'Fronting happens when a company pretends to be compliant with BBBEE legislation by placing black people in positions that would make it seem as if they either own the company, or are at a level to make decisions in the company' explains the Business Report.
The Bill, if passed, will see companies guilty of fronting facing jail terms of up to 10 years or up to 10% of a company's turnover.
That's why key legal tests of criminality in regards to the Bill amendments would be 'knowingly doing so' and providing false information in this regard to garner a state contract, says the Business Report.
The Bill also seeks to plug gaps in current legislation and proposes the formation of a commission to promote compliance in terms of the BBBEE scorecard, with emphasis falling on skills development as well as ownership, enterprise and supplier development, Eye Witness News reports.
While BBBEE is fast becoming a business imperative, it's actually easy for your business
BEE Scorecard explains that if your business turnover is less than R5 million per year and you've been in business for less than a year, you automatically qualify for a Level 4 BBBEE certificate.
If, on the other hand, your percentage of black shareholders is above 50%, you automatically qualify for a Level 3 BBBEE certificate, adds FSP Business.
BBBEE law changes are aimed at 'cutting through the red tape'
According to government, transformation levels among businesses aimed at redressing injustices of the past were low.
But, Trade and Industry Minister Rob Davies has stressed that changes to black empowerment legislation to criminalise fronting had little to do with white-led businesses failing to achieve transformation or being guilty of cheating, writes the Business Report.
'We are not making a generalised statement on that matter. We are saying that a number of companies have been sincere about promoting BEE but there are some bad apples, companies that have presented themselves as something they are not,' said Davies.
According to Eye Witness News, the Bill will now go to the National Council of Provinces for concurrence. Make sure your company complies or be prepared to face the full might of the law.