COSATU is confident that the Public Procurement Act will withstand any court challenges

The Congress of South African Trade Unions (COSATU) is confident that the Public Procurement Act will withstand any constitutional court challenges, including those recently announced by the Western Cape Provincial Government and the City of Cape Town. We are not convinced by their arguments and believe they are putting cart on top of the horse in this instance. We believe their concerns could best be addressed by engaging Treasury on the Regulations. The danger of their court action is to allow the wild west that is public procurement to continue.

COSATU supports the Public Procurement Act, in particular its objectives to boost emerging SMMEs, historically disadvantaged communities and local businesses. We believe the Act drafted by government led by the African National Congress will be a critical weapon in the war against state capture and corruption that has become a cancer across the state, especially in State-Owned Enterprises and municipalities.

Workers have paid a horrific price with the explosion of state capture and corruption that has become the norm in many parts of the state. At its heart are the porous procurement systems across organs of state. Key targets as highlighted in gory details by the Zondo Commission have been major SOEs, in particular Eskom, Transnet, Metro Rail as well as countless municipalities and departments.

It defies logic that in the 21^st century where communications have become digitised, that many municipalities opt for manual written quotes. Many state entities have shown a dogmatic resistance to any sense of oversight and transparency, let alone universal systems. The reason being that corruption thrives best under chaos and darkness. Moves towards transparency and accountability are a direct threat to that.

The Western Cape Provincial Government and the City of Cape Town claim an absence of public participation in the drafting of the Act as a basis for their court challenge. Yet this Act went through extensive engagements and redrafting during three years of deliberations with labour, business and members of the public at Nedlac and later both Houses of Parliament.

The nation's leading procurement specialists from various universities as well as international experts were brought into this process as part of enriching the Act. Whilst COSATU has often butted heads with Treasury, we appreciate how open and inclusive they were in the drafting of this important Act. Parliament's Finance Committees both went the extra mile in providing space for public participation and actively included proposals from COSATU and other stakeholders.

The Province and City further allege that the Act amounts to an undue interference in provincial and local government's ability to procure. Again, concerns with regards to agility can be dealt with through Regulations. Different organs of state will still determine their procurement. All that will be expected is for the state to use a single online and transparent public procurement system, as is already done with public service institutions, including provincial departments. Equally they will be expected to, where possible, support emerging SMMEs, historically disadvantaged communities and local businesses. This is fundamental if we are to nurture and sustain local businesses and jobs which are under dire threat from cheap imports, and to give space for SMMEs to emerge and grow.

Why the City is rushing to court claiming that the Act will be a hindrance to service delivery and emergency procurement is bizarre as the Act, much to COSATU's disappointment, actually provides for significant exemptions and where regulations and circulars are issued by national and provincial treasuries, these will not be binding upon municipalities or their entities. How the City and Province jump to claims that they will be straight jacketed is a mystery.

The ability of Treasury's Chief Procurement Office to oversee, and where state institutions fall foul of the law, to act and hold them accountable is crucial if the state is to turn the tide against endemic public procurement corruption, save scarce public resources, support emerging SMMEs and protect badly needed local jobs. The Province and the City make the mistake of assuming that whilst they have strong systems in place, this is replicated across other provinces and municipalities. It is not, and in fact it is a horror story and hence the need for a drastic overhaul for the entry point for state capture and corruption.

Issued by COSATU

Matthew Parks (COSATU Parliamentary Coordinator)

Cell: 082 785 0687

Email: matthew@cosatu.org.za