The South African Institute of Race Relations argues that the proposed new BEE regulations are unconstitutional, as they will greatly prejudice the disadvantaged who depend on the state for vital goods and services.<\/p>\n
Draft Preferential Procurement Regulations of 2016 were published in the Government Gazette on 14th June 2016, under the powers conferred on the Treasury by the Preferential Procurement Policy Framework Act of 2000 (the Act).<\/p>\n
Public comment on the proposed regulations was due no later than 15th July 2016, with the IRR arguing that the period was too short to meet the constitutional requirement for proper public consultation.<\/p>\n
In an article published on Politicsweb<\/a>, the IRR argued that section 217 of the constitution states that, \u201cwhen an organ of state\u2026contracts for goods or services, it must do so in accordance with a system which is fair, equitable, transparent, competitive, and cost-effective\u201d.<\/p>\n As an exception to this general rule, the constitution allows an organ of state to implement a procurement policy that provides for \u201ccategories of preference in the award of contracts\u201d, and for \u201cthe protection or advancement of persons\u2026disadvantaged by unfair discrimination\u201d. [Section 217 (1) and (2), Constitution]<\/p>\n However, any measure aimed at \u201cprotecting\u201d or \u201cadvancing\u201d the unfairly disadvantaged must be rationally and reasonably connected to that objective.<\/p>\n “The regulations do not meet these tests,” the IRR sated. “They will, of course, allow a relatively small number of black businesses to gain state tenders at inflated prices and irrespective of how inefficient they might be.”<\/p>\n The institute said that the new rules will greatly prejudice the great majority of disadvantaged South Africans, who depend on the state for vital goods and services.<\/p>\n “Such goods and services should always be provided in the most cost-effective and efficient way, so as to husband scarce public resources and ensure that these are spread as broadly as possible. The proposed new system is so damaging to the truly disadvantaged that it cannot be accepted as a rational or reasonable way of overcoming apartheid injustices.”<\/p>\n Contradictory<\/strong><\/p>\n The IRR further argues that the new regulations also contradict another core principle underpinning the constitution: the separation of powers.<\/p>\n It said that the constitution vests the capacity to make new law in parliament, not the executive. However, executive law-making inconsistent with the constitution is the hallmark of the regulations, which (among other things):<\/p>\n The IRR pointed out that the regulations seek to bring about radical changes in the state\u2019s preferential procurement system. At present, all that the Act allows is a 10% or 20% price advantage \u2013 for contracts worth more or less than R1 million \u2013 for the historically disadvantaged.<\/p>\n “Major changes of the kind envisaged in the regulations cannot be made by ministerial fiat without infringing on the separation of powers. Hence, if the state\u2019s preferential procurement rules are to be changed so comprehensively, this must be done via statute, not subordinate regulation,” the IRR said.<\/p>\n Read the full article here<\/a><\/em><\/p>\n How new BEE rules will make a select few crazy rich<\/strong><\/a><\/p>\n How many whites are benefitting from BEE<\/strong><\/a><\/p>\n This tool will help you with your BEE rating<\/strong><\/a><\/p>\n\n
\n
\n
\n
\n
More on Black Economic Empowerment<\/h3>\n