An over-emphasis on diversity of ownership and senior management in the implementation of black economic empowerment (BEE) was one of the key issues raised at a Black Economic Empowerment Advisory Council meeting chaired by President Jacob Zuma at the Union Buildings in Pretoria earlier this year.
“The unintended consequence of this over-emphasis is fronting and tender abuse,” Zuma said after the meeting. “We are happy that the council spoke out so strongly against fronting, which is one of the major obstacles to the implementation of BBBEE [broad-based black economic empowerment].
“Fronting is an insult to the dignity of the poor, and we have to act decisively against it.”
According to the Presidency, there was special emphasis during the meeting on the implementation of the government’s New Growth Path and the role of broad-based black economic empowerment in creating jobs.
The meeting stressed that BBBEE was not just about big business deals for a few individuals in society but also had to have a hand in empowering ordinary people.
“In this regard, the council called for the consistent implementation of broad-based BEE in all sectors of the economy, to ensure that the policy touches the lives of more people,” the Presidency said.
The meeting also noted that BBBEE was central to inclusive growth. Support was given to provisions of the New Growth Path which require a much stronger focus on the broad-based elements of the BEE regulations.
This includes ownership by communities and workers, increased skills development and career-pathing for all working people, support for small enterprise and cooperatives, as well as a new emphasis on procurement from local producers in order to support employment creation.
The meeting also pointed out that, in order to contribute to job creation, BBBEE has to promote new enterprise development, encourage local procurement, and enhance skills development and employment equity.
Participants agreed that fronting needed to be eradicated and that effective mechanisms, including possible punitive measures against those guilty of fronting practices, needed to be implemented to stamp it out.
“It was agreed that government, with the support of the BBBEE Advisory Council, would ensure a revision of the BBBEE Codes to promote employment creation, investment in small business and cooperatives, broad-based ownership and employment equity,” the Presidency said.
The Council also recommended that government ensure proper monitoring and evaluation of the implementation of the BBBEE Act.