While Debswana’s CEEP policies were designed as a means of encouraging citizen participation, certain companies in the mining industry have maneuvered around it through business fronting
BONGANI MALUNGA
Six out of the 12 companies investigated for fronting for tenders in the Citizen Economic Empowerment Programme (CEEP) of Debswana in early 2024 were found guilty and subsequently blacklisted, the Minister of Minerals and Energy, Bogolo Kenewendo, has said.
Speaking in Parliament recently, the minister acknowledged that certain companies use business fronting to maneuver around CEEP policies of Debswana Mining Company.
She added that because the practice is viewed as a deterrent to citizen empowerment, the ministry is keen to enhance regulatory frameworks that were initially formulated to drive citizen participation.
Integrity and transparency
Responding to a question from the MP for Mogoditshane East, Letlhogonolo Barongwang, the Minister of Minerals and Energy said her ministry is set to act on emerging fronting practices after Debswana flagged it as a major risk.
“As the regulatory authority overseeing the industry, my ministry takes these concerns very seriously and is committed to ensuring that empowerment policies are implemented with integrity and transparency,” the minister said.
“Business fronting, where entities misrepresent ownership or control to meet local participation requirements, is a direct violation of these principles and undermines national economic objectives.”
Not foolproof
Kenewendo explained that Debswana has the appropriate governance framework to prevent fronting and can tackle the violations upon detection.
However, she noted that the ministry understands that the systems are not foolproof. Therefore, Debswana has now enlisted the services of a consultant to deal with fronting.
“Currently, having observed other emerging fronting practices, the company has appointed a consultant for the purpose of combatting fronting in their tender award processes,” she said.
“The consultant’s scope of work includes investigating all instances of possible fronting within Debswana’s procurement activities, providing detailed reporting with findings and developing awareness and education programmes for their procurement staff and suppliers to recognise and combat fronting.”
Blacklisted
Kenewendo revealed that Debswana’s longstanding whistleblower mechanism is still active. The mechanism allows for confidential reporting platforms to enable stakeholders, employees and members of the community to report fronting.
The minister stated that in early 2024 Debswana observed a number of suspicious fronting incidents and that 12 companies were investigated.
According to the minister, after conclusion of the investigations, six out of the 12 were confirmed to be fronting and subsequently blacklisted.