Political Party Funding Bill: public hearing

Ad Hoc Committee on the Funding of Political Parties NCOP

20 June 2018
Chairperson: Mr D Stock (ANC; Northern Cape)
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Meeting Summary

The Ad Hoc Committee on the Funding of Represented Political Parties convened a public hearing for oral submissions on the Political Party Funding Bill. The Committee had received 11 written submissions and seven of the organisations that had made submissions indicated that they wished to make an oral submission. In addition, the Economic Freedom Fighters (EFF) made an oral presentation only.

The Committee was particularly pleased that the first presentation by the Council for the Advancement of the South African Constitution wholeheartedly supported the Bill. The Council praised the Bill as a significant moment in the constitutional development of the country and one that passed all tests for a satisfactory piece of legislation. It would sit in the top three or four pieces of legislation around the world on political party funding. COSATU, too, congratulated Parliament on a very progressive Bill.

Several organisations asked for the urgent passing and implementation of the legislation in the light of the upcoming elections.

Nevertheless, there was a range of clauses that presenters suggested could be amended, either in the Bill or in the Regulations that would improve the Bill. The move from a 90/10 split of funding on the basis of equity and proportionality to a two-thirds/one-third split was considered inadequate and still not aligned to the intention of Section 236 of proportionality and equity, without any suggestion of an emphasis on proportionality. A 50/50 split was recommended.

A second concern was the threshold for disclosure of donations, which was extremely high, especially considering the socio-economic context of the majority of South Africans. The threshold hid most donations from public scrutiny and was in conflict with the Bill’s goals of openness and transparency. Donations in kind, which could be quite valuable in monetary terms and could have substantial impact, were not subject to adequate controls.

My Vote Counts recommended that local government be included in the Multi-Party Democracy Fund.

Two major loopholes seen by My Vote Count were the investment arms of the parties, through which money could be challenged, while a second loophole was created in clause 10(1) where a member of a political party could accept a donation for party political purposes. That allowed any amount of money to flow into the party without tracking or monitoring or controlling of the funds.

The presentation by the Free Market Foundation claimed that South Africa was bound to abide by the Constitution and the rule of law but, in practice the country had shown contempt for the rule of law. The rule of law implied the absence of arbitrariness and excluded unpredictability and arbitrariness. The lack of adherence to the rule of law was evident in the extensive and unfettered powers that were bestowed by national and provincial legislatures on officials in the executive arm of the country. The Bill could not be enacted under such conditions where officials implemented laws without adhering to the rule of law.

Right2Know recommended that there was a need for historical transparency. If the Bill was passed by 2019, but there were no records since the dawn of democracy for researchers, journalists and others, especially for purposes of comparison before and after the Bill, there would be no way of judging the outcome of the funding changes. Right2Know believed that the historical funding records could be released showing income and expenditure without revealing the donors.

The one organisation that rejected the Bill was the Economic Freedom Fighters. It opposed the Bill on two grounds: Clause 10 and Schedule 2 Regulations 2, 3, 4. The definition in Section 10 containing a definition of a donation was too broad and suggested that one could only receive a donation for political purposes. It stated that no person might deliver a donation, a determination which infringed on the constitutional right to association. Secondly, in Schedule 2, the formula for the allocation of funds was considered totally discriminatory to smaller political parties. If the spirit and purpose of the Bill was to widen participation in democracy, there should be a 50/50 split in the formula, i.e. 50 percent proportional and 50 percent equitable. Should the Bill be passed without the amendments indicated, the Economic Freedom Fighters would refer it to the Constitutional Court to have the Act declared unconstitutional.

Members were restricted to questions of clarity. Members wanted to know whether private donations would be made to the Multi-Party Democracy Fund when the formula for splitting the funds meant that some of the money would be going to parties that the donors might not support, what had informed the proposal to lower the threshold for declaring donations from R100 000 to R50 000 and how could local government be included in the legislation when Section 236 explicitly referred to parties participating in provincial and national legislatures, as was proposed in the Bill. Members further asked about possible monitoring instruments for the monitoring of investment vehicles and the the reason for wanting retrospective information on the funding and expenditure of political parties.

Meeting report

Opening remarks
The Chairperson welcomed everyone and asked Members to introduce themselves. It was an opportunity for those who wanted to make oral submissions to express their views on the Political Party Funding. Presenters had a total of 30 minutes which included presentation and clarity-seeking questions, so he suggested that they restrict themselves to a 20-minute presentation to allow for clarity-seeking questions. The Committee would be deliberating the matters at its next meeting.

Briefing by the Council for the Advancement of the South African Constitution (CASAC)
Prof Richard Calland, Member of the CASAC Advisory Council, introduced the organisation and explained that he, personally, had worked on the subject for a long period of time and felt that it was a significant moment in the constitutional development of the country. Mike Law from CASAC had undertaken extensive comparative research into political party funding across the world and the organisation had shared that research with the National Assembly Ad Hoc Committee. Motlatsi Komote, Campaigns Officer at CASC, would be tweeting as he made his presentation.

Prof Calland stated the first substantive submission was to applaud the parliamentary process. The conduct of proceedings by the National Assembly had been admirable and the Chairperson had managed the process in an exemplary fashion. He pointed out that the National Council of Provinces (NCOP) had the power to amend the Bill once it had heard the submissions, but his principal submission was that the Bill advanced the principles of transparency, accountability and multi-party democracy to the extent that CASAC would support the Bill without amendment. He urged the Chairperson to consider that possibility. The urgency was because there would be a general election within 12 months and the Bill should be passed before the campaign season began. It was important to take account of the urgency and to remember the intense and lengthy debate that had already taken place in the National Assembly Committee.

The Bill passed all tests for a satisfactory piece of legislation. It would sit in the top three or four pieces of law amongst the 100 or so pieces of legislation around the world on political party funding. The Bill introduced a dual disclosure requirement. The relationship between the donor and the recipient political party both had to disclose donations so there was a shared responsibility for both parties in respect of disclosure. The Bill placed a burden on large corporate donors as well as political parties, which was an advanced and progressive approach to openness and transparency. The establishment of the Multi-Party Democracy Fund (MPDF) allowed donors who wished to remain anonymous to give donations to that fund. In this system the donor would be anonymous to everyone except the administrator. That would put the parties at arms-length.

If the Committee did decide to amend the Bill, Section 236 of the Constitution on public funding was one of the amendments that would improve the Bill. The two thirds/one-third split when allocating funding was a great improvement on the 90 proportionality/10 equity split, which had been completely unequal, and possibly even unconstitutional. An even split on the basis of equity and proportionality, i.e. 50/50 would be more correct and in the spirit of that section of the Constitution. A second amendment that he would propose, if the Committee was going to amend, was to reduce the amount of donations that did not have to be disclosed from R100 000 to R50 000. R100 000 could be a sizeable donation that could procure influence in smaller parties, but those were details and the Bill was, even as it stood, an excellent piece of legislation.

The Chairperson appreciated the remarks and liked the fact that Prof Calland referred to transparency and accountability in the Bill because that was precisely the intention of the Bill.

Ms C Labuschagne (DA; Western Cape) said that there had been an argument at the Portfolio Committee stage that the public could have made donations to the previous fund, but no one had done so. Now a MPDF was being established but they were not sure that people would use the opportunity to donate, although her party thought that it was the right way to go. She had heard the 50/50 proposal and had heard that sometimes people did not want to donate publicly but now, someone who wanted to donate anonymously to a particular party, could not do so. Section 236 spoke about equity and proportionality but how could the principle of freedom of association be ensured? Did it not restrict freedom of association? How did one donate when the 50/50 split meant that some of the money was going to other parties? If someone wanted to give an anonymous donation, a large proportion of the money would go to other parties that the person might not support

Mr M Chabangu (EFF; Free State) said that part of his question had been dealt with, but he thought that transparency had to play a crucial role. CASAC had said that it did not want to change anything but there was no smoke without fire. Unlike what the latter speaker had said, if people wanted to donate, they should donate to all parties.

Ms L Dlamini (ANC; Mpumalanga) welcomed the presentation which was very progressive. She knew that the Committee could get deeper into the issue but if they wanted to promote democracy, even a smaller party wanted to grow. Based on that perspective, what had informed the proposal to lower donations from R100 000 to R50 000?

Prof Calland responded to the question about CASAC’s statement that R100 000 was on the high side. CASAC did not want to create a chilling effect on any party that wanted to flourish and grow as political parties did need resources. The question was how to defend transparency. The public had a right to know who was funding political parties. There was ample experience in SA of how funds could cause the capture of political parties and to exercise undue influence on the political process. Party funding had always presented the opportunity for donations to influence policy. R99 000 would influence a small party but it would not influence the ANC or DA because of their bigger budgets. R99 000 would not buy secret influence in the ANC or DA but it could well do in smaller parties. No one knew the exact amount that would buy influence but CASAC felt that R100 000 was just too large a sum of money.

Mike Law, Researcher, explained that political party public funding emanated from Section 236 in the Constitution and had led to the Represented Political Parties Funding Act. The Act had made provision for private donors to donate to the fund and those donations would also have been split 90/10. What was different was that previously one could donate directly to political parties anonymously, but now one could not. Private funding could be made anonymously or by disclosing one’s identity. A donor had to make a decision. If one wanted to disclose one’s identity, one could donate directly to a party. If one wanted to keep anonymity, one could donate but some of that donation would go to other parties. Members should not conflate public and private funding. Public funding was direct to parties; private funding was to parties or to the MPDF. He agreed that there was some infringement of the rights of donors, but the Constitution allowed infringement of rights if a proportional interest outweighed the rights of individuals. In that case the interest of gaining a transparent and accountable system outweighed party funding that had been, for so many years, been involved in corruption or, at least secrecy. It was a trade-off and the donor had to make a decision.

The Chairperson thanked CASAC for the clarity. The Committee was taking note of the views and the proposals. As he understood the relationship between donor and donee, one had a choice. If one was happy to be known, one could donate directly and if one did not want to be known, the donation would be shared. He appreciated the comprehensive and clear way that the issues had been explained. A person also had a right not to donate at all. Mr Law had explained about the need for transparency in political parties. Things were clearer for the Committee. The Committee also took note of the recommendation to reduce the disclosure threshold from R100 000 to R50 000.

Presentation South African National Editors Forum (SANEF) and amaBhungane
Mr Izak Minnaar, Council member, SANEF, and Ms Karabo Rajuili, Advocacy Coordinator at amaBhungane made a joint presentation to the Committee.

Mr Minnaar made his presentation on behalf of SA National Editors Forum while Ms Rajuili represented amaBhungane, as both the organisations shared a common interest in ensuring the necessary freedom for journalists to do their work. SANEF and amaBhungane’s interest in the Bill was about legislation allowing for the free flow of information necessary for the media and investigative journalists to inform the public, as well as supporting the constitutional right to information which enabled civil society and oversight bodies to monitor compliance and exert accountability. SANEF was focusing on the availability of information and would not be going into the monetary issues.

Ms Karabo Rajuili explained that the intention of amaBhungane was to ensure that the accountability gap in SA’s democracy was closed. amaBhungane wished to applaud Parliament in moving towards the most important legislation in the country, given the grievous relationship between money and politics. However, amaBhungane saw significant gaps in the legislation. The organisation had concerns about the Bill allowing for the free flow of information necessary for the media and investigative journalists as well as enabling civil society and oversight bodies to monitor compliance and exert accountability.

amaBhungane had some concerns about the adequacy of the public transparency provisions, including the lack of public disclosure of contributions to the MPDF. MPDF was an important avenue for donations but the risk remained because the media could not report on those donations. Donations in kind were excluded from the provisions but certainly, donation of management, legal or public relations services could account for a very substantial benefit. The organisation was also concerned about circumvention of the donation rules such as the R100 000 disclosure threshold as relatives could each make a donation, the sum total of which could influence a party. The organisation suggested that related parties should be counted as a single donor. Another concern was that people could front for donations.

Party business ventures needed to be restricted or disclosed because of South Africa’s history of scandals over party investment vehicles doing business with the state and the corrosive effects such relationships have had on democracy in the country. That had been the single most pressing public concern relating to party funding over the course of a decade or more. Proposed amendments, as well as counter-proposals, were indicated in the organisation’s written submission.

SANEF presented the Committee with the Guidelines on Access to Information and Elections in Africa, recently published by the African Commission on Human and People’s’ Rights. SANEF‘s intention was to draw the attention of the Committee to the Guidelines because the document could contribute to the finalisation of the Bill. The Committee would find it valuable to check the Bill against the guidelines.

There was no discussion following the input by SANEF and amaBhungane as the Members had no questions of clarity.

Presentation by COSATU
Mr Matthew Parks, Parliamentary Liaison Officer for COSATU, congratulated Parliament on a very progressive Bill. COSATU was very worried about the extent of corruption in the country. It feared that the public was losing faith and parties would see a decline of interest in elections. All parties that were ruling parties in some way or the other, on national, provincial or local level were, therefore, open to corruption. COSATU had heard the fears regarding the limitations on privacy but would rather err on the side of preventing corruption. COSATU welcomed the fact that State-owned Enterprises could not fund political parties and nor could the proceeds of crime.

COSATU opposed the principle of expanding the public funding of parties in the climate of austerity, lack of service delivery and the job cuts in state departments and State-owned Enterprises. The union did not see why political parties should be rewarded not to be corrupt. The second section to which the Union objected was clause 9 which dealt with the disclosure of donations to political parties. The threshold of R100 000 was way beyond the means of most people in the country and therefore seemed unrealistic. COSATU proposed the deletion of any threshold for donations that parties were not required to disclose. The threshold removed transparency and accountability and undermined the principles of the Bill.

In conclusion, COSATU supported the progress of objectives of the Bill, the transparency and accountability clauses and supported the powers and reporting requirements of the Independence Electoral Commission. However, it opposed expanding public funding of parties and opposed the disclosure threshold principle and amount.

Mr Chabangu pointed out to Mr Parks that most of the municipalities were under COSATU leadership. How could he then say that COSATU was opposed to corruption?

Ms Dlamini called for a point of order stating that only clarity seeking questions were permitted. She added that the Committee would deal with the issues later.

The Chairperson sustained the point of order. He added that the EFF would be presenting later and the Committee would go into the presentations in detail the following week, so there was no need for debates when the Committee was there to hear the submissions of members of the public.

Mr Chabangu responded that presenters should not come to the hearings and cast aspersions on political parties.

The Chairperson said that COSATU could respond but he had a quick re-think about the dialogue and determined that COSATU had concluded its time at the podium.

Presentation by My Vote Counts
Ms Janine Ogle, National Coordinator at My Vote Counts and Ms Zahira Grimwood, Researcher, made a presentation on behalf of My Vote Counts. In the interests of transparency, Ms Ogle began with a background to the organisation and explained that My Vote Counts had gone to court to request that PAIA be amended to permit access to information about political party funding. The Western Cape High Court had found in the organisation’s favour, but it was waiting for confirmation of the judgement by the Constitutional Court.

Mr T Motlashuping (ANC) (North West) asked if the submissions were the same submissions as were being put before the court. If that were the case, the matter was sub judice and the organisation could not present.

The Chairperson indicated that the Committee could address that question later and urged the organisation to continue with its presentation.

Ms Grimwood indicated that she would address proposed amendments. There were two main points. Clause 3(5) allowed any contributor to request the Commissioner not to disclose the donor’s name or the amount donated. She proposed that the clause be removed from the Bill as it went against the spirit of the Bill.

My Vote Counts recommended that local government be included in the MPDF. There was no constitutional or legislative basis that limited local government from receiving funds in the MPDF. My Vote Counts suggested amendments to the allocation formula of the MPDF. Clause 2 (2) allowed for 66.67% of the MPDF to be distributed proportionally and 33.33% equitably. The organisation did not believe that that was an appropriate formula and that the formula should be changed so that 50% of the funds   was distributed equitably and 50% proportionally so that smaller parties would benefit more fairly.

Clause 7 was vague and included terms such as “the political will of the people” as a permissible expenditure item. Such terms were open to interpretation and so the Bill should comprehensively list and specify what parties might spend funds on. The organisation expressed concern about clause 8(4)(b) which allowed foreign entities to donate for ‘policy development’. Not only was the term vague but there was a concern that foreign entities would engage in policy development for the country, which presented a potential danger to democracy in the country.

Not regulating investments and donations to party investment vehicles simply created a loophole in that the donor could invest through that investment vehicle instead of directly and there would be no reason for disclosing that. My Vote Counts called for the prohibition of companies that did business with the state to avoid such businesses unduly gaining favour by donating to political party. A second loophole was created in clause 10(1) where a member of a political party could accept a donation for party political purposes. That allowed any amount of money to flow into the party without tracking or monitoring or controlling of the funds.

Funding limits, including the upper limit of R15 million and the threshold for undisclosed donations of R100 000 should both be lowered in adherence to the principle of transparency and to reflect the socio-economic reality in the country. My Vote Counts suggested that the information on donations received by political parties should specifically be made available to the public in clause 9(3) and finally it was suggested that the prescribed threshold be dropped from R100 000 to R10 000, firstly, to make donations more transparent and, secondly, in consideration of the socio-economic context of South Africans.

The Chairperson stated that the Committee required a response to the issue relating to the court case.

Mr M Monakedi (ANC; Limpopo) noted that the presenter had asserted that there was no constitutional or legislative basis for excluding municipal or local government from benefiting was contradicted in Section 236 which explicitly referred to parties participating in provincial and national legislatures, as was proposed in the Bill.

Ms Labuschagne asked about the monitoring of investment vehicles. She required further clarity. Were the investment vehicles to be monitored those that currently existed, or would it apply only to those established after the inception of Bill and who should monitor? The Committee had already heard that the IEC had capacity problems. What did the presenter see as the monitoring tool? One could not ask for amendments without providing clarity.

Mr Motlashuping stated that it would not benefit the Committee for him to seek clarity from My Vote Counts because the question that he was asking was self-explanatory and he did not want to engage in an academic or definition exercise because the Bill was the ‘Political Party Funding Bill’ and local government also involved those who were not members of political parties. It was not about local government.

Ms Ogle explained that the Constitution referred to public funding whereas money going into MPDF was private funds which could be distributed to local government level as it was not the public funding controlled by the Constitution. In response to the question of the monitoring of investment vehicles, Ms Ogle expressed concern that the Bill did not speak to transparency around political parties’ investment arms or any such entity linked to a political party. They should be regulated to ensure transparency because their work was to support and supply funding to political parties. The Committee would determine how it was to be done.

The current court case was a challenge to the Promotion of Access to Information Act (PAIA). There was one aspect that impacted on the process. Initially the Constitutional Court had said that My Vote Counts wanted, in essence, access to information and if it could not get it through PAIA, it should challenge PAIA in the High Court, which had been done. The order of the judgement said that the information about private funding of political parties and independent candidates – which meant local government - was reasonably required for the effective right to vote. PAIA was inconsistent with the Constitution because it did not allow access to that information. The defect in PAIA had to be remedied in Parliament. The judge had not said that PAIA had to be changed, but that the defects had to be remedied. The current Bill was actually remedying the defects in PAIA. Once judgement had been received, an issue that Parliament would have to address was the fact that the current Bill did not deal with independent candidates at all.

Ms Labuschagne had a question, although it might be for the Committee and not for My Vote Counts. She understood the reasoning behind Section 236 and that the Bill was about private funding. It prescribed activities for the MPDF. It did not refer to political activity at national or provincial level only and therefore it was the job of the administrator of the MPDF to resolve and not Parliament.

Mr Monakedi agreed with the statement of the latter speaker, but Section 236 did not talk about public funding. It simply said ‘funding’, so it had to be assumed that it referred to both private and public funding.
The difference between the Bill and what had been in place was that it made provision for private donors to come in at national and provincial levels as per Section 236.

Ms Ogle stated that they would have to agree to disagree as her understanding was that the Public Funding of Represented Political Parties Act had been drafted specifically to deal with public funding.

The Chairperson noted that there were two issues: public funding and Section 236; the principle of sub judice had to apply to the court case but that did not stop Parliament from moving forward. Until the Court had presented its judgement, the Committee could not discuss, or go into detail about, the issues. It was a fair comment for him to make. He thanked My Vote Counts for its wonderful presentation which was really appreciated.

Presentation Free Market Foundation (FMF) presentation
Mr Martin van Staden, Legal Researcher: Rule of Law Project, FMF, stated that the Bill was trying to realise the constitutional principles of open governance and transparency. The contents of the Bill were unobjectionable, but the Foundation was concerned about potential unintended consequences of the Bill. The public had to know who was funding political parties because political parties wished to govern society and the public needed to know who political parties were serving – the public, themselves or a donor.

The problem was not with the Bill itself but with the legislative and regulatory environment within which the Bill would be implemented. The Committee needed to consider quite carefully whether it should adopt the Bill at the present time or whether it should be adopted further down the line. Certain things had to happen before the Bill was passed or SA would decimate its democracy down the line.

Mr van Staden wished to problematise a phenomenon that was prevalent both in South Africa and abroad. It was not limited to the ruling party. The phenomenon was the extensive and unfettered powers that were bestowed by national and provincial legislatures on officials in the executive arm of the country. He was going to criticise the excessive and discretionary powers bestowed on officials

The Constitution and the rule of law were the two peaks of constitutionalism in South Africa that had to stand together in governing actions in the country. South Africa stated that it abided by the Constitution and the rule of law but, in practice the country had shown contempt for the rule of law. The rule of law implied the absence of arbitrariness and excluded unpredictability and arbitrariness. It meant adherence to the law and not to the whims of personalities. The law could not be applied in an arbitrary way by officials. Citizens elected parliamentarians, and not officials, to make the laws that would bind the citizens.

Legislation assigned unjustifiably wide powers on officials. Officials should not have too great a power over things reserved for Parliament. The assignment of powers to officials would allow for regulatory bullying. In the current environment, companies and directors who were funding a different party would suffer regulatory bullying and companies would lose business if they showed support for an opposition party. SA was ‘for hire’ for corruption in society.

Regulators might not take action, but it was about perception and fear. Government did not intend for it to happen, but the result was there, and the problems had to be rectified. Parliament could resolve that but not in the current Bill. Provisions that said the Minister could make a decision, for example, about where to prohibit smoking on a whim, was not subject to the rule of law.

Ms Dlamini welcomed the presentation but stated that she had been unable to follow the presentation in the document. The presenter had said in the presentation that it would not be ideal to pass the Bill in the current environment. What would be the ideal time or a more conducive environment? The presentation was more on opposition parties not being free, but there would always be opposition parties so how did that link to
corruption and the Bill where one objective was transparency. It was a problem for him that SA ranked low in corruption, but he objected to a Bill that supported transparency. She did not understand that.

Mr van Staden apologised for speaking so fast. Laws were being made contrary to the rule of law by giving a regulator the power to make arbitrary decisions. He used the example of the Regulator of Electricity who had unfettered power and could rule by decree. That needed to change. There had to be a wholesale review to fix those provisions. For example, in the US, there was complete transparency, and they did not have a perception of bullying. He agreed that that there would also always be an opposition, but it would be a significant problem for the opposition to get funding. He re-iterated that the Foundation was behind the Bill but was afraid of the unintended consequences as it might lead result in a perception of corruption while funding for the opposition might dry up.

Mr Motlashuping stated that the perception in SA was that people were corrupt, not the government. When elections were conducted in SA, they were conducted on an equal playing field. When campaigning for an election, there was no ruling party or opposition. All started on a level playing field.

Ms Z Ncitha(ANC; Eastern Cape) suggested that it was an issue of counter-balance. In Mr van Staden’s view, when could SA be ready?

Mr van Staden said that the time would be when SA climbed the ladder of perceived corruption to around 70 in the scale of corruption.

Presentation by Right2Know (R2K)
Mr Murray Hunter, Researcher, R2K, thanked the National Council of Provinces and the National Assembly for the Bill. Right2Know was fervent in the belief that people in SA had the right to know who was funding the political parties. The organisation aligned itself with My Vote Counts and the points that that organisation had made in its presentation.

He had five key points to make:
1.Threshold for disclosures: if the public had the right to know, he was not clear why R100 000 was chosen as the threshold below which disclosures would not be made. Because the public did not know what political parties were getting in funding, no one could say, but he guessed that the majority of donations would be under R100 000. Right2Know would suggest that R10 000 was more appropriate but one could not regulate in the current lack of transparency about political party finances.

2.Right2Know believed that the Bill should give more clarity as to who the information about donors would be given to. Was it only the IEC? Right2Know wanted citizens to have access to that information.

3.Donations still offered an avenue for corruption: give a donation, get a tender. The Bill needed clear prohibitions on donors doing business with the state. The same should apply to investment vehicles. They should not receive donations. Such donations should rather be made to the MPDF.

4.The funding mix should move from the 90/10 split to a 50/50 split so that smaller parties could share. The Bill had to allow for diversity.

5.There was a need for historical transparency. If the Bill was passed by 2019, but there were no records since the dawn of democracy for researchers, journalists etc., especially for purposes of comparison before and after the Bill, and there would be no way of judging the outcome of the funding changes. The historical funding records could be released showing income and expenditure without revealing the donors.

The Chairperson invited questions of clarity.

Mr Monakedi wanted to understand the reason for wanting retrospective information. Would it not be illegal if the law was retrospective?

Mr Motlashuping stated that he did not ask questions but made comments in passing. Companies were formed in terms of the Companies Act and could do business with anyone. Therefore, they were legally entitled to donate to political parties. He found it strange as companies consisted of individuals.

Mr Hunter stated that the question was how one could address corruption in a business that was donating. There might be other solutions but there had been a history of corruption, so it had to be either donate or do work with the state. With regard to the request for a record of previous donations, Right2Know was not asking for legislation. There was a need for historical records of the lives of the political parties and the history of democracy in the country. The organisation was suggesting that there be a commitment in Parliament or if Right2Know made a request through PAIA that the request would be honoured without dragging the organisation through a court process. Secondly, there was a very real concern raised by parties that smaller parties might suffer under the new donation scheme, but no one would know unless one knew if incomes had gone up or down. To make that comparison, one needed historical records. No one would be able tell if there had been unintended consequences.

Further discussion
Ms Labuschagne had a question on her mind that she been thinking about question for the last three presentations, so it might not be for Right2Know but for the Committee. Everyone agreed that the Bill was the right thing to do because of the corruption in the country, but stopping corruption was not about disclosure or non-disclosure. Private funding might be stopped but the Bill did not enable them to deal with the corruption that everyone knew about. The problem was that one could make a donation to the upper threshold, but there was no ability to monitor or disclose if that donor was also involved in other processes in government or other associations or made deals under the table.

Ms Dlamini called for a point of order. Ms Labuschagne was in discussion and was not asking questions of clarity. Even the presenter had not just clarified but had started discussions. It was a matter for discussion at Committee level.

The Chairperson took note of Ms Dlamini’s input that some of the issues could not be resolved in the hearings but would have to be taken to the Committee. He would allow Ms Labuschagne to continue.

Ms Labuschagne asked Ms Dlamini to respect the process and to stop the constant objections. The question was whether the organisations fighting for zero tolerance for corruption, would keep on fighting for limiting corruption in other state departments. As it was, even with the Auditor-General’s report, it was impossible to deal with it. The unintended consequences of the Bill could be less money for political parties but would not stop corruption.

The Chairperson asked Members to be tolerant of each other.

Mr Chabangu asked the Chairperson to run the meeting professionally and to treat everyone equally. Even as he was speaking, there were Members talking. The Chairperson should not favour those who were in his party and only become involved in managing the Committee when they had finished fighting.

The Chairperson stated that he would take that as a general statement. He explained that he had not ruled in favour of a member from his own party, but he would take cognisance of Mr Chabangu’s point.

Mr Chabangu stated that the Chairperson had not dealt with two ANC Members who were talking while the previous speaker was the floor.

Mr Hunter responded to Ms Labuschagne, acknowledging that the concern was a serious one. No one could believe that implementation of the Bill would end corruption in the country. Transparency was not only about corruption, but it was also about equality so that someone with a big chequebook was treated in the same way as the guy who could only put his cross on the ballot paper. It was also part of the maturity of a democracy to be transparent. If there was no climate of tolerance where one had freedom of association or could support the party of one’s choice, then that climate of intolerance had to be addressed.

Presentation by Corruption Watch (CW)
Leanne Govindsamy, Head of Legal Investigation, CW, explained that the organisation was also the South African chapter of Transparency International. The intention of her oral submission was to highlight some aspects of their written submission. The organisation was really concerned about the lack of transparency in funding political parties and was concerned about possible corruption in the awarding of tenders and the policy choices made by governing parties. The progress of the Bill had impressed Corruption Watch. She pointed out that a number of issues for Corruption Watch lay, as it did with other organisations that had presented, with clarity and specification around particular clauses. Notwithstanding its submission, the Bill did not have to be delayed because the issues could be dealt with in the Regulations. So, the organisation supported the call for the Bill to be passed as quickly as possible.

The definition of ‘donations in kind’ needed to be more specific and some sort of estimated monetary value attached to such donations to see if influence had been possible as a result of the donations. Corruption Watch welcomed the prohibitions contained in the Bill as they were necessary. Based on the OECD Framework for Financing Democracy, the prohibitions were in line with good practice. But there was scope for abuse in the investment arms of political parties or by donating money in order to influence policy choices or tender outcomes. It was about knowing the beneficial ownership or shareholding in order to know who was behind the companies. The same applied to Trusts. Corruption Watch would like regulations to provide specificity.

Donations for training and skills and policy development was concerning. One would have thought that foreign agencies influencing policy development would have been prevented to avoid policy capture by foreign entities or countries. Corruption Watch was also concerned about where or how the IEC would publish information about donations. The organisation believed that public funding of political parties at provincial level should be regulated as different provinces regulated different amounts and those amounts frequently exceeded the amount of funding allocated by National Treasury for the purpose of political party funding.

Corruption Watch wanted to see the passing of the Bill as soon as possible as the difficulties raised by the IEC in administering the MPDF were not around disclosure.

The Chairperson thanked the presenters and asked if there were any clarity seeking questions. No political statements or comments were allowed. There were no questions as it was a very clear presentation.

Presentation by Economic Freedom Fighters (EFF)
Mr Kwena Manamela, EFF National Head of Legal, presented on behalf of the EFF. The EFF had been at the forefront of requesting legislation to force political parties to reveal funders. However, as the Bill stood, the EFF opposed it.

EFF opposed the Bill on two grounds: Clause 10 and Schedule 2 Regulations 2, 3, 4.

Mr Manamela read Clause 10 and then explained that the definition of a donation was too broad. It stated that no person might deliver a donation which infringed on the right to association. That clause was subject to gross misrepresentation and made people fear joining a political party for fear of losing out on donations. Clause 10 said that ‘a member of a political party could not receive a donation unless for political purposes’. That meant that no one could receive a donation for any other purpose such as promoting a particular cause.
A Constitutional Court judgement had stated that the rights of a person could only be limited to the extent that it was reasonable and justified. The Court had explained the conditions under which rights could be limited and he did not believe that the Bill justified limiting a person’s rights to receive a donation. He proposed the wording “that no person or entity may deliver a donation intended to a political party to a member of that political party other than for political purposes.” The definitions of ‘donations’ were also too broad and had to be re-worded.

In Schedule 2, the formula for allocation of funds was considered totally discriminatory to smaller political parties. If the spirit and purpose of the Bill was to widen participation in democracy, why was there such an imbalance in the allocation of funds? He submitted that there should be a 50/50 split, i.e. 50 percent proportional and 50 percent equitable.

Mr Monakedi stated that some of the issues had to be discussed in the Committee. The Bill was based on section 236 of the Constitution, which referred to represented political parties in national and provincial legislatures and that South Africans voted for parties and not individuals, so individuals could not be allowed to receive a donation unless it was on behalf of a party. He asked the presenter to re-think.

Ms Dlamini had one question. She had heard the inputs and she would take the objection as seriously as all other inputs. But how was that objection different from all the objections that the EFF had made in reaction to everything that was being done? She wanted to take it seriously, but she did not know if it was genuine, given the usual practice of the EFF. How was it different?

Mr Motlashuping agreed with Mr Monakedi on clause 10.

Mr Manamela referred to clause 10(2), reading it aloud. He used the example of a 78-year-old member of a party who could only receive a donation if it was for a political party. It was surely not the intention to make the clause so broad. It was too broad and needed to be specific.

He responded to the comment about whether it was a genuine objection. He stated emphatically that if the Bill were passed without the suggested amendments, the EFF would refer the Act to the Constitutional Court to have it declared unconstitutional. He assured Ms Dlamini that the objection was genuine.

The Chairperson stated that he was not going to take that as a threat.

Ms Ncitha explained that the Bill was focused on political funding and could not be confused with other regulations or issues.

Mr Monakedi was confident that the Chairperson of EFF would correct the legal counsel.

Closing remarks

The Chairperson said the Committee could not meet the following Wednesday because the day had been allocated to the North-West proposal. He suggested moving the meeting to Tuesday but, because there was a sitting, the Committee could only meet at 6pm. If the Committee did not meet the following week, it would have an impact on the programme of the Committee as Members could then only meet after the six-week recess.

It was agreed by the Committee that the next meeting would be on Tuesday 26 June 2018 at 6 pm.

The Chairperson thanked the presenters for their inputs and Members for their attentiveness.

The meeting was adjourned.


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