As we celebrate Youth Month, I have noticed there’s still a lot our young people don’t know about the Broad-Based Black Economic Empowerment (B-BBEE) Commission. So, I thought I should write this article to shed some light on this crucial institution.

Who is the B-BBEE Commission?

The Broad-Based Black Economic Empowerment Commission (B-BBEE Commission) is an entity established within the administration of the Department of Trade and Industry (dti) by the B-BBEE Act 53 of 2003, as amended by Act 46 of 2013. Its primary role is to oversee the implementation of the Act, including conducting investigations on any matter arising from the application of the Act, such as fronting practices.

How Far Does the B-BBEE Commission’s Mandate Go?

The B-BBEE Commission is a regulatory entity with jurisdiction throughout South Africa. It is entrusted by law to act with impartiality and perform its functions without fear, favor, or prejudice. It doesn’t matter where the complaint comes from, as long as it is within South Africa.

The Commission addresses violations that occurred after October 24, 2014. However, if a violation occurred before this date and the conduct, license, or agreement is still ongoing, the Commission has the power to address such violations.

Who Can Lodge a Complaint?

Any person who suspects or is aware of a violation of the B-BBEE Act can lodge a complaint with the Commission. For example, employees within an entity may be aware of practices like fronting or tokenism, where black individuals are presented as shareholders or executives without actual involvement or benefit.

It is an offence to improperly influence Commission officials or obstruct them during the exercise of their powers and duties under the Act.

What Sort of Issues Can You Complain About?

Complaints can be made about fronting practices, which are defined in the Act as practices that undermine or frustrate the objectives of the Act or impede its implementation. Violations can include presenting black individuals as directors, shareholders, or beneficiaries to falsely enhance an entity’s B-BBEE status.

Entities often engage in these practices to gain higher points to qualify for government tenders, licenses in sectors such as mining, or government funding and incentives. These practices can take various forms, such as listing a technician as a shareholder or manager while they still earn a technician’s salary or appointing a black person as CEO while decisions are made by others in the entity.

What Are the Powers of the B-BBEE Commission?

The B-BBEE Commission has the power to receive and act on complaints from the public or initiate investigations on its own. It can issue summons, question any relevant person, and obtain documents or information pertinent to the investigation. Additionally, the Commission can approach the court for an interdict or order where necessary.

If the investigation reveals a criminal offence, the Commission is required to refer the matter for prosecution to the National Prosecution Authority or the appropriate division of the South African Police Services. Once investigations are completed, findings and recommendations are published, including on the Commission’s website.

What Are the Consequences of Violating the Act?

Violations of the B-BBEE Act can lead to severe consequences, including the cancellation of contracts with the government or government entities. Juristic persons found guilty could be fined up to 10% of their annual turnover, while natural persons could face imprisonment for up to ten years.

Violators can also be excluded from doing business with the government or any government entity for up to ten years. Additionally, parties risk significant damage to their reputation, affecting their ability to attract investments or contracts and exposing them to legal action from other parties.

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