LEGISLATIVE AMENDMENT AND DEVELOPMENT NEWSLETTER - MARCH 2022

This newsletter highlights the latest statutory amendments, enactments, caselaw, notices and ancillary developments relevant to the SERR Synergy products and services for the month. 

Minister of Finance v Afribusiness NPC (CCT 279/20) [2022] ZACC 4 (16 February 2022)

This matter arose after the National Treasury received complaints from members of the public relating to the effectiveness of the 2011 Preferential Procurement Regulations (GN R502 GG 34350, 8 June 2011) which were applied prior to, and/or served as a precursor to the 2017 Procurement Regulations. Additional concerns were raised by state-owned enterprises illustrating that the 2011 Procurement Regulations created a competitive advantage for white persons and no attempts were made to include previously disadvantaged persons. 

In terms of section 5(1) of the Procurement Act, the then Minister of Finance, Mr Gordhan, exercised his powers and promulgated the 2017 Procurement Regulations. In terms of the 2017 Procurement Regulations, organs of state may elect to apply a specified list of pre-qualification criteria to advance certain groups, and only tenderers who comply with such criteria would be eligible to tender. Regulation 3(b) provides that “[a]n organ of state must...determine whether pre-qualification criteria are applicable to the tender as envisaged in regulation 4”. Regulations 4 and 9 provide pre-qualification criteria that tenderers must meet to be eligible to tender and subcontract, respectively.  The amendment was also intended to align the Regulations with Broad-Based Black Economic Empowerment (B-BBEE) legislation.

The essence of this matter is founded on the separation of powers (trias politica), namely the executive (Cabinet), the legislature (Parliament) and the judiciary (Courts of law).

In the Constitutional Court, the ultra vires doctrine (acting beyond the scope of the powers) is the starting point for determining the lawfulness of the exercise of any public power. The majority held that the impugned regulations are not necessary. It can neither be necessary nor expedient for the Minister to establish regulations in an attempt to achieve an outcome which can already be accomplished in terms of section 2(1) of the Procurement Act. Section 2(1) of the Procurement Act gives effect to section 217(3) of the Constitution, which provides that the categories of preference contemplated in section 217(2) must be provided for in a framework by national legislation and implemented.

As stated previously, the core aspects of the matter lie with the separation of powers. The question asked by the Constitutional Court is therefore whether a Minister has the power to make regulations of this nature if not authorised to do so by on Act of Parliament. If not, as presented in this case, the matter comes to an abrupt end and the implemented regulations are invalid for being ultra vires the enabling section. Therefore, the principle of legality is breached if a state organ’s action has no legal foundation that forms part of the rule of law, which in turn is an enshrined value of the Constitution. 

Succinctly, the appeal by the Minister was dismissed with costs and Afribusiness NPC was successful in this matter. The decision by the Constitutional Court was not a decision against the component of the Regulation but was based on the fact that the Minister, in making the Regulation, acted outside of his legislative authority.

Immigration Act, 2002 (Act No. 13 of 2002): Critical Skills List

  • The Minister of Home Affairs, Dr Aaron Motsoaledi, in Government Gazette No. 45860 dated 2 February 2022 determined and published the skills or qualifications that are critical to the Republic of South Africa (RSA) in relation to the application for a critical skill work visa or permanent residence permit. The list comprises 101 critical skill occupations.

The above document can be requested by SERR Synergy Training, SDF and B-BBEE clients from the SERR Synergy Training, SDF and B-BBEE Departments.

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