AMENDMENTS are needed to broad- based black economic empowerment (BBBEE) legislation to ensure South Africa's economy is more inclusive, Trade and Industry Minister Rob Davies said yesterday.
"We cannot run an effective economy that draws its leadership and entrepreneurial capacity only from a small minority of the population," he said.
The proposed amendments to the BBBEE Act would define the practice of fronting, including "complex fronting", and introduce a commissioner with the power to impose penalties.
Complex fronting involved companies drawing up complicated contracts which deprived black managers of the appropriate authority for their positions.
The categories of the scorecard used to measure BBBEE compliance would be reduced from seven to five under the proposed amendments.
Employment equity and management control would be merged into a single category, as would preferential procurement and enterprise development.
Davies said the amendments also sought to introduce sub-minimum requirements for the priority elements of ownership, skills development and the enterprise and supply development categories.
The proposed bill, which is in the public consultation phase, would also do away with the necessity for small, black- owned companies to have their status verified by agencies.
" ... we want to turn BEE essentially from supporting passive shareholding to something that supports a much more active and productive empowerment of black people across the economy," Davies said. – Sapa
