Jail time for BBBEE 'fronters', warns Ramaphosa

9 September 2016

Cape Town - Deputy President Cyril Ramaphosa has told MPs that companies and individuals found guilty of "fronting" BBBEE statistics could now face a jail sentence of up to ten years.

Ramaphosa told the National Council of Provinces on Wednesday that the BBBEE advisory council had become aware of the "growing" practice, and agreed that penalties should be imposed on offenders.

"If you are found guilty of fronting, your business could face a penalty of up to 10% turnover, as well as 10 years in prison for individuals.

"A person convicted of such an offence, will also suffer by not being able to transact with the State for a period of 10 years."

Ramaphosa said BBBEE is one of the most important measures that the democratic government had put in place to address the economic injustices of the past.

He said the original drafters of the BEE Act didn't envisage that companies would work against active transformation, and therefore the need arose to criminalise it.

"Fronting in the end is not a victimless crime," he continued.

"The perpetrators of fronting practices often target the vulnerable, the poor, the uninformed and deprive those most in need of opportunities that should rightly be theirs."

Ramaphosa was confident that with time, business will steer clear of trying to skirt BBBEE requirements due to the penalties involved.

'One-stop investment shop'

The deputy president also informed the Provincial House of the department of trade and industry's progress in setting up a "one-stop-shop" for potential investors in the country.

"Invest South Africa has been set up, to assist those that want to invest in our country, and to ensure all their difficulties and challenges are addressed quickly."

Ramaphosa said it combined all government services in one office, and will fast track investment in the country.

Invest SA will combine the services of SARS, home affairs, environmental affairs, water and sanitation, and importing/exporting permits.

Ramaphosa cited a pilot run through automobile manufacturers Beijing Auto Works, who used the programme, invested R11bn.

He said all stakeholders, government, business and labour, were all happy with the scheme.

This article first appeared on News24, see here.