By Melani Nathan & Jackie Cameron
- A court has ruled against strict requirements of BEE in government tenders. The Supreme Court of Appeal has found that it is invalid and unconstitutional for organs of state to apply pre-disqualification criteria, such as black economic empowerment requirements, to tenders in public procurement. The Supreme Court of Appeal ruled in favour of business group Sakeliga today, with costs. Piet le Roux, CEO of Sakeliga, says the ruling is of foremost importance: “The Preferential Procurement Regulations of 2017 allowed organs of state to disqualify tenders in advance, simply because a company was not 51% black owned, for example. The objectionable regulations constitute a small, but unusually harmful extension of black economic empowerment (BEE) legislation. Since 2017, it allowed organs of state a novel power: to set their own discretionary and arbitrary minimum BEE requirements a contractor must meet if it wants to be considered for doing business with an organ of state. Prior to these regulations, organs of state could take BEE into account, but only as part (approximately between 10% and 20%) of the total points based on which tenders were awarded.
- South Africa’s manufacturing sector is showing signs of improvement. The south African PMI index, measuring sentiment in manufacturing, rose to the highest level yet in October. Demand in the sector continues to recover as coronavirus lockdown measures ease in the country. Absa’s Purchasing Managers’ Index, compiled by the Bureau for Economic Research, increased to 60.9 from a revised 58.5 in September. This is the first time the index has topped 60 and is the highest since record-keeping began September 1999.
- The National Union of Metalworkers of SA is threatening legal action over the retrenchment process under way at Comair. This could scupper the business rescue process and trigger liquidation, says Bloomberg. Numsa’s lawyers have demanded the airline operator withdraw its section 189 notice for retrenchment plans and issue a new notice based on consultations with the union by this week Friday.
- Aspen Pharmacare has agreed to manufacture the Covid-19 vaccine being developed by Johnson & Johnson at a factory in South Africa. The continent’s biggest drugmaker has the capacity to produce 300 million doses a year. The Durban-based pharmaceutical company says the deal is subject to technology transfer and commercial terms. J&J’s proposed vaccine for the deadly virus is still in clinical trials, says Bloomberg. Aspen shares traded more than ten percent higher at R116,57 just before the close of trade today. The Johnson & Johnson vaccine would be made and packaged at Aspen’s plant in Port Elizabeth, in which the company has invested about R3bn or $184m.
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