KZN’s Zikalala wants to appeal Supreme Court ruling against BEE ‘rule book’

Premier says the judgment will reverse the transformation process.

DURBAN, November 5 (ANA) – KwaZulu-Natal Premier Sihle Zikalala wants the government to appeal against a Supreme Court of Appeal (SCA) ruling that rendered procurement regulations in the broad-based black economic empowerment (B-BBEE) “rule book” obsolete.

“The Provincial Executive Council (PEC) has noted with grave concern the recent decision of the Supreme Court of Appeal. The executive council is still analysing fully the judgment and its overall implications to economic transformation of the country.

“The Provincial Executive Council considers this decision as being tantamount to the reversal of the transformation process. The Provincial Executive Council will engage the national government on this decision.

“We also encourage the national government to appeal against this judgment,” Zikalala said during a PEC meeting on Wednesday.

Zikalala said it was paramount that “transformative policies” remained clear and not be second-guessed.

The SCA ruling came on Monday after an appeal case brought forward by Sakeliga, an organisation that represents the Afrikaner minority’s business interests in South Africa.

The organisation claimed that former minister of finance Pravin Gordhan abused his power by drawing up “unconstitutional” procurement regulations in the Public Procurement Framework Act.

The Public Procurement Framework Act is a piece of legislation that determines and provides guidelines in how state-owned entities (SOEs) and the state itself should procure.

The SCA ruling indicated that the regulations drawn up by Gordhan under the act were unlawful, invalid and unconstitutional.

The SCA has given the government, under the direction of current Minister of Finance Tito Mboweni, 12 months to rectify the regulations.

Piet le Roux, the CEO of Sakeliga, said that while the ruling would help the country plug a hole in corruption and misuse of government funds, it would only do so for a while.

“The unfortunate and very damaging situation in South Africa is that this policy called black economic empowerment – notwithstanding how good it may sound – is a very destructive policy. It has cost the country and the public millions of rands in lost goods and services, inefficiencies and enabled corruption and so on. So it’s a policy that needs urgent review, but unfortunately, it still is government policy,” Le Roux told Biznews.

Le Roux said the ruling would also enable the country to enjoy much better economic growth because of the government’s previously “disproportionate influence in economic activity”.

“Companies big and small can now be considered more on the basis of their value proposition than on the basis of their race,” Le Roux explained.

The DA’s spokesperson on finance, Geordin Hill-Lewis, echoed Le Roux’s sentiments, saying that the ruling was a victory against “BEE corruption”.

Hill-Lewis said that regulations drawn up in the procurement act were huge driving mechanisms for corruption in public procurement.

“Business owners with competitively priced high-quality products have repeatedly been denied the opportunity to do business with the government because of the exclusionary requirement to meet a predetermined threshold of B-BBEE scores.

“The judgment has far-reaching consequences for public procurement in South Africa as it casts doubt on the continued use of B-BBEE pre-qualification criteria,” the DA spokesperson said.

– African News Agency (ANA); Editing by Yaron Blecher