The DA has welcomed a major ruling from the Supreme Court of Appeal after they invalidated a BEE condition introduced by Pravin Gordhan in 2017. While serving as finance minister, the ANC stalwart introduced a caveat for companies wanting to do business with the government – but that has now been set aside.
The finding that the regulations are invalid has been suspended for 12 months, to give the current Minister of Finance, Tito Mboweni, time to rectify them. In a nutshell, this is what was handed down by South Africa’s ultimate legal authority:
The decision could lift the requirement for all companies wishing to secure procurement deals with the government to be BEE-compliant. The controversial ‘Broad-Based Black Economic Empowerment’ programme has its fair share of critics, with many calling for a huge overhaul – or even a complete abolition – of the ANC policy.
Geordin Hill-Lewis serves the DA as their shadow finance minister. He says that the verdict will alleviate corruption and allow high-quality businesses the chance to work with the government for the very first time.
“The judgment has far-reaching consequences, as it casts doubt on the continued use of BEE pre-qualification criteria. Business owners with competitively priced high-quality products have repeatedly been denied the opportunity to do business with the government, due to the exclusionary requirement to meet a pre-determined threshold of BEE scores.”
“The use of pre-qualifying criteria has in the past resulted in the arbitrary application of BEE criteria, inflation of prices from the limited pool of suppliers, and corruption. Some suppliers have continued to use BEE’s exclusion criteria to constantly benefit from government tenders whilst denying access to new entrants.”Geordin Hill-Lewis