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Now or Never: It’s time to Create Real, Lasting Procurement Reform

1 September 2020

Corruption Watch and the Public Affairs Research Institute (PARI) have submitted the following open letter to President Cyril Ramaphosa and Minister of Finance Tito Mboweni, both of whom have acknowledged receipt. [Scroll down to watch eNCA interview with Dr Florencia Belvedere].

Open letter

Now or Never: It’s time to Create Real, Lasting Procurement Reform

Dear President Ramaphosa and Minister Mboweni,

We write to you as civil society organisations deeply concerned at the high levels of corruption being committed through our public procurement system. We call on you to take advantage of the current opportunities and show decisive leadership to steer a collaborative process as the draft Public Procurement Bill moves through Parliament.

Both of you have echoed South Africans’ anger at the widespread corruption that has occurred under the novel coronavirus state of disaster. In your letter from 3 August 2020, Mr President, you noted that “[a]ttempting to profit from a disaster that is claiming the lives of our people every day is the action of scavengers”. Minister Mboweni, you spoke about the “thieves waiting at the door” after you announced the Covid-19 adjustment budget.

But – despite the president’s characterisation that these stories of corruption have reminded South Africans of the state capture era – we cannot share in your disbelief at the pandemic-related corruption. In fact, we, like many other South Africans, approached any announcement of the diversion of funds to fight the virus with scepticism, sure that the funds would also be used to line many pockets. Rather than the current corruption bringing back bad memories of state capture, our experience of state capture has taught us to expect that some public officials are unprincipled enough to exploit their access to public funds for personal gain.

Mr President, you have referred to the pandemic as an opportunity to “change the way we live, do business, and govern”. The pandemic-related corruption is a perfect example of the instability and turmoil that ill-judged and corrupt procurement practices unleash on our society – incurring losses and wasteful expenditure that our society simply cannot afford. Fortuitously, there is another golden opportunity that exists at the moment to introduce such change: the draft Public Procurement Bill. We write to you in this letter about seizing the opportunity this draft legislation could represent.

The majority of the corruption that has been exposed during the pandemic has been through procurement processes. Our organisational work involves analysing the public procurement sphere. It is clear to us that there are significant weaknesses in the existing system which enable – and even facilitate – widespread procurement corruption. The draft Bill offers us all an opportunity to create a new procurement system which will allow for effective, efficient and transparent procurement of goods and services while insulating the system from corruption. This draft legislation represents one of the most significant levers – if not the most significant – we can use to reform this sphere, an area of work vital, as you well know, to a society concerned with sustainable and inclusive growth and pursuing social justice.

However, we are concerned. Despite the importance of public procurement to the fortunes of our collective society and despite the centrality of parliamentary legislation to this crucial state practice, we do not sense from government the necessary degree of commitment, urgency, and focus of the public mind which is immediately required on this pivotal issue.

South Africa’s procurement system must, in accordance with section 217 of the Constitution, be one which is “fair, equitable, transparent, competitive and cost-effective”, and should provide for “the protection or advancement of persons, or categories of persons, disadvantaged by unfair discrimination”. These are lofty – though not unattainable – goals but, we believe, addressing the weaknesses in the current system through the draft Bill will help realise these constitutional promises.

In order to achieve a piece of legislation that will minimise the risk of corruption and ensure competitiveness and fair and effective procedures within a transformative system, we need a clear demonstration of strong political will and direction from yourselves, as well as a willingness to collaborate with all stakeholders, including civil society, in the drafting process. While we welcome the appearance of this draft legislation and understand the 30-day extension of the period for comments decided upon by National Treasury, we believe that this important process of policy formulation and legislative drafting in the national interest is happening with neither the necessary focus nor with the appropriate speed.

We urgently call on you both to demonstrate the bold leadership and political will required to ensure the re-drafting process is rigorous, participatory and decisive, and that it draws input from all sectors of government. While the process must be driven by National Treasury, civil society and the numerous other public bodies involved in the procurement sphere have vital roles to play in shaping the content of the Bill. Frankly, we do not see this happening in the efforts to date.

Both our organisations made submissions on the draft Bill in June this year. In those submissions we indicated our unease with various elements of the Bill as it stands. We made a broad range of concrete proposals to, among other things, streamline procurement operations, constrain improper political interference in the procurement system, improve transparency and accountability, and incentivise and support whistle-blowers.
As civil society organisations, we remain committed to working with National Treasury to strengthen the Bill and to construct a procurement system that serves as a vehicle to address the most basic needs of society.

Corruption Watch submission  |   Public Affairs Research Institute submission

While procurement law cannot be a silver bullet, vigorous, swift and decisive debate over the shape and content of the Public Procurement Bill can be more than an important first step towards addressing current and persistent issues in this crucial area of government activity. As we have frequently seen over the past few months, our existing procurement system needs a radical overhaul.

We now have an opportunity to introduce a new system which can embed the best democratic practices when it comes to the expenditure of public finance. We simply cannot afford to squander this opportunity. We call on you to take swift advantage of the joint opportunity presented by the Covid-19 pandemic and the pre-existing procurement law drafting process to engage civil society and all other stakeholders, to give South Africa the best possible chance of introducing a sustainable procurement system that can respond to the unique challenges our procurement sphere presents.