that directly or indirectly undermines or frustrates the achievement of the objectives of the Act or the implementation of any of the provisions of the Act, including but not limited to practices in connection with a B-BBEE transaction –
"knowing", "knowingly" or "knows"
when used with respect to a person, and in relation to a particular matter, means that the person either –
"Local content"
means locally produced goods, services or works or locally manufactured goods which satisfy a stipulated minimum threshold for local production and content;
"members"
means members of the Council;
"Minister"
means the Minister of Trade and Industry;
"organ of state"
means-
a) a national or provincial department as defined in the Public Finance Management Act 1999 (Act No. 1 of 1999);
b) a municipality as contemplated in the Constitution;
c) Parliament;
d) a provincial legislature: and
e) a constitutional institution listed in Schedule 1 to the Public Finance Management Act, 1999 (Act No.1 of 1999);
"prescribe"
means prescribe by regulation;
"public entity"
means a public entity listed in Schedule 2 or 3 to the Public Finance Management Act. 1999 (Act No. 1 of 1999);
"Sector Charters"
Means sectoral transformation charters referred to in section 9 of the Act;
"strategy"
rneans a strategy for broad-based black economic empowerment issued in terms of section 11; and
"this Act"
includes any code of good practice or regulation made under this Act.
"Verification Professional Regulator"
means the Independent Regulatory Board of Auditors, a statutory body established in terms of section 3 of the Auditing Profession Act, 2005 (Act No 26 of 2005).
2. 0bjectives of Act
The objectives of this Act are to facilitate broad-based black economic empowerment by-
a) promoting economic transformation in order to enable meaningful participation of black people in the economy;
b) achieving a substantial change in the racial composition of ownership and management structures and in the skilled occupations of existing and new enterprises;
c) increasing the extent to which communities, workers, cooperatives and other collective enterprises own and manage existing and new enterprises and increasing their access to economic activities, infrastructure and skills training;
d) increasing the extent to which black women own and manage existing and new enterprises, and increasing their access to economic activities, infrastructure and skills training;
e) promoting investment programmes that lead to broad-based and meaningful participation in the economy by black people in order to achieve sustainable development and general prosperity;
f) empowering rural and local communities by enabling access to economic activities, land, infrastructure, ownership and skills; and
g) promoting access to finance for black economic empowerment start-ups, micro and medium enterprises and black entrepreneurs, including the informal black business sector.
h) increasing effective black owned and managed enterprises, including SMMEs, and their access to financial and non-financial support.
3. Interpretation of Act
Any person applying this Act must interpret its provisions so as-
a) to give effect to its objectives; and
b) to comply with the Constitution.
4. Establishment of Black Economic Empowerment Advisory Council
The Black Economic Empowerment Advisory Council is hereby established.
5. Functions of Council
The Council must-
a) advise government on black economic empowerment;
b) review progress in achieving black economic empowerment;
c) advise on draft codes of good practice which the Minister intends publishing for comment in terms of section 9(5);
d) advise on the development, amendment or replacement of the strategy referred to in section 11;
e) if requested to do so, advise on draft transformation charters; and
f) facilitate partnerships between organs of state and the private sector that will advance the objectives of this Act.
1) The Council consists of-
a) the President, who is the chairperson of the Council;
b) the Minister, with the Minister's Director-General as an alternate;
c) three other Cabinet Ministers, appointed by the President, with their respective Directors-General as alternates;
d) no fewer than 10 and no more than 15 other members appointed by the President.
2) When appointing members in terms of subsection (1)(d), the President shall have regard to the need for the Council-
a) to have appropriate expertise;
b) to represent different relevant constituencies including trade unions. business, community-based organisations and academics.
3) In appointing members in terms of subsection (1)(d), the President shall follow an appropriate consultative process.
4) The President shall appoint a Cabinet Minister who is also a member of the Council to act as chairperson of the Council in the President's absence.
1) The Minister must establish a constitution for the Council.
2) The Minister may amend the constitution of the Council from time to time, after consultation with the Council.
3) The Council may, by resolution, and after consultation with the Minister, make rules to further regulate the proceedings of the Council.
8. Remuneration and reimbursement of expenses
Council members may will not be remunerated for their services in accordance with the provisions of the National Treasury Regulations and, but will be reimbursed for expenses incurred by them in carrying out their duties, as determined by the Minister, with the concurrence of the Minister of Finance.
1) In order to promote the purposes of the Act, the Minister may by notice in the Gazette issue Codes of Good Practice on black economic empowerment that may include--
a) the further interpretation and definition of broad-based black economic empowerment and the interpretation and definition of different categories of black empowerment entities;
b) qualification criteria for preferential purposes for procurement and other economic activities;
c) indicators to measure broad-based black economic empowerment;
d) the weighting to be attached to broad-based black economic empowerment indicators referred to in paragraph (c);
e) guidelines for stakeholders in the relevant sectors of the economy to draw up transformation charters and sector codes of practice for their sector; and
f) indicators to measure local content; and
f) g) any other matter necessary to achieve the objectives of this Act.
2) A strategy issued by the Minister in terms of section 11 must be taken into account in preparing any code of good practice.
3) A code of good practice issued in terms of subsection (1) may specify-
a) targets consistent with the objectives of this Act; and
b) the period within which those targets must be achieved.
4) In order to promote the achievement of equality of women, as provided for in section 9(2) of the Constitution, a code of good practice issued in terms of subsection (1) and any targets specified in a code of good practice in terms of subsection (3), may distinguish between black men and black women.
5) The Minister must, before issuing, replacing or amending a code of good practice in terms of subsection (1)-
a) publish the draft code of good practice or amendment in the Gazette for public comment; and
b) grant interested persons a period of at least 60 days to comment on the draft code of good practice or amendment, as the case may be.
6) A code of good practice remains in effect until amended, substituted or repealed in terms of this Act.
10. Status of codes of good practice
1) Every organ of state and public entity must take into account as far as is reasonably possible, and apply any relevant code of good practice issued in terms of this Act in-
a) determining qualification criteria for the issuing of licences, concessions or authorizations in respect of economic activity in terms of any law;
b) developing and implementing a preferential procurement policy;
c) determining qualification criteria for the sale of state-owned enterprises; and
d) developing criteria for entering into partnerships with the private sector; and
e) determining criteria for the awarding of incentives, grants, and investment schemes in support of broad-based black economic empowerment.
2) Subject to section 12A, an enterprise in a sector in respect of which the Minister has issued a sector code in terms of section 9 may only be measured for compliance with the requirements of broad-based black economic empowerment in accordance with that code.
3) Enterprises operating in a sector in respect of which the Minister has issued a sector code in terms of section 9, must report annually on their compliance with B-BBEE to the Sector Council.
11. Strategy for broad-based black economic empowerment
1) The Minister-
a) must issue a strategy for broad-based black economic empowerment;
b) may change or replace a strategy issued in terms of this section.
2) A strategy in terms of this section must-
a) provide for an integrated co-ordinated and uniform approach to broad-based black economic empowerment by all organs of state, public entities, the private sector, non-governmental organizations, local communities and other stakeholders;
b) develop a plan for financing broad-based black economic empowerment, including the creation of incentive schemes to support effective black owned and managed enterprises;
c) provide a system for organs of state, public entities and other enterprises to prepare broad-based black economic empowerment plans and to report on compliance with those plans; and
d) be consistent with this Act.
12. Transformation charters
The Minister must publish in the Gazette for general information and promote a transformation charter for a particular sector of the economy, if the Minister is satisfied that the charter-
a) has been developed by major stakeholders in that sector; and
b) advances the objectives of this Act.
12A. Transformation policy
13. Support services and funding of Council
1) The Department of Trade and Industry must provide the Council with the necessary support services and funding out of money appropriated by Parliament for that purpose.
2) The funds referred to in subsection (1), must be utilised for-
a) the establishment and operating costs of the Council; and
b) the development and implementation of a communication plan on broad-based black economic empowerment.
The Minister may make regulations with regard to any matter that it is necessary to prescribe in order to ensure the proper implementation of this Act.
15. Short title and commencement
This Act is called the Broad-Based Black Economic Empowerment Act, 2003, and comes into operation on a date to be determined by the President by proclamation in the Gazette.
14 Cancellation of Contract or authorisation
Any contract or authorisation awarded on account of false information furnished by or on behalf of an enterprise in respect of its B-BBEE status may be cancelled at the sole discretion of the organ of state or public entity without prejudice to any other remedies that the organ of state or public entity may have.
15 Establishment and status of B-BBEE Commission
16 Appointment of Commissioner
1) The Minister must appoint a person with suitable qualifications and experience to be the Commissioner for a term of five years.
2) The Minister may re-appoint a person as Commissioner at the expiry of that person's office.
3) The Commissioner, who is the Chief Executive Officer of the Commission, is responsible for the general administration of the Commission and for carrying out any functions assigned to it in terms of this Act, and must-
(a) perform the functions that are conferred on the Commissioner by or in terms of this Act;
(b) manage and direct the activities of the Commission: and
(c) supervise the Commission's staff.
4) The Minister must, in consultation with the Minister of Finance, determine the Commissioner's remuneration, allowances, benefits, and other terms and conditions of employment.
5) The Commissioner, on one month's written notice addressed to the Minister, may resign as Commissioner.
6) The Minister may remove the Commissioner from office for -
(a) serious misconduct or permanent incapacity:
(b) engaging in any activity that may undermine the integrity of the Commission;
(c) any other legitimate ground that justifies the removal of the Commissioner.
17 Functions of B-BBEE Commission:
1) The functions of the Commission are-
(a) to oversee supervise and promote adherence with this Act in the interest of the public:
(b) to strengthen and foster collaboration between the public and private sector in order to promote and safeguard the objectives of B-BBEE;
(c) to receive and investigate complaints relating to B-BBEE in accordance with the provisions of this Act;
(d) to promote advocacy access to opportunities and educational programmes and initiatives of B-BBEE:
(e) to maintain a registry of major B-BBEE transactions above a threshold determined by the Minister from time to time;
(f) to receive and analyse reports as prescribed concerning B-BBEE compliance from organs of state, public entities and private sector enterprises;
(g) to promote good governance and accountability by creating an effective and efficient environment for the promotion and implementation of B-BBEE: and
(h) subject to this Act, to exercise such other powers as may be conferred on the Commission in writing by the Minister.
2) Notwithstanding the provisions of any law, but subject to the approval of the Minister, the Commissioner may enter into an agreement with any other person, body of persons or organ of state, including but not limited to a special investigating unit established under the Special Investigating Units and Special Tribunals Act 1996 (Act No. 74 of 1996), to perform any of its duties and functions under this Act.
18 Investigation by Commission
1) Subject to the provisions of this Act, the Commission has the power, on its own initiative or on receipt of a complaint in the prescribed form, to investigate any B-BBEE transaction which exceeds a value determined from time to time by the Minister.
2) The Commission may not investigate any matter that constitutes an administrative action, as defined in the Promotion of Administrative Justice Act, 2000 (Act No 3 of 2000) or may be reviewed on any ground permissible in law.
3) The format and the procedure to be followed in conducting any investigation must be determined by the Commission with due regard to the circumstances of each case and may include the holding of a formal inquiry.
4) For the purposes of conducting an investigation, the Commission may exercise the powers conferred upon the Companies and Intellectual Property Commission by sections 176 to 179 of the Companies Act, 2008 (Act No 71 of 2008) read with the changes required by the context.
5) Without limiting the jurisdiction of the Commission, the Commission may make a finding as to whether any B-BBEE transaction involves fronting practices.
6) The Commission may institute proceedings in a court to restrain the commission of any breach of this Act, including any fronting B-BBEE practice, or to obtain appropriate remedial relief.
7) If the Commission is of the view that any matter it has investigated may involve the commission of a criminal offence, it must refer the matter to the National Prosecuting Authority or an appropriate division of the South African Police Services.
8) The Commission may refer to -
(a) the South African Revenue Service, any concerns regarding behaviour or conduct that may be prohibited or regulated in terms of legislation within the jurisdiction of that Service;
(b) the Independent Regulatory Board for Auditors, any concerns regarding behaviour or conduct by a B-BBEE Verification Professional; or
(c) any other regulatory authority any concerns regarding behaviour or conduct that may be prohibited or regulated in terms of legislation within the jurisdiction of that regulatory authority.
19 Finances
1) The Commission is financed from-
(a) money that is appropriated by Parliament for the Commission:
(b) money received from any other source.
2) The Commissioner is the accounting authority of the Commission for purposes of the Public Finance Management Act. 1999 (Act No 1 of 1999).
3) The Auditor General must audit the B-BBEE Commission's financial records each year.
20 Offences and Penalties
1) A person is guilty of an offence if that person knowingly-
(a) misrepresents or attempts to misrepresent the B-BBEE status of an enterprise;
(b) provides false information or misrepresents information to the Verification Personnel in order to secure a particular B-BBEE status or any benefit associated with the compliance with this Act:
(c) provides false information or misrepresents information relevant to assessing the B-BBBEE status of an enterprise, to any organ of state or public entity.
2) A B-BBEE Verification Professional or any procurement officer or other official of an organ of state or public entity who becomes aware of the commission of, or any attempt to commit, any offence in terms of subsection (1 ) and fails to report it to an appropriate law enforcement agency, is guilty of an offence.
3) Any person convicted of an offence in terms of this Act, is liable:-
(a) in case of a contravention of sub-section (1), to a fine or to imprisonment for a period not exceeding 10 years or to both a fine and imprisonment: or
(b) in any other case to a fine or to imprisonment for a period not exceeding 12 months or to both a fine and imprisonment:
(c) in the case of an enterprise, to a fine of up to 10% of that enterprise's annual turnover.
4) In addition, any person and/or entity convicted of an offence under subsections (1) or (3) of section 20, shall be banned from contracting or transacting any business with any organ of state and/or public entity, and shall be entered into the National Treasury register of tender defaulters.
21 Monitoring, Evaluation, and Reporting
1) All spheres of government public entities, and organs of state must report on their compliance with B-BBEE in their audited annual financial statements and annual reports under the Public Finance Management Act, 1999 (Act No.1 of 1999).
2) All public companies listed on the Johannesburg Stock Exchange must provide to the Commission -
(a) the report on their compliance with B-BBEE that is contained in their sustainability reports:
(b) any other prescribed information.
3) All Sectoral Education and Training Authorities must report on skills development spending and programmes to the Commission.
22 B-BBEE Verification Professional Regulator
The B-BBEE verification professional shall be regulated by the B-BBEE verification agency regulator established in the Audit Profession Act. 2005 (Act No. 26 of 2005) as amended from time to time.
23 Interpretation of this Act
1) If any conflict relating to the matters dealt with in this Act arises between this Act and the provisions of any other law save the Constitution and/or any Act expressly amending this Act, the provisions of this Act will prevail.
2) Any person who is measuring B-BBEE compliance in terms of this Act must do so in a manner in which substance takes precedence over legal form.
24 Regulations
1) The Minister may make regulations, guidelines and practice notes with regard to any matter that is required by this Act or that it is necessary to prescribe in order to ensure proper implementation of this Act
2) Without limitation to sub-section (1), the Minister may make regulations in respect of-
(a) the conduct of investigations by the Commission;
(b) the information that any organ of state, public entity or private enterprise is required to provide to the Commission and the form and period of such reporting.
25 Short title and commencement
This Act is called the Broad-Based Black Economic Empowerment Act, 2003, and comes into operation on a date to be determined by the President by proclamation in the Gazette.
Short title and commencement
This Act is called the Broad-Based Black Economic Empowerment Amendment Act, 2011 and comes into operation on the date fixed by the President by proclamation in the Gazette.
Posted at 03:29 PM in BEE Bill, Department of Trade and Industry (dti), Government procurement and BEE, PPPFA, Preferential Procurement, Rob Davies | Permalink | Comments (0) | TrackBack (0)
Trade and Industry Minister Dr Rob Davies last night moved to stamp out confusion after various media organisations quoted a BEE analyst as saying the Broad-based Black Economic Empowerment (B-BBEE) Amendment Bill, proposed that points no longer be awarded for white women and white disabled people for their companies’ BEE scorecard rating.
He reportedly said the two categories of employees would lose their so-called B-BBEE scorecard-boosting status. But in a statement, Davies said there had never been any discussion about deviating from the original beneficiaries of BEE, namely Africans, Indians and coloureds, as defined in the B-BBEE Act.
“The statement should be dismissed with the contempt it deserves, and the market should not give credence to such statements,” Davies said.
What an idiot and he was flighted on ENews too. The embarrassment he has caused the DTI is now very obvious. Fire him Rob he's fucking useless
Posted at 08:08 AM | Permalink | Comments (0) | TrackBack (0)
