Fronting means a deliberate circumvention or attempted circumvention of the B-BBEE Act and the Codes. Fronting commonly involves reliance on data or claims of compliance based on misrepresentations of facts, whether made by the party claiming compliance or by any other person. Verification agencies, and /or procurement officers and relevant decision-makers may come across fronting indicators through their interactions with organisations.
This includes cases in which black people are appointed or introduced to an enterprise on the basis of tokenism and may be:
Discouraged or inhibited from substantially participating in the core activities of an enterprise; and
Discouraged or inhibited from substantially participating in the stated areas and/or levels of their participation.
This includes initiatives where the economic benefits received by an organisation for having B-BBEE Status do not flow to black people in the ratio specified by law.
This includes enterprises that have concluded agreements with other enterprises in order to leverage the opportunistic intermediary's favourable B-BBEE status in circumstances where the agreement involves:
Significant limitations or restrictions on the identity of the opportunistic intermediary's suppliers, service providers, clients or customers;
The maintenance of their business operations in a context reasonably considered improbable having regard to resources; and
Terms and conditions that are not negotiated at arms-length on a fair and reasonable basis.
Responsibility to Report Fronting
Intentional misrepresentation by measured entities may constitute fraudulent practice and public officials and verification agencies are to report such cases directly to the Department of Trade and Industry (the dti) by calling their call centre on 0861 843 384