President Cyril Ramaphosa signed three Bills into law on 23 July 2024 focusing on small business, climate change, and public procurement in South Africa.
These include the Public Procurement, Climate Change and the National Small Enterprise Bills, which have now become Acts of Parliament.
Public Procurement Act
Introduced by the Minister of Finance in late June of 2023, the legislation establishes a single framework that regulates public procurement, including preferential procurement, by all organs of state.
The Public Procurement Act now applies to all departments, constitutional institutions, municipalities, municipal entities, and public entities.
South African public procurement has been notorious for various degrees of corruption.
Notably, during the state capture commission, Chief Justice Raymond Zondo found that interference from members of the executive in the procurement function of government was one of the ways state capture thrived.
In response to these findings, Ramaphosa said that “apart from the abuse of procurement for the purposes of state capture, the country’s procurement system currently faces challenges of professional capacity, fragmentation and operational flexibility.”
As one of the intervening steps, the Public Procurement Bill was introduced.
“The law seeks to enhance transparency and integrity, among others, to combat corruption, ensure efficient, effective and economic use of public resources and advance transformation and broadened economic participation,” said the Presidency in a statement.
The Act prohibits bids from individuals such as public office holders, parliamentary and provincial legislature employees, as well as officials of public entities, constitutional bodies, municipalities, and their entities.
It applies to all procurement carried out by a procurement institution (including procurement through donor or grant funding), any person who submits a bid or has been awarded a bid; and all procurement carried out by any person on behalf of a procuring institution.
Legal experts at Webber Wentzel, Rodney Africa, Adriano Esterhuizen, Daveraj Sauls, Danica Jonker explained that the legislation is rooted in Section 217 of the Constitution which deals with procurement.
“Public procurement is currently regulated by various statutes, regulations and statutory instruments,” thus fragmented, explained the experts.
The Presidency stated that the Act now aligns procurement policy with Section 217 of the Constitution, which requires fair, equitable, transparent, competitive, and cost-effective procurement by state organs across all government levels, with national legislation outlining that policy framework.
Climate Change Act
The Climate Change Bill, introduced by the Minister of Forestry, Fisheries and the Environment in 2022, sets out a national climate change response, including mitigation and adaptation actions, which also constitutes South Africa’s fair contribution to the global climate change response.
It “enables the alignment of policies that influence South Africa’s climate change response, to ensure that South Africa’s transition to a low carbon and climate resilient economy and society is not constrained by policy contradictions,” said the Presidency.
The law outlines that aims to boost South Africa’s capacity to cut greenhouse gas emissions and enhance climate resilience, while minimising job losses by boosting the green economy.
It also aims to improve coordination among national departments to support South Africa’s commitments under the Paris Agreement’s Nationally Determined Contributions (NDC), which outline our goals for reducing emissions.
It formally sets out the functions of the Presidential Climate Commission, which includes providing advice on the Republic’s climate change response to ensure “the long-term just transition to a climate-resilient and low-carbon economy and society.”
The law also stipulates the role provinces and municipalities will play in mitigation efforts.
National Small Enterprise Amendment Act
The National Small Enterprise Bill looks to streamlines support services government provided to small and medium businesses as part of broadening participation in the economy.
The Act amends the National Small Enterprise Act of 1996 to establish a new entity, the Small Enterprise Development Finance Agency, which will incorporate the Small Enterprise Development Finance Agency (SEFA), the Small Enterprise Development Agency (SEDA) and the Cooperative Banks Development Agency (SEDFA).
SEDA and SEFA are currently located within the Department of Small Business Development.
“The new Small Enterprise Development Finance Agency will function as a one-stop-shop for aspiring entrepreneurs and promote the development of the Co-operative Banking Institutions,” said the Presidency.
The Act creates the Small Enterprise Ombud Service to handle complaints and suggest to the Minister of Small Business Development that certain practices affecting small enterprises be declared unfair trading.
It also allows the Minister to set criteria through regulations for classifying micro, small, and medium enterprises, and for regulating laws impacting small businesses.