Howard Donaldson | May 18, 2025
The Ministry of Trade and Industry has developed codes of practice that will help government sectors and local governments eradicate businesses that practice black floating.
The Ethekwini Municipality has investigated many companies that bid for a contract during the construction of Ushaka Marine World, but it is said that it is actually allegedly claimed to have black directors who are merely employees.
Municipalities intend to include names in public records of companies that are willing to prove their record of black empowerment.
The new code of practice is “that will greatly expand the issue of Black Empowerment,” said Pulo Radebe, director of Black Economic Empowerment in the sector.
“It would not be enough to implement black empowerment at the director level,” Radebe said.
Radebe said companies are also expected to meet the requirements in terms of employee prioritization and skill development.
“Companies must be seen as using services from other black companies, developing worker skills through training and other means, and applying enterprise development that actively provides support to up-and-coming black companies,” Radebe said.
Radebe said the Black Fronting issue was “a very conscious thing for us (the Ministry of Trade and Industry) and something we want to deal with.
He said many black front cases were picked up through corporate whistleblowers.
“That (before black people) is fraudulent,” Radebe said.
Radebe said if a bid has already been awarded to a company and it turns out he has since become black, he could establish a penalty against that company and be subject to damages.
Radebe said he wants government departments and local governments to recognize the blacklist compiled by the National Treasury Department's Supply Chain Management Bureau.
“Companies and their shareholders convicted of Blackfront or other crimes will be added to the blacklist,” Radebe said. “Their names will remain on the list for ten years.”
Cyril Gwara, chief executive of the Durban Chamber of Commerce, said his organization “will do everything with its power to eradicate and punish companies that indulge in the Black Front.”
“This practice will fly in the face of everything the government is trying to achieve with its empowerment policy,” he said. “Black fronting should be condemned. The government needs to show that it is very serious about economic empowerment for black people and that it is done with all the power to get it to be stamped.”
However, Gwara said that Esekwini's city's investigation of companies practicing black fronting showed that their West Sea empowerment policy was working.
“The fact that these black front companies have been arrested indicates that local governments take the issue of empowerment seriously. These companies should be shamed by name,” he said.
Gwara said the Chamber of Commerce was taking empowerment seriously and truly transformed, but supported previous lucrative companies that frowned upon the companies that relied on the front to win a contract.
He said that the chamber members will be put in place a Black Economic Empowerment Certification System to be implemented to enable companies practicing fronts to weed.
Mike Sutcliffe of Ethekwini City Manager said his municipality had written a letter to Ushaka contractors and asked them to provide details of the Black Empowerment record.
“We got some responses,” Sutcliffe said. “But some are still unresolved, and some of the things that ignore our requests are listed in official records.
Sutcliffe said that of the R35 billion procurement services placed in bids by the Ethekwini Municipality, only 27% has been granted to black-owned businesses.
“This is unacceptable after 10 years of democracy in this country,” Sutcliffe said. “I'm committed to fundamentally changing this number.”
Coach Andre Lategan, the state commander of Kwazulu-Natal's SAPS commercial branch, said he had never “stumbled upon this black front in the past.”
“But if the company gets a bid on the basis that it had a black supervision when it actually didn't exist, that would be misrepresented,” Latin said.
“The other party would have been suffering from potential or actual bias, which effectively amounts to fraud. You can then raise a fraud charge against the perpetrator,” he added.
Bahlend Groen, a senior prosecutor at the Durban Magistrates' Court, said that Blackflong agreed to be a fraud, but it was impossible to say what sentences will be given to those found guilty of the crime.
“There are simply a lot of variables to say which sentences might be conveyed,” he said.
“Disclaimer – the views and opinions expressed in this article are the views of the author and are not necessarily those of the Bee Room.”
