THE government wants to establish a dedicated commission to monitor fronting and enforce compliance with broad-based black economic empowerment laws.
Briefing parliament's trade and industry portfolio committee on the Broad-Based Black Economic Empowerment Amendment Bill, Department of Trade and Industry director-general Lionel October said the suggested commission would be a unit within his department.
Its task would be to tackle incidents of non-compliance with BBBEE laws such as fronting and misrepresentation of BEE score cards.
"It is proposed that the BBBEE commission be an entity within the department but that we appoint an independent commission ... we have lots of sophisticated bypassing [of the law] and we are trying to deal with both crude non-compliance or fronting but also sophisticated circumvention," he said.
In terms of the bill, the commission would fall under direct control of Trade and Industry Minister Rob Davies, who will appoint its staff and give them instructions.
But DA MP Wilmot James said he opposed this part of the bill, as it gave the minister too much power.
The bill has also proposed stiff penalties for directors of companies who engage in BBBEE fronting, including a prison term of 10 years or a fine of 10% of the firm's annual turnover if the offender is not a permanent South African resident.
The bill was published for public comment and tabled in parliament late last year by Davies. Parliament has now began processing it for passage sometime this year.It has already been endorsed by President Jacob Zuma's advisory council on BBBEE.
The portfolio committee is expected to conduct public hearings once parliament is in full session next month, where stakeholders in the economy would be invited to make submissions.
The proposed piece of law also seeks to fast-track the entrance of black business people into crucial industries such as retail, agriculture and manufacturing, which October said had been lagging behind sectors such as telecommunications, mining and financial services in terms of BBBEE transactions.
"The other part which is even more important is the creation of opportunities for black entrepreneurs and especially for black industrialists ... it's no use training people and just giving them finance if you don't give them market opportunities," October said.