Public Procurement Bill South Africa

[Ane Neemann]

Publicprocurement is the single largest corruption risk, particularly in developing countries. Transparency International estimates that governments in low- and middle-income countries spend about 50% of public funds buying goods and services from the private sector. This compares with just 30% in high-income countries.

Yet the bill introduces confidentiality clauses so dubious as to be regressive. Several researchers and civil society organisations have responded to the draft with submissions showing that in its current form it would continue to enable corrupt, inefficient and ineffective procurement.

Both Iweala, who has strong expertise in public finance, and the Open Contracting Partnership, whose procurement applications have been used in reform initiatives around the world, contend that the best way to ensure that (emergency) procurement meets its core objectives is to publish all tenders and contracts. South Africa is doing some of this. But the COVID-19 procurement information that has been published is not comprehensive.

Allegations of graft in COVID-19-related procurement by various government departments, elected representatives and for-profit companies have highlighted the risks of opacity in procurement. In response to these allegations, President Cyril Ramaphosa signed a proclamation authorising the Special Investigating Unit to investigate all purchases by state institutions of goods and services relating to COVID-19.

This was followed by the requirement for departments to submit comprehensive information on COVID-19 tenders. While publishing this procurement information is an important step, more needs to be done.

The reform of public procurement has the potential to address the poor legislative environment repeatedly flagged by the Auditor-General. But in its current form the draft bill represents a disappointing missed opportunity.

We therefore conclude that the net effect of the current formulation would be to legislate a regression in transparency. This would enable corrupt, inefficient and ineffective procurement to continue.

When it was tabled, many government and civil society stakeholders pointed out several problems with the new Public Procurement Bill. These no doubt account for the ongoing delays in finalising the draft.

Article 9 of the United Nations Convention Against Corruption (UNCAC) emphasises that to prevent corruption, procurement systems should be based on transparency, competition and objective criteria. Laws should be passed in line with the convention.

Transparency is the most important element as it enables integrity throughout the process. Open tendering and information on procedures for evaluation, award, review or bid challenges are vital. Accountability must underline all decisions taken in procurement.

UNCAC highlights the importance of free, accurate and accessible information. This may not be possible when national security is at stake, as in the case of defence procurement. Governments should nonetheless distribute information timeously on each step and enable civil society and especially the media to ensure accountability.

Civil society submissions on the draft highlighted concerns that must be resolved before its adoption. These include addressing several confidentiality clauses and updating terminological loopholes that officials could exploit. The lack of provisions for dealing with transgressions and providing the capacity to set up a regulatory framework are also problems.

Since the 30 June 2020 deadline for public comments, the bill has undergone several reviews and discussions in Parliament. Many concerns raised by members echoed those of civil society organisations. And while legislation cannot reasonably be expected to cover all challenges presented, the comments must be considered before signing the bill into law.

Regarding ethics and integrity, public officials need to understand the policies and laws governing their work. This would help prevent them from being made scapegoats or bypassing procurement processes based on directives from their superiors.

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Chapter 4 is also criticised for failing to provide clear guidelines on whose job it is to initiate procurement policies within departments. Parliamentary legal advisors point out that this becomes clearer when the procurement act is read together with the Public Finance Management Act and other acts.

The new law also sets up a public procurement office under National Treasury that will issue binding instructions on procurement matters to all organs of state, except municipalities, which will be guided by non-binding circulars.

In its submission to parliament, National Treasury argued that the anti-corruption measures in the bill conform with the Constitution of the Republic, adding that enforcement requires the collaboration of various law enforcement agencies and government institutions.

Other notable recommendations include whistle-blower protection measures to foster an accountable procurement environment, a flexible approach, periodic reviews, and alignment with emerging technological trends.

According to CIPS Southern Africa General Manager Paul Vos, the bill needs to be reviewed in its current form to address ES issues, which raises doubts about its comprehensiveness in covering these crucial considerations.

He says the legislation should articulate criteria for evaluating the ES performance of each purchase and should be weighted as part of the overall decision-making process. It should also introduce mandatory reporting requirements for transparency and ensure that ES considerations form a percentage of the purchasing decision.

In this regard, CIPS proposes explicit clauses mandating capacity-building and training programmes for public sector procurement professionals. It believes that by incorporating mandatory training, the bill will recognise the importance of continuous professional development and establish a framework for maintaining high standards of expertise.

Accordingly, it proposes implementing more precise guidelines for end-user expectations during the dispute resolution process. It also advocates for improved planning and scheduling mechanisms within the bill to address concerns over process stoppages.

It is also recommended that additional checks and balances be incorporated to prevent abuse and corruption in cases of emergency procurement. Independent oversight bodies, audits, and reporting requirements that act as preventive measures should be included.

South Africa is a constitutional democracy. Since the end of apartheid in 1994, it has been regarded globally as a proponent of human rights and a leader on the African continent. However, reports of corruption among government officials often emerge, and in recent years, the ruling African National Congress (ANC) has been accused of undermining state institutions to protect corrupt officials and preserve its power as its support base has begun to wane. Gender-based violence is a severe challenge.

In 2018, the National Assembly selected Cyril Ramaphosa, who had replaced former president Jacob Zuma as head of the African National Congress (ANC), to serve as acting president. In the May 2019 national elections, the ANC won 57.5 percent of the vote, and the National Assembly selected Ramaphosa to serve a full term as president.

The 400-seat National Assembly is elected to five-year terms by party-list proportional representation. The 90 members of the upper chamber, the National Council of Provinces, are selected by provincial legislatures. Parliamentary and provincial elections were concurrently held in May 2019. The ANC won 230 National Assembly seats, the opposition Democratic Alliance (DA) won 84 seats and maintained control over Western Cape Province, The Economic Freedom Fighters (EFF) won 44 seats, the Inkatha Freedom Party (IFP) won 14, Freedom Front Plus (FF+) won 10, and smaller parties won the remaining 18 seats.

Municipal elections are held separately from national and provincial elections. The November 2021 municipal elections were declared credible by independent observer missions. The ANC recorded its worst outcome since the end of apartheid, taking only 46 percent of the vote.

The ANC, which is part of a tripartite alliance with the Congress of South African Trade Unions (COSATU) and the South African Communist Party (SACP), has won every national election since 1994. Nevertheless, the political environment is generally free from formal constraints, and opposition parties, including newer political groups, have gained ground in recent elections.

In September 2023, the IMC reported that 155 cases of murder, 51 of attempted murder, 77 of intimidation, 12 of conspiracy to commit murder and 26 other related cases were under investigation. Additionally, it reported that 348 suspects had been arrested, 62 had been convicted, 155 had been involved in court procedures, and 17 arrested suspects had died. Bheki Cele, the Minister of Police, said the government was intensifying its anticrime strategies ahead of the 2024 general elections.

Though the ANC has won every national election since 1994, it recorded its poorest performances since the end of apartheid in the May 2019 national elections and the November 2021 municipal elections. Opposition parties continued to gain traction in 2022, and the ANC again lost voter support in the December municipal by-elections. In its May 2022 policy discussion document, the ANC stated that the party faces the prospect of losing its majority in the 2024 national elections.

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