The Minister of Trade and Industry, Dr Rob Davies says the Broad-Based Economic Empowerment (B-BBEE) Commission should take action against companies that are found to not be complying with the B-BBEE requirements for transformation. Minister Davies was speaking at the breakfast session held by the B-BBEE Commission on the national state of transformation, in Midrand, today.
“It was important for us to put it in the Act that the B-BBEE Commission should be able to get information that will enable the regulator to tell us what the state of transformation is in the country. So far, the Commission has only received 27 reports from the Johannesburg Stock Exchange (JSE) listed companies, and that is not able to give us a holistic view of what the transformation is in South Africa,” said Davies.
He added that the Commission needed to also deal with verification agencies that were found to be promoting misrepresentation and fronting by issuing B-BBEE certificates which do not give a true reflection of the transformation status in companies.
“Our economy is still characterised by monopolies; we do not have inclusive growth. We need to industrialise and grow the economy but ensure that we give people equal share to participate and be real players in the economy. We need to know that we can rely on the scorecards, that they are a true reflection of where we are in terms of transformation,” highlighted Davies.
The Acting Commissioner for the B-BBEE Commission Ms Zodwa Ntuli said the Commission took the role of the B-BBEE legislation seriously, in relation to breaking into the levels of concentration by facilitating new entrants. She highlighted that the Commission had already initiated investigations into cases of fronting and targeting the verification industry.
Ntuli announced that the Commission had developed a B-BEE certification web portal which will be linked to the database of the National Treasury. She said this portal will allow government and State Owned Enterprises to also go on to the B-BBEE website to verify the legitimacy of B-BBEE certificates from suppliers.
According to Ntuli the portal will be effective from 1 April 2017 and was an effort to try and reduce fraudulent B-BBEE certificates.
Presenting the findings of research on the national state of transformation, Ms Carla Mould who is the Chief Operations Officer for “Who Owns Whom” said based on the sampling of some of the JSE listed entities, there has been a slight improvement in terms of B-BBEE Recognition level for the April 2014 to March 2015 period, wherein entities moved from level four to three. She further said that the study also indicated a minimal increase in black female directorship and a decrease in black male directors, with white directorship still on the increase.
Speaking at the same event, the founder and CEO of the Centre for Economic Development and Transformation, Mr Duma Gqubule said at the moment the country was nowhere near where it was supposed to be. He said to achieve transformation, it was important to utilise the quota system as they are doing in the United Nations.
“Radical transformation means changing the structure of the industries we have and the codes alone cannot do that. The answer to this issue lies in the combination of legislation such as the Competition Act, and policies such as industrial policy to bring about fundamental change,” added Gqubule.