Political Party Funding Bill [B33-2017]: finalisation

Ad Hoc Committee on the Funding of Political Parties NCOP

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

The Committee met to deliberate on its Report to the House on the Political Party Funding Bill. The important matters to deliberate were the public comments and submissions received in response to the Bill. The Committee had to determine whether the proposals for amendments would be accepted or rejected.

The Chairperson referred to the recent judgement of the Constitutional Court in the case brought before it by My Vote Counts. In his view, the judgement did not deter the Committee from moving forward with its mandate. He had also received letters from My Vote Counts and SANEF/amaBhungane, but the letters did not suggest that the process be halted.

The Legal Advisor provided an explanation of the judgement. The Bill did not cater for the financial statements of political parties which was something that the Court had said that legislation should provide for. It also did not provide information on the funding of independent candidates. However, the Legal Advisor submitted that those matters related to access to information and did not relate to the current Bill which dealt with the funding of political parties and how those matters had to be addressed. It was as a result of that, that the Bill provided for disclosure. Disclosure in the Bill was not as a consequence of a lack of information. Disclosure would therefore have to be addressed differently by Parliament.

The Report on the Bill provided a clear account of processes followed by the Committee and listed those persons and organisations that had made written submissions and/or oral submissions. The Observations/ Findings noted the issues raised in the submissions and during the briefings and public hearings.

The Report noted that there was a general acceptance by the public of the intention of the Bill to direct private donations to political parties and to prohibit donations from foreign governments and their entities, except for the purpose of developing skills or policy development. The Bill placed on a cap on how much any person or entity could donate to a political party and prohibited donations directly to members of a political party, except for political party purposes. The Bill required the disclosure of all donations above a particular threshold.

The Report stated that the Committee had addressed concerns that certain aspects seemed not to be aligned to the Constitution. The Auditor-General South Africa had asserted that clause 12.5 was in conflict with Section 188 of the Constitution because it was not clear that the political party funds were for a political purpose. The view of the Committee was that Section 188 (2) of the Constitution gave the Auditor-General the authority to account for any other institution as required by legislation and both the Preamble and Clause 7 made it clear that the funds were to be used for a public purpose.

The Council for the Advancement of the South African Constitution, My Vote Counts, Corruption Watch and the EFF had submitted that the appropriate formula for the distribution of funds under the Multi-Party Democracy Fund should be 50 percent on the basis of proportionality and 50 percent on the basis of equity, and that the new formula might not pass constitutional muster. The Committee believed that the formula was the product of extensive multi-party negotiations and had been agreed to by all parties, other than one, in the National Assembly. The Constitution did not stipulate the distribution of equitable versus proportional.

CASAC and the EFF submitted that the wording of Clause 10 could result in the limitation and possible violation of the constitutional right to freedom of association and the EFF further indicated that the clause would deter people from becoming members of political parties and politically engaged citizens. The view of the Committee was that Clause 10 was clear: Members of political parties could only receive donations if they were for party political purposes and could only do so on behalf of a political party.

Despite some of the concerns raised, the Committee noted that there was a high expectation by the public that the Bill be finalised by Parliament and enacted into law before the next general elections.

The legal consultant to the Committee stated that an amendment to 5.7 in the Report would strengthen the constitutionality of Clause 10(1), the clause that the EFF had objected to. He suggested Section 39(2)(a) of the Constitution had to be read in conjunction with the Bill of Rights.

There were questions from Members around the threshold issue. The one was whether the threshold was constitutionally permissible. The answer was that the courts had already determined that it was permissible to set a threshold for disclosure. Secondly, the matter of R100 000 as a disclosure threshold had been debated in the National Assembly and had taken into account the size of every party represented. The National Assembly Committee had sought an amount below which there was no influence on a political party but had acknowledged that it was too burdensome to disclose all donations.

The legal team also suggested that the only threat to a donor would be the exercise of power by the political party and the most obvious place to do that would be in the tendering process. A tender could be challenged in the high court if it seemed to be biased because of a donation being made to a different other party.

The Committee accepted an amendment to the Report and recommended the adoption of the Political Party Funding Bill [B33 – 2017] without proposed amendments.

Meeting report

Opening remarks
The Chairperson noted that seven provinces were present which meant that the Committee was quorate. He indicated that the meeting would not last long, but the Committee had to deliberate on the Report to the House on the Funding of Political Parties Bill.

The Chairperson welcomed Members. He stated that in order to finalise the Report to the House, the Committee would need to deliberate on the public comments and submissions received.

An apology had been received from Ms Motara who was out of the country on SADC business.

The Chairperson referred to the judgement of the Constitutional Court in the case brought before it by My Vote Counts. The judgement had been delivered the previous Thursday, the day after the public hearings were held. He believed that it was safe to say that the judgement did not deter the Committee from moving forward with its mandate. If a Member or a stakeholder required a full explanation, the parliamentary legal services could assist.

The Committee had received letters from My Vote Counts and SANEF/amaBhungane. He put it to the Committee and he invited the Members to decide how they wished to proceed.

Ms L Dlamini (ANC; Mpumalanga) stated that she would like to hear the legal team provide clarification of the judgement, especially because the two organisations had written to the Committee, so that she could be assured that what the Committee was doing was in line with the court judgement and there would be no negative implications for the Committee.

Mr M Monakedi (ANC; Limpopo) agreed that the Committee needed clarification of the legal implications of the Court Judgement. The two letters had not suggested that the Committee could not proceed. There was no crisis there, but he agreed that the legal advisor should advise the Committee.

The Chairperson agreed that the two letters did not seem to be a problem, but the Committee did need reassurance from the legal team, so he requested the parliamentary legal advisor, Mr Michael Prince, to respond to the Members.

Input from Parliamentary Legal Advisor
Michael Prince stated that he had prepared a briefing on the My Vote Counts matters so he was not going to go into too much detail about the background. He would jump straight to the point where the judge referred to the judgement versus the Bill. Did the judgement undermine legislative processes going on in Parliament? The Court said that the two matters were quite distinct. The case before the Court was about access to information, which was dealt with in Section 32 of the Constitution. The matter before the Committee dealt with the funding of political parties and related to Section 236 of the Constitution.

The Judge said that the process could continue. Parliament enjoyed independence in its law making and could make its own law relating to private funding. The Court could not say whether the disclosure of political party funding should be through PAIA, or through PAIA and another Act or through PAIA and other measures that Parliament passed. The issue was whether the right to vote included the keeping of financial records by political parties or political candidates, whether the right to vote required reasonable access to private funding and whether the current PAIA provided voters with real access to that information.

The State was required to pass legislation that would provide for the recording, preservation and reasonable access to information on private funding of political parties. PAIA was unconstitutional in that it did not apply to all political parties and did not apply to independent candidates and failed to pose an obligation on political parties and independent candidates to record private funding and did not provide reasonable access to that information.

What did the Bill not cater for? The Bill did not cater for the financial statements of political parties which was something that the courts said that legislation should provide for accessing such information. It also did not provide information on the funding of independent candidates.

However, Mr Prince submitted that those matters related to access to information and did not relate to the current Bill which dealt with the funding of political parties and how those matters had to be addressed and as a result of that the Bill provided for disclosure, not as a consequence of a lack of information, but in relation to the funding of political parties.

The Chairperson thanked the Legal Advisor and agreed that the judgement had no impact on the Committee and the Bill before it. The Committee could, therefore, deal with the presentation of the Report on the Political Party Funding Bill and deliberate on the Political Party Funding Bill at the same time.

Presentation of the Report on the Political Party Funding Bill and Deliberations on the Political Party Funding Bill [B33-2017]
The Chairperson noted that all Members had received a copy of the draft Report via email that morning and a hard copy at the meeting but not everyone had an opportunity to read the draft, so he would zoom into the Report and go through each paragraph.

Mr Monakedi suggested that the Committee should look at the report very slowly, but the focus should be on the recommendations and what the Committee needed to agree upon. The rest of the report was on what had taken place during the public hearing.

The Chairperson agreed with Mr Monakedi’s proposal and indicated that Adv Tau would take the Committee through the report, emphasising the recommendations which the Committee had to agree upon, or not as the case might be.

Ms Z Ncitha (ANC; Eastern Cape) asked if the recommendations were part of the package given to Members.

The Chairperson referred her to page 8: Observations and Findings.

Dr Mangana Tau, Unit Manager, Parliamentary Committees, went through the report page by page. Starting with the receipt of the Bill from the National Assembly, the appointment of the Committee and the public comment inputs, and listing each submission made. The Committee noted and deliberated on all the issues in the submissions and the public hearings.

The Report noted that there was a general acceptance by the public of the intention of the Bill to direct private donations to political parties and to prohibit donations from foreign governments and their entities, except for the purpose of developing skills or policy development. The Bill placed a cap on how much any person or entity could donate to a political party and prohibited donations directly to members of a political party, except for political party purposes. The Bill required the disclosure of all donations above a particular threshold.

The Report noted that the Committee had addressed concerns that certain aspects seemed not to be in line with the Constitution. The Auditor-General South Africa had asserted that clause 12.5 was in conflict with Section 188 of the Constitution because it was not clear that the political party funds were for a public purpose. The view of the Committee was that Section 188 (2) of the Constitution gave the Auditor-General the authority to account for any other institution as required by legislation. Both the Preamble and Clause 7 made it clear that the funds were to be used for a public purpose. Parliament was mandated to regulate political party funding in terms of Section 236 of the Constitution. Clause 12 made it discretionary for the Auditor-General to conduct such audits.

The Council for the Advancement of the South African Constitution (CASAC), My Vote Counts, Corruption Watch and the EFF had submitted that the appropriate formula for the distribution of funds under the Multi-Party Democracy Fund was 50 percent on the basis of proportionality and 50 percent on the basis of equity, and that the new formula might not pass constitutional muster. The Committee believed that the formula was the product of extensive multi-party negotiations and had been agreed to by all parties, other than one, in the National Assembly.

CASAC and the EFF submitted that the wording of Clause 10 could result in the limitation and possible violation of the constitutional right to freedom of association and the EFF further indicated that it would deter people from becoming members of political parties and politically engaged citizens. The view of the Committee was that Clause 10 was clear: Members of political parties could only receive donations if it was for party political purposes and could only do so on behalf of a political party.

Despite some of the concerns raised, the Committee noted that there was a high expectation by the public that the Bill be finalised by Parliament and enacted into law before the next general elections.
The Chairperson asked Prof Halton Cheadle to suggest a very small correction before he handed over to the Committee for deliberations.

Prof Cheadle, consultant to the Committee and member of the Law faculty at the University of Cape Town, stated that an amendment to paragraph 5.7 in the Report would strengthen the constitutionality of Clause 10(1) which was the clause that the EFF had objected to. Reference was made to Section 232 of the Constitution which was the section dealing with international law and which was quite correct. However, to strengthen the point, he thought that it was better to look at Section 39(2)(a) of the Constitution. That Section demanded that the court had to promote the spirit and purpose of the Bill of Rights. That provision would answer the EFF’s concern which was a very literal interpretation of Section 10(1) and had not been read in respect of the Bill of Rights.

Prof Cheadle suggested an addition to paragraph 5.7: “Members of political parties may only receive donations if it is for party political purposes and may only do so on behalf of a political party. Further, there is no possibility that a court would interpret the provision as preventing donations of a bona fide financial assistance to a person who happens to be a member of a political party. Again, when interpreting any legislation, the courts are expected to prefer any reasonable interpretation of the legislation that is consistent with the Constitution over any interpretation that is inconsistent with the Constitution. The same approach is also expressed in section 39(2) of the Constitution and stipulates ‘When interpreting any legislation every court must promote the spirit, purport and objects of the Bill of Rights’.

The Chairperson asked Members if there was agreement on the amendment to the Report.

Mr M Chabangu (EFF; Free State) concurred that the change could be made as suggested by Prof Cheadle, but he stated that the EFF would not accept anything except what the EFF lawyer had said at the hearings that the EFF would accept. He also pointed out that any suggestions for dealing with the matter would have to be referred back to the EFF lawyers.

The Chairperson accepted that it was a clear party position that Mr Chabangu was presenting. The Committee had no problem with his position. It made sense because the EFF had presented an oral submission and their lawyer had taken a particular position. Members had an opportunity to deliberate the observations made in the Report and Members were free to add their inputs. Members should not differ with the Report when it was presented in the House.

Mr Monakedi welcomed the presentation of the Report and appreciated the correction to the report. The report was comprehensive in terms of the work that the Committee had done. It was straightforward, and he proposed acceptance with the slight amendment made by Prof Cheadle.

Ms Ncitha agreed with the legal team and accepted the proposal about the rights of the individual and was glad that it was in line with the Constitution. She also wanted to raise the point that a number of presenters at the public hearings had raised concerns about the threshold for disclosure, but she had noted that it would be unconstitutional if they accepted the proposed threshold changes as the Constitution did not indicate an amount. She did not know whether the consideration of the threshold should be included in the Report to ensure that there were no problems suggesting that the Committee had not addressed the matter.

The Chairperson noted that there was a response to the issue of the threshold in the Report and that the Committee had agreed to the threshold.

Mr T Motlashuping (ANC; North West) seconded the proposal. The matter of the threshold was reflected. There was a response to that. The Committee had come to a particular determination.

Ms Dlamini asked for clarity: were they deliberating on the Bill even as the Members were inputting on the report?

The Chairperson responded that they were doing that.

Ms Dlamini continued, saying that it was interesting to find that so many organisations were interested in Parliament and what the Members were doing. It was encouraging. It was clear that people would not take things for granted. There were very clear constituency-based organisations that had presented. With other organisations, one was not sure and only in the content did one know who they represented. Most organisations had asked why R100 000 was the threshold. Some presenters had suggested R10 000 and they had also warned that there could be an accumulation of several R100 000’s. The question was why the Bill did not want to disclose up to R100 000. She needed clarity on that issue but otherwise she was in agreement with everything.

Ms C Labuschagne (DA; Western Cape) said that she did not have a big issue. She referred to the responses which formed part of the Report, and to paragraph 4.4, in particular: “The Free Market Foundation (FMF) submitted that the obligation on a political party and donor to disclose donations above a prescribed threshold, as contained in Clause 9 of the Bill, would mean that a donor may be victimised.” threshold. She understood the response of the Committee that there was no evidence that it would happen, but if it did happen, under which law could the donor be protected? She understood that that protection would not be in that Bill but if it was implemented and victimisation did happen, could something be added to the regulations?

The Chairperson ask the legal team to give some input regarding the R100 000 threshold. It was a question that concerned Committee Members. He also asked for a response on whether the rights of the donors could be protected.

Mr Prince responded that there were two separate questions around the threshold issue. The one was whether the threshold was constitutionally permissible. The courts had already made judgement in the Myburgh IMATU case and had relied on national jurisprudence that it was permissible to set a threshold for disclosure. The cost said that it was permissible to set a threshold and Parliament should decide on the amount.

The matter of R100 000 had been debated in the National Assembly and had taken into account the size of every party represented. The Committee had sought an amount below which there could be no influence on a political party, having recognised the fact that it was too burdensome to disclose all donations.

Prof Cheadle suggested that the only threat to a donor would be the exercise of power by the political party and the most obvious place to do that would be in the tendering process, but a tender could be challenged in the high court if it seemed to be biased because of a donation made to another party. In so far as the direct exercise of power was concerned, there was a legal remedy.

The Chairperson thanked the legal team for the clarity about the issues and suggested that the Committee moved forward as the Committee was clearer about the R100 000 threshold and why that amount had been decided upon.

The Chairperson read the conclusion of the Report and put it to Members. He asked Mr Monakedi to repeat his proposal for adopting the Report.

Mr Monakedi formally proposed adoption of the Report with the minor amendment by the legal team, which meant that the Committee agreed to the recommendation of the Bill to the NCOP without any amendments.

Mr Chabangu suggested that was not correct.

The Chairperson asked Mr Chabangu to hold his point until he had a seconder for adoption.

Ms Dlamini stated that she believed that the Committee had given itself enough time to examine the Bill and had called for public comment, and the concerns about constitutional issues had been addressed the by legal team. She, therefore, supported the mover for the adoption of the Bill.

The Chairperson thanked the Committee for adopting the Report which would be added to the Announcements, Tablings and Committee Reports (ATC’d) and presented to the House on 28 June 2018. He asked Mr Chabangu to complete his point, although he hoped that he was not going to take them backwards.

Mr Chabangu noted that the proposer had stated that the Report had been accepted without any amendments.

Mr Monakedi stated that he had said that there were no amendments to the Bill.

The Chairperson indicated that Mr Monakedi had accepted the amendment to the Report but had stated that there were no amendments to the Bill that was to be sent to the House.

Consideration of draft Minutes
24 May 2018: Amendments were made in respect of those who were absent as they had not received the invitation to the meeting timeously. The Committee adopted the minutes.

7 June 2018: The Committee adopted the minutes without amendments.
 
14 June 2018: Mr Motlashuping noted that he had been absent without apology. The Committee adopted the minutes.

20 June 2018: Mr Chabangu noted that Mr Khawula had not attended any of the Committee meetings and wanted to be assured that he had been invited to all meetings. The Committee adopted the minutes.

Closing remarks

The Chairperson thanked everyone. The report would be ATC’d and would be tabled in the House on 28 June 2018. As the NCOP was debating the Appropriations Bill on the same day, the Chairperson suggested that the Committee did not call for a debate but asked political parties to make statements when the Bill was proposed.

He thanked Committee Members, legal advisors, staff and the NGOs for valuable input and Prof Cheadle for his commitment. My Vote Counts had been very busy, and he thanked them. He had enjoyed working as a team with the different political parties.

The meeting was adjourned.

 

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