Ayanda Mdluli
THE CABINET is expected to start deliberations on a draft empowerment bill next week, aimed at overhauling transformation in the manufacturing, retail and agricultural sectors.
The bill proposes amendments to the black economic empowerment (BEE) legislation such as the criminalisation of fronting, and speeding up transformation in the three targeted sectors.
It also seeks to move beyond mere ownership and look at ways in which black people will play a meaningful role in procurement and production processes.
The director-general of the Department of Trade and Industry, Lionel October, said black people had been involved in the running of factories at a floor manager level and understood production processes.
“There was a conflict of legislation which saw industries in the retail, agricultural and manufacturing (sectors) avoid empowerment. We will shift empowerment to production and move BEE from the margins to the mainstream. The policy was not strong on retail and manufacturing,” he said.
The bill seeks to put a greater emphasis on using skilled black workers, and helping them start their own businesses.
The flaws in the Broad-based BEE Act resulted in companies avoiding implementing BEE measures. The draft bill aimed to reverse that and would ensure that BEE was not just about government contracts and licences, he explained.
October said the department had engaged with the BEE advisory council and a process was completed which saw the draft being finalised with some changes to the bill.
After approval from the cabinet the bill would be released to the public for comment.
The act was criticised this week by President Jacob Zuma and Economic Development Minister Ebrahim Patel. They said it needed to be re-thought as it was not bringing new entrants into business and it offered limited benefits.
At the Black Business Summit on Tuesday, Zuma said BEE should ensure participation of women and disabled people as well as making provision for black South Africans to start their own industrial firms.
Patel said the policy was a breeding ground for corrupt fronting and added that the government would promote stronger forms of ownership.
The new draft would criminalise fronting, October said.
The government had identified a number of problems with the Broad-based BEE Act, which was introduced seven years ago. It over-emphasised ownership and neglected procurement and enterprise development, October said.