SOEs warned over equity breaches
State-owned entities face prosecution for failing to implement procurement that benefits the government’s black industrialist programme
State-owned entities (SOEs) and government departments that do not implement the Broad-Based Black Economic Empowerment (B-BBEE) Act could be prosecuted and risk being named and shamed, warn two senior officials in the Department of Trade and Industry.
This was crucial for the success of the black industrialist programme, led by the trade and industry department.
"We are monitoring this closely and SOEs could be criminally prosecuted if they do not comply," said B-BBEE commissioner Zodwa Ntuli.
Of the 195 compliance reports received by the B-BBEE Commission, only eight are from state entities and government departments, and there are none from Sector Education and Training Authorities.
"We will release names at the end of the financial year of who has complied," Ntuli said.
Department of Trade and Industry director-general Lionel October said: "We’re trying to name and shame them.
"There was never a reporting system before and now we have established it under the commissioner, we can call them out," he said.
The department had been working to integrate the black industrialist programme and SOEs, he said. Many parastatals had been complying.
Trade and Industry Minister Rob Davies called on SOEs to play a more robust role in implementing the B-BBEE Act last week.
Section 10 of the act requires all government and state entities to integrate B-BBEE requirements in awarding contracts, licences, grants, incentives and concessions to entities that are compliant. The government amended section 10 to ensure it was obligatory.
The amendment included a requirement under section 13G of the act to make it obligatory for all organs of state and public entities to report their B-BBEE compliance in audited financial statements and annual reports.
"A public entity is not exempt from implementing the act. Everyone in the public space must implement the B-BBEE legislation", he said at the annual B-BBEE Commission conference late last week.
The earlier version of the act had stated that all organs of state had to implement the act as far as possible. But the new amendments make it mandatory for all organs of state to implement the new legislation.