Cabinet approves changes to black empowerment act

Newly approved amendments to Broad-Based Black Economic Empowerment Act focus on enterprise development and procurement by LINDA ENSORThe Cabinet has approved amendments to the Broad-Based Black Economic Empowerment Act to elevate the status given to enterprise development and procurement in the scorecard.

Penalties have also been included for non-compliance with these requirements, as have penalties for other forms of non-compliance, including fronting, which will range from 2% to 5% of turnover.

The amendments provide for the ownership elements of the scorecard to be broadened to include designated groups in the main points.

Jimmy Manyi, spokesman for the Cabinet, said this would create “greater incentives for genuine broad-based ownership, such as employee share ownership, co-operatives and community ownership”.

Minimum thresholds have been set for each element of the scorecard, except for the adjusted ownership element.

The act will also be amended to adjust the scorecard for qualifying small enterprises, and certain elements will be made mandatory.

The thresholds for exempted micro enterprises will be reviewed and the employment-equity element of the scorecard brought into alignment with the Employment Equity Act.

The skills development element will be aligned to the government’s new skills development strategy and New Growth Path, which aims to create 5-million jobs in 10 years, while the targets for ownership development, procurement and enterprise have been adjusted.