BDLive carried this story this morning (and no I haven't subscribed and won't do so until they change their viewing rates). The Black Business Council (BBC) has long been upset with the PPPFA. With such ZumaLuminaries like Zungrabber on their board they are able to namedrop very effectively and force a meeting with Treasury to voice their concerns. They plan to march to Treasury in Pretoria "to express our serious issue with the Preferential Procurement Policy Framework Act (PPPFA) and the negative role of the National Treasury towards BEE". They want the PPPFA repealed altogether so that set asides can be used to allocate spend to certain types of black business. Something that Malusi Gigaba has insisted that he will allow. But the best thing here is that they are threatening to go to the Constitutional Court for the final word. However I don't think that Zungrabber and his lot will be willing to shell out cash for this case. I suspect they are going to browbeat and namedrop until Pravin relents. Let's say that they do go to the Constitutional Court and I was the advocate representing Treasury (I'm sure I could fake a university degree and forge my acceptance to the bar to do this), this is the argument I would use.
The BDLive article refers to section 217, a section of the constitution that I have blogged about often. Section 217 is where we find the need for the PPPFA, specifically section 217 (3)
National legislation must prescribe a framework within which the (allocation of preference points) may be implemented.
But – section 217(1) says this
217. (1) When an organ of state in the national, provincial or local sphere of government, or any other institution identified in national legislation, contracts for goods or services, it must do so in accordance with a system which is fair, equitable, transparent, competitive and cost-effective.
It identifies five principles of procurement that every company should implement; namely fair, equitable, transparent, competitive and cost-effective. Treasury argues that these five principles provide enough protection for those who claim they are marginalised. They further argue that the PPPFA provides preference points that take those same principles into account. Set-asides would compromise the fairness, competitive and cost-effective principles.
The BBC on the other hand are going to depend entirely on a piece of section 9 (2) of the Constitution
Equality includes the full and equal enjoyment of all rights and freedoms. To promote the achievement of equality, legislative and other measures designed to protect or advance persons, or categories of persons, disadvantaged by unfair discrimination may be taken.
They will argue that certain people are still unfairly disadvantaged and that the PPPFA does not go far enough. People like me would counter that by suggesting that the promotion of a class of person in state procurement favours them unfairly over other citizens. After all section 9 (3) says
(3) The state may not unfairly discriminate directly or indirectly against anyone on one or more grounds, including race, gender, sex, pregnancy, marital status, ethnic or social origin, colour, sexual orientation, age, disability, religion, conscience, belief, culture, language and birth.
But the BBC won't take that lying down. They'll say that section 36 (limitation of rights) allows the limitation of certain rights. This is where my constitutional knowledge becomes scratchy. I would imagine that the rights of certain people (read white or foreigners) could be limited "in terms of law of general application to the extent that the limitation is reasonable and justifiable in an open and democratic society".
Ultimately the final argument is going to revolve around section 9(5)
Discrimination on one or more of the grounds listed in subsection (3) is unfair unless it is established that the discrimination is fair.
We'll argue that the discrimination proposed by the BBC is unfair and they'll argue it's fair. It is therefore vital that this issue does go to the Constitutional Court. But as I mentioned earlier in this post, I somehow doubt that it will get to the highest court in the land, the BBC and Malusi will no doubt namedrop and bamboozle Treasury into agreeing to this because the ANC needs to deliver something to the very pissed off black middle class. There will be consequences however.
The state will pay an unnecessary premium for goods supplied by black suppliers. This concern has been voiced by Treasury many times over the last ten years.
The taxpayer is going to have to foot the bill for this which is going to result in Treasury allocating funds for things like healthcare, security, basic services etc. to state procurement.
Those black suppliers who are now doing very well thank you very much from the state will never be competitive in the private sector that will be loath to pay a premium from companies that have little more to offer than the colour of their skin.
It will further divide the economy into black suppliers who look after the state and white suppliers (i.e. not black) who look after the private sector (and probably supply the black companies to sell to the state).
And the ANC will then claim that the private sector is white and racist and the reason why black South Africans are so poor.
All of this is probably of little concern to the BBC or ANC. Both live for the present and have little concern for the future. And the future does not look too rosy at all.