IRR Legal calls on Parliament to expose BEE premiums

IRR Legal has formally submitted to both of Parliament’s finance committees a report on the constitutional duty of making BEE premiums in public procurement explicit, and setting out the mechanism to do so now.

IRR Legal also called on Parliament to use the 2026 budget review process to bring BEE premiums down to zero, in line with advice from the Zondo Commission, and polling commissioned by the Institute of Race Relations showing that four out of every five voters likely want BEE premiums to be zero.

Treasury’s headline budget statement to Parliament in 2026 was that “government expenditure is expected to increase at an average annual rate of 3.9 per cent, from R2.58 trillion in 2025/26 to R2.89 trillion in 2028/29.”

But even though Treasury has repeatedly stated that BEE “preference premiums” are part of that cost, since they are “capped” at 25% for most contracts, the total cost of BEE premiums in the forthcoming period has not been estimated.

The 2026 Estimates of National Expenditure document is 1,095 pages long, tabulating costs across departments along a range of classifications to show South Africans how the state plans to spend the people’s money.

However, there is no indication of the cost of BEE premiums at any point in that long document, even though Treasury officials have repeatedly insisted that BEE premiums are paid, have been paid in the past, and will continue to be paid in the future.

This lack of transparency clearly violates the Constitution, which states that public procurement “must” take place “in accordance with a system which is fair, equitable, transparent, competitive and cost-effective” [emphasis added].

Furthermore, the Constitution requires that national legislation “must establish a national treasury and prescribe measures to ensure both transparency and expenditure control” inter alia through “uniform expenditure classifications” [emphasis added].

IRR Legal has reminded the parliamentary committees – the Standing Committee on Finance in the National Assembly, and the Select Committee on Finance in the National Council of Provinces – of the plain legal duty to make BEE premiums transparent, as well as the simple legal mechanism to do so.

Once those premiums are exposed their unpopularity may cause them to be extinguished. Then they would be gone from the books again, but this time for the good reason that such premiums are not being paid anymore.

Media contact: Gabriel Crouse, IRR Legal Executive Director Tel: 082 510 0360 Email: gabriel@irrlegal.org.za 

Media enquiries: Michael Morris Tel: 066 302 1968 Email: michael@irr.org.za