Public Procurement Bill: National Treasury briefing

NCOP Finance

06 February 2024
Chairperson: Mr Y Carrim (ANC, KwaZulu-Natal)
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Meeting Summary


In a virtual meeting, the Select Committee on Finance received a presentation on the Public Procurement Bill from National Treasury to be fully briefed in preparation for the forthcoming public hearings. Where general questions on constitutional and legal issues could be raised, the Committee would seek expert advice to ensure the Bill's alignment with constitutional and legislative provisions. The Public Procurement Bill, which was introduced in the National Assembly on 30 June 2023, aims to create a single framework to regulate public procurement by all state organs.

In discussion, a Member highlighted the imperative of efficient governance for effective transformation, advocating for procurement policies to be focused on value for money, rather than preferential treatment. He criticised the current broad-based black economic empowerment (B-BBEE) model, proposing a shift towards sustainable development goals and prioritising price and efficiency in procurement decisions to benefit society at large.

Addressing concerns over public participation timelines, the Chairperson assured Members of ongoing negotiations with the National Assembly, and stressed the importance of adhering to constitutional and legislative requirements. He cautioned against politicising the Bill, and urged a balanced approach to empowerment and efficiency.

Another Member expressed moral objections to the Bill, decrying preferential treatment based on race and its adverse impact on governance and economic growth. He warned against perpetuating apartheid-era divisions, and called for merit-based opportunities.

A Limpopo legislature representative echoed concerns over divisive procurement policies, citing their detrimental effects on economic growth and job creation. She urged collaboration between the public and private sectors, and emphasised the need for productive synergies to address poverty and inequality.

Another Member underscored the importance of capacity-building initiatives as outlined in the National Development Plan, which advocated localised procurement strategies to stimulate economic growth and create jobs. Another member emphasised the need for a comprehensive review of the Bill's legal and constitutional compliance, urging provinces to scrutinise its provisions and ensure alignment with transformation goals. She called for inclusive procurement policies that empowered historically disadvantaged individuals and promoted economic participation.

In response, the Chairperson urged Members to focus on the concrete provisions of the Bill, rather than polarising the debate. He emphasised the need for balanced empowerment measures and called for careful consideration of the implementation capacity at both national and provincial levels. He concluded by urging the National Treasury to provide a summary of relevant court decisions, and to address concerns over implementation capacity. He underscored the Committee's commitment to thorough deliberation within constitutional and legal constraints, emphasising the imperative of efficient governance and inclusive economic transformation.

Meeting report

Public Procurement Bill

Purpose of the Bill
Mr Willie Mathebula, Chief Procurement Officer, National Treasury (NT), said the primary objective of this Bill was to establish a comprehensive regulatory framework governing public procurement processes and practices. It seeks to provide clear guidelines and standards for procurement activities across various government entities. Additionally, the Bill aims to promote transparency, efficiency, and accountability in the procurement process while addressing socio-economic challenges and advancing transformation goals.

Background of the Bill
The Bill was rooted in constitutional imperatives outlined in sections 195, 216, and 217(1) of the Constitution, which mandates the promotion of ethical conduct, effective resource utilisation, and fair, transparent procurement practices in public administration. These constitutional provisions underscore the importance of ensuring that procurement processes are conducted in a manner that upholds the principles of fairness, equity, and accountability.

Over the years, South Africa's public procurement system has been characterised by fragmentation, with different laws governing various aspects of procurement across different government spheres. This fragmentation has led to confusion and inconsistency in procurement practices, undermining the effectiveness and credibility of the procurement process. In response to these challenges, there was a pressing need for unified legislation that aligned with constitutional principles and effectively addressed the socio-economic imperatives of the country.

The objectives of the Bill were multifaceted, aiming to establish uniform Treasury norms and standards for procurement, while also fostering a preferential procurement framework. These objectives aligned with constitutional mandates and sought to ensure the efficient use of public resources, promote ethical conduct, combat corruption, advance transformation objectives, streamline procurement processes, facilitate dispute resolution, and promote innovation and sustainable development.

Clause 3 of the Bill delineates the scope of its application, extending to various entities, including departments, constitutional institutions, public entities, municipalities, and municipal entities. This broad applicability underscores the comprehensive nature of the legislation and its relevance across different levels and sectors of government.

Further, the extension of Chapter 4, which addresses preferential procurement to Parliament and provincial legislatures, highlights the importance of incorporating preferential procurement principles into legislative bodies' procurement practices.

Public Procurement Office
Chapter Two introduces establishing a dedicated Public Procurement Office within National Treasury, tasked with overseeing procurement activities and ensuring compliance with the provisions of the Bill. Additionally, it outlines the functions of provincial treasuries and mandates all procuring institutions to establish procurement functions within their organisations.

Procurement, integrity and debarment
Chapter Three contains provisions aimed at promoting integrity and transparency in procurement processes. It includes codes of conduct for officials, bidders and suppliers, as well as measures to prevent abuse of the procurement system. The chapter also addresses the debarment of bidders and suppliers found to have engaged in corrupt or fraudulent practices.

Preferential procurement
Chapter Four provides a historical overview of the evolution of preferential procurement policies in South Africa, highlighting the shift from focusing on contract allocation preferences to broader empowerment objectives. It underscores the importance of responsive preferential procurement policies in advancing constitutional mandates and socio-economic transformation goals.

General procurement requirements
Chapter Five outlines general procurement requirements, including procurement systems and methods, Ministerial regulations on procurement thresholds, and measures to promote access to procurement processes and disclosure of procurement information.

Dispute resolution
Establishing a Public Procurement Tribunal in Chapter Six aims to provide an avenue for bid reconsideration, review, and dispute resolution. This chapter ensures that aggrieved parties have recourse to an independent body for the resolution of procurement-related disputes.

General provisions
Chapter Seven encompasses various general provisions, including measures for investigating procurement-related matters, delegation of powers and duties, criminalisation of misconduct, regulations, amendments, and implementation procedures. It provides a comprehensive framework for effectively enforcing and administrating the Bill's provisions.

See attached for full presentation


The Chairperson told Mr Mathebula not to sound too apologetic, because he had had a long Bill to take the Committee through and had done so competently. The presentation was barely over an hour. He reminded the Committee Members that they would receive a further briefing on this Bill, and that this was only the first brief. Members of the National Council of Provinces (NCOP) Committee looked at the Bill more closely as they neared the public hearings. This was an initial attempt at understanding the broad principles and major provisions. He said Mr Mathebula had taken the Committee further than that and concretely dealt with specific things. On the constitutional legal issues, general questions could be raised by the Committee, but it would have to get expert advice from Members in Parliament on the constitutional and legal provisions, and whether the Bill met them. These things were quite technical, but the Members could raise general questions. If possible, he suggested looking at the policy issues for now and get additional legal opinion afterwards on whether the Bill met constitutional and legislative requirements. The National Assembly (NA) had already done this, but the Committee’s role was to review this.

Mr W Aucamp (DA, Northern Cape) said that if there was to be a speedy transformation, government should be well-run in an efficient manner. Government’s purpose should be to provide opportunities for those who could not do so for themselves. By doing its job effectively, government would achieve its desired outcomes. Unfortunately, this was not the case, as could be seen. If the government interfered with the system by implementing cadre deployment and preferential procurement that was not based on value for money and made the government inefficient and expensive, it would benefit only a few cadres and already rich business owners. This would occur at the expense of people who could not help themselves.

He thought it was very important for the final goals and desired outcomes to be looked at. Public procurement accounted for a significant portion of government expenditure -- it was nearly R1 trillion and approximately 22% of South Africa’s gross domestic product (GDP). It presented a crucial opportunity for the government to address socio-economic challenges by incentivising companies to engage in behaviour that would contribute towards its goals. Government could not operate on its own -- it had to obtain public-private partnerships. It needed to apply a whole-of-society approach. The Democratic Alliance (DA) believed it needed to involve private companies and give them targets they could implement instead of forcing things onto them.

The DA believed that broad-based black economic empowerment (B-BBEE) should be scrapped and replaced with a sustainable development model. The B-BBEE was rooted in a concept of trickle-down redress and had proven ineffective in promoting economic inclusion. Currently, it benefits a political minority, well-connected and already wealthy people. It excluded the majority of South Africans meant to benefit from it. The DA believed that it should be eliminated and there should be an amendment to the Preferential Procurement Policy Framework that incorporated companies to contribute to a range of these sustainable development goals (SDGs). The primary factors needed to be price and efficiency, which had to remain the pivotal role in government procurement decisions. Prioritising the lowest cost and most effective delivery of government services would ultimately benefit those who relied on these services and uplift society as a whole.

This was unlike what had been seen over the last three decades, where public services had been neglected due to a huge amount of contracts that were not effected or finalised as intended. At the end of the day, it was the people on the ground that suffered. In many instances, it was mainly because of people appointed to do jobs but did not have the capabilities to do them. The DA believed that a broad-based society approach had to be applied. This was where companies were incentivised to provide certain services to communities, and put them back into their communities, instead of the government being forceful on what needed to happen, which would continue creating a richer elite society, and services to people at the ground level would be ineffective.

He mentioned that there was no water in places like Mokala in the Northern Cape. A company had been contracted to install taps there, but there was no water. Amongst the several reasons for this was that it was a cadre-deployed contract that was involved. The people at the ground level still did not have those services. There were several examples of this.

What would be the public participation process, and when would they be able to address the provinces on this? He wanted some timelines.

The Chairperson asked Members to stick to four minutes when speaking. The Committee would have to negotiate with the NA on the last question. He was dealing with the Speaker. The Committee was not going to do anything stupid, like telling the Constitutional Court it did not care what it said. The Committee would abide by its rulings. Yesterday, he had spent four hours drafting letters and changing them because of constraints. The Committee was in the hands of the Chairperson of the House and the Speaker. He thought the negotiating would be finalised by Friday.

He had been around for a very long time, and people often brought up processes because they were opposed to a particular viewpoint. In this case, there were two opposing imperatives. The majority party needed to get this Bill through because it was part of its election manifesto, so it wanted to do it as quickly as possible. The opposition parties opposed this Bill, so they would create stumbling blocks like going to court, to prevent this from happening. This was so they could tell the public they had stopped the Bill and should be voted for in the upcoming elections. This was politics. He was the Chairperson of the Committee -- he was not there as an ANC Member. He would put on his ANC hat later when he responded to Mr Aucamp, but right now, he was the Chairperson. There were constitutional and legislative prescripts. The Committee was in the good hands of Adv Frank Jenkins, Senior Parliamentary Legal Adviser, and would consult with him on every detail drafted from the politicians’ side, so Mr Aucamp would receive a reply. However, he would not get it today -- it could not be done -- and he could speak to the Chairperson offline if he wanted. He asked the Committee not to bring up that topic -- there was no need, and there was nothing more he could do than what he already had done.

Mr S du Toit (FF+, North West) said it was obvious the Freedom Front Plus (FF+) did not support this Bill. He had a moral obligation to oppose it because of its contents, and the fact that people were being given opportunities based on skin colour and not qualification. It had been seen where B-BBEE had brought South Africa, and what the results of this had been and still affected all government institutions like Eskom and municipalities daily. South Africa was feeling and living the detrimental effects of the cadre deployment taking place. Exorbitant prices were being paid for goods and services, and the government wanted to further legislate this.

He said that Mr Aucamp had touched on most of the points he wanted to raise, but this would be engaged further. South Africa needed quality products and service delivery from qualified individuals, irrespective of their race. Mr Mathebula had referred to apartheid in his presentation, as he knew it would happen, but did they realise that what they were currently doing was reverse apartheid? People were being denied opportunities in the country. The bulk of South Africans who were ANC supporters bore the brunt of labour restrictions, although it was being promoted as something meant to benefit them. This was not the case -- it was only the few who benefited from B-BBEE. Taking preferential procurement further with stricter regulations would lead to more poverty, unemployment, and corruption.

It was unfortunate that over the last 30 years, government had not learnt that enforcing and implementing restrictions and putting legislation like this in place was detrimental to the country. It formed part of the ruling party’s manifesto, making this matter a political one, which was a cheap way of campaigning because people did not benefit from it.

The Chairperson said he had not said what Mr Du Toit thought he had said. He had referred to all parties, including opposition parties and the majority party, like in any democracy. South Africa was a healthy democracy. The DA and FF+ were also opposing the Bill for political reasons.

Ms E Wilson (DA, Limpopo Provincial Legislature) said she was covered by Mr Aucamp and Mr Du Toit. The South African economy could grow only by creating productive synergies between the public and private sectors. This was known by the Members of the Committee. However, throughout its tenure, the ANC government had implemented a progressively racially divisive procurement framework. This resulted in the enrichment of a few elite cadres and created increased unemployment. South Africa was at its worst poverty levels, and inequality was rife. The insistence on continuing B-BBEE policies had led to miserable failure. It facilitated the rise of tenderpreneurs, enhanced systematic corruption, and crowded out the economic growth needed to generate jobs and alleviate poverty. She urged the Committee to visit Limpopo so she could prove what the system had done and how the province had collapsed.

Mr M Moletsane (EFF, Free State) said he wanted to believe that the country had a National Development Plan (NDP) in place. The intention of this was to build the capacity of the state. Today, Members discussed the sourcing of capacity for the state -- were they not undermining the intentions of the NDP, which was to build the capacity of the state? He thought Members should have discussed how the state could aim to build itself by perhaps imposing the instruments that could be used to localise certain goods to benefit the South African economy and create more jobs.

Ms Q Madlopha (ANC, KwaZulu-Natal Provincial Legislature) thanked the Chairperson and the Committee for sharing this important procurement Bill. She said the concern with the previous Bill was the fact that section 217(1) was the only section used, neglecting sections 217(2) and 217(3). She thought National Treasury had tried to address this in Chapter Four, but the way it dealt with it undermined the preferential procurement policies that were there. She agreed with the Chairperson in saying that National Treasury had covered a lot of the previous concerns. However, it could not be said that it met the legal requirements. It needed to be given to the legal team to review outside of the National Treasury so that Members could understand it. The Bill was rejected by the majority of communities, meaning that nobody had looked at it closely from a legal standpoint. There could not be a bill that looked only at section 217(1), while there were other sections below that dealt with accommodation and trying to transform the economy for the majority of South Africans.

She appreciated that the Chairperson had said the legislatures would be presented with this specific Bill. The legislatures would also be in a position to ask their legal departments to analyse the amended clauses and try to accommodate the submissions that had previously been made. The issue of affirmative action had also happened during the apartheid era. It had affirmed the minority group, but now the majority group, which needed to be involved in the economy, was being discussed. When analysing it, it was not like this was the apartheid government, where people who were not qualified were made managers, and qualified black people were not given any positions. The challenges of the past made by the apartheid government were being discussed here. These challenges were being addressed so everybody could be involved in the South African economy.

There was a section speaking about all the sectors that dealt with procurement, which would be given the same opportunity to accommodate the previously disadvantaged. Was the private sector part of this? She did not think this approach to procurement would transform the economy if the government was the only institution that would be transformed, and the private sector did what it wanted. The collusion and funnelling of billions of rands was done by the business sector, and massive corruption took place. She did not agree with the colleagues who said there would be further corruption, because massive corruption took place when people colluded with one another. This was being done by big businesses and disadvantaged those who were not part of the economy.

If one looked at China and France, one would see that they had identified those who were disadvantaged in their procurement policies, and were motivated to address that matter. In South Africa, it was not about motivation. It was a well-known case that the apartheid government did not allow black people to be part of the economy. let alone business. This happened even in the subjects black people learnt at school, which prevented them from succeeding. They did not allow black people to understand the economy and be part of it. This was what was being spoken of when saying there needed to be transformation and affirmation for those who were not part of the economy before. This Bill covered a lot of concerns. The provinces would look at it closely and understand it now that they had a clear understanding of what was included, especially as Chapters Four and Five outlined what had been amended and the outcome of the courts. She supported the Chairperson in saying the outcomes of the courts on the Bill would assist the provinces when it came to whether it met legal and constitutional requirements.

The Chairperson said the Members should be "cool" about the Bill. It was their early entry into this area, and nobody was rushing into it. There were time constraints, but they were negotiating with the NA. The Committee would have to take the presentation it received from National Treasury. The National Council of Provinces (NCOP) would also do so and go to their respective provinces and take them through it. He wanted to ask National Treasury about some issues the NCOP should consider. He first asked if anybody wanted to speak.

Mr T Xulu (ANC, Finance Chairperson, KZN Legislature) asked if the Committee was commencing with public comments on the Bill on 15 February? Was an isiZulu translation of the Bill available? He asked this because the province wanted to comply effectively with section 118(1)(a) requirements.

The Chairperson said he would come back to that. National Treasury had dealt with this Bill for a very long time and knew all the legal and constitutional objections to the public participation process through its gazetting of the Bill and subsequent workshops, and asked if it could give the Committee a summary of all the relevant court decisions within ten days. He was sure it had summaries already. This should also be sent to AdvF Jenkins and the Committee’s secretary for distribution to everybody who attended the meeting.

He said National Treasury had provided for regulations in various parts of the Bill. This was a matter that had preoccupied the Members since early in the term. This was when some of the Members felt that what ministers and director-generals did was to bring the bills before Parliament, and there would be a clause inserted that the minister would regulate. Members had objected to this, and said some of the regulations had to be brought to the committees for approval. If the committees did not respond within three months of it being tabled, then it was taken as accepted. This was so that it did not hold up the ministers, the executive, or the departments because the committees did not get around to the matter. In other instances, the committees had said the matter could be tabled and did not require approval. Inflation rates and things like that could not be anticipated, so committees could not ask the ministers to appear every two years to bring forth regulations in certain departments. There were various forms of comments, and Members had to look carefully at how much latitude they gave the minister to regulate and so on.

The ANC's Public Procurement Bill was not in the election manifesto. The manifesto was yet to be released. It was not like the Bill was specifically in the manifesto. It had been a general ANC policy since 1994. This was the point. Similarly, the opposition parties were the same. They wanted to stop this Bill so they could use it in their election campaigns. They were also opposed to the Bill’s principles. This was democracy. If this Bill did not pass, it did not mean the ANC would lose a percentage of its votes. All the Members needed to help each other. The NA had passed this Bill, but it was a 76 Bill and also affected the provinces. It was not a 75 Bill, so it had to be given earnest attention. A lot of slogans were being exchanged on all sides. He said the powers of the minister should be looked at more carefully.

He reverted to the general points made, and said the Committee was not looking at specific provisions of the Bill. All the Members needed to seek the necessary balance between the need for empowerment and the need for efficiency. The two were not mutually exclusive. The way departments and entities made decisions sometimes leaned in either direction, but there needed to be a balance. The facts were glaring. Thirty years later, the economy was not transformed. A lot of coloured people were marginalised. He asked Members to look at the statistics and facts. If these issues were not addressed, people would become impatient. All the Members would be caught up in the whirlpool of conflict that would ensue. It would be uncontrollable -- it would be a social explosion. He mentioned the balance between price and efficiency, and suggested that National Treasury could perhaps provide empirical facts on this. The Department of Trade, Industry and Competition (DTIC) could also assist. What was the extent of empowerment? What percentage of the economy included black people, including coloureds, in general?

It was far beyond the stage where the state believed it could deliver on its own. This was never the case, hence these contracts and structures between the Presidency, Members of Executive Councils (MECs), Premiers, and the private sector. The government did not think it could do it alone, otherwise it would. Right now, with Transnet and Eskom, the private sector was being brought in, as it should be. The question should not be whether there should be public-private partnerships, but about the terms of these partnerships and around what these partnerships were formed. An example of this was basic public services, as set out as human rights in the Constitution. This included water and electricity. These things could not be handed over to the private sector but could be worked fruitfully in partnership.

He thought it was true to the extent that B-BBEE primarily benefited a certain elite, like politicians and officials within the state. When looking at documents and the President’s speeches, it would be seen that everybody acknowledged this fact, so that was not the issue. However, B-BBEE could not be scrapped for the aforementioned reasons. He referred to the figures. Instead of trying to sweep the ocean back with a broom, the opposition should try to engage in the concrete provisions of the Bill and suggest realistic changes, some of which the majority party could agree with. Continuing with general statements of all types would not help improve efficiency. It could help to improve the policy, even if the opposition parties disagreed with it. Everyone agreed there were class issues.

He mentioned Ms Wilson’s comment about productive synergies, and thought the majority in government agreed with this. A productive society was needed now more than ever. The elites benefited from this. Mr Moletsane’s mention of localisation was an important aspect, and perhaps National Treasury could dwell on this. Localisation ultimately referred to anybody, white or black, with the capacity to produce locally and create jobs. However, the white owners of these entities had to enter into partnerships within the framework of B-BBEE regulations.

He thought the Members were polarising matters, which would not help. He initially understood the emotional and moral factors, with some saying there were moral issues on both sides. Others argued it was opposing the Bill morally because it was reverse discrimination. The Constitution did not allow reverse discrimination, and people had gone to court on various occasions and had sometimes won. Ultimately, the court would have to be the arbiter, which he thought would happen because several Members fought against certain key issues and would lose when going to the court. Unhappy non-governmental organisations (NGOs) would also go to court. This should be decided in the courts. There were moral issues for empowerment, and some would argue there were moral issues against it. These were political differences. He was unsure to what extent there were moral underpinnings to this, and whose morality was being considered anyway. Members could throw those words around because they were all politicians, but it would not help them process the Bill, given their limits. It was not the amount of weekly focus on the Bill that ultimately mattered; it was the number of hours. A Bill could be spread over six months, yet there might be only 15 hours of deliberation on the Bill and its clauses. A Bill could be finished in six to eight weeks and dealt with for 80 hours, which had happened in local government on the eve of the 2000 elections. He asked the Members not to polarise matters. They were part of the NCOP, not the NA, and were much more ideologically and policy-driven. He pleaded for Members to move to more concrete things once they got to the public hearings.

He said National Treasury had another issue that needed a response. The Bill was complex, difficult and challenging. It involved other departments beyond National Treasury -- primarily the DTIC. Did they have the capacity to implement this? Were there phased programmes for implementation? If so, could the Committee see a programme? It was all very well giving the Committee these words on paper, but the real test was delivery. Could they do it? Where was their capacity to do it? National Treasury faced huge difficulties at the moment. Do they have the capacity to do it? What about the provinces -- was Treasury going to help them implement this? Was there capacity at the provincial level? He asked National Treasury to deal with the questions he put forth. The other questions were more for Committee Members to think about the process. If NT wanted to respond to those questions, that was fine, but they were really issues addressed to the Committee to think about. The Members would sit for 25 hours a day to finish this Bill, if need be, within the constitutional and legal constraints.

National Treasury's response

Mr Mathebula said that, as pointed out by the Chairperson, some of these comments were for the Committee, so he would leave them out. The one issue raised was around the regulations.

The Chairperson said that some of these questions were quite complex, many were general and political questions, and Mr Mathebula did not have to respond to them. Those questions were not addressed to National Treasury -- he was a department official, irrespective of his personal and political affiliations. He did not have to answer all the specific issues concerned. This was because these required long answers. His response would be general, and the Committee would receive written responses from the National Treasury as it engaged with it and the provinces. He did not want Mr Mathebula to feel like he had to respond to the political issues.

Mr Mathebula thanked the Chairperson and said one issue that he had raised was the one against more regulations coming to Parliament. Yes, this was provided for in the Bill and the regulations by the minister, and would have to go to Parliament for scrutiny. That was the only question he thought was worth answering -- the rest of the questions, as correctly pointed out by the Chairperson, did not need a response.

The Chairperson said there were far too many questions for him to simply say there was only one worth answering. The Committee had also asked him to give an overview of the Constitutional Court decisions on these issues, etc. There were far too many questions that needed responses. He was not giving him an exit route -- he had merely said he did not have to respond to the issues of morality because Members would say he was being a politician. He knew two of the opposition party Members would say that. He did not have to respond to the moral issues, but there were questions he needed to answer, like those around price and efficiency, on B-BBEE benefiting the elites, and what National Treasury was doing to stop that.

Mr Mathebula responded that transformation and value for money were not mutually exclusive. Most of these issues could be achieved simultaneously. The point was that this Bill did not necessarily promote exorbitant prices as people would want others to believe. National Treasury looked at the issues of value for money while coupling this with the issues of transformation, because the issues around preferences were a function of the Constitution. It could not ignore the regulations. It was prescribed by the minister to detail and elaborate on how some of the provisions would be implemented and also be subjected to public consultation, including Parliament.

On the public procurement policy, National Treasury did speak about public-private partnerships in the Bill, which was provided for in the regulations. The details would come in the form of regulations which would be subjected to public participation. The B-BBEE Act itself was within the purview of the Minister of Trade and Industry and Competition. On what should happen to B-BBEE, National Treasury could always refer to the extent to which empowerment should be enforced through the act, which was an issue that would be raised with the DTIC.

The Chairperson said B-BBEE may fall under the DTIC, but it was a government-wide programme. National Treasury itself was required to abide by it. Therefore it should have a view of the way B-BBEE functioned. Did NT have any statistics as government? The DTIC could have done it, or the National Treasury could be aware of it. If Mr Mathebula could get hold of it, he asked him to send it to the Committee. Did they have any statistics? He saw them now and then in the media, and did not know who provided them. Had the government itself got statistics on how B-BBEE functioned? He was not asking for political platitudes, but statistics. It was a common sense impression, even amongst ANC comrades, that a certain connected elite kept getting tenders and empowerment while the masses who were not below the middle classes did not get it. Surely this was not new. Surely it was raised repeatedly in National Treasury’s engagements on this Bill, or other bills. Did they have any statistics in government about exactly who gets connected and who becomes a beneficiary? What percentage of them were doing so repeatedly, etc? Could he look for these statistics and give them to the Committee?

Mr Mathebula said National Treasury would look at the statistics with its colleagues in the DTIC and provide them to the Committee.

The Chairperson said he would follow up on this to ensure the Committee received it before the public hearings. National Treasury should get it to the Committee within ten days. The Committee’s content advisor and researchers were present in the meeting, and he asked them to look for independent statistics on the beneficiaries of B-BBEE -- not policy issues, but tables and statistics indicating those who benefited.

Mr Mathebula said he had heard the Chairperson loud and clear, and would do as instructed. National Treasury would communicate with the DTIC immediately and independently. He said there was a tracking system of who benefited. It would have to look for some information from its system, which was a central database. It would extract that information and see if it would be helpful to the Committee.

Ms Madlopha referred to the issue of the beneficiaries, and said it would perhaps also empower the provinces, because they would start hearings on 15 February. She asked if the provinces could receive that information before then, so they could understand who benefited.

The Chairperson asked if anyone else wanted to say anything about this. He said she had made a good point. The majority party could find there was more empowerment, and the opposition could find there was less. He wanted the facts to be dealt with so they could be secured.

Mr Mathebula said it took the point that some of the questions were political. To the extent that the questions raised were related to procurement, the National Treasury would try to make that information available.

There was another specific case he wanted to deal with, which was around the capacity of the state. There was a provision in the Bill to the effect that the state should not be only about outsourcing services, but also to ensure some of the services were internally facilitated by the state itself when the state needed to internally offer certain services. This was in the Bill. The only thing that was not done was to identify which items those were, because that specific issue would always lie with the procurement institution. At least there was an enabling provision in the approval of the Bill to ensure that the state created internal capacity.

On the issue of whether the Bill was constitutional, the Chairperson had given the direction there in saying the legal teams within Parliament and the community would deal with that issue. The National Treasury would also provide the necessary support.

The Chairperson addressed Mr Mathebula respectfully, and said perhaps this was his first NCOP committee meeting. If he was going to attend the meeting and not respond to the questions, then he would delay the process. He was not helping the process run smoothly. He had presented very well, but was evading certain questions. The only thing he had said to him was not a requirement for him to discuss was whether the Bill morally sound. He could have a personal opinion on it, but he was not answering the helpful questions. The Committee would have a legal opinion established on the Bill. The Committee wanted the necessary information within ten days, and Mr Mathebula had assumed why he could not get it done. A province was meeting on 15 February and required a summary of the overview of all court decisions that were in some way part of the process of shaping this Bill. There were implications for this Bill. How could he address those concerns? The Committee was very specific. He hoped somebody was taking minutes. The Committee wanted this information by 14 February -- could they get that done? He had someone sitting next to him who was quite competent and could do it. He asked him to answer the question of whether there was a Zulu version of the Bill.

Mr Mathebula said National Treasury would do as instructed. It would get the court decisions and a summary as directed.

The Chairperson said the summaries would likely be in an appendix. He meant the court decisions, which would be lengthy. There was limited time and the Bill had been brought to the Committee quite late. This Bill had been brewing since he started being Chairperson. When he had chaired between 2014 and 2019, in some way, the National Treasury had promised this Bill.

The Committee did not want the court decisions only -- it wanted to ask somebody what the key issues were and how they were dealt with in the Bill. The appendix of all the court decisions could be added. He did not know who on Parliament’s side would read that. Was there any isiZulu version of the Bill?

Mr Mathebula said there was no IsiZulu version.

The Chairperson said the provinces had the right to ask for a translation of these Bills. This was a massive issue between 1994 and 2004, and it had just collapsed. There was a decision made by various actors for the Bill to be put into the major streams- one Nguni language, a northern language, and either English or Afrikaans, although Afrikaans would not be automatic. At some stage, the bills were in about three or four languages. This had stopped, and the chairpersons had asked what was going on in a meeting with the Speaker. The answer was that it was expensive and time-consuming, especially with long bills. Even in public hearings, the Committee did not have translators. Instead, when someone wanted to speak in a different language, they would alert the Committee beforehand and the Committee would then get it translated. There was no simultaneous translation. Parliament did not have the resources. He suggested that all provinces would have to ensure their people in rural areas were involved when there were public hearings. This could be done, and was something National Treasury’s officials could communicate with the Committee’s officials.

Mr Aucamp thought getting the statistics he had asked for was important. If National Treasury provided a list of beneficiaries of the B-BBEE, it would give the Committee an indication of how many people had benefited financially from it. However, this was only half of what was needed -- the Committee should also get a list of statistics about contracts from the government or local government side -- provincial governments did not matter. He wanted a list of contracts awarded to those B-BBEE entities. How many contracts had been executed to the letter of the contract? How many of them were not executed well, or were still not completed? How many of them had gone over budget? He thought this would give the Committee the big picture of the effects of the B-BBEE. Not only should this include the people who had benefited from it, but also the effect it had on service delivery and the implementation of services. Therefore, the Committee needed to see how many of those contracts had been completed successfully. How many of them were not completed successfully, or at all?

Ms Madlopha said she appreciated what had been raised in the meeting about statistics. Apart from how beneficiaries had benefited since the commencement of B-BBEE, the province also wanted to make a comparison of the budget- how much went to those people, and how much went to formal businesses? This was so that the province could look at whether B-BBEE had impacted transformation, and the involvement of the majority of citizens.

The Chairperson said that was what the Committee had meant, and he thanked her for making it clear. He told Mr Aucamp he was not a lawyer, and some of this issue had been in the public domain about whether one could look at the contracts and their confidentiality, etc. He did not know whether the Committee could get that information. He thought between Adv Jenkins and the Members of Parliament, it could be sorted out. He did not know if the Committee could get the full details, but if the law said the Committee could have access, then it would do so. As far as he knew, when looking at empowerment, it would have to look at outcomes. In other words, if someone was given R3 million to deliver a service, did they or did they not deliver it? That was being asked. He thought it was a fair question when asked to look at the contracts. What was one going to know about the contracts? He asked this, because he did not know anything about contracts, and they were very technical things. He suggested letting the lawyers on both sides sort it out.

Mr Mathebula said that, as previously indicated, National Treasury would get the statistics from its system and the DTIC on some of these issues. It would also address the questions asked during his response, so that by 15 February, there could be an isiZulu interpreter to speak about the presentation.

Information on the impact of service delivery could not be made available in the short timeframe as indicated, but National Treasury would also look at the impact of service delivery and which projects had been awarded to whom, and whether they had failed or fulfilled the requirements. It would take time, because procurement happened in various places and it would need to collect that information. It would also look at the budget issues raised, because it was responsible for checking and getting that information. It would check the budget to see how much money went to certain individuals, including groups of other people who had benefited from it.

The Chairperson thanked Mr Mathebula for his responses. The Committee had asked for things in the generic sense, and he knew that what it was now asking for was too much and unreasonable within the limits. He asked a Committee staff member to look for independent assessments of the outcomes of these programmes. Within reasonable limits, the information could be obtained. The aim today was not to dig deeply into the issues that had been covered. The Members should get a feel for the Bill. They would get information from the provinces and have public hearings shortly, and there would be further briefings.

Ms Mendoe Ntswahlana, Head: Chief Procurement Office, National Treasury, referred to the issue of the awarded contracts. As National Treasury had said, its system was a centralised supply database, and it did not have that information, and would communicate that to the Committee. On the execution of the contracts, it would be important. This was because execution happened at the level of various entities and departments. Information on the awarding of contracts was readily available. The system was also able to provide the contracts awarded and the people they were awarded to. Even the provincial treasuries did not have that kind of information. If Members wanted more information, especially if they saw that some of the companies awarded were within certain jurisdictions, they could get it. It should not be a challenge. On the number of executed contracts, one could assume that if a payment was made, it was executed. The provinces would assist in this regard.

Closing remarks

The Chairperson thanked Ms Ntswahlana, and said her input was very helpful. He was not asking for every municipality’s decision to implement B-BBEE, but more so in an overall sense. He did not want to give the National Treasury too much to do. Lots of ground had been covered in the meeting.

He drew the Committee’s attention to what was in the chat group, where Mr Du Toit had attached an article about how B-BBEE had benefited from state capture and corruption. The Chairperson said that was one of many articles and was a common argument, not just on the opposition’s side, but also in some of the ANC's documents and what some leaders had said.

He said the Language Bill of 2012 made it compulsory for each department to translate any state-based documents, and there was a budget for this. He agreed with this -- there was a policy, but no capacity and means to implement it. Another Member in the meeting had said National Treasury did not have to provide the names of the companies, only the statistics, and everyone agreed with this. The statistics would be provided.

There was a meeting taking place on Friday about the current dates of the NA and the NCOP rising. The time constraint in the requirements was six weeks, but he did not make the rules and would have been more lenient if he had the authority. The Western Cape kept asking for more than six weeks, and wanted a week-long extension, but the cycle of the Constitution provided for only six weeks. It was the only province that requested such an extension. The Members would have to ask the Chairperson of the NCOP and the Secretary of Parliament to approve that. He thought this matter would be sorted out by Friday.

The meeting was adjourned.


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