local procurement accord - dti · local procurement accord ... buying in bulk 2. promote...

PROUDLY SOUTH AFRICAN

LOCAL PROCUREMENT ACCORD

Adv. Leslie Sedibe CEO: Proudly South African

23 March 2012

“We cannot change the problems with the same minds that created them”

Albert Einstein

“WORDS of WISDOM”

ABOUT PROUDLY SA

• Campaign was born out of Socio-economic necessity in 1998

with the Presidential Jobs Summit – under leadership of former

South African Pres. Nelson Mandela

• Preceded by international research, based on the Australian

model

• Established in 2001 through Nedlac and has representation

from Government, Business, Organised Labour & community

VISION

The Proudly South African Campaign

will encourage the Nation to make

personal and organizational

contributions to economic growth

and prosperity in South Africa,

thereby increasing employment

opportunities and reinforcing

national pride.

MISSION

To be an economic prosperity

and competitiveness driver

and business partner for all

South African producers and

service providers who are

serious about quality and are

committed to creating and

sustaining employment and

meaningful gain for local

industries, by joining the

Campaign.

PRIMARY OBJECTIVES OF PROUDLY SA

• Main objective - to promote sustainable job

creation

• Sustainable job creation will be promoted by the

supporting objective of improving the production

and consumption of quality locally manufactured

goods and services

• To ensure that quality jobs are created with fair

labour standards to protect the rights of workers

PRIMARY OBJECTIVES OF PROUDLY SA (2)

• Environmental concerns are included in the

objective of ensuring environmentally

responsible management practices

• Essence of the Proudly SA brand –

engendering pride as a nation, patriotism

• Fundamental purpose – developmental:

national pride, social cohesion, prosperity,

business competitiveness

• Buy Local activism

MEMBERSHIP – CRITERIA (4 Pillars)

Local Content At least 50% of the cost of production must be incurred in South Africa and there must be “substantial transformation” of any imported materials.

High Quality Product/Service The product or service must be of a proven high quality.

Fair Labour Practice The company must comply with labour legislation and adhere to fair labour practices

Environmental Standards The company must be environmentally responsible and adhere to production processes that are environmentally friendly and acceptable. Even services companies – recycling, waste management, carbon footprint reduction, etc.

BUY LOCAL RATIONALE – Why local ?

An internationally proven & universally relevant mechanism to build the resilience of local communities and economies – A KEY TO JOB

CREATION:

• Helps to keep money in the local economy

• Embrace what makes a country/community different

• Foster local job creation

• Benefits accrue to local owners‘/businesses

• Tax Benefits

• Little or Zero Migration of capital

• Encourages Innovations and Competitiveness

• Ensures that a country/specific cities/regions/communities stand out from the

crowd

Background – the development of the Local Procurement Accord

Local Procurement Accord

A Social Dialogue on the

NGP [New Growth Path] Facilitated by the

Department of Economic Development

14 (Fourteen) Commitments

Objective 1

Support creation of 5 Million Jobs

by 2020

Local Procurement (75% localisation)

Goods & Services Public and Private

Sectors Initial List includes: • Power Pylons • Rolling Stocks • Buses • Canned Vegetables • Clothing • Textiles • Footwear • Leather Products • Set Top Boxes

Support of the revised

preferential procurement regulations

(promulgated by Minister of

Finance, Pravin Gordhan in 8 June 2011)

Objective 2

Support attainment of goals of the

Industrial Policy Action Plan

(IPAP2)

Intervention To achieve How Supported by

Further discussions (with a high focus on Retail) in March 2012

10

12

14

16

18

20

196719681969197019711972197319741975197619771978197919801981198219831984198519861987198819891990199119921993199419951996199719981999200020012002200320042005200620072008200920102011

Million

US Employment in Manufacturing

Trends in Manufacturing Production

Monetary Analysis

Resource Analysis

Economic Analysis

Economic Impact

(A) Government Commitments – There are 3 (plus 1)

Expand the Value of Goods & Services that Government procures from SA Producers

1. Through the PPPFA (Preferential Procurement Regulations which were promulgated on 8 June 2011 and came into effect on 7th December 2011 through the designation of sectors by DTI

• Specific Sectors • Specific Sub-Sectors • Specific Products

2. Two indicative lists of specific Products

3. Update above lists 4. Reviewing Legislation

Establishment of Standards for Measurement and Verification

of Local Content

1. Introduction of South African Technical Specification (SATS 1286:2011) for the calculation and verification of Local Content published on 23 November 2011 by SABS

2. The SATS is a precursor to a South African National Standards which will be developed after the SATS has been tested

Commitment to ramp up the roll-out of infrastructure

1. Localisation of Procurement of Goods & Services

2. Refer to the State of the Nation Address of 8 February 2012

Commitment 1 Commitment 2 Commitment 3

how how how

(B) Organised Business Commitments – There are 4 (plus 1)

Support for Local Manufacturers

1. Company-wide procurement strategies

• Target 50 companies by 31st October 2011

• Report on an Annual Basis • Focus on top 84 companies

(members of BLSA) 2. Assist in growing the Product

lists (Commitment 1) 3. Establish the SASDC (SA

Supplier Diversity Council) • Provide database of South

African products • Development programmes,

training etc. to Black owned companies that want to be on the database

Commitment 4

Investment in Domestic Manufacturing Sectors

Commitment 5

Synergies between Private and Public Sector Procurement

1. Linked to designated Products (Commitment 1)

2. Look at viable opportunities • Economies of scale • Increase

Competitiveness • Potential Linkages

Commitment 6

1. Buying in Bulk 2. Promote Competitive

Pricing 3. Identify more products

that can be put on the Designated Product List (Commitment 1)

4. (Public) eliminate collusive and unethical tendencies

Initiatives by Organised Business and Industry

Association

Commitment 7

1. BUSA (& affiliates) promote local procurement

2. BUSA buy stationery, office furniture & promotional items from local manufacturers

how how how how

(C) Organised Labour Commitments – There are 3 (plus 1)

Organised Labour and its Affiliates Procurement Practices

1. Three Federations (& affiliates) promote local procurement

2. Three Federations (& affiliates) buy stationery, office furniture, vehicles & promotional items from local manufacturers

• Set-up a Procurement Desk

• Report on above 3. More impetus needed to

support the clothing and textile industry

Alignment of Union Linked Investment Funds to Local

Procurement

1. Alignment of investments and Pension Funds

• Finalise a Socially Responsible Investment Code (by December 2011)

2. Investment into government guaranteed Development Bond

3. Engage with 20 top Retirement Funds (Code and Bonds)

4. Challenge top 100 funds to report on local procurement

Shareholder and Corporate Governance Activism

1. Through representatives on governance structures of public and private companies

2. Link the ‘Local 75%’ campaign to other campaigns e.g. Living Wage Campaign, Decent Work Country Campaign etc

Commitment 8 Commitment 9 Commitment 10

how how how

(D) Community Constituency Commitments – There are 2 (plus1)

Creating Awareness and Social Mobilisation

1. Uses platforms and networks to mobilise on the benefits of buying locally

2. Community organisations to review current procurement ....to buy locally

3. Buy stationery, office furniture, vehicles & promotional items from local manufacturers

• Use Procurement Desk f Unions

• Report on above

Supplier Development Opportunities (for

Cooperatives and Social Economy Enterprises)

1. Strengthening cooperatives through enhanced participation of small-scale producers

2. Information on Market Access and linkage opportunities

Commitment 11 Commitment 12

how how

(E) Program of Action – Public Awareness

Partnerships with Proudly South African

1. Awareness Campaign of the benefits of buying locally

2. Public Education Programmes on ‘labels of origin’ (to promote fair and legal trade)

3. Work with SARS etc to prevent illegal imports

Implement the Accord by developing a program of action

1. Proudly SA to compile a list of locally produced products and services

2. Plan will include the following : • When ‘lists’ will be updated

with new products/services • Government hold conference

with National Departments and SOE’s on guidelines (31st Oct 2011)

• Business convene a Suppliers workshop to inform (30th Nov. 2011)

• Business hold a SA Suppliers Diversity Development Conference by 30th April 2012

• Implementation of revised PPPFA regulations on 7th Dec. 2011

Commitment 13 Commitment 14

how how

Perform 2020

Accord Implementation Roadmap

Go

vern

me

nt

O

rgan

ize

d B

usi

ne

ss

Initiatives

Commits the Leveraging of Public Procurement

Commits the Establishment of standards for measurement and verification of local content

Commits the roll out of infrastructure

Dec’11 Jan – March ‘12 April – June ‘13 July-Sept ‘12 Oct – Dec’12 Jan – March ‘13 April – June ‘12

Prepare

Org

anis

ed

Lab

ou

r

Commits to Organised labour and affiliate procurement

Commits to alignment of Union linked Investment funds to local procurement initiatives

Commits to Shareholder and Corporate Governance Activism

Execute

31/10/2011

01/06/2012

07/12/2011

07/12/2011

Milestones Confidence

Level

High

Moderate

Low

Key

Program Activity

Commits to the support for Local Manufacturing

Commits for investment in Domestic Manufacturing Sectors

Commits to complementariness between Private Sector Procurement and State Procurement

Commits to Organised Business and Industry Associations Initiatives

07/12/2011

01/06/2012

01/06/2012

07/12/2011

01/06/2012

ANNUAL REPORT

1

Journey Map – Focus on all constituencies

Perform 2020


Par

tne

rsh

ips

wit

h P

rou

dly

SA

Initiatives

National campaign to create awareness on the economy wide benefits of buying locally.

Social partners initiate and support public education programmes

Cooperation with South African Revenue Services and work with enforcement agencies.

Database Management

Dec’11 Jan – March ‘12 April – June ‘13 July-Sept ‘12 Oct – Dec’12 Jan – March ‘13 April – June ‘12

Prepare Execute


Level

High

Moderate

Low

Key

Program Activity

1

Co

mm

un

ity

Co

nst

itu

en

cy

Commits to Creating awareness and social mobilisation and procuring locally Commits to Supplier Development Opportunities for Cooperatives and Social Economy Enterprises.

07/12/2011

01/06/2012 ANNUAL REPORT

1


Perform 2020


Imp

lem

en

tati

on

of

the

Acc

ord

Initiatives Dec’11 Jan – March ‘12 April – June ‘13 July-Sept ‘12 Oct – Dec’12 Jan – March ‘13 April – June ‘12

Prepare Execute


Level

High

Moderate

Low

Key

Program Activity

Constituencies will work together to Develop programme of action for the implementation of the accord.

Government will implementation roadmap to incorporate critical milestone

Business will conduct a Consultative conference with procurement units of National Departments State owned enterprise and Metro Councils.

Suppliers workshops in consultation with government will be convened.

Implementation of PPPFA regulations will come into effect.

Business will host SA Supplier Diversity Development Conference.

Social partners will conduct regular reviews of progress.

PSA will compile a list of locally produced products and services

Commence discussions on support that retail sector can provide to local procurement goals.


31/10/2011

30/11/2011

07/12/2011

30/04/2012

28/02/2012

ANNUAL REPORT

Perform 2020

Monitoring and Evaluation Roadmap

Sett

ing

up

a J

oin

t C

om

mit

tee

Initiatives Dec’11 Jan – March ‘12 April – June ‘13 July-Sept ‘12 Oct – Dec’12 Jan – March ‘13 April – June ‘12

Prepare Execute


Level

High

Moderate

Low

Key

Program Activity

Working Cooperatively through the accord to expand local industrial capacity.

Potential to accelerate the attainment of sustainable development growth and job creation .

Establish high level committee with sector representatives meeting every six months

Receive reports from each constituency on steps take.

Consider creative ways to achieve the commitments.

First high level meeting

Journey Map – Focus on Monitoring and Evaluation

01/06/2012

ANNUAL REPORT

26

Journey Map – Focus on Government Cont’

Perform 2020

Government Implementation Roadmap

Ro

ll o

ut

of

Infr

astr

uct

ure

Initiatives

Ramp up of Infrastructure procurement leveraging on Development Finance Institutions (DFI)

Oct ‘11 Nov ‘11 Jun –Dec‘13 Jan -Jun ‘12 July – Dec’12 Jan – Jun ‘13 Dec‘11

LSI/Road shows LSI/Road shows LSI/Road shows

Prepare Execute


Level

High

Moderate

Low

Key

Program Activity

Activity

ANNUAL REPORT

27

Journey Map – Focus on Organised Business

Perform 2020

Organised Business Implementation Roadmap

Sup

po

rt fo

r Lo

cal M

anu

fact

uri

ng

Initiatives

Promote measures to enhance level of localisation in Private sector supply chains Develop company level procurement strategies in different sectors 50 Companies signing corporate commitment Reports tabled annually Business analyse and review company level procurement strategies and increase top 84 companies members of BLSA Support of procurement strategies and commitments set for South African Supplier Diversity Council (SASDC) A target of 25 companies with a turnover of R350 billion has been established Identification of products in the designation list and products outside will be forwarded to companies Social partners will establish systems within the different sectors and industry association to consider applications



Prepare Execute

31/10/2011

01/06/2012


Level

High

Moderate

Low

Key

Program Activity

Activity

01/03/2012

31/11/2011

01/06/2012

ANNUAL REPORT

28

Journey Map – Focus on Organised Business Cont’

Perform 2020

Organised Business Implementation Roadmap

Inve

stm

ent

in D

om

est

ic

Man

ufa

ctu

rin

g Se

cto

rs

Initiatives

Increase investment in viable business opportunities Business will work at sectoral level to identify potential areas of investment Business will investigate potential linkages evaluate and develop multiplier opportunities.



Prepare Execute


Level

High

Moderate

Low

Key

Program Activity

Activity

Co

mp

lem

en

tari

ne

ss b

etw

ee

n P

riva

te S

ect

or

Pro

cure

men

t an

d S

tate

Pro

cure

men

t

Promote competitive pricing policies and quality provision of products Eliminate collusive and unethical tendencies Indentify extensions of value chains within sectors Explore potential for matching procurement of products Business will work with state owned enterprise provinces and municipalities to identify products that are not on the designate.

Org

anis

ed

Bu

sin

ess

an

d In

du

stry

as

soci

atio

ns

Init

iati

ves

BUSA and its affiliates will promote local procurement by analysing and reviewing their supply chain activities BUSA will ensure that all stationery, office furniture, promotional items , consulting services and catering services will be procured locally

ANNUAL REPORT

29

Journey Map – Focus on Organised Labour Cont’

Perform 2020

Organised Labour Implementation Roadmap

Shar

eh

old

er

and

Co

rpo

rate

G

ove

rnan

ce A

ctiv

ism

Initiatives

Labour to engage corporate governance activism through its representatives Campaign for target of 75% local content and procurement for all goods and service through living wage campaign decent work country programme.


Prepare Execute


Level

High

Moderate

Low

Key

Program Activity

Activity

31/06/2012 ANNUAL REPORT

Journey Map – Focus on Community Constituency

Perform 2020

Constituency Implementation Roadmap

Cre

atin

g aw

are

ne

ss a

nd

so

cial

mo

bili

sati

on

an

d

pro

curi

ng

loca

lly

Initiatives

Mobilise civil society to support large scale national campaign to buy local products Social education and awareness campaigns will be conducted within communities Analyses and reviewing of supply chains activities will be conducted. Procurement desk set by trade unions will enable suppliers to be identified.



Prepare Execute


Level

High

Moderate

Low

Key

Program Activity

Activity

Sup

plie

r D

eve

lop

men

t o

pp

ort

un

itie

s fo

r C

oo

pe

rati

ves

and

So

cial

Eco

no

my

Ente

rpri

se

Enhances participation by small scale producers in dynamic supply chains exposing them to key drivers. Empowerment with information on market access and supplier linkage opportunities in private and public sector. Consideration will be given to a set side of smaller business and enterprise n social economy.

31/12/2011

ANNUAL REPORT

Journey Map – Focus on Government

Perform 2020

Government Implementation Roadmap

Leve

ragi

ng

Pu

blic

Pro

cure

men

t

Initiatives

Expansion of value of goods and services it procures Review the Public Procurement System through the amended regulations of the Preferential Procurement Policy Framework Act (PPPFA) Release of designations regularly Prioritisation of sectors identified in New Growth Path and Industrial Policy Action Plan (IPAP 2) Conference and workshops of local suppliers Measurement of impact of the designate instrument against set criteria Continual and longer term review of procurement legislation principles


Esta

blis

hm

ent

of

Stan

dar

ds

for

mea

sure

men

t

and

ver

ific

atio

n o

f Lo

cal C

on

ten

t

Establishment of standards for measurement and verification of local Content consultation Draft standard developed with social partners


Prepare Execute

07/12/2011

07/12/2011

01/06/2012


Level

High

Moderate

Low

Key

Program Activity

Activity

ANNUAL REPORT

THANK YOU!

QUESTIONS?

Please contact us:

[email protected] [email protected]

Tel: 011 – 327 7778 083 750 1975

www.proudlysa.co.za Follow us on Facebook and Twitter

mailto:[email protected]










http://www.proudlysa.co.za/







local procurement accord - dti · local procurement accord ... buying in bulk 2. promote...

Documents