No fronting! New act to criminalise B-BEE fraud
PRESIDENT Jacob Zuma says the proposed law on Broad-Based Black Economic Empowerment (B-BBEE) Act will criminalise fronting and other forms of empowerment misinterpretations.
MEAN BUSINESS: President Jacob Zuma is to get tough on 'fronting' companies with the new B-BBEE ActFronting is an insult to the dignity of the poor and we have to act decisively against it
Delivering his state of the nation address on Thursday, Zuma said the amendments will establish a statutory commission that will deal with non-compliance and circumvention.
According to the act, heads of government departments and CEOs of parastatals have a "legal obligation" to report on the performance of their institutions in implementing B-BBEE.
Some companies have increased their chances of procurement by falsifying their credentials.
Last year Zuma told a meeting of the Black Economic Empowerment Advisory Council that: "Fronting and tender abuse is an 'unintended consequence' of an overemphasis on diversity of ownership and senior management in implementing B-BBEE.
"We are happy that the council spoke out so strongly against fronting, which is one of the major obstacles to the implementation of B-BBEE," he said.
"Fronting is an insult to the dignity of the poor and we have to act decisively against it.
"I am pleased that the council is so determined to work with us to act against this heinous practice," said Zuma in a statement then.
The meeting agreed that fronting had to be eradicated - possibly through punitive measures against those found guilty of such practices.
The council recommended that the government should "urgently ensure proper monitoring and evaluation" of the implementation of the Act.
Zuma also announced that his government was working towards a women empowerment and gender equality bill to promote compliance in both the government and the private sector.
He added: "With regard to issues of disability, we have directed all government departments to ensure that we meet the target we set several years ago of having 2% of people employed in the public service to be disabled persons."
