Clampdown on companies violating BEE laws in South Africa

The B-BBEE Commission will conduct site visits at businesses that have previously been found to have violated the B-BBEE Act and where it has received tipoffs about companies who are deliberately circumventing the regulations.

This follows recent concerns raised by members of the public that the country’s B-BBEE regulations seem to benefit those that are not intended under the law.

The commission said this includes foreign nationals, permanent residents, those with refugee/asylum status, and white people claiming to be black.

According to the B-BBEE Act, ‘black people’ is a generic term that refers to Africans, Coloureds and Indians who are citizens of the Republic of South Africa by birth or descent, or who became citizens by naturalisation (i) before 27 April 1994; or (ii) on or after 27 April 1994 and who would have been entitled to acquire citizenship by naturalisation before that date.

“The B-BBEE Act specifically defines black people to exclude any non-black South African citizens, foreign nationals and black people who acquired citizenship by naturalisation after 27 April 1994,” the commission said.

“It is also the responsibility of verification agencies to ensure that the people they recognise as black during the verification process do actually qualify and meet the requirements in section 1 of the B-BBEE Act.”

Moipone Kgaboesele, who heads the Investigations and Enforcement of the B-BBEE Commission, said that her office has dealt with cases that show the extent to which entities would go to achieve a higher B-BBEE status or to appear B-BBEE compliant for purposes of accessing contracts, authorisations and benefits, with some verification professionals being complicit in most of the cases.

“This conduct was rife in the early stages of the B-BBEE Commission around 2016/2017, but we are now seeing verification professionals becoming more vigilant in improving the quality of the verifications and reporting entities that attempt to cut corners.

“Misrepresentation and fronting are serious criminal offences. Now that we have focused our attention on raising awareness over the years, we will not hesitate to refer entities for prosecution and the cancellation of licences and contracts awarded.

“We also provide free advice, so there is no excuse not to do the right thing now,”  she said.


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Clampdown on companies violating BEE laws in South Africa