Public Procurement Bill: Treasury response to public submissions

Meeting report

Public Procurement Bill: National Treasury responses to public submissions
Mr Willie Mathebula, Chief Director: Contract Manager and Ms Empie Van Schoor, Chief Director: Legislature at National Treasury gave the National Treasury responses to public submissions on the Bill.
There were submissions from the African Procurement Law Unit; Public Affairs Research Institute; City of Cape Town and Joint Strategic Resource (JSR). The National Treasury (NT) response to public comments was summarised as follows:

Key Issues in Submissions - Constitutional Concerns
A. Preferential procurement (Chapter 4 of Bill)
Alignment Comments:
Chapter 4 of the Bill must be understood within the context of the procurement system outlined in section 217(1) of the Constitution, and its connection to Chapter 5, which provides a framework for this system through regulations. Procuring institutions should tailor their procurement systems and policies according to the specific nuances of their sectors and industries. The Constitutional Court's judgment in Afribusiness v the Minister of Finance underscores the importance of considering the founding values of the Constitution and addressing past discriminatory practices in legislation aimed at implementing section 217(2) of the Constitution.

Framework Comments:
Parliament has the authority and obligation to enact legislation establishing a framework for the implementation of preferential procurement policies outlined in section 217(2) of the Constitution.
The level of discretion afforded to organs of state in developing their procurement policies within this framework is determined by Parliament. While section 217(2) enables but does not require organs of state to implement preferential procurement policies, Parliament has the authority to mandate their usage through legislation.

Prequalification & Subcontracting Comments:
Prequalification for preferential procurement and subcontracting conditions align with the aims of section 217(2) and (3) of the Constitution, as highlighted in the Constitutional Court's judgment in Afribusiness v the Minister of Finance.

Set-Aside Comments:
Set-asides are not considered unconstitutional, as section 217(2) of the Constitution provides for preferences in contract allocation and protection of previously disadvantaged individuals or groups. The invalidation of set-asides in the Afribusiness case was due to the context of the PPPFA, rather than the concept itself. Chapter 4 of the Bill aims to provide a range of preference measures to address past imbalances and includes provisions for cases where set-asides may not be feasible.

Preferential Procurement Policy Framework Act (PPPFA) vs. Chapter 4 of the Bill:
Chapter 4 of the Bill expands beyond the PPPFA by offering measures beyond preference point systems to empower previously disadvantaged groups. The Bill seeks to address constitutional provisions in section 217(2) and (3) and outlines regulations to ensure responsible implementation of preference measures.

Local Production & Content Comments:
Preferences in contract allocation, including local manufacturing, are provided for in section 217(2)(a) of the Constitution. Clause 20 of the Bill outlines procedures for designating sectors for local production and content, including public consultation and consideration of various factors. Checks and balances are included in clause 20 to ensure responsible designation of sectors for local production and content.

B. Five principles in section 217(1)
The argument posits that certain provisions within Chapter 4 of the Bill appear to supersede the five principles outlined in section 217(1) of the Constitution. While the Bill addresses these principles and intends to supplement them through regulations, it is deemed unfeasible and inappropriate to encapsulate all principles equally within the Bill. Instead, it is suggested that these principles should be upheld in conjunction with sections 217(2) and (3), as well as sections 195(1)(b) and 216 of the Constitution. Upon enactment, the Bill, alongside accompanying regulations, will guide procuring institutions in incorporating these principles into their procurement systems and policies. The contention arises from the perceived conflict between preferential procurement, as outlined in sections 217(2) and (3), and the principles in section 217(1). However, it is emphasised that all provisions of section 217 are expected to coexist within the procurement systems envisioned in section 217(1) of the Constitution.

C. Scope of the Bill
The perspective presented argues that the Bill extends beyond the requirement outlined in section 217(3) of the Constitution, which mandates a framework for preferential procurement policies under section 217(2). It asserts that while national legislation such as the PFMA and the MFMA fall within Parliament's legislative authority, they are insufficient in fulfilling the requirements of section 216(1) of the Constitution. Section 216(1) necessitates national legislation to establish measures ensuring transparency and expenditure control across government spheres, including the introduction of uniform norms and standards. The argument posits that these uniform norms and standards encompass the regulation of procurement processes.

Key Issues in Submissions - Independence of PPO
The argument posits that the PPO need not be independent and separate from the NT. This perspective is based on section 216(2) of the Constitution, which mandates the NT to enforce compliance with uniform norms and standards, including procurement standards, as part of its functions. Accordingly, the inclusion of the PPO within the NT aligns with this constitutional mandate. The Bill proposes to grant the PPO original powers, effectively separating it from other functions of the NT. However, it is argued that this separation is unnecessary since the PPO's role primarily pertains to government procurement activities, not those of the private sector. Therefore, there is no need for the PPO to operate independently, as it serves a governmental function similar to provincial treasuries.

Key Issues in Submissions - Integrity, Transparency, Accountability & Anti-corruption Measures
The argument contends that the Bill does not adequately address integrity, transparency, accountability, and anti-corruption measures. While the Bill is founded on constitutional provisions such as sections 195, 216, and 217, it is perceived as insufficient in combatting corruption effectively. It is asserted that the fight against corruption requires collaboration with various government institutions and law enforcement agencies. The Bill alone should not be relied upon as the sole instrument to combat corruption. On the establishment of an anti-corruption agency, as proposed by the Zondo Commission, it is suggested that such an agency would be best placed within the departments in the Justice cluster, where it can function most effectively.

Key Issues in Submissions - Incentivised Whistleblowing & Protection of Whistleblowers
The perspective argues that while incentivising and providing protection for whistleblowers is crucial, it should be addressed through amendments to the Protected Disclosures Act (PDA) administered by the Department of Justice, rather than through the current Bill. The Department of Justice has already taken steps in this direction by publishing a detailed discussion paper in 2023 for public comment, indicating a commitment to strengthening protection for whistleblowers. Concerns were raised during public hearings in various provinces on incentivised whistleblowing. Stakeholders expressed apprehension that incentivising whistleblowing could lead to the creation of an unwelcome market for criminal conduct. They feared that unscrupulous individuals might fabricate information and evidence implicating others in procurement-related misconduct in order to claim payment, thereby perpetuating a cycle of false allegations. Instead of monetary rewards, stakeholders advocated for enhanced protection of whistleblowers, highlighting recent incidents and questioning the ethical implications of attaching a monetary value to information that could potentially save lives.

Public Affairs Research Institute (PARI) response to National Treasury
Prof Jonathan Klaaren, PARI Research Associate, mentioned he would give two responses – on behalf of PARI and then Joint Strategic Resources (JSR) as these were two separate institutions. The first point would be from PARI and the rest from JSR. The participation in Joint Strategic Resources was a carry on from the participation in the NEDLAC process mentioned by Mr Willie Mathebula of Treasury. The Public Affairs Research Institute (PARI) was a think tank which had been around for a while. It was affiliated with Witwatersrand University and the University of Johannesburg (UJ), but was an independent entity. It had been researching and working in the area of state contracting and procurement for about 10 years. At times, it worked closely with the Office of the Chief Procurement Officer (OCPO) and Treasury.

He noted that Ms Sarah Gilbert, PARI senior researcher, was working on the parallel Methodology for Assessing Procurement Systems (MAPS) process. Members would be aware that the World Bank and Treasury were working closely on their usual MAPS process on the public procurement system at the moment. He believed this report would come out soon.

Prof Klaaren asked for clarity on the public participation process, Treasury had partly responded to public comments from some of the provincial legislatures. As far as he knew, Treasury was still deliberating on the provincial legislature comments. He was a stakeholder at the Gauteng Provincial Legislature (GPL).

There was something to be substantively welcomed in Treasury’s response. There was a sentence in the presentation which read, “The spirit in which the constitutional issues are discussed by the stakeholders is appreciated.” He thought it was fair for both PARI and JSR to return the compliment. The spirit in which the constitutional issues were discussed in Treasury’s response was mutually appreciated. There were four additional parts to the mutual appreciation of the constitutional issues.

The first was the welcomed disclosure of senior counsel’s opinion from April 2023. It is fair to say that one could have wished for this to be disclosed even earlier. However, it is helpful and provides clarity. There may have been nuances and disagreements of which he was unaware, but it was hopeful. It could enrich this discussion to be pulled through even more.

Secondly, a commentator made the constitutional argument based on Section 216(2) about the placement of the Public Procurement Office (PPO) in Treasury. This was arguably required by the Section 216(2) of the Bill. He noted the senior counsel’s opinion was based on Section 217. As the constitutional issues progress, it is important to distinguish carefully between the two sections.

Thirdly, in Treasury’s response, there was a welcomed engagement with questions about the independence of the PPO, its separation and internal structuring within Treasury on pages eight and nine. Here there was an understanding between the chief buyer and the chief regulator. There was agreement that the regulation was not exclusively for private firms, it differed in some sense from other industries. This was an important nuance. He thought it was important for the set of issues to cascade down to Provincial Treasury level.

Lastly, Treasury had included much more discussion of the Afribusiness case both in its Constitutional Court manifestation and the Supreme Court Appeal. He did not want to make everything a legal issue, but there was an appreciation of the driving force on constitutional issues.

On whistleblowing, this was a position adopted by the JSR but long-developed within PARI. There were several types of whistleblowing. Incentivised whistleblowing was noted by Treasury. PARI long-maintained that one type was incentivised whistleblowing for people who provided information that materially aided in the recovery of funds from procurement corruption and contract fraud. This accorded with a repeated point made by Chief Justice Zondo and the Special Investigating Unit (SIU) that the majority of state capture was in the terrain of public procurement. He asked Treasury if there was a view on incentivised whistleblowing. It appeared Mr Mathebula was of the view that this should not be engaged in.

COSATU and SADTU response
Mr Matthew Parks, COSATU Parliamentary Coordinator, said that it was useful to hear Treasury’s comments. He echoed the sentiments of appreciation of some of the collegiality in Treasury’s engagements even if COSATU remained frustrated with some of the stumbling blocks. In all relationships, there were communication challenges. It felt as if some basic things were not being fully comprehended by both sides.

There was alignment with commentators on the Bill and Treasury on several high-level principles. This was not surprising as everyone wanted a more effective state that rolled out service delivery progressively. A large number of attendees saw the need for a transformational component to the work of the state’s public procurement. Not everyone agreed, he knew there were some who vehemently opposed this, but there was largely an alignment in this sense.

COSATU’s concerns were not with the high-level principles, but whether this Bill did the work to enable those. COSATU had previously pointed out that it thought this was not the case. There were significant problems that remained embedded in the Bill and not sufficiently addressed by Treasury’s comments. COSATU maintained that the Bill needed to return to NEDLAC to work through some of the contentious issues.

Treasury returned with some comments about constitutionality. COSATU would not speak on all those matters. It was clear whatever came out of Parliament in this Bill would be challenged in court, this was a no-brainer. Whether it was the most remarkable nirvana or the most destructive and terrible Bill, it would be challenged in court by an interest group somewhere. COSATU’s need was to ensure it had the best opportunity to win a court challenge where possible. This was why it flagged the issues of constitutionality. If the Bill went through, it was not clear if COSATU would not get a hiding or undermine fundamental parts of the Bill. It was a headline principle and not a small thing.

On the price issue, it was embarrassing as a trade unionist to say COSATU and SADTU love pricing and did not like the state to spend more than it should, because they did not believe in this. They believed that there should be a premium spent by the state on transformational aspects of public procurement. They did not have a problem with the principle of premiums in public procurement. This did not mean there should be an absence of pricing in public procurement legislation. It sounded so dire and almost existential as a threat. This was because it left a constitutional component and imperative unaddressed on the issue of cost-effectiveness, transparency, etc. Treasury’s response in the document suggested that it wanted flexibility. If this was the case, then there would be nothing in the Bill, because nothing would be addressed in the Bill. Why is the price not in the Bill? It did not make sense. If Treasury wanted flexibility, then it should have an absent Bill with nothing in it and leave everything to regulations – but this was a ridiculous outcome. Why would we leave price out? The danger was that if nothing was said about price, a silver platter would be handed to every member of society who was freaked out that the state was abusing public funds. The reality was there would be an abuse of public funds. Why do we not put a guardrail there?

The same was true for other issues that were being kicked into regulations. It was understandable that a Bill could not deal with everything. The need for flexibility via regulations was understandable, but it was not smart to kick everything to regulations. At the moment, so many of the clarities, guidelines and principles around selecting and preferences in Chapter 4 are moved to regulations that a problem would arise. Some of these were sketched. COSATU thought there had to be a rethink on some of the principles, guardrails and guidelines that would work there.

There were missing items in Chapter 4 such as the unequal treatment of different kinds of preference like the requirement for market research and designation, but not in other forms of preference. It did not make sense to apply different considerations and requirements to different preferences.

Carving up tenders was highlighted in the previous concern. This would make it difficult to sustain legitimate businesses. This was not addressed in Treasury’s comments; instead, it said it would deal with it in regulations. This could not be dealt with there as it was a principal issue of selection.

Issues were raised on confidentiality and the ‘‘confidential information’’ definition in Clause 1 stated these issues required the Protection of Personal Information Act (POPIA). Civil society had huge experience in trying to extract information from the state and consistently learned that Promotion of Access to Information Act (PAIA) was better than POPIA for these issues. There was a theoretical justification from Treasury to hedge confidentiality on POPIA. This was not the way it worked. PAIA would be a better instrument and COSATU wanted to engage on this.

On Clause 11 about automatically excluded persons, Treasury suggested that information resided in the CIPC. This was misleading, comments would be provided on this. However, COSATU was looking for a national register of excluded persons for public oversight and transparency.

Lastly, somehow through NEDLAC and Cabinet, it was acceptable for leaders of political parties to be excluded from tenders and now Treasury said it was unconstitutional. It could not be unconstitutional, it was inconvenient and COSATU wanted to bring that back into the final Bill.

National Research Foundation response
Mr Ron Grace (FRF Financial Director) said that the NFR expressed appreciation for the Chairperson's approach in putting Treasury under pressure to go to the next level, up its game and respond to everything. NRF had met with Treasury which did not respond to everything. It had placed a document in the chat which highlighted what was not addressed. In the first round of public consultation in the National Assembly (NA), the NRF had about 300 of the 2300 comments. Treasury, as indicated in the last consultation in the National Council of Provinces (NCOP), had dealt with a small fraction. The latest response from Treasury only dealt with a small percentage of comments. The vast majority of Treasury's responses were non-responsive and these included the use of the word “Noted” which was not a response.

National Treasury had not respected the Chairperson’s wish to strive to achieve sufficient consensus, which was lacking. The impact of that was that the current legal obligation was with Parliament, specifically the Committee. Treasury was exposing Parliament and the Committee by not adhering to the Committee’s requirements. He recalled the Chairperson saying he did not expect to read everything, but he did expect Treasury to engage in everything. Failing to do so exposed the Committee and Parliament.

Mr Grace provided a high-level summary in the interest of time. A good procurement system should be economical, efficient, and effective. In the South African context, it should limit corruption and promote transformation. The NRF view resonated with the community of practice in the country. In its current form, considering all the proposed changes, the Public Procurement Bill would achieve the opposite goals. He used both the argument of Treasury’s historic performance and the proposed trajectory of the Bill. Based on what was seen, procurement would continue being a lot slower, less efficient, and more expensive. In addition, quality could be compromised because an inadequate toolkit was being given. One could not give a brain surgeon an axe to operate on the brain. The appropriate toolkit had to be provided, there had to be a diversity of instruments that were reliable and prevalent in the space.

The NFR concerns had been expressed at the NA hearings. The first concern was the inadequate oversight of Treasury if there was an acceptance of the de facto situation.

The Chairperson interjected and said Mr Grace had limited time left to speak. The purpose of the current meeting was to take things further. NRF could engage with the Committee directly having heard from Treasury in two pages. The Committee could not but its researchers would. People sought to have another public hearing where they repeated themselves and he urged them to focus on precise items and send the Committee a two to three-page document of what more they wanted to raise beyond what they had already said. He asked speakers to stick to two minutes.

Mr Grace continued and said the oversight of Treasury were referred to in the Section 60 comments. This included the scope of procurement, removal of contract management, and asset management. Treasury’s capacity did not have the requisite depth. In the past it flip-flopped too much, and the procurement by other organs of state was largely unlawful in terms of the proposal. Going forward, NRF proposed to do this properly. It had not been done properly. The consultation process was fatally flawed. NRF had provided two opinions. Its recommendation was that in its current form, the Bill would do more harm than good.

The Chairperson made it clear to stakeholders that the Committee wanted to hear them out because several of them were technical experts. Committee members were politicians and did not have the expertise the stakeholders had in procurement. The members of the Committee had to assist in coming to a conclusion. Ultimately, these were political decisions like in every democracy. Going to the extreme of starting from the beginning was something he could not see the majority of the Committee agreeing to. This Bill had been in the pipeline for a long time. He asked Treasury if it could answer that question first. When did you start on this Bill? How long has it been with you? How long was it in NEDLAC? How many hours did you spend in NEDLAC?

Treasury was not obliged to accept all the proposed amendments, which conflicted with one another because stakeholders had different interests. The parliamentary committee was not obliged to listen to Treasury. It would hear Treasury and say where it agreed and where it did not. The same applied to civil society. This was a democracy. Ultimately, it was the elected politicians good or bad, who reflected on the matter and decided. Civil society had to decide as part of its constitutional right what was key; nobody was entitled to be conceded to on every issue, but they had to be heard and given space to engage. He had some ideas as mandated by his party on what some of the options were.

Treasury could not keep saying “noted”. Where does this come from? When you say “noted”, what do you mean? What is your response? This was needed. This was an inadequate presentation; Treasury could not be serious. Yes, it was a Section 76 Bill and it had to carry nine provinces with it. He asked if there could be agreement that civil society could not get everything it wanted, it was too late now. It would not get everything, nor would it ever, that would be stupid. That would mean Parliament was toothless, populous, and gave into all the civil society stakeholders. On the other hand, Treasury knew it did not make the final decisions, Parliament did. Why did all these issues not get raised and addressed in the NA? Treasury also needed to answer this.

He asked for agreement not to repeat that the Treasury presentation was inadequate, this was clear. He asked if he could speak with Treasury offline about how this process should be managed. This response was unacceptable; it was not good enough. When he looked at the presentation last night and this morning, he thought it was inadequate. He did not care which party said what about it. He did not know what the majority thought, perhaps they were happy with it. He told the stakeholders there was no need to say Treasury did not consult them because this was not true. They were consulted at NEDLAC and did not get what they wanted. He asked them not to go to extremes and polarise the discussion. Instead, they should try to see where they could meet each other in a give-and-take process.

He made a final point because things were going a bit haywire. The Committee would allow the stakeholders to make further submissions no longer than two pages. This should be in bullet-point form on what they wanted. He told Treasury not to come to the Committee until it had a proper, comprehensive response. This did not have to be on every issue. It could not have 5 000 proposed amendments, it could cluster them and respond to them. This would have to be done again, it was unacceptable. On the other hand, there could not be stakeholders being intolerant of Treasury and not recognising their responsibilities. He asked for this to be submitted by noon on 21 March. Next week, the Committee would pay more attention to the Bill. He asked stakeholders to focus on a few things and not to tell the Committee who they were, this was already known.

Public Service Accountability Monitor (PSAM) response
Ms Lisa Higginson (PSAM Budget Advocacy Coordinator) said that PSAM remained concerned that the Bill did not provide a much clearer and binding set of reporting requirements that would improve transparency in procurement. Treasury's response said there were sections on disclosure and participation. The concern was there were already provisions in place in the existing regulations that compelled procuring entities to publish information. These entities either did not adhere to these regulations, or the information was incomplete, or inaccurate with insufficient oversight and monitoring. E-tenders had insufficient information and several errors. For example procurement for the next quarter referred to fictitious dates. There were also challenges with the dashboards as there was limited functionality and the dashboards were not up to date.

Treasury’s response raised concerns. It appeared that Treasury would revert to the system of circulars and instructions with optional compliance for local government. In the current scenario local government could choose to report and publish information on procurement, or not publish at all. Treasury's response that no additional resources were required to implement the Bill, was another concern. This was because the functionality of e-tenders and some procurement frameworks were inadequate with information missing. If no additional resources were committed, then what changes? What is different from the current scenario? It was widely known that it was not working. Treasury succeeded in making the system completely impossible.

PSAM was a civil society organisation (CSO) based in Makhanda, a town famous for its water supply and quality challenges. Currently, large parts of the town were without water and had been without water since the weekend. This had been ongoing for at least a decade. There was a Boil Water notice in effect due to high levels of contamination in the municipal water. As a civic actor, PSAM could not find accessible statistics on how much was spent on water projects and water plans, etc. There was a recent session with stakeholders, where a dispute took place between the Department of Water and Sanitation (DWS) and the Water and Sanitation municipal council committee on how much had been spent. The concern was not only if civil society could access the information, but also if critical oversight actors and committees were unable to access information.

PSAM appreciated the response and recognised transparency improvements in this version of the Bill. However, it was not convinced these were strong enough to ensure information would be published in an easily accessible format to the public to conduct oversight or understand what was going on in municipalities and departments. PSAM thought this was an important aspect of the Bill and possibly less controversial than some of the more complex matters. It wanted information to be clear and for entities to publish information in a timely manner.

South African Medical Device Industry Association (SAMED) Response
Ms Monica Lucas, SAMED representative, noted that the medical health concerns needed to be addressed.This included the recognition that medical assistive devices had unique challenges. A one-size fits all procurement plan would raise significant problems with patient healthcare. The removal of bid specification committees, strategic sourcing and daily-based procurement in the Bill were major concerns for the healthcare sector as it had a direct impact on how healthcare practitioners could provide care for patients. It also raised significant challenges with what was contained in the NHI Bill.

There were significant contradictory requirements between what was proposed in the Public Procurement Bill and the NHI Bill and then what was required of specialist heakthcaresectors within the Medicine’s Act and medical device regulations that were already in legislation. The proposed NHI centralised procurement system was contradictory to the Public Procurement Bill. SAMED would rather advocate for a decentralised procurement system that allowed for the care of different demographics and disease burdens. It also advocated for a system that allowed for technical support and spare parts and training for healthcare professionals throughout the system that would be available in the local setting rather than from a centralised national setup.

The bid specification committee concern was due to the absence of a legislative framework for supply chain management and how those committees worked. Without those committees, there would be ongoing instances of inappropriate medical procurement and implementation of contracts. This included healthcare professionals not having working medical devices. Ultimately, this would lead to sub-optimal health outcomes as seen during the procurement challenges during the COVID-19 pandemic. Any procurement system that considered price as the predominant factor would fail to account for the cost value of the care for a patient. It would favour much older technology which would hurt patient needs and healthcare outcomes in the long run.

The concept of value-based procurement was removed from the draft Bill. This set out important parameters to ensure that medical procurement was appropriate and responsive. Strategic sourcing was also removed as a definition in the current Bill, and SAMED recommended reinstating these in the Bill. Value-based procurement was making purchasing decisions that considered how a product or solution could best deliver outcomes being measured and reduced to the total cost of care at the end of the line, rather than exclusively focusing on purchasing a specific product at the lowest possible price. Anyone who ever experienced patient care within the government sector was fully aware this was a system that could do so much better. How goods were procured, how the system operated, and what was planned were central to that. Without the implementation of those parameters in the healthcare system, it would lead to a detrimental lack of delivery in the government sector and patient care would be compromised.

Will Power response
Mr Shaun Scott (Will Power Director and Chain Supply Management practitioner) said Treasury did not respond to a recommendation that Will Power thought was important which was that Parliament and the provincial legislatures should be included in the application of the Act. There was an important definition change that Treasury recommended on “construction”, which was welcomed. However, the same logic should be applied to the definition on asset management that came later in the Bill. It was worrying that Treasury insisted that asset management was part of procurement management; it did not make sense. For example, Eskom managed assets and now the whole of Eskom would come under procurement. This did not make sense and should change.

Throughout the responses, Treasury said complementary goals should be defined. This was a point another stakeholder made about price. Complementary goal was not understood by anybody except Treasury. It was a fundamental part of Chapter 4, the framework that s217(3) required. It was fundamental but stakeholders did not know what it was. Unless complementary goal was defined and there was an understanding of what it was, a framework did not exist. He encouraged the NCOP to engage with Treasury on what it meant. Without clarity, there was no framework.

Treasury made a significant change in that it corrected a reference to a section that did not exist and said it should refer to Clause 17(3). This was a very significant and welcome change, where it could pre-qualify black women, women and a range of designated groupings in Clause 17(3). This change was new and had not existed before and suddenly there with this correction, so it had to be discussed a lot more.

Treasury said that one of Will Power's statements was looked at operationally and did not work. The statement was about sub-contracting where Treasury said sub-contracting was a critical lever in transformation. Provinces and municipalities wanted to be able to encourage sub-contracting of their suppliers in their municipalities and provinces. They would not be able to do that. This had to be addressed now. They would have to choose between sub-contracting to anyone in the country or any supplier in their area even if it was a big white supplier. This did not make sense and had to be looked at carefully.

The reference to panels within tribunals was welcomed. Treasury suggested that it should be covered in the tribunal rules. Will Power suggested that it had to be explicitly stated in the Act and acknowledged the financial impact. In the matrix, Treasury identified more than 30 recommendations in the detailed matrix. Will Power fully supported that this needed to be addressed in the updated Bill.

Institute of Race Relations (IRR) response
Mr Gabriel Crouse (IRR writer and analyst) welcomed Treasury’s recommended amendments. Clauses 62 and 63 said Minister could grant could grant exceptions and the PPO could grant departures. [Mr Crouse’s connection cut].

Discussion
The Chairperson asked if Committee members wanted to speak in the interim.

Mr D Ryder (DA, Gauteng) congratulated Dr Mampho Modise on her recent appointment as a Deputy Governor of the South African Reserve Bank (SARB). He thanked the Chairperson for postponing the previous meeting as the Committee had a much better and more constructive engagement today.

Mr Ryder asked Prof Klaaren what his thoughts were on where South Africa stood on the MAPS process which was an international assessment of the procurement system of South Africa and other countries based on international criteria. If this Bill becomes an Act, is it likely to stand up to that scrutiny?

Mr Ryder said COSATU’s inputs were excellent and spoke for a lot of people in that everyone shared a desire for an efficient system. This trust should be expected and he suggested looking at the Zondo Commission and all the allegations and comments. Treasury should not be surprised at the level of distrust the Bill was being met with. A court challenge to the Bill was inevitable. He thought the process should hold up to scrutiny when that time comes. He had a look at Treasury’s response and noted KwaZulu-Natal, Limpopo, and North West’s public participation was not detailed in the matrix and Gauteng had one opportunity for public participation. Are we on track to meet the public participation thresholds expected by the courts?

Mr Ryder referenced the point by PSAM that Treasury said no additional resources would be required. Tribunals were being set up; who are we fooling if we think those would not require massive staffing? Over and above that, there were lots of additional requirements in this Bill.

Mr Ryder said Mr Scott pointed out the limited nature of the Treasury response and the omissions. He also pointed out the amount that was being left to the regulations, which would still be coming through. There was too much undecided. He did not have a grasp on the big jargon that came through like “complementary goals” and “set asides” and the stuff that would be dealt with in the regulations. This was problematic, because a flawed Bill would be passed based on expectations that something would happen down the line and would not happen.

Mr Ryder enjoyed Adv Budlender’s inputs and thought Treasury chose to interpret it in its favour. As was always the case in a legal opinion where something was interpreted, the legal opinion also had to be interpreted. He referred to Treasury in paragraph 42 of Adv Budlender’s response – he did not think Treasury was covering itself in glory. There was certainly going to be potential for further constitutional actions, specifically Sections 125 and 217 of the Constitution where the spheres were separated. This was unpacked earlier and he would not repeat it.

One of the issues was the draft amendments made in Chapter 4. Those amendments were made largely in comments in the National Assembly committee report. The actual defined clauses were not agreed on by the NA. The Bill was before the Committee and he saw amendments being proposed. While some of them were welcomed, most were necessary. The specific wording of those clauses needed to be seen. The first thing that had to be looked at when interrogating a law was the wording. The public participation and Committee deliberations resulted in certain in principle changes, leaving Treasury to crystallise that into the wording of the specific clauses it changed, which was problematic. Before adopting its final report, the Committee should looked at the B version of the Bill and the specific wording, which was important.

IRR continued
On return to the virtual platform, Mr Crouse said the minister could grant an exemption from any requirement of the Act if not doing so was economic impracticality creating an impossible procurement situation. IRR’s concern was with the word “may” because this meant the minister may or may not choose to grant these exemptions. Treasury recommended that “may” should be “must”. The minister “must” grant exemptions from this Act if failing to do so would make procurement impossible or impractical. In Clause 63 the PPO “may” in the present version of the Bill grant departures.

Treasury suggested that PPO ‘must” grant deviations if the alternative was impossible or impractical. However, Treasury made it clear that while it suggested changing “may” to “must” when it came to that which was impossible or impractical, the “may” should remain when it came to that which was uneconomical – this can be clearly seen in the comments matrix. The Committee should apply its mind to Treasury stating that it agreed exemptions “must” be granted if the alternative was impossible, but when the alternative was uneconomical, then the minister may or may not grant an exemption. This would be up to the minister. The Bill was there to grant executive authority to uneconomical procurement.

Next, the Treasury response today used the word “transparency” several times. IRR welcomed that Treasury was now looking at the Section 216(1) requirement for transparency and cost-effectiveness. It was not saying that this was not there from the start, it agreed and thought it was good that Treasury drew attention to this. There were various occasions in the Bill where Treasury mentioned transparency. There was a very specific point on what had to be made transparent, which were the premiums being paid for the preferentialism, or broad-based black economic empowerment (B-BBEE), and any other premiums. Will the public know how much is being spent in general and on a contract-by-contract basis on these premiums?

Currently, the system was made worse by the Bill, the situation made it to be as if it was inherently corrupt to pay such premiums. There was nothing corrupt about a black business being paid a premium based on B-BBEE laws that provided for that. The law was the law and it was not corrupt to follow it. Do the public get to know how much is being spent by the taxpayer, including the poorest citizens who paid disproportionally, on these premiums? Treasury never said how much was being spent on these premiums in the Budget. The problem with the Bill was that it made this even harder for the public to know because the set-aside system and pre-qualification criteria system meant that no one in Treasury or the PPO would know the cheapest price available to pay for the goods and services and by contrast the extra being paid on the premium. The talk about transparency is all good and well, but where is the transparency about these premiums? Under this Bill, how is the public going to know the amount of premiums being paid by taxpayers for the purposes of B-BBEE or preferentialism? This question was not answered and until it was, even for those who thought this was a good way forward, the Bill would be a failure. In addition, IRR submitted that the whole Bill was flawed.

Discussion
The Chairperson thanked the IRR for its response and asked if anyone else wanted to come in. All the views for now depended on what the majority of the Committee thought. This was a transformative Bill. As it was in a sensitive area, it would be vigorously contested. There were a variety of interest groups. Some could feel that they would lose out and those who felt excluded demanded change. Those inside the system had an advantage over the B-BBEE and similar policies. Some would feel insecure because of all the requirements for public procurement now. This has became an election issue and made things more polarised. Some parties made it clear they stood for the scrapping of affirmative action and B-BBEE and policies like that. Some people were previously advantaged who were now in lower-income groups. It was an election issue as should be expected.

The degree of polarisation was extreme. There seemed to be no give-and-take from stakeholders; only a few were willing. Stakeholders and other entities were heard, but Parliament decided. Unlike most Bills which were Section 75, this was a Section 76 Bill. It was the wording that mattered. Parliament had to look at every word. It was insufficient for Treasury to communicate in policy terms what it agreed to amend. The parliamentary lawyers and the Committee had to take major responsibility. The Committee would not let anything pass until it saw the wording and to what extent it was consistent with the policy it agreed to.

On constitutionality, sometimes those who raised that did it because they genuinely believed something was unconstitutional. Often people took a Bill to court because they were unhappy with its policy. He had no doubt some person or organisation was going to take this Bill to court. Committee members were not constitutional experts – their job was to ensure the Bill was constitutionally sound based on advice given by lawyers. There was no lawyer on this Committee. He had learned a lot being in the system since 1994, especially dealing with local government and spheres of government where every clause had to be questioned. Questions that were asked were: is this legally sound; can we do this; do we make it “may” or “must”?

It was fine for those who wanted to take the Bill to court, the Committee would not be threatened by that. It was not the Committee’s ultimate decision, its members were not judges, but politicians. It was up to the Constitutional Court to decide if the Bill was sound. The Committee’s job was to decide it was sound as far as possible with the help of the legal unit. He asked Treasury how long it had been working on this Bill. What is the extent of the participation of civil society in NEDLAC and outside it?

On whistleblowing, while recognising the huge resource challenges and other constraints, it was disgusting what happened to many whistleblowers, which would be occasionally read about in the media. This did not happen only because of the failure of the state, including Parliament, but the private sector, for all its blabbering, it did not want to employ people who stood out and sacrificed and lost so much income, with threats to their lives and some have died. What was happening in this country was shameful. Government said it had no money and that was understandable, but nothing prohibited the Committee from stating in its report that what was going on was wrong.

It was true that some people falsely offered themselves as whistleblowers to secure money. There were ways of trying to reduce that. It was terrible. Why should people come out and risk their lives, families, and income in a society as corrupt as ours if they are not going to be protected? It was not the Committee’s responsibility. People accused Treasury unfairly, which was not government as a whole, and could not be blamed because the police and court system were inadequate. Treasury was right that the Protected Disclosures Act was important and nothing stopped the Committee from proposing that the Justice Portfolio Committee amend it.

On the regulations, he was advised by Parliament and independent lawyers that “may” and “must” did not mean the same in legal terms. “May” had a binding aspect of it except if the minister could not provide an exemption. If “must” was used, then in every circumstance, the issue would revolve in the court around what the exceptional circumstances were and if it they were justified. He came from a background where there was a reluctance to provide ministers with the power to regulate unless it was necessary. Even in the local government framework legislation, Members kept saying whenever the minister regulated, the Department would have to come to Parliament and tell the Committee what the regulations were. In some cases, the regulations had to be adopted within a month or they had to be tabled so the Committee could comment on them. The Committee always consulted with South African Local Government Association (SALGA) like any other department. The Committee should look carefully if it wanted to give the minister too many powers.

The Chairperson was an active proponent of civil society and its role. When looking at his background, he shifted away from his romantic view of what was possible in the local government. He thought it was important to be less romantic, there had to be a more stringent national framework. National sphere could not take over the powers and functions of the local government sphere, it was unconstitutional, but there needed to be stronger framework legislation. Where possible, it needed to disincentivise people from wrong and penalise those who were wrong in terms of the Constitution. This was not to say that local government had the right to say it. It was to say there was no capacity. The right balance had to be found. Some people complained about local government, it had to be managed better from the national sphere without violating the Constitution.

The Chairperson said the legal opinion was helpful. COSATU said it should be taken back to NEDLAC, but it was in NEDLAC for long. Perhaps there was another way out which should be thought about. Going back to NEDLAC could be a ponderous bureaucratic process. He had done this on several Bills where the Committee could ask Treasury and stakeholders to meet outside the Committee process. It had a two-week constituency period in April 2024 and it would make amendments to the Bill and send it back to the NA. He did not think there was an appetite to defer this Bill to the Seventh Parliament. If the Committee had to then it would.

The Committee had sought an extension. All the provinces were notified last week that it was highly likely that they would not have to rush and they had more time. The Committee would not rush blindly through this Bill. It had an extension and had already passed the eight-week cycle which was 22 March 2024. The Committee fought for public participation, and mainly content issues because the content was rushed. Those extensions were granted.

Someone spoke about how small businesses would be penalised and he was not clear in what sense. He would skip many of the responses because he ended up taking too much time. Treasury, why do you not concede that you have limited capacity and resources? What Treasury sought to do was very ambitious. Firstly, the Committee did not buy Treasury statement about no financial implications. The Committee had asked for Treasury’s programme. The Bill was delayed for about six to eight weeks until the Committee was given capacity. Only after that did the Committee continue with the Bill. Treasury had to accept that this was a very ambitious Bill and it had to face this. If it had a programme, then it should bring it to the Committee.

He did not buy some of the arguments made by the stakeholders about how local government had been trampled on. He thought the clauses in the Bill could be tweaked, ultimately looking at how they were worded and the Committee could sort that out.

The best way out of this public procurement mess with inevitable litigation and subsequent delays was to put as much information in the public domain as possible. If there was a seriousness about tackling corruption, which was a major concern, why can we not put as much information as possible without being insensitive to the market? He was not an expert in this area.

Nobody understood the 'complimentary goals'. He asked the stakeholder who mentioned this to give the Committee two pages on this and where the problems were. He urged stakeholders to highlight three or four issues. Two or three pages were enough. This was not an endless discussion. The Committee would not agree to start from the beginning. This was Parliament. Unless the Committee felt it could not proceed with the Bill, it would pass it this term. People would think that he was under pressure from his party but he did not think those who knew him saw him as a spineless chairperson. People made this an election issue and had provoked responses.

At this stage, the Committee wanted to pass this Bill for a variety of reasons, most of which had nothing to do with the election. The Committee could say it was a transitional temporary Bill. There would be a new term of Parliament and people would have to find their feet. He asked how many Committee members would return in the new Parliament. He urged stakeholders to think realistically and see how much could be processed in the Bill. Issues that were too contentious should be removed. Ultimately, the Bill went back to the NA, which could reject what the NCOP Committee said. He pleaded with the stakeholders to submit by noon on Friday 22 March in a short bullet-point submission. They had to be realistic about give-and-take. Apart from the stakeholders present, there were several others.

He asked Treasury to explain what happened in the NA process. Why the sudden change at the last moment? He also did not think civil society stakeholders were being reasonable. There was a Parliament whether they liked it or not and whether they liked the majority party or not. There was an election coming up and they had choices. The NA was the one to decide in the end. He did not know what the complaint was, the Committee was not obliged to go back to civil society and ask them if they agreed. He also pleaded with Treasury to be realistic. It was a disappointing set of responses and he will talk with Treasury offline. This was unacceptable. There had to be a more comprehensive response about what had happened and was said in the initial public hearings and what Treasury had not responded to now. Everyone had to be responded to. If it was too much to handle, it could speak to the Director-General and that could be handled offline.

People could not come to the Select Committee and repeat themselves and expect everything they wanted to be done by Treasury. He asked both sides to be understanding. He already consulted with the ANC study group, which would speak when necessary. He asked Treasury to respond concretely and precisely. If it did not have the answer now, it should give it in writing. Can any Member from any party who disagrees with me raise it? As Chairperson he was trying to direct the meeting as a representative of the institution.

Committee members could not sit here endlessly and look at very finite, technical issues and go back and forth. The stakeholders and civil society could attend, but there was no obligation for the Committee to include them further. They were always welcome to send submissions. He asked the Senior Parliamentary Law Advisor to provide a report on the constitutional issues at least 48 hours before the next meeting. Apart from Treasury’s response, constitutional issues were not dealt with by the Committee. The Committee would receive a report on what Parliament's Constitutional and Legal Services Office (CLSO) thought of the Bill. If Committee members disagreed with this then they could say so.

Instead of the NEDLAC process, can stakeholders and Treasury meet? Treasury had three weeks before coming back due to the April constituency period. The Committee wanted a report on what issues were agreed on and what issues were disagreed on. Both sides should recognise this but ultimately it was the Committee’s call. He told Treasury to cluster the issues in the report. If the Committee agreed with this then he would engage with the DG further. Before then, he wanted to speak to Treasury about process. The Committee wanted Treasury's buy-in – it did so much work on the Bill.

Treasury response
Mr Mathebula replied Treasury started working on this Bill ten years ago. In 2014, Cabinet took the decision to modernise the procurement process. The process of drafting the Bill began at that time and Treasury consulted internally within government institutions. Eventually, it took the Bill to Cabinet on 5 February 2020. Cabinet approved the draft Bill to be published for comment ago. More than 4000 comments were received. Treasury had to work through all 4000 comments. This culminated in a Bill. The Minister of Finance requested that this Bill be subjected to the NEDLAC process so the social partners at NEDLAC could have input. The Bill was sent to NEDLAC in April 2022. There were many engagements there with the social partners and many issues were discussed. Some issues Treasury agreed to but agreed to disagree on certain issues. The NEDLAC process lasted until October 2022. The NEDLAC report on the issues agreed was signed off by all social partners on 25 October 2022 and submitted to both the Ministers of Finance and Labour. After that, the Bill had to be discussed within Treasury and the Acting DG at the time. Eventually, it requested permission from the Acting DG to take the Bill to the state law advisors. The required Social Economic Impact Assessment (SEIA) report was produced by the Presidency through the Department of Planning, Monitoring and Evaluation (DPME). The Presidency issued a certificate acknowledging the SEIA which permitted Treasury to proceed with the Bill. It submitted the Bill with the NEDLAC report to the Office of the Chief State Law Advisor in December 2022. The state law advisors certified the Bill in February 2023. Treasury rushed to ensure it came to Parliament before the end of the financial year at the time.

The Chairperson said the Committee knew the process after that. The state law advisors would say that Treasury went through the motions. This had been germinating for 10 years. Treasury had six months in NEDLAC. In response to the Chairperson asking if Treasury engaged with NEDLAC after October 2022, Mr Mathebula replied that it had not after that time. The Chairperson said that some would say what was in the Bill that got to the NA and the NCOP was very different from what was negotiated at NEDLAC. This would be the subtext. He was predicting what would be said. Treasury went through the motions and did not respond to some fundamental issues and what was received from the NCOP was a far cry from the NEDLAC process. This was fine; Treasury introduced the Bill; the Committee members formed part of Parliament and decided on the outcome. He did not see what was wrong in the process. However, the quality of the engagement meant different things and would be said on both sides.

He suggested Treasury do a quick reply as the Committee did not want to wait for another three weeks. It wanted Treasury to give a more comprehensive matrix that responded to all the issues raised here that were not responded to in the matrix. He asked for this to be done by Tuesday 26 March so Treasury had a week to submit this. If this was not done by then, the Chairperson had some discretion considering civil society members had worked hard. Whatever the disagreements, these people worked very hard.

Treasury response
Mr Mathebula spoke about the premium. He was happy that the stakeholders acknowledged there was no way that the state would not pay premiums. The state had to pay premiums in the current legislation. On the percentage the state would pay going forward, Treasury said in Chapter 4 it would publish proposals for comment. In the earlier iteration of what was submitted to the Committee, there were conflicting views from stakeholders with some stating price was discredited around the world as an instrument to evaluate tenders. The comments by stakeholders on the Bill as introduced in Parliament on 30 June 2023, stated that Chapter 4 did not have the necessary details on the exact principles; they wanted Treasury to elaborate. This was where the expatiation in Chapter 4 came in. It did not mean the principles that were expatiated in Chapter 4 were not contained in the introduced Bill as gazetted for comment.

These principles were there. The set-asides and the issues around industrialisation came from the NEDLAC process and the Bill as agreed on in NEDLAC. Treasury wanted to expand on those principles to give an indication of what was being spoken about. On the evaluation criteria for the percentages picked up on the premiums government agreed to pay to use procurement as a strategic lever to drive socio-economic and other policy objectives, Treasury said it would not do this discreetly. It would come up with the evaluation criteria, which included price. It had to publish this so the public had a chance to comment. This was where it was with the premiums. In the current law, there were maximum premiums the state agreed to pay in the preference points system. The public would have an opportunity to comment on what would be published. Treasury would consider these views when it developed what would be prescribed by the minister through regulations. In addition, Treasury had different sections in the Bill where it spoke about transparency and that the public would have access to certain information. This was contained in Clauses 32, 33, etc. He assured stakeholders there was no way in which the Bill was structured for Treasury to hide certain information. There was disclosure of information for transparency reasons. The public would have full access to information.

The concern about the removal of bid committees was incorrect. Clause 29 was explicit and referred to the bid committee system and how the committees would work. The minister had to prescribe the system and how this would work.

On the removal of strategic sourcing, this was a technical issue. Strategic sources was one form of sourcing strategy. There were several of them, strategic sourcing being one. In Chapter 5, Treasury said in everything the government procured, it had to apply a strategic approach. A stakeholder had stated that when buying infrastructure and capital assets, the same method could not be used as when pens and pencils are bought. The education sector was massive so when buying pens and pencils for schools, government could not follow any other route just because it was pens and pencils and not infrastructure. Treasury was saying there had to be a strategic approach, which included strategic sourcing as one of the methods. Several methods could be used in procurement. That was why Treasury did not want to dictate all the procurement methods in Chapter 5. Procurement evolved and changed occasionally. Hence, the details on procurement would be contained in the regulations, because it made it easier to accommodate innovation. This was why innovation was in the Bill, which was another procurement method that needed to be followed.

On 'complementary goals', Treasury acknowledged in its response to the Committee that this was something that had to be defined. It would define this so there was clarity on what was meant by this in Chapter 4 of the Bill.

On subcontracting, Treasury was saying where it was feasible to do so. Secondly, it provided for geographical areas. It was not only left at the national or provincial levels but even geographical areas which made it a locality. Contractors would have an opportunity to subcontract within a geographical area. Government procurement institutions should implement a system within a system and their procurement policy should provide for a lot of these things. Guidance would be provided on all the issues in the regulations.

On the accessibility of information in the e-tender portal and central supply database, Treasury agreed that any system would need to be enhanced from time to time. It thought this was the best system it had in its current form. It could scale the system and enhance it with development and so forth. At least the public could now access that platform and see the procurement plans from various state institutions, which were published annually. It included what each department and state institution would procure. That information was readily available to the public. He said this without discounting the fact that there could be some issues in other systems.

It was true the PPO would issue instructions and circulars, but these were for augmenting where there were gaps. Secondly, unlike the current system where Treasury issued instructions, many of them were in the system where people complained that Treasury kept issuing instructions and officials could not keep up with these; some of which unintentionally led to irregular expenditure. The instructions that would be issued would also be published for comment. It was not going to be issued by Treasury without the public’s knowledge.

Mr Mathebula said that the entire Bill was premised on all the constitutional sections like 195, 216 and 217. One of the principles in Section 217(1) was transparency. This would be a transparent system. He understood that there could be some element of distrust in the system based on what was currently out there in terms of corruption and so on, which the entire country complained about. He had yet to find a country that could regulate or legislate greed. Corruption was a function of greed. There could be the best legislation but this could not guarantee that it would deal with all corruption-related issues. In Chapter 3, Treasury provided fundamental principles that should form part of the guardrails on what would happen to those who misbehaved.

On automatic exclusion, he was glad the Chairperson commanded Treasury to meet on these issues and submit a report. This was the position it took when it looked at the original provision of automatic exclusions. Some of these people were leaders of political parties. If somebody led a political party but was not in Parliament, it believed that those leaders were ordinary people. To avoid encroaching on their constitutional rights, they should also have an opportunity to do business with the state as long as they were not in Parliament.

Secondly, it looked at the extent to which the original Bill covered many people who should not participate. There was an issue around cultural diversity which the laws should consider; currently, there were blended families. The original Bill said family members could not participate. Treasury said it could not be this way. It could not be open-ended because it said if someone worked for Parliament, their family could not do business with the state. It did not think this was correct. It put a limit to looking at immediate family; if it went further, it became problematic.

Another issue discussed at the time was if someone worked for government in a small dorpie or village. The government was the only employer and economic instrument through which the people in that small dorpie could earn a living. The fact that an individual worked for government in that small dorpie should not deny the family the chance to do business with the state as long as the individual disclosed a potential conflict of interest. In Clause 11, Treasury looked at all these things to ensure that where there was potential for conflict of interest, then this had to be disclosed. If the government employee happened to participate in a committee, then they had to declare this and recuse themselves from that process. These were issues that would be discussed.

There was another issue with the NHI Bill as this Bill stated that there was no central procurement. Treasury said the relevant government procuring institutions would decide if they wanted to centralise or decentralise their procurement system. This could be for the benefit of economies of scale but they would decide. As the principles in this Bill, Treasury was yet to come to a provision that said procurement should be centralised unless in the event of transversal contracts, which was another method of procurement. Beyond that, it said in Chapter 5 that there would be a differentiation in this process. It would not be a one-size-fits-all. There would be regulations that spoke about all the sectors in their different forms, including the different state-procuring institutions such as Eskom and Transnet which was in a different sector. There would be regulations that spoke about all of them instead of clamping all of them into one procurement system. He believed that when this dealt with, healthcare and medical technology issues as raised by stakeholders would also fall within that area.

The Chairperson said there was agreement that Treasury would meet as often as it had to. Ultimately, it was the Executive bringing a Bill to Parliament after consultation. It was important for it to respond as fully as possible to the Committee now as it needed to understand the issues better.

Mr Mathebula noted MAPS as well which was a process that Treasury engaged in to modernise public procurement. It benchmarked against international best practice, which process included the OECD and World Bank.

Mr Mathebula replied that there had been public participation in Limpopo where Treasury had a session in Polokwane last Friday 15 March. There was also a briefing of the legislature previously. North West did not take up the Treasury offer to participate in its sessions, but on the last day it said it wanted Treasury to participate. By that time, Treasury was all over the country so it could not attend. KwaZulu-Natal had its sessions and so did Gauteng and Treasury was there. It was also awaiting the legislature to say if it wanted to have public participation.

The Chairperson noted a question raised in the chat about has happened to the negotiating mandates. He had sent the provinces letters about the extension. Adv Jenkins should write a letter to the provinces about the process and dates.

Adv Frank Jenkins, Senior Parliamentary Law Advisor, replied that the negotiating mandates should come to the Committee. The Committee gave an extension after it got permission and had followed the NCOP Rules. It would be helpful to indicate to the provincial legislatures when those negotiating mandates should come through. Everybody heard the Chairperson say that the Select Committee could not continue endlessly with back and forth about certain provisions in the Bill. The negotiating mandate process had a certain form that had to be followed and there was an Act that determined it. The letter would be drafted. There were a few questions about “must” and “may” and he wanted to look at this and get back to the Committee. The public participation concerns ran into the constitutionality of the “must” and “may” and Chapter 4 and if it was a Section 217(1) and (2) issue or if it went further and back to the core judgment Treasury referred to.

The Chairperson asked if Adv Jenkins knew the NCOP had sought an extension of the eight-week cycle as prescribed in the Constitution. This was the first time it happened.

Adv Jenkins replied that he was not aware of a formal request for extension of that timeframe for the Bill. He was not aware especially since the NCOP rules were changed in 2021. He did not think it had happened since the new rules were implemented which changed from at least eight weeks. Before it had been no longer than six weeks.

The Chairperson said the negotiating mandates could be discussed offline considering it was a new process. He told Mr Grace that nobody was obliged to involve the public from the beginning. It was not something Parliament could legislate for a department. Some departments did and some did not, but it was not a constitutional legal obligation as far as he knew.

On the removal of the previous Chapter 6, he asked Treasury to give a quick response.

Mr Mathebula replied that the previous Chapter 6 was mainly on infrastructure and was part of the draft Bill published in 2020 for public comment.
 
The Chairperson said Treasury could respond to this in the matrix of public submission responses.

Closing remarks
The Chairperson asked if Treasury and civil society stakeholders were agreeing to meet before coming back to this Committee. It was not a nominal thing; Treasury had to be serious about it. Ideally, one or two people should coordinate from civil society. He was trying to bridge the gap. This did not mean there would be 100% agreement because that would not happen. The Committee could reject everything that was agreed on. The deadline for the Treasury report was the Friday before Parliament reopens in April. He did not want them to submit two reports but if they did it was fine. If civil society was unhappy with the contents of the matrix table, they could submit something separately.

The Chairperson ascertained there were no further questions from Members or civil society stakeholders.

The Committee would meet tomorrow to consider the Revenue Laws Amendment Bill. The Committee accommodated late submissions. Next week, it should finalise the Revenue Laws Amendment Bill, but would not take it to the House unless it suspended the three-day rule. It would receive a briefing on the Pension Fund Amendment Bill on 26 March if the National Assembly committee adopted the Bill. It was dropping the Public Procurement Bill for now because it was not ready to proceed.

The Chairperson said as long as the Pension Fund Amendment Bill was adopted by the NA, then it could advertise for public hearings on the Bill. Otherwise, the public hearings could be deferred to when the Committee returned.

On constitutional matters, the Committee deferred to the legal advisors in Parliament. If stakeholders wanted to make a submission on that, they were welcome to send it to the Committee secretary and it would be forwarded to Treasury.

Meeting adjourned.