Almost 500 suppliers implicated in corruption remain cleared to trade with the government, underscoring the persistence of state capture-era practices in South Africa’s procurement system.
A written reply to Parliament, prompted by a question from ActionSA MP Alan Beesley, confirmed that of 509 individuals and companies referred by the Special Investigating Unit (SIU) for blacklisting, only 18 have been placed on the Treasury’s List of Restricted Suppliers.
The remaining 491 are still under review, leaving entities linked to state capture and pandemic procurement scandals eligible for new contracts despite detailed investigative findings.
The Treasury explained it does not initiate restrictions but records them once organs of state submit requests. “National Treasury cannot restrict the affected suppliers, though SIU has issued a report. Organs of state must still follow the restriction process,” finance minister Enoch Godongwana said.
Annexures to the response show that Eskom, Umngeni Water Board and Transnet were contacted to submit restriction requests, while others either failed to respond or submitted incomplete information. In several cases, requests were returned due to noncompliance with legislative requirements, including Instruction Notes, General Conditions of Contract and Preferential Procurement Regulations.
Beesley said the figures confirm ActionSA’s warning that consequence management is “fundamentally broken”. He pointed to companies such as EOH, SAP and Impulse, which remain eligible for contracts despite SIU referrals, as well as suppliers implicated in the PPE procurement scandal and the Digital Vibes matter.
The health minister has separately confirmed that none of the 207 suppliers implicated in the R2bn looting of Tembisa Hospital have been blacklisted. Those cases, which range from inflated tenders to diversion of funds for personal gain, reflect the continuity of corruption patterns first entrenched during the state capture period.
Section 217 of the constitution requires procurement to be fair, transparent and cost-effective. The Public Finance Management Act and Preferential Procurement Policy Framework Act provide for restrictions on suppliers who fail to comply with contractual obligations or who are implicated in corruption.
Yet the current framework requires organs of state to initiate restriction requests, creating a bottleneck when departments fail to act. ActionSA has lodged a complaint with the public protector, who is investigating the matter as potential maladministration under section 182 of the constitution. The party has also announced plans to introduce legislation to empower the Treasury to act directly on SIU referrals.
Administratively, the absence of automatic suspension mechanisms means implicated suppliers continue to access public contracts, exposing the state to fiscal risk.
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