Broad-Based Black Economic Empowerment Amendment Bill [B42-2012]: adoption

Meeting report

The Chairperson mentioned Mr M Oriani-Ambrosini (IFP) was seriously ill, and she had sent a message of sympathy. 

Broad-Based Black Economic Empowerment Bill: final consideration
The Chairperson reminded Members that it was the last opportunity to effect amendments at the Committee stage. She read the objects of the Bill. The Bill would now be adopted clause by clause. Members agreed that the Bill would be discussed.

Mr G McIntosh (COPE) said that he had received a short document tabling an amendment to Clause 8. He asked if this was on the amended or original clause.

The Chairperson had amendments from COPE, ANC and FF+, and had just received a proposal from DA. These would be dealt with when the relevant clause was up for discussion. The Committee would be working with both the A (Committee proposed amendments only) and B versions of the Bill. She would start with version B42B-12. The Committee proposed amendments put forward previously had been incorporated into this version.

Clause 1 Amendment of section 1 of Act 53 of 2003
The Chairperson said this included a definition of BBBEE. There was an amendment to the definition of a BBBEE verification professional.

Ms S van der Merwe (ANC) pointed out a typographical error. The definition was adopted with the amendment.

The Chairperson continued with 1(a). She read the definition of a BBBEE verification regulator. The definition was adopted. She had a concern that none of the opposition Members had moved or seconded any of the definitions to date.

The Chairperson read the definition of 'black people' in 1(b). This defined black people as those defined as African, Coloured, Indian or Chinese under apartheid law. She noted objections from three Members.

Mr G Hill-Lewis (DA) raised an objection. The current wording of the clause relied on a set of legislation which was no longer on the statute books. While there could be theoretical reference to those laws, there was no way to settle any dispute without reverting to apartheid law. This was an anathema to any democratic South African. He knew that this amendment came from the sub-committee. A proposal had been initiated by his colleague Dr W James. The matter had since been discussed in the Democratic Alliance caucus, and the proposed amendment which he now put forward resulted from that discussion. The principal foundation of apartheid was that each and every person belonged first and foremost to a group that was defined without their permission or representation in legislation. Those groups were called races, and classified as African, Coloured, Asian, European and Chinese. He was only seven years old in 1994 and had no personal experience of apartheid. Twenty years after this system had fallen he could not accept that these classifications could still be used. A definition of black people had been crafted without this classification. The whole edifice of apartheid discrimination had been based on race, and race was largely the base for redressing these imbalances. A new definition was needed to unite South Africans in a non-racial way while still redressing previous wrongs.

Mr Hill-Lewis said that the proposed amendment was to include a reference to all people who had not been entitled to vote in national elections between 1959 and 1983. There had still been some black people with the right to vote in 1959. The franchise had been withdrawn in 1959, and coloured and Indian people had limited voting rights under the tricameral system introduced in 1983. The Committee could also consider using the interim Constitution of 1993 as a watershed date.

The Chairperson said that the Committee should vote on each amendment put forward by parties in turn, but it might be more practical to hear all three party proposals as there might be some common ground.

Adv A Alberts (FF+) proposed a change which would not use race-based labels. He quoted from the Employment Equity (EE) Act, which spoke of historically disadvantaged individuals (HDI) or designated groups. Using this as the basis for a definition would remove the race labels and bring this Bill into line with the EE Act. His alternate proposal mirrored that put forward by the sub-committee but substituted 'black' for 'African' and included a reference to women and people with disability. Use of 'African' implied that some persons were not African, which he felt to be unconstitutional. 'Coloured' was regarded as derogatory by some people, and the use of 'brown' might be more appropriate. There was no reason not to include people included in the designated group in the EE Act. The usage of EE in terms of the BBBEE scorecard and the Code of Good Practice of 2007 referred to the EE Act as a way to ascertain if a company had made progress regarding EE. This included women and people with disability.

Adv Alberts moved on to the trumping clause of the BBBEE Bill. It was clear from reading Clause 63 of the EE Act, that only the Constitution could trump the EE Act. Either the BBBEE Bill must be competent to trump the EE Act, or the EE Act would have to be amended. He felt that the legal advice given to the Committee was wrong.

Mr McIntosh thanked the Chairperson for remembering to send Mr Oriani-Ambrosini. He had made a great contribution at the Congress for a Democratic South Africa (CODESA) and in Parliament, and he hoped for a miracle that he might recover. He thought that the Bill and the definition under discussion was a touchstone for South Africa. One of the statements in the Freedom Charter was that the country belonged to all who lived in it. When on trial, Nelson Mandela had cast a vision of a non-racial South Africa. The country had been reformed by a settlement rather than a revolution. There was affirmative action in the country, referred to as redress by Mr Hill-Lewis. The Bill was essentially about doing business with government. There were many features in the Bill that would be race-based. Race would be entrenched by the Bill, and the abilities and competencies of people would be determined by skin colour. He had fought against this myth all his career. It was nonsense to say that black people were any less competent than others. The Bill was about entrepreneurship. If people were given opportunities and education they would become entrepreneurs. To take an analogy put forward by Mr Radebe at an earlier meeting further, 30% of children now being born in Sandton were black and 50% in the adjoining squatter camp were of Zimbabwean or Mozambiquan parentage, and had come to South Africa for better economic opportunities. He appealed to ANC colleagues to consider the vision put forward by Nelson Mandela and the Freedom Charter. All black people would be encapsulated by the amendments put forward.

The Chairperson said that this was a serious piece of legislation, and she had allowed Members to speak at some length. She would now give Members the chance to make comments on the proposals.

Mr B Radebe (ANC) knew the Freedom Charter inside out. It also supported nationalisation of banks and mines, which did not fit with the policy of opposition parties. Members should not be selective in their quoting. The concept of the country belonging to all was an ideal. People had been denied opportunities by apartheid laws. Nelson Mandela should not be misquoted. Whatever he had articulated was the vision of the ANC. Selective quotes could not be used to misquote him. When on trial in 1964, his speech was based on the Freedom Charter. People were not equal, not by choice but because of apartheid laws. There were differences between Bantu and Model C education. Subjects of Bantu education were prepared to be servants, and those in the Model C system to be governors. Apartheid policy, as acknowledged by Mr Hill-Lewis, was based on race. The policies of Nazi Germany had been entrenched in the laws of the time. References now to Nazism did not mean that there was a desire to revive their policies. The government had no wish to resuscitate apartheid laws. When black people had been oppressed it had been a reality. On 19 June it would be 100 years since the land of the country had been hijacked, long before the National Party had come to power. Natives had been categorised. People had been dispossessed legally. The government had no choice but to refer to apartheid. The issue of the EE Act also had to be understood. They were two different acts addressing different issues. Entrepreneurship was the key. The EE Act dealt with the workplace, and white women were covered there. The BBBEE Act looked to create industrialists.

Ms van der Merwe said that the ideal situation would be that no South African was labelled by skin colour. This was not yet a reality. The point of the Bill was to overturn apartheid legacies. 'Black' was in the title of the Bill and had to be defined. The government did not want apartheid laws, and this Bill was an attempt to redress the historical situation. The legacy of apartheid was still apparent years later. The franchise as a criterion did not make sense. There were many other restrictions and bars on ownership of land and business, and career options. The phrase quoted from the Freedom Charter said that the country should be owned both by Black and White citizens. 'Black' was regarded as a generic term and had been broadened by the sub-committee.

Mr Z Wuyile (ANC) appreciated the democratic platform of shaping a new South Africa, allowing differing political views. It was important that movement must be based on political realities. There had been a number of issues raised. There had been twenty years of democracy, but since 1652 some of these problems had been inherited. There had been entrenched problems both in terms of race and gender. The frontiers of colonialism had to be rolled back. The rainbow nation should not be a hollow one. People could come together to watch the Blue Bulls play, but went back to different social environments. It was always black people protesting against their own government. A fundamental question for government was to create a platform from which it could be toppled. The rainbow nation had to ensure equality for all people. In 1969 the ANC had foreseen the problem. The failure to transform the economy was then identified as leading to inequality. A lot of lessons had been learnt from liberation movements in the rest of Africa, some of which had been toppled without transforming the economy. In terms of the EE Act, a number of multinational companies had been non-compliant. This was an open defiance of legislation aimed at transformation. If people embraced the rainbow nation concept there would be no need to introduce such legislation. The Constitution protected everybody.

Mr Hill-Lewis said that almost every speaker had responded to his amendment. The time to press forward to Ms van der Merwe's ideal was now. Mr Radebe had referred to race, which had defined the country since the fifteenth century. The policies of apartheid had been acknowledged in the first line of his amendment. The use of 'convenience' could be deleted, as black was synonymous with disadvantaged. The franchise was not the only issue, but this captured all of them in a short definition. The golden thread was that people defined as black, coloured and Indian could not vote in the past. He appreciated the point made by Mr Radebe. However, if he defined himself as a black person when applying for a government tender, the only way to resolve any dispute would be to go back to apartheid legislation. Such laws should never be used again. Breathing new life into apartheid legislation was just wrong.

Mr X Mabasa (ANC) said that the object of the Bill was to achieve inclusive participation. This included the broad ownership of the means of production. Extending this to those who had been denied ownership before would seek to advance the transfer of skills. This was a long process, and could not be confined to those born before 1994. The fact that some black children attended former Model C schools, or grew up in former white suburbs, only meant that the Group Areas Act had been defeated. The BBBEE Act would have to be explicit in who it aimed to address. There could not be an Act which defined people simply as Black. There would otherwise be various challenges and interpretations. The amendments proposed would not help the country to move forward, and would condemn those disadvantaged communities to remain in that condition forever. Members had to take responsibility to accept the consequences of apartheid.

Mr Radebe said it was unfortunate that wishes were not horses. There was no magic wand to transform the country overnight. Leaders of other parties should be leading the campaign to protect previous wrongs. This could not be left just to the ANC. This was particularly for those parties who had benefited from apartheid. The 1913 Land Act was a specific issue. Until something was done by leaders the land ownership situation would remain unchanged. Leaders needed to continue to engage with change. It was important to call things by their true name. If not there would be a lack of clarity. He wished that opposition Members would agree with the motivations of the ANC.

The Chairperson said that this clause was the crux of the legislation. Government would fail the people if Members cut the discussion short due to time factors. She hoped that Members would take heed of political history and economics. The franchise had not necessarily been granted on membership of a group. There were some countries where the franchise was not related to land ownership. Women in South Africa had enjoyed the franchise long before some other rights had been granted to them. This was perhaps why Dr James had not included the consideration of the franchise in the sub-committee's discussions. It was the first time she had considered being black as a synonym for being disadvantaged. There must be cognisance of the fact that other legislation had served the country well, but the purpose of the EE Act had to be considered compared to the purpose of the BBBEE Bill. They could be complementary rather than contradictory. A Member had made a statement that the Bill would exclude whites from the economy, but this was not the case. The Bill spoke to achieving equitable representation at all levels in the workplace. This was why the State Law Advisor (SLA) had urged Members to look at the Bill as a whole.

Mr Hill-Lewis was trying to look at the Bill holistically. Other terms could be used than 'synonym'. He suggested a different phrase showing the intent of the Bill to assist in moving the country forward to a non-racial condition. The legacy of apartheid did not disappear on 28 April 1994. There had been hundreds of other disadvantages other than the franchise, but it had been a common factor. If the Committee rejected the amendment, there would still be a practical problem with the current definition in the event of a dispute.

Mr McIntosh was surprised at the knee-jerk reaction from ANC Members. To him, the amendment considered by COPE was a neat way to serve the purpose of those who believed that there had been a class problem for 300 years. It seemed that Mr Mabasa and Mr Radebe were being religious about the current definition. The Pass Law had only impacted on 'black black' people. If the ANC Members had applied their minds properly they would have welcomed the proposals put forward by opposition Members. Judge Mogoeng had referred to regulation 1 (H) which defined an HDI, which included women and people with disability. This definition excluded those born after the introduction of the current Constitution.

Mr Radebe appreciated the attitude of Mr Hill-Lewis and how deep the issue was. However, there was a culture of a lack of respect for government actions. There was an assumption of a future scenario of a person claiming to be Coloured when he was White. People would not go to that extreme. The essence of the Act was that it was broad-based. He would have added another rider. Apartheid had been introduced in 1948, and the Native Land Act in 1913 under colonial law. This still referred to Natives and was a tool of disempowerment. The law advisers must advise on what was wrong with the current definition. The challenge regarding people of Chinese origin had been an issue with the EE Act.

The Chairperson said that the definition was simply looking at a classification. The definition was the essence of the Act.

Mr Radebe felt that the amendment had disrupted the Committee. The issue of disempowerment went back to 1913. The party had actually been founded as the African Native National Conference. Black was a generic term meaning Africans, Coloureds and Indians. He proposed that the Clause be accepted in its current form.

The Chairperson said that the Committee had spent more than an hour debating the clause.

Mr Hill-Lewis moved that his amendment be accepted.

Mr McIntosh seconded Mr Hill-Lewis, and withdrew the amendment he had put forward.

Adv Alberts had been in discussion with the law advisers about the trumping provision. This related to the definition which he had proposed. The advisers agreed that the BBBEE Bill would not trump the EE Act. Designated groups such as women and people with disabilities were included. He now suggested that the EE Act be recognised as being fully relevant to the BBBEE Bill.

The Chairperson asked if Adv Alberts wanted to move his own amendment.

Mr McIntosh seconded the proposal of Adv Alberts.

The Chairperson found that this was out of order. Mr McIntosh could not second both alternate proposals. Without a valid seconder, Adv Alberts was advised that his proposal would not stand but he was welcome to attach his comments on the issue to the final report of the Committee.

Mr Radebe proposed on behalf of the ANC that the original wording of the Bill, simply referring to Black people as Blacks, Coloureds and Indians. His proposal was seconded by Ms van der Merwe.

Mr Hill-Lewis changed his proposal to read 'Black people is a term for HDI'. The references to convenience and synonym were deleted.

The Chairperson put the amendment of the DA to the vote. Three Members voted for the amendment and five against. There was no need for her to exercise her vote. The proposal was therefore defeated.

Mr McIntosh was happy to forgo his proposal in support of the DA. He was assured that it would still be recorded.

Mr Radebe moved that the amendment proposed by the sub-committee be removed, and that the definition of 'black' be the same as that contained in the BEE Act.

Adv Johan Strydom, Senior Legal Adviser, Department of Trade and Industry (dti), pointed out that if Mr Radebe's proposal was accepted, then Chinese people would not be included in the definition.

Adv Herman Smuts, State Law Advisor, had nothing to add.

Adv Desiree Swartz, Parliamentary Legal Advisor, did not agree with the interpretation that Chinese people would be excluded. There had been a court ruling that they fell within the ambit of black people.

The Chairperson asked if there was disagreement.

Adv Strydom said that they tried to speak from the same mouth. The consequence of the proposal was that black people would be defined as Blacks, Coloureds and Indians in terms of the Act. The inclusion of Chinese as a result of a court ruling was insufficient in his view. They should be included implicitly in his opinion.

The Chairperson did not want to rely on court judgements. She called a short adjournment so that ANC Members could discuss this issue.

Adv Swartz re-iterated her point that the previous definition had included Chinese people as Coloured.

The Chairperson asked the proponent to make the amendment clear.

Mr Radebe replied that the definition of 'black' people in the B version of the Bill should be removed, and the original definition in the Act should be retained. These people should be citizens of South Africa by birth or naturalisation before 27 April 1994. This would ensure that citizens of other countries would not benefit from BBBEE provisions. There was no intention to discriminate against people of Chinese descent. The fact that they were classified as Coloured would be enough to cover them.

Mr Radebe read the proposed amendment. What would be deleted would be 'Black people, peoples classified under Africans, Coloureds, Indians and Chinese under apartheid law' would be removed. There would thus be no amendment to the BEE Act. 1(b) could be added to. This would specify that it would only pertain to those regarded as South African citizens.

Adv Smuts agreed that 1(b) should be retained.

The Chairperson emphasised that the wording had to be clear. She again asked Mr Radebe to read the amendment.

Mr Radebe, after conferring with the SLA, read that the definition would be: 'African, Coloured or Indians' who were citizens by birth or naturalisation.

The Chairperson called for a vote on the ANC proposal. Five Members voted in favour and three against. The proposal was adopted. She asked the legal advisers to record the amendment correctly. All comments made would be kept on record.

Mr Hill-Lewis was concerned that it was reasonable for the meeting to be adjourned. It was, however, not appropriate for members of the dti to be party to a party caucus. Any views that were raised should be made in public.

The Chairperson said that the Deputy Director-General (DDG) had advised the ANC Members on a point of law.

Mr Tumelo Chipfupa, dti DDG: The Enterprise Organisation, had asked the secretariat for leave to approach the ANC caucus.

The Chairperson noted that she had in fact left the caucus to speak with the DDG.

Mr Hill-Lewis was satisfied with this explanation.

The Chairperson moved on to 1(c). In line 13 the word 'black' was to be inserted after ‘‘broad-based’’. The amendment was adopted.

On page 3, from line 29, the phrase 'local content procurement' was to be omitted. This amendment was adopted.

The amendment to 1(d) was adopted: (d) by the insertion after the definition of ‘‘broad-based black economic empowerment’’ of the following definition:

‘‘ ‘Commission’ means the Broad-Based Black Economic Empowerment Commission established by section 13B;’’.

The insertion amendment to 1(e), the fronting definition, was adopted.

Most of the amendments were not contentious, and so the Chairperson said that she was disappointed that only ANC Members were moving for the adoption of the amendments. The rest of the amendments to the definitions  were adopted.

Clause 2 Amendment of section 2 of Act 53 of 2003
The Chairperson continued with the amendment to Clause 2, which would amend section 2. The amendment was adopted. She noted that the members of the sub-committee had supported most amendments.

Clause 3 Amendment of section 3 of Act 53 of 2003
This had been rejected, and a new clause proposed. Paragraph (a) would be substituted. This was the so-called 'trumping' clause. There was a qualification. There were counter-proposals. Adv Alberts had proposed an amendment.

Adv Alberts had received an interpretation that was in line with his opinion. In terms of EE elements, the EE Act would trump the BBBEE Bill. The proposed amendment was to make the interpretation more certain for one reading the Act.

The Chairperson hoped she was interpreting Adv Alberts correctly in that he believed he was now covered by the legal interpretation.

Adv Alberts said that it would only be stating the obvious for one with a legal background. He proposed that his amendment be adopted. He accepted the clarification provided, but his amendment would make the Bill clearer. He was seconded by Mr McIntosh. Five Members opposed the proposal.

The Chairperson concluded that the proposal from Adv Alberts had been defeated. She called for a vote, and his proposal was defeated by five votes to zero.

Clause 4 Substitution of section 8 of Act 53 of 2003
The amendment was adopted.

Clause 5 Amendment of section 9 of Act 53 of 2003
The amendment was adopted.

Clause 6 Amendment of section 10 of Act 53 of 2003
The phrase 'as far as is reasonably possible' in Section 10(1)(a) would be deleted. The amendment was adopted. The next amendment was to Section 10(1)(e).

Clause Amendment of section 11 of Act 53 of 2003
The Chairperson said it was difficult working with two different versions of the Bill. The amendment to this clause was adopted.

Clause 8 Insertion of sections 13A, 13B, 13C, 13D, 13E, 13F, 13G, 13H, 13I, 13J, 13K, 13L, 13M, 13N, 13O and 13P in Act 53 of 2003
The amendment was adopted. The amendment made provision for an Acting Commissioner.

Clause 9 Substitution of section 14 of Act 53 of 2003
Mr Hill-Lewis said that even though the opposition Members were silent on the adoption of the clauses, it did not mean that they were opposed to them. He proposed that the amendment to Clause 9 be adopted, and it was adopted.

Return to Clause 8 Appointment of Commissioner and Acting Commissioner
The Chairperson referred back to Clause 8 dealing with the appointment of a Commissioner in Section 13C(1)(a).

Mr McIntosh said that it was an important amendment as there was a difference between 'in consultation' as it appeared in 13C(1)(a) which read "The Minister must, in consultation with the relevant Portfolio Committee of Parliament" and the phrase 'after consultation'.

Adv Smuts said that there was a fixed interpretation that 'in consultation' implied that there was concurrence. 'After consultation' did not necessarily mean that there was concurrence.

Mr McIntosh was aware of what the advocate was saying. If the Bill was worded 'after consultation' the Minister could appoint a candidate even without the agreement of the Portfolio Committee.

Mr Radebe said that the Commissioner would account to the Director General, but was not an accounting officer. The Bill stated that the Minister should nominate three candidates.  

The Chairperson noted agreement over the exact meaning. Members agreed that the appointment should be made 'in consultation'. This amendment was adopted. In 13C(1)(b), the Minister was directed to provide three candidates.

Mr Radebe said that (b) was very stringent in the accountability to the DG. It was clear that such an appointment should be made in consultation with the Portfolio Committee. He felt that (a) catered for the total scenario and proposed that (b) could be scrapped.

The Chairperson called a short adjournment so that the legal advisers could confer.

The Chairperson had just been informed about the illness of Mr Oriani-Ambrosini. Out of respect to him, she proposed that the discussion on the National Credit Amendment Bill be postponed. There would be more engagement with BHP-Billiton, and Members might wish to read the documents distributed before discussing the report. No-one had anticipated the length of the discussion on the BBBEE Bill. She proposed that discussion of the Special Economic Zones Bill be delayed until the following day. She returned to Clause 8 of the BBBEE Amendment Bill.

Mr Radebe said that in the original Bill, the term for the Commissioner was set at a maximum of five years. The Minister could not make the appointment alone, and the Committee had to play a role. He proposed a new sub-paragraph (b) which would force the Minister to make the appointment in consultation with the Committee.

Mr McIntosh thought he understood what Mr Radebe meant.

Mr Radebe read from line 31. His proposal was to make the first statement 1(a), and 1(b) would make provision for consultation with the Committee.

Mr Hill-Lewis raised a point on the semantics of 'consult'.

Adv Smuts said that the only obligation was on the Minister to consult. There was no need for agreement.

Mr McIntosh said that the working committee had felt the need to exercise oversight.

Mr Radebe said that there had been no provision for consultation in the principal Act. The Minister would remain responsible if there was a failure in the system. The person must be suitably qualified, and the Minister would have to explain why the candidate should be chosen. If the 'in consultation' option was chosen, the final appointment would be done jointly done with the Committee who would be equally liable in the event of a failure.

Mr Mabasa felt that it was better if the Committee was not both player and referee.

Mr McIntosh was not necessarily disagreeing. 'In consultation' was a more powerful option, and he asked what sort of hold Mr Radebe would like to have over the Minister.

Mr Radebe said that the critical issue was blurring of legislative and executive authority. Parliament wanted to see that a suitable persons was appointed. This Commissioner was not an executive authority, and the same sort of stringent conditions applicable to other commissioners were not applicable in this case.

Adv Swartz said that the legal perspective preferred that the appointment not be done 'in consultation'. This would be an encroachment on the executive powers of the Minister.

The Chairperson said that in some cases the Committee had been incestuously involved. She felt the issue was now exhausted.

Mr Radebe moved that the fresh amendment be adopted, seconded by Mr Hill-Lewis. The amendment was adopted.

The Chairperson moved on to the rest of the amendments to Sections 13C, 13D and 13E and these were adopted.

Mr Hill-Lewis noted in Section 13F(5) that the Commission could refer matters to the Special Investigating Unit (SIU) in terms of the amendments to Functions of the Commission. He felt that only the President could make such a referral by proclamation.

Adv Strydom felt that Parliament could legislate such powers.

Adv Smuts agreed with his legal colleague.

Clause 13F was adopted.

The Chairperson took Members through amendments to Section 13G which referred to the Johannesburg Stock Exchange. The amendment was adopted.

Amendments to Section 13H were adopted. This gave the Commissioner authority to delegate any power conferred on him or her.

Section 13I dealt with specialist committees and the amendments were adopted.

Section 13J and 13K were adopted.

Section 13 L dealt with confidential information.

Mr Hill-Lewis said that under 13L(3)(b) written reasons should be provided. He asked if it was implicit that this should go to the applicants.

Adv Swartz said that the only reasonable conclusion was that this pertained to the applicant.

Amendments to Section 13L were adopted.

The Chairperson said that Section 13M dealt with conflicting interests. Amendments were adopted. Section 13N dealt with offences relating to a breach of confidentiality, and were adopted. Section 13O dealt with other penalties. The amendments were adopted. Section 13P dealt with the prohibition of doing business with any person convicted under the Act. An insertion would be 'a period not exceeding ten years'. The amendment was adopted.

The Chairperson said that Section 14 in the Act dealt with regulations, guidelines and practice notes. The amendments were adopted.

Clause 10 Short title and commencement
This clause had been rejected, and a new clause put forward. The implementation of Section 3(b) would come into effect one year later than the date on which the Act came into force, or one year after the implementation of Section 3(a). This delay had been regarded as essential during the discussion. Clause 10 was adopted.

Mr Hill-Lewis wanted to go back to the amendment to Section 13O. This provided a comprehensive list of other offences and penalties. In 13A, there was a provision for the cancellation of a contract. This gave enormous powers to state owned enterprises to cancel contracts.

Adv Strydom said that it would be a prerequisite that there be a criminal conviction before this power could be invoked. At present such a cancellation could be based on a false, untested accusation.

Mr Hill-Lewis said that Section 13O(b) made it a criminal offence to provide false information. There should be some consistency.

Adv Swartz said that a person might first have to be found guilty, and this might take some time. In terms of the common law, a contract could be cancelled if there was any misrepresentation. She did not how this could be dealt with in practice.

Mr Hill-Lewis felt that in the interests of justice, a multi-billion rand contract could not be cancelled on mere suspicion. An allegation should be tested in a court of law. He proposed that 13A should be amended to refer specifically to an offence under 13O.

The Chairperson felt that one of the purposes of the Act was to move against complex fronting. Court cases were often lengthy and complicated while the accused parties continued to front.

Mr Radebe said that the Bill would criminalise fronting. When it was found that there was something amiss in a contract, the contract should be terminated. There would be a legal recourse, but this could be expensive and that would act as a deterrent.

Mr Mabasa agreed that the intention was to combat fronting.

Mr McIntosh understood the position of Mr Hill-Lewis. The Bill spoke to false information that had been willingly furnished. The aggrieved party could obtain an interdict to suspend the cancellation of a contract. He hoped that this would not be necessary. False information should not be encouraged.

The Chairperson noted that the clause in question had already been adopted. She read the report of the Committee on the Bill. It had been tagged as a Section 76 Bill. The report was adopted.

Mr McIntosh said that opposition Members were not happy with the powers to be conferred on the Commission and Minister.

Mr Hill-Lewis registered the objections of the DA.

Adv Alberts registered the objections of the FF+.

Mr McIntosh thanked the Chairperson for her fairness and the leadership that she had shown.

The Chairperson noted that Members might have disagreed on some issues, but had also come to new insights.

Mr Hill-Lewis had noted the objections of the DA to the report which recommended the Bill to the House with all amendments. He asked if there was a way to vote on a question.

The Chairperson said that the procedure was to record the objections, which had to be reported in an unedited format.

Mr Hill-Lewis wanted to make it clear that he did not object to the entire Bill.

The Secretary said that the rejected amendments would be included in the report, and would also indicate that the opposition parties had objected to certain clauses.

Mr Hill-Lewis wished to make it clear that he supported the passage of the Bill, but had objections to certain clauses.

The Chairperson understood that Mr Hill-Lewis was still new in Parliament, and other Members would understand how objections would be recorded.

Adv Alberts agreed that the procedure as described by the Chairperson was correct.

The meeting was adjourned.