COSATU Submission: Public Investment Corporation, the PIC Amendment - - PowerPoint PPT Presentation

COSATU Submission: Public Investment Corporation, the PIC Amendment Bill & Related Matters

17 June 2019

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COSATU Interest in the PIC Bill

• COSATU, its 16 affiliates, almost 2 million

members & 10 million dependents strong support for Bill;

• PIC is workers’ monies (87% GEPF, 7% UIF, 4%

COIDA);

• PIC owns 12.5% of JSE shares and is largest

investment fund in SA and Africa; and

• PIC is too large to fail.

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Context of PIC Bill & COSATU Concerns

• Explosion of state capture and looting, including at

the PIC;

• Collapse of SOEs due to looting and

mismanagement:

• Retrenchments, tax hikes and possible PIC bail outs;
• Looting of pensions, e.g. Fidentia and Transnet;
• PIC failure to meaningfully account to GEPF & UIF;
• Need to restore trust in the PIC; and
• Minister Gigaba’s address to COSATU CEC, 2017.

3

PIC Bill Drafting

• 2 bills:

– DA bill rejected; and – ANC bill passed overwhelmingly by SCOF and NA.

• Extensive public participation processes:

– More than 4 public hearings; – 2 years of consultations; – Systematic addressing of Treasury & PIC issues; – Active involvement of unions; and – Numerous COSATU concessions.

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PIC Act, 2004

• 4 and a half pages Act to protect R2 trillion

fund;

• Ministerial appointment of PIC Board:

– No union representation;

• Ministerial directives to PIC:

– No checks and balances;

• No transparency and accountability provisions;
• No depositor mandating requirements; and
• No investment guidelines.

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PIC Amendment Bill: Board Chairperson

• Minister to appoint Deputy Minister Finance; or
• In consultation with Cabinet, another economic

cluster Deputy Minister.

• ANC motivations:

– GEPF is defined benefit and fiscus must cover any shortfall. – Important economic transformation role of PIC. – Political accountability and oversight; & – Independent chairs and problems of accountability.

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PIC Amendment Bill: Board Union Representation

• 3 union representatives on Board of 13:
• To give workers a voice in how their money is spent;
• Key anti-corruption and oversight measure;
• Selected by Public Service Bargaining Council;
• 2 from majority unions, 1 from minority unions;
• Accountability to unions and workers;
• Not dependent on Ministerial favours;
• Will be subject to same criteria as all board members;
• COSATU concessions; and
• PSA and FEDUSA pull out of PIC stance.

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PIC Amendment Bill: Transparency & Accountability

• Regulations:

– Tabling at Parliament for noting and comments; – In line with standard practise;

• Annual Reports for Minister to table to

Parliament:

– All listed investments; – All unlisted investments; – All Ministerial directives.

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PIC Amendment Bill: Depositors’ Mandate

• “The corporation must, when investing a

deposit on behalf of depositors, invest to the benefit of the members or beneficiaries of the respective depositors.

• The corporation must act in accordance with

the instructions of the depositors, and…seek to invest to—

• Ensure its security and financial sustainability;”

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PIC Amendment Bill: Investment Guidelines

“The PIC must, as far as possible, seek to invest to— – Ensure its security and financial sustainability; – Create and protect local jobs; – Industrialise the economy of the Republic, by building the manufacturing sector and boosting exports; – Promote sustainable development; – Be in line with the Republic’s development objectives; – Strive to build a capacitated developmental State; – Transform the economy and society; or – Prioritise investments in the Republic.”

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Resistance to PIC Bill

• Beneficiaries of looting & PIC governance crises;
• Treasury officials covertly;
• Reasons:

– Chair should not be DM: Finance; – No worker representatives;

• Subsequent positive request from Minister Mboweni for

labour representatives to be selected by the PSCBC.

– Oppose reporting on listed & unlisted investments; – Depositor mandates; and – Investment guidelines.

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Resistance to PIC Bill

• PIC Commission of Enquiry:

– Repeated attempts by Treasury to stop bill; – Pre-empting Commission outcomes; – Commission an extension of executive; – Executive undermining of constitutional role of Parliament; – Committee not executive bill; – Future Commission recommended amendments to Act welcome; and – Urgency of now and dangers of delays.

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Resistance to PIC Bill

• Treasury:

– Was part of entire SCOF processes; – All issues addressed and included in bill; – New issues now being raised covertly; – Undermining of ANC, SCOF and NA mandate; – Fears of assertive Parliament (e.g. tax interventions); – Treasury failures to hold PIC accountable and stop looting; – Treasury drafted fatally flawed PIC Act; and – Treasury refusals to engage workers.

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Way Forward

• 1. Kill anti-corruption PIC bill:

– Amendments, reject, delays, quorums etc; – Green light to looting and anarchy at PIC; – Massive political fall out.

• r
• 1. Enact anti-corruption PIC Amendment &

further amendment bills;

– Rebuild trust and confidence; – Accelerate fight against corruption; – Stabilise and clean up PIC.

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Conclusion

• President assent of PIC Bill now;
• Further amendments recommended by

Commission;

• COSATU and workers overwhelming support;
• Excellent anti-corruption bill;
• Key weapon to fight looting of pensions;
• Need to stop PIC looting and governance mess;
• Cannot afford to delay further; &
• Restore hope of workers and pensioners.

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