Question NW3129 to the Minister of Finance
04 October 2023 - NW3129
Mafanya, Mr WTI to ask the Minister of Finance
Noting that in its ruling the Constitutional Court stated that section 2 of the Preferential Procurement Policy Framework Act, Act 5 of 2000, (PPPFA) allows organs of state to formulate their own regulations and further clarified that the power of the Minister to make regulations does not override section 2, what are the reasons that he has not liberated the stateowned companies to make their own regulations instead of forcing them to comply with the PPPFA regulations of 2022?
Reply:
Section 5 of the Preferential Procurement Policy Framework Act (Act No. 5 of 2000 – “the Act”) states that the Minister may make regulations regarding any matter that may be necessary or expedient to prescribe in order to achieve the objects of this Act. The judgement of the Constitutional court was that the impugned regulations 3,4 and 9 of the 2017 Regulations amounted to determining preferential procurement policy which was the responsibility of the organ of state in terms of Section 2(1) of the Act. The Minister made the Preferential Procurement Regulations 2022 in line with the Constitutional Court judgement to prescribe what is necessary or expedient in order to achieve the objects of the Act.
It is important to note that the Constitutional Court did not rule that State-Owned Companies can make their own regulations as that would be going against what the Act provides, but it did rule that each organ of state is empowered to determine its own preferential procurement policy (in terms of section 2(1) of the Act) and that these policies must still comply with the Act, which includes the 2022 Regulations.