The Broad- Based Black Economic Empowerment (B-BBEE) Amendment Act, which has been effective since 24 October, replaces the original 2003 legislation. It is designed to promote B-BBEE compliance, introduce offences and penalties, allow for the cancellation of contracts or authorisation, and to include the creation of incentive schemes to support black-owned and managed enterprises. The key implications of the Act include the following: All government departments and organs of state must apply B- BBEE as a qualifying criteria to issue licences, concessions or other authorisations (for example, environmental impact assessments, land and water use permits and Financial Services Board licences) in respect of economic activity in terms of any law. This includes the procurement of goods and services, the sale or disposal of government assets, entering into partnerships with the private sector, and the awarding of incentives, e.g. to the automotive industry. Fronting i s now defined and penalties are applicable of up to 10% of turnover for entities and up to 10 years in prison for individuals. Fronting is defined as any act that directly or indirectly undermines or frustrates the achievement of the objectives of the Act – a definition critics say is too broad and will add to the regulatory compliance burden on companies. All laws that conflict with the B-BBEE Act will have 12 months to be amended to remove such conflicts. Sectors that will be impacted include mining and liquid fuels. Establishes the BEE Commissioner (expected to happen early in 2015). B-BBEE reporting is now compulsory for all spheres of government and listed companies in a prescribed format (yet to be finalised).
Source: black lite consulting; B-BBEE Amendment Act (2013)