Scrap BEE pre-disqualification in state tenders (PPPFA case)

SCRAP BEE PRE-DISQUALIFICATIONS IN STATE TENDERS (PPPFA CASE)

IMPACT OF THIS CASE

Sakeliga achieved the first comprehensive rollback of BEE through litigation with this case. On 16 February 2022, the Constitutional Court ruled in Sakeliga’s favor that the then Minister of Finance, Pravin Gordhan, acted ultra vires (outside his powers), by regulating as if he had legislative power when he promulgated the 2017 PPPFA Regulations. The victory in the Constitutional Court follows Sakeliga’s earlier success in the case before the Supreme Court of Appeal.

The 2017 Procurement Regulations meant a watershed in procurement and BEE in South Africa. Prior to 2017, companies that tendered for state contracts could be penalized at most 10% to 20% if they did not meet BEE requirements. It was harmful enough. However, since the 2017 regulations, organs of state have gone much further: tender requirements have begun to exclude companies in advance, based on BEE criteria such as if a company was not 100% black-owned, for example. In this case, the court has found in Sakeliga’s favour that the Finance Minister’s pre-disqualification regulations are invalid and unconstitutional.

State organs may now no longer follow or embody the illegal parts of the 2017 regulations in their procurement policies. It is invalid and unconstitutional for them to apply black economic empowerment pre-disqualification criteria to public procurement tenders.

CASE DETAILS

Afribusiness NPC v Minister of Finance (High Court)

Afribusiness NPC v Minister of Finance (SCA)

Minister of Finance v Afribusiness NPC (CC)

Status: Completed

Court: Constitutional Court

Date of last judgment: 16 February 2022

**Result: **Judgment in Sakeliga’s favour, with costs

Court papers

COURT PAPERS

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Scrap BEE pre-disqualification in state tenders (PPPFA case)

SCRAP BEE PRE-DISQUALIFICATIONS IN STATE TENDERS (PPPFA CASE)

IMPACT OF THIS CASE

CASE DETAILS

COURT PAPERS

Support similar cases

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