LAW

Finweek English Edition - - COVER -

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)

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