Nicola Daniels | 14 December 2023
The Department of Forestry, Fisheries and the Environment (DFFE) has come under fire for “abandoning” the target of 75% of budget expenditure on Broad Based Black Economic Empowerment (BBBEE) and black-owned enterprises.
In response to a parliamentary question from EFF MP Nazier Paulsen, DFFE said it had revised its policy in line with the new Preferential Procurement Regulations (PPR) of 2022.
Paulsen wanted to know why the target of 75% of budget expenditure on Broad Based Black Economic Empowerment and black-owned enterprises was removed.
Minister of Forestry, Fisheries and Environment Barbara Creecy responded that the target was set in 2019 for the DFFE 5-year strategic plan when the National Treasury’s Preferential Procurement Policy Framework Regulations of 2017 were still in effect.
“The DFFE revised its policy in line with the new Preferential Procurement Regulations (PPR) of 2022. The department’s new supply chain management policy makes use of specific goals applicable for preferential procurement. The specific goals in the policy allocate preference points to enterprise/entities from the following categories: More than 50% ownership by black people, more than 50% ownership by women; and more than 50% ownership by people with disabilities.”
The department said it stipulated one or more of these specific goals for its tenders.
Paulsen said this week that the ANC had never been a party empowering black people and transforming the economy in favour of black people who had been marginalised.
“The ANC has now adopted a neo-liberal type of approach,” he said. The Black Business Federation said the move was inconsistent with the national policy of BBBEE and had not undergone public scrutiny.
“We need to revise that law to make it inclusive. We have BBBEE which provides a certificate as a regulation and works with a standard scorecard you get tax rebate. How will PPR work? The law needs scrutiny before it can be applied. It has loopholes that might exclude some and make room for bias and favour big companies in big business. We need to enhance BBBEE, not fall short or cut corners. We still remain fractured; the imbalances of the past are still there,” Black Business Federation spokesperson, Sifiso Shezi said.
Cosatu parliamentary co-ordinator Matthew Parks said they supported preferential procurement.
“It is critical expenditure and can be used to support preferential procurement, localisation and job creation.
Parliament will soon pass the Public Procurement Bill which will strengthen preferential procurement, localisation and job creation requirements for public expenditure across the state. This will be an important boost and binding across the state,” he said.
President of the General Industries Workers Union of South Africa, Mametlwe Sebei said: “The attempt to invent a class by means of a state legislation is always going to give us a problem that has its own contradictions. The economy is monopolised, you cannot reverse that.
“The reality is that monopoly is a feature of modern capitalism all across the world. The issue is how do you insert black capitalism in that monopolised capital.
“Fundamentally, it is undoable on the scale required. Capitalism is about profit. The idea that somebody is just going to hand over money based on racial markers as people in majority, that is never going to go smoothly.
“That’s why we are seeing fronting. The mining industry is the most remarkable example of the failure of BBBEE as they argue once empowered always empowered, which means if they comply once they don’t have to comply again and again.
“Changing regulations after regulations will not address the fundamental problem. We say nationalise key sectors of the economy/industry on the basis of public ownership by democratic control to contribute to national wealth for everyone.”
Policy analyst Nkosikhulule Nyembezi said even when seen through Paulsen’s eyes, things “do not look good right now” for Creecy’s specific goals in the policy to allocate preference points to enterprises and entities with 50% ownership by blacks, women and people with disabilities.
“In 2022, the minister announced revisions to its policy in line with the new Preferential Procurement Regulations (PPR) of 2022 and targets by which she expects to be judged. With an election looming, such targets matter more than usual amid widespread disappointment over the minister’s admission that the department has not set targets in line with specific goals, as per their policy.
“Embarrassingly, despite the 2022 department’s new supply chain management policy, the waiting list for targeted enterprises and entities has just risen, as the minister’s admission of lack of targets has led to under-performance and not improvements.
“Politically, this is the big problem that Minister Creecy seems unable to solve. She has defined herself as a minister who can deliver. Yet even if her priorities were the right ones, which they are, and the figures showed her implementation of the policy to be making progress in empowering the category of beneficiaries – they continue to show slow progress – she would struggle to persuade voters that she understands their priorities in the absence of set targets in line with specific goals as per the policy,” Nyembezi said.
Economist Duma Gqubule said that the government was abandoning its own policies and unless there was pressure to revive the policy and mend the mistakes of the past, it was “as good as dead”.
“If you look at issues like ownership, there are so many loopholes in law. The BBBEE code has become like an exam that is easy to pass. They (companies) get points they don’t really deserve. They make fatal policy mistakes, especially in the design. The compromises they made in the drafting of the mining and finance charter, for example, completely diluted the process of BBBEE. It’s supposed to be a measurement system. The department is taking its cue from government. The president doesn’t even talk about it in the State of the Nation Address. I don’t see the pressure from black business organisations to change it,” he said.
‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’.