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Johannesburg - Current law on broad-based black economic empowerment (B-BBEE) needs to be changed, Association of BEE Verification Agencies (ABVA) deputy chairperson Kate Moloto said on Wednesday.
"A lot is subject to interpretation," she said at a conference in Sandton. Ultimately, this became problematic for companies.
The association was working on producing best practice notes to help its members clear up some of the uncertainties.
"But first prize is for DTI (the Department of Trade and Industry) to revise areas of uncertainties," she said.
The BEE Act of 2003 and the Codes of Good Practice of 2007 set measurable goals for increasing economic participation by black people as part of the country's transformation goals.
However, according to ABVA the codes contained drafting errors and were silent in some areas and unclear in others.
This made it difficult for companies to apply the codes and develop B-BBEE strategies.
The codes define seven measurable elements: ownership, management, employment equity, skills development, preferential procurement, enterprise development and socioeconomic development.
According to verification agency AQRate's website, the codes categorise businesses into three types depending on their size.
Companies with a turnover of less than R5m do not have to complete B-BBEE score cards, but larger ones do.
The scorecards measure parameters like percentages of black employees in junior, senior and middle management, levels of purchases from black-owned companies, and how much is spent on black learnerships.
A B-BBEE verification certificate is issued and also lodged with the DTI's registry where clients and potential clients can access it.
To encourage compliance with this voluntary transformation project, the government added the "carrot" that its procurement processes would only be with B-BBEE-compliant companies.
The ripple effect was that these companies in turn would do business with other B-BBEE-compliant companies.
Moloto said on Wednesday's conference was in response to repeated press coverage of fronting, and the notion in the public's minds that fronting was rife and aided by verification agencies.
The association decided to host a conference to help its members and associates spot the signs of fronting, and to develop codes of best practice which would cover aspects of the law that were open to interpretation.
Fronting, according to DTI, is regarded as a deliberate circumvention of the act and includes cases in which black people are appointed or introduced to an enterprise on the basis of tokenism.
"A lot is subject to interpretation," she said at a conference in Sandton. Ultimately, this became problematic for companies.
The association was working on producing best practice notes to help its members clear up some of the uncertainties.
"But first prize is for DTI (the Department of Trade and Industry) to revise areas of uncertainties," she said.
The BEE Act of 2003 and the Codes of Good Practice of 2007 set measurable goals for increasing economic participation by black people as part of the country's transformation goals.
However, according to ABVA the codes contained drafting errors and were silent in some areas and unclear in others.
This made it difficult for companies to apply the codes and develop B-BBEE strategies.
The codes define seven measurable elements: ownership, management, employment equity, skills development, preferential procurement, enterprise development and socioeconomic development.
According to verification agency AQRate's website, the codes categorise businesses into three types depending on their size.
Companies with a turnover of less than R5m do not have to complete B-BBEE score cards, but larger ones do.
The scorecards measure parameters like percentages of black employees in junior, senior and middle management, levels of purchases from black-owned companies, and how much is spent on black learnerships.
A B-BBEE verification certificate is issued and also lodged with the DTI's registry where clients and potential clients can access it.
To encourage compliance with this voluntary transformation project, the government added the "carrot" that its procurement processes would only be with B-BBEE-compliant companies.
The ripple effect was that these companies in turn would do business with other B-BBEE-compliant companies.
Moloto said on Wednesday's conference was in response to repeated press coverage of fronting, and the notion in the public's minds that fronting was rife and aided by verification agencies.
The association decided to host a conference to help its members and associates spot the signs of fronting, and to develop codes of best practice which would cover aspects of the law that were open to interpretation.
Fronting, according to DTI, is regarded as a deliberate circumvention of the act and includes cases in which black people are appointed or introduced to an enterprise on the basis of tokenism.
