All details about the new law that will replace Black Economic Empowerment (BEE) Act

All details about the new law that will replace Black Economic Empowerment (BEE) Act

The opposition Democratic Alliance has announced its intention to table the Preferential Procurement Policy Framework Amendment Act for public comment.

The bill proposes scrapping the current Broad-Based Black Economic Empowerment (BBBEE) Act and making several key amendments to the Preferential Procurement Policy Framework Act (PPPFA).

“The proposed Preferential Procurement Policy Framework Amendment Bill will seek to give priority to a tenderer’s competency and remove the BBBEE consideration from the Preferential Procurement Policy Framework,” the DA’s Dean Macpherson said.

“Instead, preference should be given under certain circumstances, to a company which makes the most positive socio-economic impact as measured by a variety of Sustainable Development Goals (SDGs). The Bill will also seek to repeal the Broad-Based Black Economic Empowerment Act.”

Macpherson noted that one of the most powerful ways government is able to implement policy, is through the manner in which it selects companies to do business with.

“This proposed bill will under certain circumstances recognise companies which make the most positive socio-economic impact as measured by a variety of Sustainable Development Goals instead of BBBEE status.

“However, competency and pricing will take priority, as effective and cost-efficient service delivery will benefit those reliant on government services the most.”

Proposed benefits

The DA has previously said its proposed SDG model has several ‘benefits’ over the current BBBEE model, including:

  • It will leverage the significant government procurement expenditure of almost a trillion rand, approximately 22% of our GDP, to incentivise a private company’s contributions towards achieving SDGs;
  • The most important factor for government procurement will remain price and functionality as the capability to execute and lowest cost will benefit those reliant on government services the most, and in turn, lead to the greatest upliftment of society as a whole;
  • Root causes of inequality will be directly addressed without relying on ineffective trickle-down redress;
  • The SDG model will target the vulnerable and disadvantaged directly, the majority of whom have been classified as black under Apartheid, and make it more difficult for those who do not require benefits to accrue them. This will also stem rampant corruption and patronage;
  • The SDG model will provide for 17 different goals, which companies focus on based on what they will have the most sectoral impact on;
  • The SDG model is globally recognized, and is increasingly international best practice, whereas existing legislation is highly localised and not internationally accepted;
  • The SDG model may encourage investment in companies with strong SDG awareness and commitments. The PPPFA tends to discourage local and international investment.
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