PQ 288 for Oral Reply
NATIONAL ASSEMBLY
QUESTION FOR ORAL REPLY
QUESTION NO.: 288
DATE OF PUBLICATION: 15 NOVEMBER 2011
Mrs E M Coleman (ANC) to ask the Minister of Economic Development:
(a) What are the (i) objectives of the local procurement accord between his
department and the business sector and (ii) the areas of agreement and the
names of the relevant companies, (b) why were other companies unable to join
government and other social partners in this accord and (c) how is this accord
intended to help in growing the small, medium and micro enterprise community?
NO4268E
REPLY
The objective of the Accord is to improve the levels of local procurement by both
the public and private sectors.
The Accord sets an aspirational target of 75% localisation of goods and services
that the parties will work together to achieve over a period of time. The Accord
identifies immediate steps that each party commits to take.
There are 14 areas of agreement in the Accord. They range from what the state
will do to buy more locally-made products in its infrastructure procurement
programme, to the actions by large companies to use local suppliers for goods
and services. A copy of the Accord will be supplied to all MPs.
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PQ 288 for Oral Reply
In the Accord, government committed to:

Significantly expand the value of goods and services it procures from local
producers, using new regulations that will come into effect on 7 December
2011

Identify the products that it will designate so that only local producers
qualify to produce these. Initial indications are these may include buses,
power pylons, railway rolling stock, pharmaceuticals, set-top boxes for
televisions, uniforms and other clothing products, certain food products
and office furniture and school furniture.

Adopt a public SABS standard to define and identify local content in
various product categories and

Use the large infrastructure-build programme to support and create local
supplier capacity and work with such companies to produce for export
markets.
Business committed to

Develop company-level procurement strategies that will analyse existing
supply-chains to identify opportunities to increase buying from local
suppliers. The 85 largest companies have agreed to drive the effort in the
private sector to improve localisation. These companies will report
annually on their targets and achievements

Use the newly-created South African Supplier Diversity Council to support
smaller local manufacturers of goods and producers of agricultural
products and services

Support the setting of conditions on companies who benefit from state
contracts that will commit them to improve localisation of their own supplychains, invest in skills development and new technology and undertake
efforts to improve overall competitiveness and expand their markets

Increase levels of investments in areas identified for local procurement,
eliminate collusive and unethical pricing practices in public tenders and
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PQ 288 for Oral Reply
promote competitive pricing policies and quality products so that citizens
receive value-for-money
Organised labour committed to

review its own supply-chain in the procurement of goods and services to
identify products that can be sourced locally

work with union investment vehicles and worker retirement funds to align
their mandates to support local procurement strategies, including through
promoting greater levels of investments in companies who will benefit from
the state’s local procurement policies

promote better knowledge and education of labour trustees on retirement
funds

support investment in development bonds that are issued by public
entities that will promote infrastructure investment, and so doing, provide
support for the localisation effort.
Community representatives committed to

strengthening cooperatives and other social economy enterprises
including small-scale farmers, craft and creative enterprises and home
industries and

increase public awareness of the buy local campaign, including through
work undertaken with churches and other faith-based organisations,
women and youth groups.
In addition to these specific commitments, business organisations, trade unions
and community organisations committed to ensure their stationery, office
furniture and promotional items such as t-shirts and other clothing items are
produced locally. They will also strengthen the Proudly South Africa campaign.
A high-level committee will be set up to meet every six months to review
progress, receive reports from each constituency on steps taken and the impact
of such steps and consider creative ways to achieve the outcomes of the Accord.
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PQ 288 for Oral Reply
The Accord is not signed by individual companies but by their business
representatives. The business organisations who committed to the Accord are
BUSA (representing a number of sector organisations such as Seifsa, AHI, Agri
SA and NAACAM), Business Leadership SA (who represent the top 85
companies in the economy) and NAFCOC and FABCOS who represent many
smaller businesses.
The SA Supplier Diversity Council is one key mechanism in the Accord through
which larger companies can support small black-owned manufacturing
operations to supply goods to them. Fifteen large companies, with an
approximate market turnover of R350 billion have already pledged to support the
SA Supplier Diversity Council.
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