The Constitutional Court judgement setting aside the Public Procurement Act is a matter of extreme importance to workers and society. Whilst respecting Constitutional Court rulings, the Congress of South African Trade Unions (Cosatu) fears its unintended consequences.
The Court found Parliament erred with regards to public participation, namely that the majority of Provincial Legislatures had not properly mandated their Delegates to the National Council of Provinces, that substantial additions to the Bill had not been released for public comment, and submissions from the public had not been fully considered by Parliament.
The ruling did not come as a surprise as it is not the first time such findings have been made against Parliament. It is crucial that Parliament absorbs this ruling to avoid future such devastating setbacks.
Public procurement across national, provincial and local governments, as well as public entities and state-owned enterprises (SOEs) account for over R1 trillion annually.
If used strategically, these resources can play a positive role in supporting locally produced goods and services, plus local jobs, businesses and value chains.
If used wrongly, they fuel a parasitic class of tenderpreneurs, incentivise state capture and bleed scarce public resources.
The Zondo Commission of Enquiry into State Capture and Corruption shone a powerful spotlight into the role public procurement played during that dark decade and which remains in many parts of the state despite efforts by government to eradicate this national cancer.
In 2022, Sakeliga, a belligerent opponent of transformation, won a devastating court victory setting aside Treasury’s Preferential Procurement Regulations on the basis of an absence of an enabling legal framework to do so.
Four years later, the courts have now set aside the Public Procurement Act passed by Parliament to correct this very legislative vacuum.
On average, it takes five years to draft, process, adopt, promulgate and implement legislation. The unintended consequences of this court ruling will be to delay rectifying this massive legislative gap for several more years.
The danger of not having a comprehensive, progressive and well thought through Act, is that there is no single framework or standards by which departments, entities, SOEs and municipalities can be held accountable to.
Cosatu campaigned for the Act over many years, precisely to correct this legislative gap and to ramp up support for locally produced goods, jobs and businesses and tighten the screws on the cancer of state capture and corruption.
The Act contains many progressive provisions that Cosatu fought hard for and if implemented would be a game changer for boosting localisation, nurturing emerging SMMEs, and tackling corruption. It was a bold and badly needed response by the African National Congress led government.
The Act correctly provides for a single, transparent online procurement system for the state. This is key to enabling the media and the public to expose corrupt deals and hold the state accountable.
Cosatu pushed particularly hard for clauses requiring public procurement be utilised to support locally produced goods and services and historically disadvantaged persons.
This is urgent given the flood of cheap and often subsided imports threatening badly needed local jobs and businesses in an economy battling to reach the 3% growth plus needed to tackle our dangerously high unemployment rate of 43.8%.
The Act provides for certain categories of politically influential persons as well as persons employed by the state from doing business with the state.
Other politically exposed persons are required to be disclosed in a publicly available registry.
The Act requires Government to blacklist persons and companies found to be involved in corruption, fraud and similar criminal offences.
Treasury’s Public Procurement Office is empowered and mandated to act when government institutions fail to uphold and comply with the Act.
These are critical weapons in the war against state capture and corruption.
Now that the Court has ruled that Parliament failed to fully comply with constitutional provisions for meaningful public participation, it is critical that Treasury and Parliament move with speed to address the court findings and fill the legislative vacuum.
Treasury must move with speed to strengthen and retable a revised Public Procurement Bill at Nedlac and Parliament.
This needs to be done before the February 2027 State of the Nation Address (SONA) to ensure Parliament has sufficient time to process the Bill and consider public submissions. It takes Parliament approximately two years to pass legislation.
Any delay beyond the 2027 SONA would risk this not happening before the 2029 elections, this would be an absolute disaster.
Key public concerns with regard to the Act’s provisions need to be addressed. In particular, Cosatu’s call for the Act to be extended to local government, the state’s weakest link and all too often a site of mass looting.
A correct balance should be found for SOEs to ensure they are protected from state capture and corruption on the one hand and have sufficient agility to operate and compete in the economy on the other.
Complaints from progressive civil society, some arms of government and business, about suffocating red tape and overly complicated provisions, need to be addressed.
There are two Private Members’ Bills proposing further amendments to the Act currently before Parliament.
These should be taken into account.
Proposals to strengthen the Act by further empowering the Public Procurement Office and the Special Investigations Unit to act on instances of public procurement corruption must be incorporated into a new Bill.
Proposals to replace Broad-Based Black Economic Empowerment (BBBEE) with the United Nations’ Sustainable Development Goals are misplaced and should rather be included under BBBEE’s Equity Equivalent Provisions as must Worker Ownership Programmes be elevated to ensure BBBEE truly empowers the poor and not the wealthy.
The endless delays in putting in place a comprehensive pro-poor and anti-corruption Public Procurement Act are a painful blow to our battles to uplift the working class, nurture SMMEs, boost localisation and tackle state capture and corruption.
Cosatu will intensify its efforts to ensure a well-crafted and progressive Public Procurement Bill is expedited. Workers simply cannot afford further delays.
**The views expressed do not necessarily reflect the views of the National Media Group.