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LOCAL CONTENT POLICY & DESIGNATION

1 LOCAL CONTENT POLICY & DESIGNATION MEASURES TO ENSURE COMPLIANCE AND VERIFICATIONDATE: 11 MARCH 2020 PRESENTATION TO THE PORTFOLIO COMMITTEE ON TRADE AND INDUSTRYC onfidentialPRESENTATION OUTLINE POLICY AND REGULATORY CONTEXTS DESIGNATION PROCESS PRODUCTS DESIGNATED COMPLIANCE WITH LOCAL CONTENT REQUIREMENTS VERIFICATIONS BY SABS CHALLENGES ON VERIFICATION2 PREFERENTIAL procurement REGULATIONS 2017 ON LOCAL CONTENT Regulation8(1):empowersthedtitodesignate specificindustries/sectors,whereonlyloca llymanufacturedproductsthatmeetthestipul atedminimumthresholdforlocalcontentwillb econsidered.

PREFERENTIAL PROCUREMENT REGULATIONS 2017 ON LOCAL CONTENT • Regulation 8(1): empowers the dtito designate specific industries/sectors, where only locallymanufactured ... Understanding of LC requirements and industrial policy objectives by both Bid Evaluation and AdjudicationCommittees.

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Transcription of LOCAL CONTENT POLICY & DESIGNATION

1 1 LOCAL CONTENT POLICY & DESIGNATION MEASURES TO ENSURE COMPLIANCE AND VERIFICATIONDATE: 11 MARCH 2020 PRESENTATION TO THE PORTFOLIO COMMITTEE ON TRADE AND INDUSTRYC onfidentialPRESENTATION OUTLINE POLICY AND REGULATORY CONTEXTS DESIGNATION PROCESS PRODUCTS DESIGNATED COMPLIANCE WITH LOCAL CONTENT REQUIREMENTS VERIFICATIONS BY SABS CHALLENGES ON VERIFICATION2 PREFERENTIAL procurement REGULATIONS 2017 ON LOCAL CONTENT Regulation8(1):empowersthedtitodesignate specificindustries/sectors,whereonlyloca llymanufacturedproductsthatmeetthestipul atedminimumthresholdforlocalcontentwillb econsidered.

2 Regulation8(2):organsofstatemustincludel ocalcontentintheirbidinvites. Regulation8(3):NationalTreasurymustinfor morgansofstateviacircular. Regulation8(4):allowsorgansofstateto selfdesignate Regulation8(5) FOR NON-COMPLIANCE AcrucialaspectofLocalContentisitsverific ation,andtheSouthAfricanBureauofStandard s(SABS) :Remedies 14(1)Anorganofstatemust,upondetectingtha tatenderersubmittedfalseinformationregar dingBBBEE,LocalContentoranyothermatter:( a)informthetendereraccordingly;(b)giveth etendereranopportunitytomakerepresentati onswithin14days;(c)ifitconcludes,afterco nsideringtherepresentationsthatfalseinfo rmationwassubmitted disqualifythetendererorterminatethecontr actinwholeorpartandifapplicableclaimdama gesfromthetenderer.

3 14(2)AnorganofstatemustinformtheNational Treasuryofanyactionstaken. 14(3) PROCESS FLOWG azette Regulations & Circulate Practice NotesDesignation of Industries & Sectors Industrial / SectorResearch & ReviewConsultation & Stakeholder ManagementApproval by the IDD EXCO thedtifollowsarigorousresearchprocessbef oreaproductcanbedesignatedforlocalproduc tion. Thedesignationframeworkrequiresthatthere mustbeevidenceindicatingthatthegovernmen tbuysproductwhichisunderdistresscausedby importswhichdisplacelocalproductionandjo bs. Duringtheresearchstage,thedesignationpro cessinvolvesconsultationwiththeindustry( associationsandlocalmanufacturers)aswell asprocuringauthorities.

4 DESIGNATED FOR LOCAL PRODUCTION 2012/132013/142014/152015/16 Working Vessels (Boats) Residential Electricity and Water* Meters Two-way Radios Solar Photovoltaic System Components Rail-Signalling System and Components Wheelie bins Fire Engine/Truck Steel Products and Components for construction2017/18 Plastic Pipes Bulk Material Handling Lead Acid Batteries MV Switchgear27 designations over 8 years2016/17 Rail Rolling Stock Steel Power Pylons and Substation Structures Bus Bodies Canned/Processed Vegetables Textile, Clothing, Leather and Footwear Sector Pharmaceuticals Solar Water Heater Components Set-top Boxes Furniture Products Electrical and Power Cables, Valves Products and Actuators Steel Conveyance Pipes Transformers and Shunt Reactors2019/20 Rail Perway (Track) Pumps & Medium Voltage Motors67 PRODUCTS DESIGNATED FOR LOCAL PRODUCTION Designated ProductsLC ThresholdDate16.

5 Two Way Radio Terminals60%30-06-201617. Solar PV Components70%30-06-201618. Rail Signalling System65%30-06-201619. Wheelie Bins100%18-08-201620. Fire Fighting Vehicles30%21-11-201621. Steel Products and Components for Construction100%13-01-201722. Rail Perway (Track) Infrastructure90%13-11-201723. Pumps & Medium Voltage Motors70%12-12-201724. Plastic Pipes & Fittings100%16-08-201925. Air insulated MV Switchgear50%20-12-201926. Bulk Material Handling 85%20-12-201927. Industrial Lead Acid Batteries50%20-12-20198 AcrucialaspectofLocalContentisitsverific ation,andtheSouthAfricanBureauofStandard s(SABS) :Remedies 14(1)Anorganofstatemust,upondetectingtha tatenderersubmittedfalseinformationregar dingBBBEE,LocalContentoranyothermatter:( a)informthetendereraccordingly;(b)giveth etendereranopportunitytomakerepresentati onswithin14days;(c)ifitconcludes,afterco nsideringtherepresentationsthatfalseinfo rmationwassubmitted disqualifythetendererorterminatethecontr actinwholeorpartandifapplicableclaimdama gesfromthetenderer.

6 14(2)AnorganofstatemustinformtheNational Treasuryofanyactionstaken. 14(3) FOR NON-COMPLIANCE9 AREAS OF NON-COMPLIANCE TO LOCAL CONTENT REQUIREMENTSNon-complianceisacomplexmatt erandhasdifferentphases: Advertisementoftenderswithlocalcontent(L C)conditions. SubmissionofcorrectLCdocumentsbybidders( ). Selfdeclarationofcorrectminimumthreshold sforlocalproductionbybidders. ProperevaluationofbidsintermsofLCrequire ments(nopointsallocatedforLCbutitisthefi rsthurdlethatmustbeachievedbybidders). UnderstandingofLCrequirementsandindustri alpolicyobjectivesbybothBidEvaluationand AdjudicationCommittees.

7 Posttenderawardreportingtothedtibytheorg ansofstate(submissionofsignedBiddingDocu mentsandAnnexures). Turnkeyprojects(design,build,operateandt ransfer) IN PLACE TO ENSURE COMPLIANCE TO LCR Industry(includingunionsandbusinessassoc iations)areencouragedtoflagtendersandspe cificationswherelocalcontentandproductio nrequirementshavebeentransgressed. Specificationsforproductsdesignatedcanbe doneincollaborationwiththedtitoensuretha tspecificationsaresetaccordingtofunction ality( )ratherthanbrand,producttypeorpastpracti ces. EffortsaremadethroughMasterPlanstoencour ageprivatesectorfirmstoalsobuyfromlocalp roducerstostrengthenthedemand,andcapabil itiesofsupplierstomeetglobalstandards,wh ereappropriate.

8 TheJobsSummitincludedactionstostrengthen localprocurementfromtheprivatesector,inc ludingakeyroleforProudlySAtoengagewithfi rmstosupportthenationaleffort. WorkingcloselywithProudlySAthroughtheten dermonitoringsystem. thedtiisworkingcloselywiththeOfficeofthe AuditorGeneraltoscaleuptheauditingoftend ersdesignatedforlocalproduction. on1 April2019,theamendedPublicAuditAct(PAA) NTissuedanInstructionNote(No2of2019/2020 )onirregularexpenditureeffective17 May2019, OF PROUDLY SA IN SUPPORT OF LOCALISATION13 IndicatorsKeyProgrammesPublicsectorinter ventioninsupportofdesignations Tendermonitoringsystemdeveloped, PublicSectorProcurementForumsestablished atProvinciallevel.

9 AnMOUconcludedwithSALGA andtheactivitiesincludeaccesstobegivento educateSpeakers,Mayors,MunicipalManagers ,CFOs, Databaseoflocalproductsandservices,withr ecruitmentofmembersintensifiedindesignat edsectors. 'mark'oflocalmanufacturing FundinghasbeenmadeavailabletoProudlySAto enableittoimplementitsactivities,includi ngmarketingactivities,resuscitatingtheBu yBackSAcampaign, :promotionofbarcodesofalllocallymanufact uredandpackagedconsumergoods Retailersareengagedtoensurethattheysuppo rtlocalmanufacturersandincreasetheirleve lsoflocallymadeproductssoldintheirrespec tiveretailstores.

10 EDCON committedtoincreaselocallymadestocktobeo ver50%. Woolworth, OF PROUDLY SA IN SUPPORT OF LOCALISATION Thepublicsectortendermonitoringsystem. Thesystemmonitorstendersissuedbyallorgan sofstateandadvertisedononlinewebsites. Currentlylinkedtoover763websites(entityw ebsitesandNTmandatoryonlineplatforms/sit es). Continuouslysearchfortendersissuedfordes ignatedproducts(sectors)usingkeywords. Assiststateorganswithcompliancetolocalco ntentprovisionsofthePPPFA. Advertisedbidsareforwardedtothedtitointe rvenewhentendersareissuedandnotaftertend ersareawardedorcontractsareconcluded.

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