In December 2024, the Portfolio Committee on Planning Monitoring and Evaluation issued a call for the public to submit written comments on the National State Enterprises Bill (the "SOE Bill"), [B1-2024]. The closing date for submission is Friday, 14 February 2025.
Public participation in the legislative drafting process forms part of the fibre of our constitutional democracy. This highlights the dual nature of our democracy, encompassing both participatory and representative elements. Thus, whenever new legislation is drafted, the public has the opportunity to contribute to and shape its content.
The significance of public participation in legislative processes was highlighted in Doctors for Life v International v Speaker of the National Assembly and Others 2006 (6) SA 416 (CC) ("Doctors for Life"). The Constitutional Court held that:
"All parties interested in legislation should feel that they have been given a real opportunity to have their say, that they are taken seriously as citizens and that their views matter and will receive due consideration at the moments when they could possibly influence decisions in a meaningful fashion. The objective is both symbolical and practical: the persons concerned must be manifestly shown the respect due to them as concerned citizens, and the legislators must have the benefit of all inputs that will enable them to produce the best possible laws."
The Constitutional Court also cautioned that members of the public who choose not to participate, when called to comment on draft legislation, cannot challenge the legislation on grounds that they did not participate / were not heard during its drafting.
The objectives of the SOE Bill are, among others, to:
- Enhance the operational efficiency of national commercial state-owned entities ("SOEs") through a national strategy, to be implemented by a holding company and national commercial SOEs;
- Establish the State Asset Management SOC Limited ("SAMSOC") as a holding company;
- Transfer the shareholding of a number of commercial SOEs (which are listed in an annexure to the SOE Bill) to SAMSOC, allowing SAMSOC to exercise the ownership function over its subsidiaries;
- Ensure the proper governance of SAMSOC and its subsidiaries; and
- Promote the commercial sustainability of SAMSOC and its subsidiaries.
Critics have argued that the SOE Bill fails to address the current financial, organisational and leadership challenges at the national SOEs, such as Eskom Holdings SOC Limited, South African Airways SOC Limited, Denel SOC Limited, Transnet SOC Limited and the Post Office SOC Limited, among others. Additionally, a single holding company arguably offers no protection against the risk of political interference in the administration of SOEs, the consequences of which are well documented through the State capture era. The fact that SAMSOC and its subsidiaries will not be subject to the PFMA, as per the SOE Bill, elevates concerns regarding political interference and a lack of transparency in the procurement and financial management systems applicable to commercial SOEs.
When the SOE Bill was first introduced, we noted that it broadly aligns with, and expands on, the Companies Act, 2008. Additionally, the national strategy developed by the President will play a significant role in determining how the performance of SAMSOC and its subsidiaries will be measured. The manner in which SAMSOC board members are appointed in terms of regulations developed subject to public participation is a step in the right direction for a transparent and participatory way of governing SOEs.
Comments to the SOE Bill can be emailed to Ms Mandy Balie at nsebill@parliament.gov.za or submitted through this link, by no later than Friday, 14 February 2025. Persons interested in making an oral presentation before the Portfolio Committee on Planning, Monitoring and Evaluation must express their interest to do so in the aforementioned email.
For key highlights from our previous article on the Bill, which touches on issues discussed here, click here.
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