It looks that state-owned entities like Eskom and Denel to name a few may not be forced to use or hire BEE-compliant companies in the future.
Finance Minister Enoch Godongwana has started the process to implement new legislation that would allow state-owned companies to engage with not only BEE-compliant firms.
Godongwana’s new legislation would seek to repeal some of the regulations in the five-year old Preferential Procurement Regulations Act.
The minister made it clear in his Medium-Term Budget Policy Statement Speech in October that he wanted to modernise the procurement process in South Africa.
The aim is to make it easier and faster to get things done.
There has been major criticism that the current legislation helped companies increase the price of services and products that made it difficult for other companies to compete with.
The new proposed regulations would allow the different state-owned entities to take control of their individual companies’ needs and work through it’s own ecosystem to link with other companies that meet its needs. This may not be controlled by legislation that made BEE compliance a vital requirement.
It should be stated that the new regulations do not bring up BEE requirements and does not have a law or clause that allows the minister of trade and industry to force SOEs to purchase local products and services, according to City Press.
OPPOSITION TO THIS LEGISLATION
The South African Youth Economic Council (SAYEC) said on Sunday that it rejected the new proposed legislation by Minister Godongwana.
“The new promulgation by the minister is regressive and and counter-productive,” according to SAYEC.
SAYEC argued that the use of back economic empowerment policies and affirmative action has allowed disadvantaged companies and communities to develop. It has forced the private sector to acknowledge these businesses and allowed them to grow.
“Industries or sectors such as energy, mining, transport, and telecommunications have not had great transformation and these new amendments to the regulations will stop growth,” said SAYEC.
It said these new rules “will exclude our people from a chance of competing in these industries and move up the supply chain”.