The National Economic Development and Labour Council (Nedlac) has issued a statement discussing its efforts to address both the corruption around procurement and lack of procurement of locally manufactured personal protective equipment (PPE) by government bodies.
Media reports in recent weeks have centred around the nation’s outrage at allegations of serious corruption, wasteful expenditure, fronting, overpricing, illegal importing and inefficiency in government’s procurement of PPE in the fight against Covid-19.
The social partners at Nedlac - government, business, labour and community - have noticed that the corrupt practices in respect of the buying of PPE often goes hand in hand with the purchase of imports and eschewing local manufacturers who have proved during the Covid-19 epidemic to be able to deliver quality products at lower prices than imported ones.
“The cancer of corruption is a threat to the entire nation and permeates every facet of our society. It requires decisive action from all social partners - government, business, labour and community.
“Not only tackling the scourge of corruption, but also ramping up local procurement is key to our economic survival and recovery and thus decisive action is required,” says Congress of South African Trade Unions Parliamentary officer Mathew Parks, who is also an organised labour representative at Nedlac.
“Corruption in the State procurement of PPE means that scarce public resources are lost to thieves, that money needed for critical public services is lost, that health workers are given PPE that puts their lives at risk and that local manufacturing jobs are lost to illegal imports.
"It further erodes public morale in our ability to rebuild our nation,” notes Business Unity South Africa CEO Cas Coovadia, who is a business representative at Nedlac.
From the community constituency at Nedlac, Nhlanhla Ndlovu states that ramping up local procurement fosters inclusion and transformation and should not be misconstrued as providing business opportunities to politically exposed persons and as an avenue for corruption.
With the economy in a deep recession and 40%-and-rising levels of unemployment, the social partners believe that not a single job or business should be lost. Therefore, ramping up local procurement from the public to the private sector and ordinary consumers is key to economic recovery.
To aid in the fight against corruption, the Nedlac social partners are working together to modernise public procurement systems so that they are online, transversal, competitive and available for public scrutiny at all times; and to provide for key large-scale public procurement items to be centralised under National Treasury to ensure lower costs, less scope for looting and greater public transparency and efficiency.
Further, the partners aim to engage with the relevant industry sector to ensure that the prices set in regulations are reflective of production costs and not inflated for gross profiteering; and suggest legislation to extend the ban on public servants doing business with the State to include politically exposed persons as defined by the Financial Intelligence Centre Act.
The partners will establish more effective consequence management, including rapid response anti-corruption courts (following the model of the 2010 World Cup Courts); and set up transparent systems for all stakeholders to monitor public procurement.
Toward ramping up the procurement of locally manufactured products, the social partners are working together to tighten up the implementation of the local procurement requirements of existing public procurement regulations; and fast-track the passage into law of the Public Procurement Bill, ensuring that it is bold and comprehensive enough to to restore public confidence in public procurement and prioritises the procurement of local products.
The partners will also identify key products that should be prioritised for a buy local campaign that can help unlock critical economic sectors, as well as identify key public and private procurers who can help scale up local procurement and develop reward systems to incentivise local procurement by businesses and consumers.
This while continuously working to create opportunities and reinforcing existing opportunities for new, local manufacturers.
To improve compliance with existing legislation and regulation, social partners are working to ensure that preferably, and where feasible, State tenders are awarded to local companies that are compliant with all tax obligations and labour legislation, and reinforce and further capacitate quality assurance structures such as the South African Bureau of Standards.
Moreover, the partners are reviewing trade agreements that strengthen export promotion and reduce imports of products earmarked for local procurement and manufacturing.
This while ensuring awareness and buy-in from government departments, provinces and other procurement organs and agencies of the State to buy locally produced products as per government policy.
The intention is that these targeted interventions will be developed into a social compact at Nedlac and accompanied by an implementation plan with specific timeframes and responsibilities allocated to each social partner.
A statement issued by Nedlac on September 2 confirms that regular reports on the implementation of these actions will be submitted to the proposed Presidential Working Committee on Economic Recovery and made publicly available.
The social partners believe that it is only by working together that they can defeat corruption, grow the economy and create jobs. They believe that the public is exhausted and disillusioned by the scale of looting and needs to see decisive action.