Parks Tau seeks stricter compliance with BEE legislation

Trade, industry & competition minister Parks Tau has called for tougher compliance of broad-based BEE legislation by private sector firms as he seeks to drive empowerment and transformation by his department. 

Though conceding that the legislation had not achieved its intended aim of economic redress, Tau said the department and the BBBEE commission would work together to “encourage” firms to comply with the empowerment legislation. 

“In the short term, the department and commission will engage organised business, labour and other stakeholders to encourage firms to comply,” Tau said on Tuesday during the tabling of his department’s budget vote in the National Assembly. 

In addition, the trade, industry & competition department would combine monitoring resources to strengthen the BBBEE Commission’s capacity to monitor compliance and emerging trends, he said.

The commission’s ability to enforce compliance is limited as it can only make recommendations to a court of law and cannot directly issue fines like the Competition Commission can for findings of bad practice. 

Only a third of JSE-listed companies and 95 of SA’s hundreds of public entities submit reports on their broad-based BEE performance to the BBBEE commission as required, making it difficult to measure progress. 

Two decades after SA’s BEE legislation was enacted in 2003, the commission estimates black people own about 30% of the economy with black women owning 14%. But empowerment numbers tend to be contested, with a variety of different metrics and targets used in the public and private sectors to measure it.

The legislation had not fully achieved its intended outcomes of fostering an inclusive economy, Tau said. 

“There is extensive research that demonstrates that more equitable societies grow faster than those which are deeply unequal. This is in part because equal societies are more politically stable, but more importantly, consumer demand is almost always higher in more equal societies as more households have access to disposable income.” 

maekot@businesslive.co.za