MEDIA RELEASE
DATE: 15 MARCH 2018
STATE-OWNED ENTITIES MUST IMPLEMENT THE B-BBEE ACT, IT IS NOT AN OPTION BUT AN OBLIGATION
All state-owned entities and government departments must implement the Broad-Based Black Economic Empowerment (B-BBEE) Act. It is not an option to implement, but a must and no one is exempted to implement this Act. This was said by the minister of Trade and Industry, Dr Rob Davies while addressing the B-BBEE Commission’s annual conference at the Gallagher Convention Centre in Midrand, Gauteng, today.
Minister Davies said he received an update from the B-BBEE Commission that out of the 195 compliance reports received by the B-BBEE Commission, only eight are from state entities, and government departments and none from Sector Education and Training Authorities (SETAs). He described this as a gross high level of non-compliance that undermines transformation, adding that it was disturbing.
“To ensure that B-BBEE is a reality for black people, Section 10 of the B-BBEE Act requires all government and state entities to integrate B-BBEE requirements in awarding contracts, licenses, grants, incentives and concessions to entities that are B-BBEE compliant. We deliberately amended Section 10 to make it obligatory and included a requirement under Section 13G of the B-BBEE Act for all organs of state and public entities to report on their B-BBEE compliance in the audited financial statements and annual reports and submit these to the B-BBEE Commission to monitor the state of economic transformation,” added Minister Davies.
Minister Davies informed the conference that the B-BBEE Commission identified a trend where manufacturers/entities resist transformation by creating intermediaries wherein they put in place exclusive dealing agreements with these newly created 51% black owned entities, through which they market and supply their products. The opportunistic intermediary basically becomes a front for the manufacturer in question, in that you buy from the very same untransformed manufacturer but through an intermediary that merely gets a commission or operates as a shelf which keeps limited funds in its account to keep afloat.
Furthermore, Minister Davies said these individuals close opportunities for real black industrialists to be involved in the value-chain, and perpetuate increased barriers through these exclusive arrangements. Minister emphasised that this sophisticated way of fronting must come to an end.
Minister Davies and the Chairperson of the Portfolio Committee on Trade and Industry, Ms Joan Fubbs who also addressed the conference stated that fronting was fraud and will not be tolerated as it undermines transformation. They both mentioned that in order to enjoy a better South Africa with socio-economic freedom, everyone needed to embrace and appreciate the importance of the B-BBEE objectives and accelerate proper implementation of the B-BBEE Policy.
Ms Fubbs urged the business fraternity to have the desire to be part of the real economic transformation by implementing the B-BBEE objectives.
While Ms Fubbs called for integrity within the Verification Agencies, Minister Davies called on the B-BBEE Commission to be tougher with those companies bypassing the B-BBEE Act and fly by night verification agencies and also get rid of those that are accredited but act unprofessionally. He added that his department and the B-BBEE Commission were not going to tolerate such acts.
The theme of the conference was Improving State Procurement for Real Empowerment is aimed at finding effective ways for the state to make B-BBEE a reality for black South Africans and to achieve the objectives of the B-BBEE Act.
The conference was attended by accounting officers, procurement officers and chief operating officers from all spheres of government, state-owned entities and the private sector who exchanged views on what is expected of them in practice in as far as the implementation of the B-BBEE Act is concerned.
Enquiries:
Sidwell Medupe - Departmental Spokesperson
Department of Trade and Industry
Tel: +27 12 394 1650
Mobile : +27 79 492 1774
E-mail : MSMedupe@thedti.gov.za
Follow us on Twitter: @the_dti
