Minister of Finance Enoch Godongwana has dismissed the recent speculations that the National Treasury is doing away with the Broad-based-BEE and localisation. This comes after government was forced to amend the regulations empowering state companies to exercise discretion in the implementation of BEE requirements.
Godongwana says the new preferential procurement regulation was amended as required by the Constitutional Court. The new change will no longer disqualify 100 percent white-owned companies from tendering for government jobs. The new legislation will come into effect in January next year.
As per the court ruling, Minister Godongwana says the 2017 regulation had to be reviewed to take stock of the 2022 regulation.
Minister Godongwana says the aim of the new regulation is to comply with Section 217 of the Constitution on procurement of goods and services by organs of state, while also complying with the Preferential Procurement Finance Act of 2000.
Godongwana says his department had to furthermore comply with the Constitutional Court judgment of February 2022, on the 2017 Regulations.
The new rules will allow all 100-percent white-owned companies to take part in the government tendering process. It will further give government departments leeway to use their discretion on the implementation of preferential procurement policies.
This will ensure that all state organs implement fair, equitable, transparent, and cost-effective procurement policies.
“What these regulations are trying to achieve is to give effect to that legislative framework. The Constitution, the Preferential Procurement Act and the court judgment by saying all state organs or organs of state must have their own preferential procurement framework. Of course, that framework must be in line with the current regulatory framework.”
Last week, National Treasury gazetted the new Preferential Procurement Regulation. Despite that – Godongwana has maintained that the government’s vision of empowering the previously disadvantaged stands. “Some suggestion is that we’re throwing away the bee and I want to clarify that there is no substance in that allegation, the specific goals that the regulation refers to are defined quite ??? And I want to read them … that in itself suggests that we are not doing away with BEE.”
On the other hand, Acting Director General at the National Treasury, Ismail Momoniat, says they are aware of the looting of procurement budgets.
And systems have been put in place to address these shortcomings. However, he says transparency remains the key element to monitor procurement. “Treasury can’t be God and try and pick up corruption, those who embark on corruption do so in secret, they don’t come and announce. So what are the internal mechanisms to the extent that people identify it and they come to the OCPO and they come to the treasury that is often late and we are looking at other mechanisms like how do you disrupt those networks and in fact part of the whole anti- money laundering strengthen system I think will help tremendously to disrupting those who are trying to loot procurement budgets.”
National Treasury says that organs of the state remain the ones to determine the outcome of the tender.