Much has recently been made of the government’s renewed focus on blacklisting suppliers implicated in corruption.
Public works and infrastructure minister Dean Macpherson announced plans to blacklist dozens of companies implicated in construction sector corruption. Transnet has announced steps to debar suppliers linked to tainted contracts.
More recently, the eThekwini municipality published its intention to blacklist Madupha Business Enterprise after the Special Investigating Unit’s (SIU) findings into the Phoenix Infill Housing Programme.
These are welcome developments. But they should not be mistaken for evidence that South Africa’s supplier debarment regime is working. On the contrary, they illustrate just how badly it has failed. South Africa already has laws allowing corrupt suppliers to be excluded from doing business with the state. What it lacks is a system that ensures those laws are implemented.
That failure is not theoretical. Last year, parliament’s standing committee on public accounts was informed that despite the SIU recommending 467 companies and individuals for supplier restriction, only one had ultimately been placed on the National Treasury’s database of restricted suppliers. The remaining 466 suppliers remained eligible to continue doing business with the state.
That statistic should have triggered national outrage. Instead, it exposed one of the greatest weaknesses in South Africa’s procurement system: investigations continue, reports are written, recommendations are made, yet consequence management too often stops there.
The SIU has become exceptionally good at what it does. Under the guidance of Andy Mothibi, who has since been appointed national director of public prosecutions, the SIU has become one of the state’s most effective investigative institutions, regularly uncovering procurement fraud worth billions of rand and identifying the suppliers and officials responsible.
The problem is what happens next. Accounting officers frequently fail to initiate debarment proceedings. Municipalities and departments delay implementation of SIU recommendations for months or even years. The Treasury maintains the database of restricted suppliers but has limited powers to intervene when procuring institutions fail to act.
Meanwhile, the Presidency receives SIU reports and issues referrals, yet there is no effective mechanism to ensure implementation across government. The result is entirely predictable: suppliers implicated in corruption remain eligible for new government contracts.
ActionSA has spent the past year exposing this implementation gap. After parliament learnt that only one of the 467 SIU-recommended suppliers had been added to the Treasury’s database of restricted suppliers, we lodged a complaint with the public protector regarding government’s failure to implement supplier debarment recommendations. The public protector’s investigation is ongoing, and we respectfully await her findings.
We then used parliamentary oversight to expose that none of the 207 suppliers implicated by the SIU in the R2-billion Tembisa Hospital procurement scandal had been placed on the National Treasury debarment register, despite recommendations that they be considered for restriction.
More recently, ActionSA laid criminal charges against the eThekwini municipal manager after serious concerns emerged regarding the implementation of the SIU’s findings on the Phoenix Infill Housing Programme. Only after sustained pressure — including parliamentary questions, criminal complaints and public scrutiny — did the municipality finally initiate blacklisting proceedings against one of the implicated suppliers.
That decision is welcome. But it also illustrates the problem. The blacklisting should not have depended on opposition oversight, media attention or public pressure. It should have followed automatically from a properly functioning procurement system. That is precisely why ActionSA has introduced the Blacklist Corrupt Suppliers Bill, which will be gazetted for public comment this week.
No procurement system can claim integrity if suppliers identified by the state’s own anti-corruption agencies remain free to bid for the next government contract.
The bill does not reinvent South Africa’s procurement framework. It fixes the part that does not work. First, it gives the National Treasury’s public procurement office genuine step-in powers to intervene where procuring institutions fail or unreasonably delay initiating debarment proceedings.
Second, it introduces mandatory timeframes for initiating and completing debarment proceedings so that recommendations cannot simply gather dust for years. Third, it strengthens transparency by requiring a public debarment register to be updated promptly and by obliging procuring institutions to report annually on supplier misconduct, debarment decisions and decisions not to initiate debarment proceedings.
Finally, it closes one of the most glaring loopholes in the present framework by ensuring that recommendations and orders arising from SIU investigations are properly integrated into the debarment process, rather than depending solely on the willingness of individual accounting officers to act.
These are practical reforms aimed at one objective: ensuring that suppliers implicated in serious corruption cannot continue profiting from public contracts because of administrative inertia.
The timing could not be more important. The regulations accompanying the Public Procurement Act of 2024 are now open for public comment. That legislation promises a modern procurement framework built on fairness, transparency, competitiveness and cost-effectiveness. But no procurement system can claim integrity if suppliers identified by the state’s own anti-corruption agencies remain free to bid for the next government contract.
South Africa has spent years strengthening its investigative institutions. It is now time to strengthen the consequences that follow those investigations. A procurement system that cannot reliably exclude corruption-implicated suppliers is not only inefficient; it undermines public confidence, rewards misconduct and weakens every honest business seeking to compete fairly for public work.
The law already recognises that corrupt suppliers should not do business with the state. The question before parliament now is whether we are finally prepared to ensure that principle is enforced.
• Beesley, an ActionSA MP, is a member of parliament’s finance and public accounts committees.
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