The national Treasury has been accused of dragging its feet in finalising crucial legislation to ensure government departments spend their money at companies that comply with laws meant to encourage the participation of black people in business.
National departments, provincial governments and municipalities do not have to comply with the Broad-based Black Economic Empowerment (BEE) Act although empowerment is government policy, according to Andile Tlhoaele, an expert on empowerment legislation.
Tlhoaele says the Broad-Based BEE Act has a well-defined scorecard, unlike the Preferential Procurement Policy Framework (PPPF) Act, which organs of state have to follow for their procurement.
Under the PPPF Act, 80 points are awarded in a tender for the price and up to 20 points for BEE status on contracts under R500 000. The ratio for contracts over R500 000 is 90 points for price and 10 points for empowerment.
The act is housed in the National Treasury while the Broad-based BEE Act is under the jurisdiction of the Department of Trade and Industry, which had not responded to questions by the time of going to press.
He says that under the Broad-based BEE Act, a trading entity has to have a verified BEE certificate, whereas this is not required under the PPPF Act.
In response to questions by Business Report, Treasury spokesman Jabulani Sikhakhane e-mailed: “Wheels are in motion.”
The Treasury held public consultations two years ago, and submissions were made by stakeholders on the alignment of the PPPF Act to the Broad-based BEE Act.
The Black Management Forum has called for the overhaul or repeal of the PPPF Act to be replaced by the procurement codes of good practice contained in the Broad-based BEE Act.
It suggests that “50 of the 100 points be allocated to BEE compliance, a minimum level four contributor for public service compliance, remove all thresholds on tenders irrespective of value, 30 percent set-aside on government procurement and include a mandatory audit by the auditor-general of public sector broad-based BEE compliance.”
Last year it made a submission through Business Unity SA as a member organisation. But nothing has been heard since, says Tlhoaele.
He says there is no stick for public entities that are not complying with the BEE act. At present, the auditor-general has no mandate to include BEE in his audit of these enterprises.
“The auditor-general needs to report on BEE compliance by public enterprises. This will compel government departments to report on BEE compliance to the extent to which government procures or when entering into partnerships or issuing licences,” says Tlhoaele. - Wiseman Khuzwayo