New BBBEE policies will encourage compliance
The Department of Trade and Industry (DTI) is going on a countrywide tour to educate businesses about government's newly revised broad based black economic empowerment (BBBEE) policies.
Vella Nyoni
LIMPOPO – The Department of Trade and Industry (DTI) is going on a countrywide tour to educate businesses about government’s newly revised broad based black economic empowerment (BBBEE) policies.
The new policies encouraged better compliance and adherence to the BEE codes, which in the past showed signs of weakness. The DTI visited Polokwane, where stakeholders and owners of black businesses gathered to hear about the new codes. BEE was established in 1994, where black-owned companies are assisted with better access to funding and markets.
Director of BEE and stakeholder engagement at the DTI, Jacob Maphutha, said compliance and adherence has not reached its optimum.
“We identified some progress made where companies were hovering around level five and level six, but you know that is not enough.
“Hence we are saying that with these new codes, we want to see companies get the highest compliance level.”
Maphuta mentioned that the goal with the new codes was to achieve better levels of compliance, which is between level one and level four. According to him, this will lead to economic transformation.
The DTI is also concerned that South Africa is one of the countries plagued by inequality. The new codes seek to close that gap.
“The new codes are about transformation, about ensuring that true transformation is taking place.”
Challenges observed according to Maphuta was a lack of markets, funding and a new challenge known as business fronting.
With fronting, black-owned companies deliberately circumvent the codes, leading to non-compliance. In the new codes, fronting will be defined as a criminal act.
“There has been shortcomings, but also there is this new emerging disease, called BEE fronting, when people try to circumvent the policy making it difficult for us to see the true benefits of transformation.”
BEE aims to address the high inequality statistics in the country. Black-owned companies that fully comply will also have better opportunities of striking partnerships with larger and established companies in different sectors of the economy. Skills development and job creation have also been prioritised.
