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Ntuli: SA cannot rely on B-BBEE certificates

Jun 28 2016 21:15

Johannesburg - Fronting B-BBEE transactions tops the list of the number of reported cases and complaints received so far by the Broad-Based Black Economic Empowerment (B-BBEE) Commission.

The second most reported cases and complaints related to fraudulent verification certificates, acting commissioner for the B-BBEE Commission, Zodwa Ntuli said at a seminar on Tuesday.

The seminar, which was attended by more than 200 B-BBEE practitioners, including verification agents, consultants and advisers, was meant to engage practitioners on matters affecting B-BBEE legislation.  

According to Ntuli the total number of complaints since the establishment of the commission last year demonstrates challenges where legislation is not properly implemented. She further mentioned that the verification process is a critical part of concerns raised during stakeholder engagements as SA currently cannot confidently rely on the certificates issued.
“The verification process must assist with achieving compliance and proper implementation. It must provide the necessary assurance that what the company says about its B-BBEE status is indeed correct and can be relied upon. It is the most critical part of B-BBEE as government entities dealing with companies ought to trust that the certificate is worth the paper it is written on,” she said.

Ntuli added that there are indications that some agents award points to companies without even verifying if indeed the status is correct.

“For instance, points are awarded to shareholding that still is subjected to debt payment or where no economic benefit flows to the shareholders at all, when this should not be the case. With proper verification, these issues will be identified and prevented.” said Ntuli.

She added that without proper verified B-BBEE processes, the country process through reports that are not correct and doctored to make everyone believe that transformation is happening when it is not the case.

“Verification professionals have an obligation to report practices that undermine the act to the commission. The commission also has the powers to investigate practices, including where agents have failed to report fronting practices, or have aided companies to circumvent the Act,” said Ntuli.

“The B-BBEE legislation is a redress intervention, but since 2003 we haven’t seen significant progress in it to say it is no longer necessary. We must accelerate it to achieve the necessary inclusivity in line with the NDP. The longer it takes for the private sector to actually transform the longer the B-BBEE legislation will exist in our law books.”

She urged the private and public to collaborate as it is critical for the legislation to succeed.

“We must talk and engage more, and continuously identify issues that require guidance in the codes and legislation. This will ensure that the legislation, regulation and the codes are simplified, and that we all work on the same page,” said Ntuli.



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