Public Investment Corporation Bill: hearings; Chairperson Election

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Finance Standing Committee

24 June 2004
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Meeting report

FINANCE PORTFOLIO COMMITTEE
25 June 2004

PUBLIC INVESTMENT CORPORATION BILL: HEARINGS; ELECTION OF CHAIRPERSON

Chairperson
: Ms B Hogan

Documents handed out
COSATU submission on PIC Bill
Suid Afrikaanse Onderwyserunie submission on PIC Bill
Public Investment Corporation Bill [B6-04]

SUMMARY

Dr Rob Davies was elected as the new Chairperson of the portfolio committee.

COSATU, in its submission on the Public Investment Corporation Bill, was opposed to any initiative that would compromise or put at risk the government employees pension funds. It was proposed that any amendment to the PIC should happen in a far more participatory and consultative manner.

COSATU lodged a strong objection to the rushed and flawed manner in which the Bill was tabled in Parliament. The Bill was not tabled for discussion at neither the NEDLAC nor the Public Service Co-ordinating Bargaining Council (PSCBC). This ws problematic given the size and importance of the funds and their potential to fulfil commitments made at the Growth and Development Summit in 2003.

COSATU called for the immediate withdrawal of the Bill pending a further process of consultation.

MINUTES
Election of chairperson of newly convened Finance Portfolio Committee
The committee clerk invited members to nominate a candidate for the position of the Chairperson of the committee following the dissolution of the Ad Hoc committee on finance. Dr R Davies was nominated and in the absence of further nominations he was declared as the duly elected Chairperson of the committee.

Dr Davies thanked members for the election and proceeded to the business of the day. He invited Ms B Hogan to lead the discussions.

COSATU submission on Public Investment Corporation Bill
Mr E Paulus (COSATU: Research Co-ordinator) represented COSATU. (See presentation document).

Mr Paulus said that COSATU strongly objects to the manner in which the Bill was introduced in Parliament. It was rushed. The government website classified the bill as a draft bill but this seems not to be the case anymore. The turnaround time for submissions was effectively far less than a month. Even more objectionable is the fact that a Bill of such import, proposing to transfer public assets worth approximately 25% of the current GDP of South Africa, into a corporation regulated under the Companies Act, is accorded such a short period of consultation.

Of concern to COSATU, are the assertions made that government will 'continue to engage to refine an approach broadly in line with the emerging framework for BEE'. Any initiative using these pension funds for a narrowly defined BEE should be opposed on the basis of the past losses incurred. Such use falls outside the scope of empowerment and enrich a few individuals.

Key shortcomings of the Bill include the absence of a detailed explanatory memorandum, draft policy and strategy documents, and more importantly a consultative and negotiating process where clarification could be sought, and the rationale of this Bill would have been better understood. It has therefore raised even more questions than answers. One of the central issues is to unpack the meaning and intention of proposing the establishment of a Corporation.

COSATU's understanding of corporatisation is inextricably linked to the broader processes of privatization and commercialization of State assets. COSATU is not opposed to restructuring unless this process forms part and parcel of the broader privatization programme.

Discussion
Ms Hogan said that the Committee had not had an opportunity to look at COSATU's submission. Together with the Chairperson, she suggested that discussion on the bill should be held over unlit the next term of Parliament. There is a perception that the Committee is driving the process on the bill very fast. This was never the case. The program of the Committee was drawn long time. The Finance committee was one of the committees to table their program and on the programme was the PIC Bill.

Ms Hogan said that the Bill is very important because of the incredibly difficult situation that the PIC board present finds itself in. it has never been suggested that the bill should go through for any political reasons. The Bill has been tabled in Parliament and is therefore no longer a draft. It is true that the Bill that was initially presented is not the same as the one that was tabled.

Mr B Molefe (CEO: PIC) said that the submission contains some inaccuracies. There is no relationship between the government debt and PIC assets.

The committee adopted the minutes of its three previous meetings.

The meeting was adjourned.

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