ATC181017: Report of the Standing Committee on Appropriations on the 12th Smart Procurement World Indaba held from 18 to 19 September 2018 in Midrand, Johannesburg, dated 17 October 2018

Standing Committee on Appropriations

REPORT OF THE STANDING COMMITTEE ON APPROPRIATIONS ON THE 12th SMART PROCUREMENT WORLD INDABA HELD FROM 18 TO 19 SEPTEMBER 2018 IN MIDRAND, JOHANNESBURG, DATED 17 OCTOBER 2018

The Standing Committee on Appropriations, having attended the Smart Procurement World Indaba, reports as follows:

Introduction

The Standing Committee on Appropriations (the Committee) was established in terms of the Money Bills Amendment Procedure and Related Matters Act, No. 9 of 2009 (the Money Bills Act). In terms of section 4(3) of the Money Bills Act, each House must establish a Committee on Appropriations whose powers and functions include considering and reporting on the following matters:

Spending issues;
Amendments to the Division of Revenue Bill, the Appropriation Bill, Supplementary Appropriation Bill and the Adjusted Appropriation Bill;
Recommendations of the Financial and Fiscal Commission (FFC), including those referred to in the Intergovernmental Fiscal Relations Act, 1997 (Act No. 97 of 1997);
Reports on actual expenditure published by the National Treasury (section 32 reports); and
Any other related matters.

The 12th Annual Smart Procurement World Indaba, herein after referred to the Indaba, was held at Gallagher Estate, Midrand, Johannesburg. The theme of the Indaba was ‘Innovation that transforms, talks to one core outcome: Transformation without innovation is not sustainable’. The Indaba focused on developing the competencies of Supply Chain Management (SCM) professionals in the public and private sectors through the provision of needs directed, and competency based training. Competent SCM professionals were central to the breaking down of silos and the provision of SCM services in an integrated manner.

Delegation

The conference was attended by the following Committee Members: Ms YN Phosa (Committee Chairperson, African National Congress [ANC]); Mr NE Gcwabaza (ANC); Ms DZ Senokoanyane (ANC); Ms SCN Shope-Sithole (ANC), Mr A McLoughlin (Democratic Alliance), and Mr AM Shaik Emam (National Freedom Party). The Committee was supported by Mr D Arends (Committee Secretary), Mr M Zamisa and Mr P Dlomo (Committee Researchers), and Mr L Ben (Committee Assistant – Stand-in).

Outline of subject matters and stakeholder inputs

The Conference was divided into various sessions and facilitated by different stakeholders as follows:

Day 1 : Welcome and setting the scene for the conference
Subject	Stakeholder Input
Back to the future of procurement Artificial Intelligence (AI) and Blockchain are rapidly redefining the traditional role of procurement professionals. Simultaneously, organisations require ever-higher standards of corporate governance and social responsibility. What skills sets will be required from the future procurement professional? Take a close look into emerging best-in-class people-development initiatives and analyse key trends that will open up opportunities for the procurement function.	Mr D Brock, Chartered Institute of Procurement & Supply (CIPS)
South African Economic Outlook 2019 There is optimism surrounding political change, but economic challenges persist and South Africa’s rating fortunes maintain a negative outlook. What can procurement expect from the year ahead/ are we likely to see more of the same or is change really on the way?	Mr M Maluleke, Absa Economist
Corruption and unethical behavior in Major Cities Corruption and unethical behavior is an ongoing concern for major cities around the world. How is the City of Johannesburg working towards being a world-class city through clean governance? How is the City of Johannesburg ensuring that the Board stays out of procurement while giving procurement its mandate to influence?	Dr NV Khumalo, Member of Municipal Council for Corporate and Shared Service, City of Johannesburg
Ministry of Crime and Inside the Capture project Why was it so easy for South Africa to be captured? What role has procurement played in this regard - innocent bystanders or active accomplices?	Ms K Maughan, Investigative Journalist
The procurement guide to Blockchain technology and how it will change our world	Mr B Maltaverne, International Procurement Digitalist, Austria
Preparing for the Revolution: Procurement and Industry 4.0	Dr H Britt, Content Director, Procurious
Bringing continued compliance throughout Public Sector SCM before it becomes a challenge How and where should compliance be addressed? Who is at fault and who carries the burden of non-compliance?	Ms R Motseto, Chief Director, Office of the Chief Procurement Officer in National Treasury
During the State of the Nation Address, corruption crackdown and strong governance was flagged high on the agenda What does this mean for procurement?	Mr M Gungubele, Deputy Minister of Finance
The evolution of fraud and corruption in supply chain and contract management	Mr A Louw, Chief Director, Eastern Cape Provincial Treasury
Discussing the State's fruitless, wasteful and irregular expenditure despite efforts by most institutions to achieve a clean audit What can provinces learn from each other and what recommendations can they propose in order to combat fruitless, wasteful and irregular expenditure in SCM? How can provinces close the gap on Audit findings?	Panel Discussion Moderated by Mr R Moolman, SCM Director, Western Cape Provincial Government
An international Public Sector Case Study: Making progress on society's biggest problems requires governments to make better use of data, involve citizens, invest in employees and collaborate with other sectors. What are the top pillars to great SCM and better public sector service?	Mr S Wills, International Procurement and Supply Chain Expert
Attract and retain superior talent: How do you attract and retain great people to work in public sector procurement department?	Panel Discussion moderated by Prof I Ambe, University of South Africa (UNISA)
Day 2
Subject	Stakeholder
Procurement consequence management The Zambia Institute of Purchasing and Supply's far reaching mandate has been incorporated into the Country's Companies Act. How has the Act advocated for professionalisation? How does it protect professionals that stand for what is right while bringing the rest to task? What are the consequences for individuals that act unprofessionally? Under what circumstances can a professional's licence to practice be revoked? What are the consequences for individuals practicing procurement without a valid licence?	Mr C Mwelwa, President of the Zambia Institute of purchasing and supply
Making Big Data count and using it to make more informed decisions regarding travel spend, traveler friction and travel programme efficiencies	Mr L Barkhuizen, FCM Travel Solutions
Inclusion of the Black Industrialists on Supply Value Chains: Shaking up monopoly suppliers! The Department of Trade and Industry’s Black Industrialist (BI) programme aims to reconfigure the South African industrial landscape, with the creation of new entrants that will shake up existing supply structures. This will open up opportunities for procurement to find new sources of supply and negotiate with companies that have monopolised the supply base. How can we effectively build in the BI Programme into supply chains?	Ms M Mabidje-Thompson
How to unlock value through innovative ESD Models It takes innovation to get value out of your ESD programme. This panel gives you the vital keys to unlocking innovation within your organisation, taking an innovative approach beyond just transformation obligations. 5 things to consider when you initiate and integrate a successful ESD strategy.	Panel Discussion moderated by Mr M Farrel of Supply Chain Network
How can Chief Procurement Officers and Heads of Procurement/Supply Chain build stronger relationship and greater understanding between their function and finance? Procurement and finance both in private and public sector are all tasked with responsibilities around increasing revenue, cutting cost, enforcing compliance and controlling risk while advocating for greater transparency and value creation. Working hand in hand, procurement and finance can garner more meaningful results at a higher level. So why does this relationship continue to take a back seat? From SA's to CFOs and CPOs on what procurement and finance leaders can do to work together more closely.	Panel Discussion moderated by Mr N Bagosi of Total
The status and plans for public sector competency development	Mr S Manyathi, National Treasury
Local Economic Development (LED) in practice When correctly implemented, LED is a bottom-up development approach that will unleash the development potential of a locality. What has been some recent LED success stories and case studies? Hear from a top LED manager in the country as they explore procurement drivers to a successful LED programme and linking it to provincial economic growth.	Ms C Phillips, Drakenstein Municipality
The liabilities imposed on SCM Role Players in the public sector Discussing the Joint and Several Liability developments and the judgement in the Ethekwini court case What can SCM practitioners do to protect themselves?	Prof G Quinot, Stellenbosch University
Political Discourse: Buying local vs global Sometimes the most cost effective sourcing strategy might require goods to be sourced from outside our borders. But the best thing for our local economy and transformation is to buy locally. Which is best? Is there a way to innovatively transform our economy and procurement practices?	Messrs G Mofokeng and K Matabane, Black Business Council
From science fiction and predictions to real life battle between humans and machines An integrated future with robots and the real life battle between humans and machines: WHO WILL WIN?	Mr F Langenhiven, Cobots (Pty) Ltd

The section hereunder provides an overview of the lessons learnt from the Indaba.

Observations

The Committee made the following observations at the Indaba.

National Treasury indicated that they are in the process of establishing a Supply Chain Management Council and that a Bill has been drafted in that regard. Other Southern African Development Community (SADC) countries such as Zambia already have legislations in place to that effect.
Even though South Africa found itself in a technical recession, there was still hope for the country through using a bottom-up approach, i.e. at local governmental level. This approach would enable economic growth in South Africa.
The KwaZulu-Natal High Court in Durban ordered that several employees of the eThekwini Municipality be held personally liable for half of the litigation costs in the case of Westwood Insurance Brokers vs Ethekwini Municipality. The following lessons were learnt from this far reaching judgement for the public sector:

Apply mind independently;
Closely scrutinize recommendations/reports/prior entity’s work;
Make sure all relevant information is before you;
Ensure that decision is aligned to tender requirements;
Record decisions – including dissent;
Provide full information when requested; and
Acknowledge when failures were made and take steps to rectify.
1. There was a call for patriotism among procurement officials from small businesses by looking at local suppliers before going abroad to source for services. Local Suppliers need market access.

Conclusion

The Committee noted that a number of small businesses and entrepreneurs expressed concerns about the lack of inclusivity and were not fully allowed to engage with big businesses. To this end, a letter would be drafted to the organizers of the Smart Procurement World Indaba indicating areas which required improvements.

Report for information.

Documents

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ATC181017: Report of the Standing Committee on Appropriations on the 12th Smart Procurement World Indaba held from 18 to 19 September 2018 in Midrand, Johannesburg, dated 17 October 2018

Standing Committee on Appropriations

Documents

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