Public Procurement Bill: Committee Report; Revenue Laws A/B: implementation date of two-pot system

Meeting report

The Chairperson welcomed everyone. Thereafter, he asked if any apologies were received.

Mr Allan Wicomb (Committee Secretary) said that no apologies were received.

The Chairperson noted this and then indicated that the Committee would consider its report on the PP Bill.

Committee report on the PP Bill

Dr Zakhele Hlophe (Committee Content Advisor) took the Committee through the report.

The Chairperson asked if certain clauses specified in 5.13 of the report would be removed from the Acts mentioned, which included the Construction Industry Development Bank (CIDB) Act and Broad-Based Black Economic Empowerment (B-BBEE) Act, among others.

Adv Empie Van Schoor (Chief Director: Legislation at the NT) confirmed that this was the case. She added that those Acts were reflected in Schedule 2 of the Bill.

The Chairperson asked if the Bill provided for an appeal tribunal.

Adv Van Schoor confirmed that it did, but it is referred to as the tribunal, not the appeal tribunal.

The Chairperson asked if the Bill contained a provision on how procurement during emergencies should be done.

Mr Willie Mathebula (Chief Director: Supply Chain Management at the NT) confirmed that Chapter 5 of the Bill contained such a provision. 

Mr M Manyi (EFF) mentioned that he would raise a few points. One, he highlighted that he did not see a definition of value for money in the report.

Two, he felt that the proposed removal of certain clauses in the CIDB Act did not go far enough to address the issues faced by the agency and called for the entire Act to be repealed.

Three, he asked if his recommendations for joint ventures (JV) and consortiums to be included in the Bill were considered.

Four, he asked why his recommendation – made during the Committee’s deliberations on the Bill – for the designated category of ‘women’ be replaced with ‘white women’ in clause 18 (3) of the Bill, given that it provided for black women which includes Africans, Coloureds and Indians.

The current formulation of subsection (3) was not correct and would lead to many unintended consequences. Given this, he recommended that the Bill include the word ‘all’ before each designated group, to read like ‘all women’ or ‘all people with disabilities’.

Five, he asked if there was any provision in the Bill that set aside a specific percentage of goods and services that must be locally procured by the government.

Notwithstanding these concerns, he was generally pleased with the Committee’s report.

The Chairperson said that the Committee could not deliberate on each clause again, especially as many of the issues raised by Mr Manyi were covered during the Friday meeting.

He reminded Members that certain things will be dealt with in the Minister’s regulations.

Adv Van Schoor explained that the definition of value for money has been removed from Clause 2, with the Bill now referring to the terminology used in Section 195 of the Constitution.

In response to comments related to the removal of the CIDB Act, she pointed out that an amendment was made to ensure alignment between the CIDB Act and the PP Bill.

Regarding JVs, she stated that this would be addressed in the regulations.

Touching on why the proposal for ‘women’ to be substituted with ‘white women’ in Clause 18 (3) as one of the designated groups was not included in the Bill, she outlined that ‘women’ was listed as a separate category in the Bill, in line with the Employment Equity Act (EEA). However, there was a proposed provision under set-asides that provides for targets to be set that must be complied with.

Ms P Abraham (ANC) said that ‘women’ included women of all races, whilst the designated group of ‘black women’ took into account the oppression African, Coloured, and Indian women faced during Apartheid.

Mr Manyi appreciated the responses provided by the department to his questions and concerns. However, he still felt that the Bill should include ‘all’ when referring to designated groups such as women, people with disabilities, and youth.

In addition, he proposed that the Bill contain a statement that set aside a specific percentage of goods and services that must be locally procured.

The Chairperson asked the Parliamentary Legal Advisor (PLA) if such an amendment could be included in the Bill.

Adv Frank Jenkins (Senior Parliamentary Legal Advisor) mentioned that this would be unnecessary as each advert for a bid would specify which categories would be set aside.

The Chairperson thought that the PLA had provided a sufficient response to Mr Manyi’s question.

South Africa, he continued, belonged to all who live in it: both blacks and whites. Be that as it may, the various pieces of legislation and policies were biased toward blacks in general and Africans in particular, he said.

Mr Manyi felt that the PLA’s response did not address his issue with the current definition. This clause was unclear, which meant that the procuring institutions would be able to overlook a certain group over another. Moreover, he felt that it was open to abuse.

Once again he proposed that the Bill include a sentence that sets aside a specific percentage of goods and services that must be locally procured. Such a provision would reflect Parliament’s desire for the government to promote local content and create jobs in the country.

The Chairperson outlined that the intention of the Bill was to promote local content – which has been made clear. Furthermore, he was weary of Parliament passing a Bill which would be difficult for the executive to implement. Given this, he rejected Mr Manyi’s recommendation and suggested that it be included in the Minister’s regulations.

Mr Manyi argued that his proposal to include one sentence setting aside a specific percentage of goods and services that must be locally procured by the government had to be included because the PP Bill had a trumping effect over other legislation.

In addition, he asked why the department and PLA were opposed to including ‘all’ in Clause 18 (3).

Adv Van Schoor argued that this change was unnecessary as the terms ‘youth’ and ‘women’ referred to all persons who fell into that group.

Mr Manyi proposed that this be outlined in the definitions section of the Bill.

The Chairperson asked if Mr Manyi’s proposal could be accommodated.

Adv Van Schoor pointed out that ‘youth’ was not listed in Clause 18 (3) as a separate category but under small enterprises. Considering this the Bill could not say small enterprises owned by all women because the prescribed 51% set-aside for women-owned would not work.

The rule for statutory interpretation was that any term used in legislation has its ordinary dictionary meaning. As such, she again argued that the change was not necessary.

The Chairperson accepted the department’s advice.

Mr Manyi asked if he could make a further contribution.

The Chairperson denied him the opportunity to do so as he believed that the Committee had exhausted the matter.

Mr Manyi did not understand the difficulty in his proposal and again asked for it to be considered by the Committee.

The Chairperson said that the Committee could not adopt his proposal given the legal advice it was given. However, the Committee would record Mr Manyi’s objection to the report.

He proposed that the Committee move to the next item on its agenda.

Mr J De Villiers (DA) supported the Chairperson’s proposal, as he too believed that Mr Manyi had been given enough time to convince the Committee otherwise.

Mr Manyi mentioned that moving on to the next item suited Mr De Villiers’ agenda.

The Chairperson took exception to Mr Manyi’s remarks and asked that he not speak to Members in that manner.

Mr G Skosana (ANC) also felt that the Committee had given Mr Manyi enough time to argue his point on the matter.

Following the discussion, the Chairperson requested a mover for the adoption of the report.

Ms Z Nkomo (ANC) moved for its adoption.

Ms D Mabiletsa (ANC) seconded the mover.

Mr De Villiers said that the DA reserved its position on the report.

Mr Manyi stated that the EFF reserved its position on the report.

The report was duly adopted by the majority of Members, noting the DA and EFF’s reservations.

Read: ATC231205: Report of the Standing Committee on Finance on the Public Procurement Bill [B18 - 2023] (National Assembly- section 76), dated 04 December 2023

Mr G Masualle (ANC) thanked the drafting team for the quality of the Committee’s final report.

The Chairperson mentioned that the Committee recently received the Minister's response regarding its decision to amend a clause in the RLA Bill which provided for the two-pot system to be implemented from 1 March 2024 and not 1 March 2025.

Thereafter, he asked if the Committee had any other meetings scheduled for the week.

Mr Wicomb indicated that this was the Committee’s only meeting scheduled for the week. However, he advised that the Committee would have to find a date to deliberate on the proposed technical amendments made to the Municipal Fiscal Powers (MFP) Bill by the Select Committee (SC) on Finance.

Read: ATC231011: Report of the Select Committee on Finance on the Municipal Fiscal Powers and Functions Amendment Bill (National Assembly- Section 75, B21b-2022), Dated 10 October 2023

Minister of Finance’s response to the Committee on the RLA Bill

The Chairperson read the letter (see attached document) out to the Committee. After doing so he asked what Members thought of the Minister’s proposal for the implementation date to be moved from 1 March 2024 to 1 September 2024.

Mr Manyi supported the Minister’s proposal for the implementation date to be moved to 1 September 2024.

Mr De Villiers also supported the Minister’s proposal.

Ms Abraham also supported the Minister’s proposal. She appreciated that the Committee was united in its support for the date change.

The Chairperson expressed hope that the Pension Funds Amendment (PFA) Bill would be approved by February.

Adv Van Schoor clarified that the department submitted the Bill to the State Law Advisors (SLA) for certification. She hoped that the Bill would be tabled in the Committee before the end of this year.

Dr Hlophe indicated that the Committee has already held public hearings on the RLA Bill. He asked if this process would have to be restarted if the Bill is re-tabled to the Committee.

In addition, he advised the Committee to adopt its report on the RLA Bill.

The Chairperson clarified that he was referring to the PFA Bill and not the RLA Bill. In addition, he said that the Committee had already adopted its report on the RLA Bill.

Adv Van Schoor explained that the PFA Bill was submitted to the Committee earlier this year together with the RLA Bill, however, the department was subsequently advised that it had to first table it to the SLA and thereafter, the Cabinet.

The Chairperson stated that the Committee will have to conduct public hearings on the PFA Bill once it is tabled in Parliament.

Thereafter, he asked the Committee Secretariat to elaborate on the proposed technical amendments to the MFP Bill.

Mr Wicomb asked if the support staff should finalise the Committee’s report on the RLA Bill in time for the House debate scheduled for Wednesday.

The Chairperson asked if the Bill was scheduled to be debated on Wednesday.

Mr Wicomb said it was, pending finalisation by the Committee. The amendment made to the implementation date would form part of the Committee’s final report. Furthermore, both the A-List and B-Version of the Bill would have to be amended before Wednesday.

The Chairperson gave the Committee Secretariat the green light to finalise the report, A-List and B-Version of the Bill before Wednesday.

Mr Wicomb said that the SC on Finance proposed technical amendments to the MFP Bill, which was adopted in May of this year.

Adv Van Schoor outlined that the department picked up on an error in the Bill during the SC on Finance’s deliberations, and technical amendments were made after the guideline for implementation was done.

The Chairperson asked what time on Wednesday the National Assembly Plenary was expected to begin.

Mr Wicomb said that it would sit from 10:00 to 16:00.

The Chairperson proposed that the Committee either meet physically before 10:00 or have a virtual meeting after the House sitting to consider the proposed technical amendments made to the MFP Bill.

Mr Manyi supported the proposal for the Committee to have a virtual meeting after the sitting.

Closing remarks by the Chairperson

The Chairperson indicated that while it was not perfect the PP Bill was important as it concerned the lives of ordinary South Africans and their economy. Even if future parliamentarians wanted to amend the Bill, Members should be pleased that they had laid a strong foundation for the procurement regime in the country, he added.

Having said that, he thanked Members, the Committee support staff, the SLA, and PLA for their efforts during the entire process.

The meeting was adjourned.