Regulations for Political Party Funding Act: IEC Public Hearings Day 2
02 August 2019
Chairperson: IEC Commissioner Glen Mashinini
Regulations for Political Party Funding Act: IEC Public Hearings Day 2 part 1
Regulations for Political Party Funding Act: IEC Public Hearings Day 2 part 2
Regulations for Political Party Funding Act: IEC Public Hearings Day 2 part 3
Political Party Funding Act
Political Party Funding Act Draft Regulations
Day Two of the Electoral Commission public hearings on the Regulations to administer the Political Party Funding Act began with a submission by a former Minister of Constitutional Development who contended that when the Constitution was adopted in 1996, it constituted a near perfect document but, in his view, one of the biggest shortcomings was that it had not regulated the lives of political parties. In that sense, the Political Party Funding Act dealt with an outstanding constitutional matter. Mr Valli Moosa made three points: political parties were absolutely essential to democracy; the right of citizens to vote freely for the party of its choice would be seriously impaired if citizens did not know what they were voting for; the sovereignty and integrity of Parliament was essential. He added that the intention of the Regulations was never to stifle local political activity and the simpler the regulations, the better.
Commissioners asked the former Minister to comment on the schema for a decentralised and a centralised approach to checking on donations in kind, cash or otherwise. What about the funding of parties not represented in Parliament? Did the Regulations cater adequately for funding of cyber information? Did he think that there was a need for separate legislation to deal with political party campaigning? Did he think that the IEC should be stricter about private funding and rely more on public funding?
Business Unity South Africa welcomed the promulgation of the Political Party Funding Act and looked forward to its speedy implementation. The years of corruption and state capture, including malfeasance in business corporates, made it incumbent on the country to implement such legislation that began to narrow the space for those who were bent on looting the country. BUSA was keen to work with the Commission to assist in socializing the legislation amongst its membership base and offered assistance and resources to the Commission to prepare for and to implement the legislation.
Commissioners asked if BUSA would be willing to look at the forms and regulations to see that the required kind of adequacy was provided for in the regulatory environment.
The African National Congress was represented by a team of head office officials and Members of Parliament. The law on Political Party Funding reflected the values of the ANC and was a practical expression of the ANC’s commitment to the constitutional values of fairness, equity, accountability and transparency. The ANC would support the Commission to successfully implement the Act and Regulations at the earliest possible time. It urged the Commission to consider what it would take to successfully implement the draft Regulations by addressing issues of the capacity of political parties, the practicality of systems and requirements and the need for education and training for parties, the public and donors. The ANC would be using aspects of the legislation to better manage some of its internal democratic processes.
The ANC presented five specific proposals, including that the Multi-Party Democracy Fund should allow tax breaks, parties should disclose all donations above R100 000 but not be expected to aggregate small donations in cash or in kind from branch level, reporting periods should be once every three months, with a 90 day time period to report.
Commissioners asked what political parties would be doing to curb vote buying, vote rigging and the transactional nature of politics. Was there value in getting disclosure of that level of detail that required branch reporting? Was there another way of getting the same level of scrutiny? If sandwiches were provided every day for every member of a branch for three months before an election, there was an issue of scale that political parties had to be able to disclose. What was the alternative to the current schema? Was the ANC clear that the Representative Political Party Fund would have to comply with the PFMA and might require monthly or quarterly audits? The IEC needed help from the major political parties but the main parties did not seem to be able to help.
The submission by the Information Regulator alerted the Commission to the requirements of the Promotion of Access to Information Act and the Protection of Personal Information Act. The legislation came about as a result of the courts declaring Promotion of Access to Information Act (PAIA) unconstitutional to the extent that it did not provide for the disclosure of funding to political parties. The Political Party Funding Act and its Regulations could only have meaning if it drew its inspiration from PAIA.
The Information Regulator said that in making the final the decision not to disclose a donor’s identity or the amount of the donation, the Commission would have to determine whether the public interest in disclosing that information outweighed the harm contemplated in the Act. Donors were considered data subjects in terms of the Protection of Personal Information Act. Both the Commission and political parties would be responsible parties and would have to comply with the eight conditions of lawful processing of personal information in the Protection of Personal Information Act. The Information Regulator cautioned the Commission against collecting excessive information as it had to protect and safeguard that information.
The Commissioners noted that the public interest would be interpretative almost in a judicial sense because there was no absolute in the public interest. Did the Information Regulator think that making decisions about the public interest would be possible? If the donor and the political party completed a form, would that be seen as giving consent?
The African Independent Congress considered the Political Party Funding Act a necessary intervention to root out corruption, to address limitations in the Public Access to Information Act and to deepen multi-party democracy. The AIC noted that the Commission was allowed to return any donation made if it suspected the money came from an unapproved source. It was the view of the AIC that the regulation contravened the audi alteram partem rule because the contributor was not given a chance to be heard. The lack of a definition of a ‘person’ in neither the Act nor Regulations had to be addressed.
The Commissioners stated that they had attempted to define a ‘person’ in the Regulations, although it was subject to review. They asked for comment from the AIC about that definition. Was the AIC suggesting that the contributor should be invited to respond to the Commission’s proposal not to accept the donation?
The Right2Know Campaign stated that the public had a right to know who was bankrolling a political party. The Political Party Funding Act required urgent implementation. The 2019 elections had been missed and it was less than 18 months to the next important elections, the local government elections. Right2Know stated that it had made some substantial proposals in its joint submission with My Vote Counts. Mindful of the lack of trust in the political system, it was important that the principle of proactive disclosure should be adopted. Considering the Court’s displeasure at the lack of access to information, Right2Know believed that how the information was made known was important. There had to be proactive disclosure and proactive reporting. Right2Know noted that the roll-out was planned over three years with sanctions being put in place at a later date. While everyone was anxious for the process to get started, enforcement was a crucial aspect. Right2Know was interested in protection for whistleblowers but the Regulations made no mention of whistleblowers.
The Commissioners asked if Right2Know had suggestions for the key elements of whistleblower policy.
The Chief Executive of the Political Party Funding Unit at the Commission expressed his gratitude to every person and organisation that had participated in the public hearings on the Regulations for the Political Party Funding Act. Since publishing the draft regulations, the IEC had received 4 300 submissions from civil society organisations, political parties and public sector organisations. The Commission would immediately review the submissions and might request bilateral meetings with some presenters.
Mr Sy Mamabolo, Chief Electoral Officer, welcomed everyone, and in particular National Treasury, to Day Two of the Public Hearings on the Regulations for the implementation of the Political Party Funding Act. The panel, as per the previous day, consisted of the five Commissioners: Chairperson Commissioner Glen Mashinini, Deputy Chairperson Commissioner Janet Love, and Commissioners Dr Nomsa Masuku, Judge Dhaya Pillay and Mr Mosotho Moepya. Mr Mamabolo handed over to the IEC Chairperson.
The Chairperson, Commissioner Glen Mashinini, welcomed everyone on behalf of the Commission and thanked everyone for their contributions to the finalisation of the Regulations.
Valli Moosa, former Minister of Constitutional Development, submission
Mr Moosa expressed his appreciation at the opportunity to share his thoughts with the Commission. On a general note, he said that it was important for the Regulations to be developed in the light of the overall perspective that one should have of the Act. Firstly, the regulation of political party funding could have been included in the Constitution and, at the time, many felt that it should been included. When the Constitution was adopted in 1996, it constituted a near perfect document but, in his view, one of the biggest shortcomings was that it had not regulated the lives of political parties. In that sense, the Political Party Funding Act (PPFA) dealt with an outstanding matter. So, when Parliament passed the Act, it was actually doing constitutional work and it was legislation of a constitutional nature. Constitutional matters were not for the day’s headlines but a long term matter to hardwire democracy in the country and to deepen the democracy. It was not solving a short-term issue.
Mr Moosa made three points about the legislation:
1. Political parties were absolutely essential to democracy, not nice-to-haves. Without political parties the democracy enshrined in the Constitution did not work. They were much more than private clubs but important institutions that had a crucial role to play. Much was said of the Chapter 9 Institutions, which did good work, but not much emphasis was placed on political parties. They had to have integrity, be law-abiding and be sustainable with adequate capacity to function as political parties. In a sense, political parties had been left in the wilderness and left to pay their own bills. It was a free-for-all. Society should collectively own the political parties.
2. The right of citizens to freely vote for the party of its choice would be seriously impaired if citizens did not know what they were voting for. It was the responsibility of the citizen to be knowledgeable about the party that he votes for but it was also the job of the IEC to inform the voters who they were voting. At the moment the IEC was not in a position to know who influenced a party by funding it. The right to know who one was voting for was important.
3. The sovereignty and integrity of Parliament was essential as Parliament was the central institution in the SA democracy. It made the laws, but who controlled Parliament and who was paying the bills for the political parties? Everyone had a general idea of what was going on but one needed to look into the future, e.g. an important political party being funded fully by another government, for example. Theoretically, (although Mr Moosa was very sure that it was not currently happening) foreign governments could run Parliament and it was not inconceivable that it could happen. In the modern era, countries had intervened in the governments of other countries. Currently, there was a huge concern that Russia had interfered in the USA elections. Citizens of SA had to protect themselves. Members of Parliament had to be responsible only to the people of SA. Political parties should never feel more responsible to the funders, be it a company or four or five wealthy individuals.
Mr Moosa hoped that when the regulations were finalised that the IEC would bear the above points in mind.
The intention of the Regulations was never to stifle local political activity. There were concerns regarding local political initiatives and activity but it was not intended to do that. For example, if someone donated two tubs of Kentucky once it was not an issue. However, if the same person donated tubs of Kentucky to every branch every day for a month before the elections, then the IEC would want to know about it. It was a question of scale and manner.
It was important for National Treasury to understand so that political parties did not have to scratch around for money, especially the smaller parties and so a substantial part of PPF should come from the public purse. Based on his experience, he had an idea of how much political parties cost and he believed that National Treasury could be the main funder of political parties. That would be more fool-proof than any regulations and political parties would then truly be accountable to the citizens.
Mr Moosa was not going to go into the Regulations themselves, except to say that the simpler the regulations, the better. The IEC needed to ensure that they were in proper alignment with the Act. In terms of style and language, it would be better if it spoke to the Act in a better way than it did at that point. Care needed to be taken that there was nothing ultra vires in the Regulations and there might be, arguably, some of that in the Regulations at that point. He did not think that there was a need for Schedule 1 as the fines were covered in the Act and he was not sure that the IEC wanted another, slightly different, set of sanctions in the Regulations.
Mr Moosa had heard people commenting on the new fund that people could donate to. In general, he believed that anonymous donations into that fund should be discouraged. Why would one want to fund in secret? Attracting funding from the private sector and from wealthy individuals was beyond the authority of the IEC but National Treasury could look at it more closely, such as in tax incentives. There were always arguments on both sides to things like that but, overall, it would be better to encourage private funders than to use only revenue funding.
The Chairperson thanked Mr Moosa.
Commissioner Love noted that he had suggested that it was not necessary to report one bucket of chicken. The issue raised had been burdensome reporting. In the schema of the Act, the idea was that political parties would manage the donations in a central banking account but obviously there were also activities at local level. The schema of the Act did not overtly address that. The regulations recognised that some way had to be found for everything to be reported, and while all the accounts need not be submitted, all the details needed to be known. Could he comment on the schema for a decentralised and a centralised approach to checking on donations in kind, cash or otherwise?
Mr Moosa suggested that political parties would have to up their game internally. One would assume that political leaders would like to have a good understanding of what was happening as far as finances were concerned, at all levels. Currently they did not, and that was the reality of how things worked at present. Political parties would be required to have properly audited financials to submit to the Commission. One could not audit financials if one did not know what occurred in every single bank account. A political party could not say that it had a large number of branch accounts and it did not know what money went into the accounts and what went out of the accounts. That would have to change. It should have changed long before.
Mr Moosa added that people who made laws should not have a laissez-faire approach to their own organisations. With IT facilities, it was simple to know, on a daily basis, what the cash reserves were so that if there was a large donation into an account, the party would immediately be aware of it. It was not complicated or costly. Political parties had to know how much was in the accounts on a daily basis. Banks could easily identify any large amounts going into an account, even though they had millions of accounts. Technically it was not difficult and political parties should do that without delay.
On donations in kind, Mr Moosa said that a donation of say a marquee for a weekend was fine but if thousands of marquees were being erected across the country by the same person, the political party should identify and report such a donation in kind. The onus was on the political party. Political parties should know details about donations in kind.
Commissioner Love noted that he was talking about Members of Parliament but the Act in some senses spoke only of those in Parliament in respect of the political party funding and multi-party democracy funding but what about the funding of parties not represented in Parliament? She also reminded Mr Moosa that there was a Constitutional Court judgement that required disclosure of the funding of all political parties, including those that did not have a seat in Parliament and independent candidates.
Mr Moosa stated that the judgement that Commissioner Love was referring to had been brought before the courts by My Vote Counts. At the time of the drafting of the legislation, provision was not made for new political parties and independent candidates at local level. Quite clearly a framework was needed for them but the Act had not gone into that. My Vote Counts, in its submission to Parliament, had said that it was happy not to include independent candidates at that stage but it was outstanding and Parliament would have to apply its mind to that. He knew that there was some thought going to providing for independent politicians in PAIA.
Commissioner Pillay said that she was sure that in 1996 cyber theft was not a concern. In Mr Moosa’s view, did the Regulations cater adequately for funding of cyber information? Following the cyber intervention in Brexit and the USA elections, it had become a cause for concern.
Mr Moosa agreed that social media had introduced a new aspect and had given rise to populism. Traditional political parties would find it difficult to explain their policies in a twitter-sized message but populist parties could because they were populist. He was not sure that social media was related directly to funding the political parties. Political parties used social media more and more. The need for honesty by political parties was not in the purview of the Act.
Commissioner Pillay suggested that funding came into the picture at two levels: the analytics and the messaging. The Brexit YouTube videos suggested that “dark forces” used information to plug in messages that misinformed people.
Mr Moosa believed that some of that would have to be dealt with by the interpretation of the courts because one could not predict everything. For example, in the USA people who were not members of political parties raised a lot of money and supported the party through television advertising, etc. which would undermine the intention of the Act. Political parties were inventive and would think up ways of circumventing the legislation. He thought that every party would have someone on social media presenting supposedly independent views but raising awareness and even money for a political party. The courts would likely say that if one raised money to support a political party, even if one were not a member of the party, it would be in violation of the Act not to disclose it.
Commissioner Pillay noted that such a situation could arise in non-disclosure.
Mr Moosa agreed but added that political parties would say that they had not known that someone was raising funds for them. He thought that it would take some time to resolve all the matters but the legislation and Regulations had sufficient to catch them all out and political parties should just be given a warning that they would be caught.
Commissioner Masuku noted that Mr Moosa had said that the legislation was an attempt to legislate the lives of political parties through an Act as the Constitution had not done so. What had arisen the previous day was the issue of campaigning. Did he think that there was a need for a separate piece of legislation to deal with political party campaigning?
Mr Moosa had forgotten to say that he thought it was quite remarkable that 25 years into democracy, political parties in Parliament had created an Act to regulate their own funding. It was absolutely remarkable. No one had voted against, although some Members of Parliament had abstained, but the overwhelming majority had supported the legislation, and that gave a strong mandate to IEC.
Mr Moosa believed that because SA was an open democracy, there would always be vigorous campaigning. If one tried to legislate that there should not be falsehoods and people should not cast aspersions, and so on, it came very close to impacting on freedom of speech. An open democracy had its downside. It was necessary to look at fake news, although it was such a new thing, and there the voters did need protection, as voters were led to genuinely believe something that never happened, and not only in SA. For example, Brexit was promoted by fake news. The IEC had to apply its mind to it because the Commission had to protect the voter. With fake news, the voter believed things that were not true. Maybe he was too old to know where to start with social media but he knew it was a danger. SA was lucky that voters had not rejected traditional political parties in favour of parties promoted via social media. In many countries, people had literally voted for clowns.
Commissioner Moepya noted that Mr Moosa had said that it might be ideal to look at the public purse to support political parties. Did he think that the IEC should be stricter on private funding and rely more on public funding?
Mr Moosa agreed that was his opinion. In essence that was that the Act did: it placed restrictions on the raising of money from private sources. Funding should be material and substantial. As an ordinary citizen, he would feel more comfortable if the majority of funding came from public purse because then the public could hold the political parties accountable. He knew that some people said that SA was a poor country and could not afford to pay political parties but people generally exaggerated how much it would cost. Political parties lived on a shoestring and it did not take that much money to manage a political party.
The Chairperson thanked him and promised further engagement with him.
Business Unity South Africa submission
Ms Busisiwe Mavuso, Board Member of Business Unity South Africa (BUSA) and CEO of Business Leadership SA, apologised for the absence of the President of BUSA, Sipho Pityana, who had been unable to make the hearing after the NEDLAC meeting the previous day. BUSA represented about 60 industry bodies and associations and one of those was Business Leadership South Africa.
BUSA welcomed the promulgation of the PPFA and looked forward to its speedy implementation. The years of corruption and state capture, including malfeasance in business corporates, made it incumbent on the country to implement such legislation that began to narrow the space for those who were bent on looting the country.
BUSA had been very vocal about the corruption and the loss of millions during the lost decade. Corruption had been allowed to run rampant in both the public and private sector. Business had been complicit in the wholesale corruption and looting. The Act would demand transparency and would legally bind all parties to disclose all funding above R100 000. BUSA noted the maximum of R15 million. Those thresholds needed adjustment as they would open up corruption. The thresholds were too high in the SA context, especially after what the country had undergone and BUSA recommended a revision of the thresholds. It was especially important to ensure that there was no way of getting around the thresholds.
BUSA liked the Multi-Party Democracy Fund (MPDF) as it allowed business to support democracy and it was progressive to have a diversity of voices in politics. The MPDF allowed business not to bet on a particular horse but to support the concept and principle of democracy. In business one always said business is business but businesses understood the importance of the political economy.
Taking into account donations in the form of assets was important. It was progressive for SOEs to be banned from donating. People needed to understand that monies collected from taxpayers had to be used for the said purpose. SOEs were huge risks and it was not their business to donate to political parties.
BUSA would engage and support implementation of the legislation. BUSA was keen on working with the IEC to assist in socializing the legislation amongst its membership base and looked forward to engaging with the Commission at the appropriate time.
The Chairperson thanked Ms Mavuso for her passionate submission. He appreciated the fact that business was engaging with the IEC as the business community was a key stakeholder in shaping democracy in SA.
Commissioner Love noted that in the course of inputs the previous day, civil society had made the point about business entities attempting to circumvent thresholds via subsidiaries. Some suggestions as to how the Commission could put in mechanisms to deal with such a possibility, submissions had recommended requiring different pieces of additional information in order to try and track donations but the Commission did not want to receive monstrous amounts of information that could not be processed. It was hoped that the forms would allow sufficient information for the IEC to use other repositories of information that understood who owned whom, etc. Would BUSA and BLSA be willing to have a look at the forms and regulations to see that that kind of adequacy was provided for in the regulatory environment?
Ms Mavuso assured the Commissioner that BUSA would welcome that kind of tracking and exposure. BUSA welcomed the Act because of its exposure. It was true that when pieces of legislation came out, people in business came up with inventive ways of circumventing policies. B-BBEE was one of those pieces of legislation that people attempted to circumvent. However, people were aware that at that stage in the country’s development, things had to change. One could not keep doing the same thing and achieve different results. If BUSA and BLSA were needed to assist or support the tracking of information in any way, be it financial support, IT support or human resources, they were happy to do that because it was time to instil ethical and moral regeneration.
Commissioner Masuku said that looking at company tax and the transformative codes that came with B-BBEE incentives as well as tax incentives, she thought that perhaps looking at the transformative role of business might help plug the gaps. She wanted to have conversations about all the transformative mechanisms available and how it could assist in ensuring that the legislation was transformative in the field of political party funding.
Ms Mavuso would welcome such engagements because business could only prosper in a prosperous society but the country was currently flawed and there was no country that could survive or prosper with 10% of the population in the opulent class, 40% in the middle class and the majority of people living in abject poverty. Even though companies arrogantly budgeted for penalties, they were hardly ever penalised for circumventing regulations. The business of government was to make tough decisions but business had been allowed to run amok for 25 years. The conditions for prosperity were not God-given. The government had to create the macro-economic policies and environment. The country needed to look, in a holistic way, at what business’s role would be in fundamentally transforming society. The biggest ticking time bomb was inequality and that fight would very quickly be brought to the doorstep of business in the way one saw Alexandra take the protest into Sandton. Business had to sit up and ask questions. The route to transformation had to be done differently. The country cannot continue doing what it had always done and expect a different result.
Ms Mavuso explained that that was a long way of saying that she agreed with Commissioner Masuku.
The Chairperson said that one of the tenets of a liberal country with a capitalist system was that market forces would correct the situation. However, 25 years down the line, people were talking about funding the lifeblood of democracy, the political parties. In an ideal free market environment, regulation was the last thing one wanted as business would want to self-regulate the issue of funding political parties. He had not heard any time in 25 years where business had deliberated the question of how business regulated itself in respect of the lifeblood of democracy. He welcomed what business was doing, but there was also a question of what accounted for the vacuum of 25 years.
Ms Mavuso responded that the short answer was that business had not been led by her for 25 years. But on a more serious note, she agreed with him. There was no purist system in the world so there could not be a pure free market or capitalist or socialist system. That was where government had to manage the macro-economic policy. The objective of BEE had been intended as the tool to normalise the country in 1998 and, at the time, there had been requests for a timeframe for BEE so that business knew how long it would take to move society. But 25 years later, the country was nowhere near a transformed society. The problem statement had not been clear when the BEE intervention had been introduced. No one had known what the country was working towards. One now knew that it had to be a sustainable economy. In her view, a sustainable situation was a bulging middle class of 80% of the population. The middle class sustained the economy, not the rich. Business self-regulating had not been successful and people were even saying that just maybe their lives were better in the apartheid system.
Ms Mavuso said the short answer was that business was in the business of profits but, through policy and regulation, government had to steer the country in the right direction. No constituency could be left to do as it pleased. Business had done what came naturally to business. The role of government was to create conditions for people to prosper. In the apartheid era, they had solved the problem of the poor Afrikaner. They had done that in 40 years. Did the democratic government understand the problem statement when it came into power? She did not think so and that was why the country was sitting where it was 25 years into democracy.
The Chairperson thanked Ms Mavuso for her spirited input and engagement.
The Chairperson welcomed the team from the African National Congress (ANC).
African National Congress submission
NEC member and Acting Treasurer-General, Dakota Legoete, led a delegation from the ANC consisting of Febe Potgieter-Gqubule, General Manager, and Coordinator of the National Working Committee and the National Executive Committee, Andries Nel, parliamentary Chief Whip Pemmy Majodina, and Member of Parliament and former Chairperson of the Ad Hoc Committee on Political Party Funding, Vincent Smith.
Mr Legoete introduced the ANC as a party that contested elections but was also a national liberation movement. He stated that the law on PPF reflected the values of the ANC. The law was a practical expression of the ANC’s commitment to the constitutional values of fairness, equity, accountability and transparency that would deepen democracy, protect the sovereignty of the country and usher in a new culture of transparent funding for political parties. The ANC would support the IEC to successfully implement the Act and Regulations at the earliest possible time but urged the Commission to consider what it would take to successfully implement the draft Regulations by addressing issues of IEC and parties’ capacity, the practicality of systems and requirements and the need for education and training for parties, the public and donors.
Mr Legoete informed the Commission that the ANC would be using some aspects of the legislation to better manage some of its internal democratic processes.
Ms Febe Potgieter-Gqubule raised some practical considerations. Parties relied overwhelmingly on volunteers who raised funds at every level. Many of the donations were literally hundreds of thousands of small donations in kind and nominal cash. Branches raised funds for their own needs and the ANC had around 4 700 branch bank accounts at local level for the funding they raised but they could easily be linked to the national account. Funds raised could be captured and aggregated nationally to see if any large donors were approaching the R100 000 disclosure threshold. It had not been the intention of parties in Parliament to regulate those donations, but the intention had been that big donors and foreign donors should be disclosed and limited to curtail undue influence. Donor uncertainty about disclosure and the obligations on them might affect funding and parties were already underfunded. Democracy was not cheap.
Mr Andries Nel presented the conclusions and proposals. He made nine broad points:
- Regulations had to give effect to PPFA and not go beyond.
- Regulations had to recognise different realities and challenges faced by political parties.
- The IEC had to avoid unimplementable legislation.
- Legislation should respond to the regulatory impact assessment.
- The IEC should avoid an overly complex system that discouraged donations and drained public resources into compliance.
- Legislation had to be implemented as fast as possible but as slowly as necessary.
- The introduction of the legislation required careful coordination and education.
- The IEC should develop a PPFA roadmap and implementation plan.
- Party funding should be increased to allow for implementation.
Finally Mr Nel presented five specific proposals:
-The MPDF should allow tax breaks and anonymity should not be complex to implement.
-Parties should disclose all donations above R100 000 but not be expected to aggregate small donations in cash or in kind from branch level.
-Reporting periods should be once every three months, with a 90 day time period to report.
-Reporting of donations, membership fees, income, should be done at national level, after provincial and regional reports.
-Disclosure requirements for donors should be simplified and without complex declarations on forms. IEC could investigate specific cases and complaints as needed.
Mr Legoete informed the panel that the whole team was ready to respond to questions of clarity.
Commissioner Pillay stated that it was accepted that the target of the legislation was not the buckets of chicken or the tents. The target was the transactional nature of politics. Vote-buying was the issue and that was in the domain of the political parties. That had brought about the legislation. What would political parties be doing to curb vote buying, vote rigging and the transactional nature of politics? Secondly, the Commission had heard Mr Moosa say that it was easy to disclose financial information. The DA and the ANC said that it was very impractical. Was there value in getting disclosure of that level of detail? Was there another way of getting the same level of scrutiny? And a question of fact: Was it easy to do or not?
Commissioner Pillay worried that in SA, at that time in the history of the country, one talked rights but did wrongs – so how did one fix that gap?
Ms Febe Potgieter-Gqubule agreed with the Commissioner on the core objective of the Act. As far back as 2000, the ANC had been worried about the role of money in politics. To address the transactional nature of politics was through legislation like that before them that allowed for thresholds and disclosure and, secondly, by managing the situation within parties. A week previously, the ANC had taken a decision to look at rules for lobbying within the ANC for positions and that would include funding for lobbying. The ANC was committed not only to the legislation but also to looking internally at regulations to manage that approach. It was not going to be easy but the situation had to improve. It was not a problem unique to SA but an international problem
Ms Potgieter-Gqubule responded to the second question about the ease of disclosure at branch level. Valli Moosa had spoken about how a clever young person could do that, but one had to have a system at branch level to account for all the small donations. She agreed the intention of the Act was not to outlaw those donations but it required parties to, on a regular basis, provide all ANC bank accounts, including the 4 700 branch accounts to track donations and then disclosing if donations could be aggregated to the threshold. The obligation on political parties to supply bank accounts at all levels to sub-regions as well as disclosing donations in kind was one way of tracking to ensure that there was no unwarranted interference. The ANC was concerned that the regulations should not discourage the spirit of volunteerism.
Commissioner Love reminded the presenters that the schema of the Act required that the Commission would be receiving truncated bank account statements. Political parties had to provide the Commission with an audited account for the entire remit of however many accounts the party had. The ANC was saying that it was hard but had not suggested an alternative. The lift scheme and sandwich did not need to get reported but the point was if sandwiches were provided every day for every member of a branch, there was an issue of scale. Political parties had to be able to disclose that. What was the alternative to the current schema?
Commissioner Love recalled that Mr Moosa had said that political parties had to up their game. How did that sit with the ANC’s understanding and longer term capability? Mr Legoete had mentioned the issue of a roadmap so that necessary measures could be put in place but what did ANC see as necessary ingredients in a roadmap?
Andries Nel said that, in terms of the last point, the ANC envisaged the Commission sitting with political parties in the National Political Party Liaison Committee, or whatever appropriate forum, to tell the political parties what capacity would be needed to successfully implement the legislation. Every party might approach the matter differently but there should be an opportunity for each political party to present its situation. For example, the ANC had 4 700 branches and some branches opened more than one account, sometimes each time a new Committee was elected. Those accounts were not centrally controlled. The ANC would have to take stock of all accounts and would have to link all the accounts centrally. The Treasurer-General of the ANC would have to be given permission by the bank to get access to all accounts which was currently not legally the case as they had been set up by independent signatories. It would take the ANC six months to a year to consolidate all the accounts. The appeal was to work through those issues. For that reason, the party did not want a big bang approach where the focus was on non-compliance.
Mr Vincent Smith addressed the issue of what went through bank accounts. The Act and the Regulations made it obligatory for audited financials and an auditor would not append a signature to an audit if he or she did not know the state of the organisation at all levels. He believed that it would be covered there. The difficulty was around the frequency. It was not possible to do it monthly but it was doable annually. Also, audited financial statements could not be presented one month after year-end. Nowhere in the world was that expected. Parties would require six months to present audited accounts and that would cover all issues of disclosure by the ANC.
Commissioner Love indicated that the Commission had set up a liaison committee and practicalities should be addressed in the liaison committee but maybe there was also a need for one-on-one meetings with parties. There were certain regulations on the purview of the MPDF but when it came to the Representative Political Party Fund, that would have to be driven by compliance with the PFMA and might require monthly or quarterly audits. Was the ANC clear about that?
Ms Potgieter-Gqubule confirmed that the ANC understood that and would be happy with quarterly reports.
Commissioner Masuku asked for confirmation that a branch had complete autonomy to open its own accounts and transact. However, he noted that Mr Smith had said that the audit would have a mechanism of oversight.
Ms Potgieter-Gqubule said that the ANC Treasurer-General had authority over all bank accounts but he or she delegated that authority to branches and regions because the finance staff was too small to administer thousands of accounts. The intention was not to have a bloated bureaucracy but a decentralised model. There was a process of oversight but the ANC needed time to build up the branch system. Currently the 46 regions and provinces were linked. Branches accounted to their annual general meetings.
Mr Nel said that he had been a branch and regional secretary. In the engagement it would be good to go into detail of some of the realities. Political parties were not well-organised corporate structures. The ANC was largely a voluntary organisation which was the format that the party wanted, but it did have implications for doing certain things.
Commissioner Moepya noted that political parties had a fear of the intentions of the Commission but there was a challenge for the Commission that arose as a result of disclosure and the Commission needed assistance.
He said that there was a need for political parties, civil society and business to find each other. There were different expectations of the Commission, which was concerning. Civil societies said it should have been done yesterday; political parties needed time to socialise it and deal with it in a clean way. The complication was agreeing about what was in the best interests of everyone and how the Commission accounted for it going forward. The Commission did not have any interest in asking for things that it did not need. The primary focus of the Commission was managing elections but the legislation demanded that the Commission safeguarded the sovereignty and sustainability of the political parties without alienating those who were so-minded to support the political economy. The Act was alright but the challenge lay in the mechanics of doing it - that was where similar agreement was required.
Mr Smith said that the ANC shared the opinions of the Commission. Political parties and civil soc expectations had to be appeased and could not be done in a big bang moment. The legislation outlawed political party funding at legislated level and some provinces would have to repeal legislations. That process had to be allowed to happen. Democracy was an expensive process. There would be an impact on the fiscus and that could not happen overnight as the budgetary process was extensive. The ANC supported a phased-in approach in the shortest possible time, not a delayed phased-in approach.
The Chairperson thanked the ANC for the inputs. He observed that the process of taking that direction had been driven by a Committee chaired by Mr Smith and in one engagement, the Commission had raised the issue of the timeframe and when the IEC had raised the issues of timeframes and capacity, it was Mr Smith in his capacity of Chairperson that had brought the issue of urgency of implementation. Now the Commission heard that the main political parties saying that the IEC was putting regulations that were not congruent with the intentions of the legislatures. Commission would look into matters as best it could. However, key civil society stakeholders had said very clearly that that the country needed to address political party funding.
He added that the elephant in the room was disclosure, and disclosure yesterday. The country was heading for local government elections in 2021 and civil society was saying that the country could not afford to go into those elections without regulations in place and with disclosure mechanism that met the expectations of the political players as well as broader society. The Commission needed to find a balance. The Commission had been clear on the resource constraints, including financial constraints. The Commission had made that clear but it had been given the responsibility and when challenges hit the ground, the Commission found itself under the bus. The Commission had to work out what was optimal to address what the legislation required with minimal court challenges and the IEC needed help from the major political parties but the main parties did not seem to be able to help. The Commission had engaged in further detail at party liaison level. He put it to Mr Smith and Mr Nel that there was a variance between the two matters before the Commission.
Mr Legoete promised the Chairperson that the ANC would address the issue. He asked Ms Potgieter-Gqubule to respond.
Ms Potgieter-Gqubule did not want to give the impression that the ANC was not happy with the Regulations. The party welcomed the regulations. Certain aspects had not been raised because the ANC agreed with those provisions, or could live with them. In the submissions, the ANC had raised its concerns, such as the reporting of matters in kind, and she was glad that they were finding each other around that issue. The concern about the reporting period was a reasonable concern. The need to simplify issues of disclosure had been raised. She believed that that the input had been specific. The ANC believed that, for the time available to the Commission, the Regulations were solid and it congratulated the Commission on the work done.
Ms Potgieter-Gqubule stated that some issues had been raised, such as where the ANC wanted a phased in approach. The ANC would be able to offer disclosure at the regional and upper levels but with the decentralised branch level financial, it was difficult at branch level and hence the request for a roadmap. The point about the Regulations and the implications of the legislation was critical to the fabric of the country but needed to be implemented in a way that strengthened democracy in the long-term, as Valli Moosa had suggested. The ANC was looking for an approach that said the parties should start with the work, the Commission would provide a roadmap, and the parties would be able to say how long it would take. She did not see the kind of fears that the Chairperson was expressing. The ANC wanted to make it work; it had just needed to raise the issue of time required. The ANC did not want to have to ask for extensions of time as the Commission would then ask why the extension of time had not been raised at the beginning of the process.
Mr Smith stated that the other reality that the Committee had to look at was the IEC capability and especially the unit to deal with enforcement. The ANC was cognisant that the IEC could not implement yesterday and it was happy to give the IEC the space to get itself organised. He knew that the Head of the Unit had been appointed just the previous day. It was the same with political parties. The ANC was willing to adapt its policies and do what was necessary but everyone should be given time to do what was necessary. He did not, personally, think that the IEC was capacitated at that point.
Mr Legoete said that even though the ANC was a movement that was built out of the blood and sweat of its forebears, currently it was destroying the movement with money and patronage. So the regulations, including the ANC’s own internal regulations, in terms of who should ascend to leadership in the movement, were going to be important. The ANC could not afford to have anyone ascending to the highest office through blood money or through the influence of money. The ANC had agreed to review its ‘Through the Eye of the Needle’ document and would also try to regulate how individuals were going to do their campaigns and how to fund them going forward The ANC wanted to regulate even internal funding. It did not want to bash the regulations but wanted regulations to be practically phased in.
He noted that in April all legislatures with Party Funding Acts had issued budgets to political parties in provincial Legislatures. The Act said that had to stop and so many things had to change. But the ANC was in full support of the Act and the Regulations and was confident that they would assist in protecting SA’s democracy and sovereignty from other countries and intelligence forces. There were no ifs or buts from the ANC’s side.
Mr Legoete added that democracy was not cheap and the national fiscus had to assist.
The Chairperson thanked the ANC for its input but the IEC still had processes to be followed and it would continue to engage. At the end of the day, the devil was in the detail.
Information Regulator submission
The Chairperson welcomed Adv Pansy Tlakula, the Information Regulator. She was accompanied by
Adv Lebogang Stroom-Nzama, a full-time member of the Information Regulator (IR).
Adv Tlakula thanked the IEC for the opportunity to engage. She had just two areas that she wanted to comment on as they fell within the mandate of the Information Regulator. She would first deal with the impact on the Promotion of Access to Information Act (PAIA) and the second input by Adv Stroom-Nzama would deal with how the Protection of Personal Information Act (POPIA) should have an impact. They were dealing with two rights: the right to access of information and the right to privacy.
The IR comments on the Regulations were a continuation of its inputs into the legislation. The IR welcomed the Act and the Regulations as it was an improvement of the country’s democracy.
Adv Tlakula said that PAIA and POPIA should be taken into consideration in the interpretation of the Political Party Funding Act (PPFA) and its Regulations. Section 3(5) of the PPFA provides that a contributor to the MPDF may request that his name and the amount of the donation not be made known. The IEC has prescribed the manner in which that request could be made in section 4(2) and on form PPR1. Regulation 4(3) prescribes the factors which the IEC must consider in making a determination for non-disclosure. Those factors included: “any other relevant the Commission considers necessary, taking into account the purpose of the Act.”
Unfortunately, the PPFA did not expressly state the purpose of the Act but the purpose could be deduced from the Preamble which provided, among others, that the principle of transparency in the funding of political parties lay at the heart of the legislation. Moreover, the legislation had come about as a result of the Courts declaring PAIA unconstitutional to the extent that it did not provide for the disclosure of funding to political parties. The PPFA and its Regulations could only have meaning if it drew its inspiration from PAIA. PAIA provided, amongst other things, that despite all the grounds stipulated for the refusal of information on a public or private body, the information officer of a public body or a head of a private body must grant access to the record of that body if the disclosure of the record would reveal evidence of a substantial contravention of, or failure to comply with, the law and the public interest in the disclosure of the record clearly outweighs the harm contemplated in the provision in question. (Sections 46 and 70 of PAIA).
The IR said that in making the final the decision not to disclose his or her identity or the amount of the donation, the IEC would have to determine whether the public interest in disclosing that information outweighed the harm contemplated in the PPFA. If it did, the IEC had to disclose the information. The public interest override was one of the factors that would have to be taken into account when the IEC made a final determination in deciding whether or not to disclose the person’s identity or the amount of the donation.
The IR proposed that in Regulation 4(3), the IEC should add words indicating the factors which the Commissioners had to take in considering disclosure, and those should include any other factor, including public interest. The public interest override was essential otherwise everyone would be able to hide under the cloak of non-disclosure, and opaqueness might be built into the Regulations. The declaration of PAIA as unconstitutional had led everyone to that point.
Adv Lebogang Stroom-Nzama, addressed the impact of POPIA on the PPFA and the Regulations. POPIA defined a responsible party as a public or private body or any other person which alone or in conjunction with others determined the purpose of and means for processing personal information. The IEC, as custodian of the Act, fulfilled the definition of a responsible person. Likewise political parties are deemed to be responsible persons in terms of POPIA. The argument was based on the premise that political parties would process personal information of donors, and donors were considered data subjects in terms of POPIA. Both IEC and political parties had to comply with the eight conditions of lawful processing of personal information in Chapter 3 of POPIA.
The eight conditions were:
2) Processing Limitation
3) Purpose Specification
4) Further processing limitation
5) Information quality
7) Security Safeguards
8) Data Subject Participation
The Information Regulator had looked at forms PPR1, PPR4, PPR6 and PPR8 and was of the view that they might not comply with the conditions for lawful processing, especially conditions 2, 3 and 4. Adv Stroom-Nzama paused to mention that the IR was of the view that the IEC should make that decision because it was the one requesting that personal information. Was it excessive or not? The IR could not make that determination for the IEC. The IR could not say whether they were asking for too much data but could say that must adhere to conditions 2, 3 and 4 of POPIA. She also cautioned the IEC against collecting excessive information as the IEC had to protect and safeguard that information.
The Chairperson thanked the IR for the well-considered inputs on PAIA and POPIA.
Commissioner Love asked Adv Tlakula about the issue around public interest. Once it had been included, would it be something interpretative almost in a judicial sense because there was no absolute? Did Adv Tlakula think that making that decision in the first instance would or would not be possible?
Adv Tlakula agreed that in taking the initial decision, the IEC would have to take into account the public override. There were definitions of public interest and standards that had been developed internationally. They were important and would save the IEC from making decisions that were not in line with the promotion of transparency. The fear that the IR had voiced to the PPFA Ad Hoc Committee was that the confidentiality clause would defeat the purpose, but if it put in a public interest override, it might save the Act. Otherwise donors could give reasons for not disclosing their identity.
Commissioner Love thanked her for confirming the interpretative role, subject to review. Regarding POPIA, Adv Stroom-Nzama had spoken to the issue of consent for retaining information. She asked if a donor understood that giving a donation was subject the PPFA and that the act of giving had to be disclosed, whether that would that be seen as giving consent. The donor and the political party would complete a form. Would that be seen as giving consent?
Adv Stroom-Nzama stated that the IR was still struggling with the interpretation of consent. It was a very complex principle in law. POPIA defined consent but there were different modes of consent. In POPIA, consent meant any voluntary and informed expression of will in terms of which permission was given for the processing of personal information. In the POPIA Regulations, it stated that any form had to have a statement which expressly stated that the person gave consent.
Commissioner Love asked about the reasonableness of the retention of information which related to the intent and the duties that the Commission had to fulfil. If the Act said that records had to be retained for five years, then the records could be retained for five years. However, if the IEC decided to change the retention period to ten years, that would be a problem. Was that a correct interpretation?
Adv Stroom-Nzama stated that section 14 of POPIA dealt with retention and that it was good that the period of retention was included in the Act. After five years, the information would have to be destroyed, deleted or de-identified.
Commissioner Moepya took the warnings about a number of the forms seriously and the IR was very clearly raising the issue that the IEC might, inadvertently, over-regulate. In form PPR6, the IEC wanted one to indicate that a donation was being made, in-kind, or whatever it was. However, the IR was suggesting that there might be an over-reach. The discussion the IEC was having was that on the one hand civil society was seeking disclosure of who was giving the donation, and on the other hand, someone was donating who did not want to disclose his identity, and political parties said the IEC should not alienate the donors. The issue was disclosure. There was no intention of over-regulating. The IEC just wanted to be responsible about information. Within the hearings there was consent that the IEC might over-regulate but there were also views that inadequate regulations would hide precisely what the legislation sought to expose.
Adv Tlakula stated that the Commission had a very difficult task of balancing the right to information against the right to privacy. The IR had deliberately and strategically come to the hearings with the intention of not telling the Commission what was excessive and what was not excessive. The Commission had to make that call. The IR would not give advice because there was a chance that someone would complain about IEC in terms of non-compliance of POPIA. The IEC would then say that the IR had so advised. The Commission had to look at the forms and determine whether they complied with all the conditions.
Adv Tlakula warned the Commission that it was taking on a huge burden in terms of ensuring cyber security. Data breaches were very real and the IEC would have to ensure that sensitive personal would not be compromised because the fines were very high for those who allowed details to be exposed. Top cyber-security measures would have to be put in place. She was sounding a warning.
The Chairperson, jokingly, asked Valli Moosa if he could see the Constitution at work.
Commissioner Love stated that the object of the Act was transparency. While the IEC was hoping that the bulk of people who would be giving donations and who were sitting in relevant positions in political parties would be scrupulous and honest and happy to be transparent but, in life, that was not always the case. Enforcement was an issue. If the purpose of the Act was to ensure transparency, the purpose of the enforcement was to ensure that the transparency was not breached. It would be in line with the principle in an inverse way. What was the opinion of the IR on that understanding?
Adv Tlakula replied that the point was the need to balance privacy and transparency.
Commissioner Pillay thanked the IR for the helpful input. She had noted that there was additional legislation to be checked. Two themes had underpinned the Regulations: one of discretion, and the other of onus. The IEC was trying to regulate so that the discretionary powers of the bureaucracy were limited to minimise the range of disputes that could arise internally and compromise the independence of the IEC.
When the rule says one might vote only once, the onus was put on the voter to vote only once. Could that principle be transferred? Talking about public interest was a loaded question because one was not only importing law, but also importing morality which could shift from one community to the next. The IR had mentioned that there were ways of standardising and minimising discretion if the Commission indicated what violated the public interest. Would it help if the public interest component was broken down to particular ‘do’s and don’ts’ so that the bureaucracy could take a tick box approach?
On the question of onus, Commissioner Pillay stated that in keeping with the IEC strategy of shifting the responsibility to the donors and political parties, the IEC wanted them to certify the information provided in some way so that the IEC was indemnified. Would that meet the requirements of the IR? She was not asking for advice!
Adv Tlakula said that she would answer to the public interest definition. She had seen legislation that referred to public interest stating that it could be defined in a particular way and then gave examples. That could be done but to leave the Regulation as “any other factor” was too vague and left it open to subjectivity.
Adv Stroom-Nzama referred Commissioner Pillay to Condition 8 in which an individual had the right to ensure that the responsible party had the correct information. However, she did not think that the IEC should push the onus onto the data subject as the responsible party had certain obligations.
Adv Tlakula reminded the Commission that POPIA took precedence over any law that dealt with personal information.
The Chairperson said that there would be a one-on-one engagement and thanked the IR and her office for making the public submission. The process of the dialogue was in the national interest and it was equally important for the IR to explain her position in relation to the legislation. He recalled that Mr Moosa had located the legislation in the historical context of unfinished business of the Constitution. He appreciated the inputs which had also enriched the Commission’s understanding of the role of the Regulator. He added that, hopefully, there might be some advice forthcoming.
African Independent Congress (AIC) submission
The African Independent Congress delegation was led by National spokesperson, Aubrey Mhlongo, while Researcher and Policy Developer Lebogang Mokoatle made the submission. The Acting Treasurer, Margaret Arnolds, completed the delegation.
Mr Mokoatle stated that he was not going to repeat what others had said the previous day. The AIC had participated in the deliberations on the Political Party Funding Bill. In the National Assembly debate, the AIC had said: “The PPF Bill is a necessary intervention to root out corruption, to address limitations replete in the Public Access to Information Act and to deepen multi-party democracy.”
Reg 4.1 allowed the Commission to return any donation made if the Commission suspected the money came from an unapproved source. Mr Mokoatle suggested that that regulation had a number of limitations. All that the Commission had to do was to plead suspicion. In the view of the AIC, that regulation contravened the audi alteram partem rule because the contributor was not given a chance to be heard. Those powers would stifle multi-party democracy as the small parties would be hit hardest. To allow the accused contributor audi would be in line with the South Gauteng High Court ruling that the audi alteram partem rule was a fundamental right under the rule of law.
Regulation 16 dealt with any person who made a false statement or gave false particulars in any manner or in documents, was liable to a specific sanction. However, neither the Act nor Regulations provided a definition of a person. The Commission had to look into that.
The Chairperson thanked the AIC for the concise but informative input. He pointed out that the technical team was noting the input.
Commissioner Love stated that the Commission had attempted to define a person in the Regulations, although it was subject to review. Had he looked that definition and did he have any comments?
Mr Mokoatle said that he had read the Regulations but he could not recall reading a description of any person.
The Chairperson noted the point about the funds being withheld if they were suspicious. It was not about the size of the party but prevention of a suspect entering the political water stream. When something was suspect, if one did not prevent it, it might be too late. He asked the AIC for a mitigating solution that would not allow illicit funds to enter the system.
Mr Mokoatle stated that the principle was sustained to say that transparency should be deepened and there should be balances and checks. The IEC’s argument was compelling but AIC was suggesting that the contributor should be invited to respond to the IEC’s consideration of not accepting the donation. The MPDF was designed to assist all parties and it particularly impacted on small parties that found themselves in the cycle of underfunding.
The Chairperson thanked the AIC for its contribution.
Mr Ghalib Galant, Deputy National Coordinator, accompanied by Lundi Mazizi a member of the National Working Group, represented Right2Know.
Mr Galant said that the oral submission would amplify what was in its written submission and address some subsequent questions. Right2Know welcomed the signing into law of the PPFA as it had long been pushing for a long time. Right2Know also welcomed the commitment in moving swiftly with the Regulations so that the Act could be implemented.
The Constitution gave political parties a unique and almost sacred duty to make democracy work. That role required funding to ensure democracy was delivered to the doorstep of the average citizen. Five times what the fiscus gave to political parties came from private donors and the relationship between money and policy had been shrouded in secrecy in which deals were struck, policies developed and tenders awarded. The will of ordinary SAs had been outbid by those with deep pockets. The private donors had also created the inequality of political parties. The secrecy had allowed corruption to thrive and had undermined the value in SA’s democracy and electoral system. He believed that the need for transparency was also a greater step towards political transparency and creating a more equal political playing field. The IEC had to get it right in the implementation and that was why the Regulations were so important.
The public had a right to know who was bankrolling a political party. The 2019 elections had been missed and it was 18 months to the next important elections, the local government elections. The Right2Know Campaign had made some substantial proposals in its joint submission with My Vote Counts.
Mindful of the lack of trust in the political system, it was important that the principle of proactive disclosure should be adopted. In Regulations 3(3) and 3(4) there was a whole process regarding non-disclosure. The public needed to know how many requests for non-disclosure were received, the break-down of the number of requests approved and those that were rejected, the monetary value and the cumulative monetary value, as well as the reasons for requesting non-disclosure and the reasons for acceptance or rejection by the IEC. Considering the Court’s displeasure at the lack of access to information, Right2Know believed that how the information was made known was important. There had to be proactive disclosure and proactive reporting. The onus should not be on the public to request information. The record of disclosure would be made available at provincial offices but access to those nine offices was a challenge so Right2Know proposed that the information be made electronically available on a website, and searchable.
Resourcing of the implementation plan: Mr Galant noted that the roll-out was planned over three years with sanctions being put in place at a later date. While everyone was anxious for the process to get started, enforcement was a crucial aspect. Kenya had introduced party funding regulations but it had not been implemented. The amount of shillings spent on the last elections ran into billions and the outcome has been that a political figure is arrested on a daily basis for party funding malfeasance. That was a greater threat to democracy.
Right2Know believed that the IEC needed forensic investigators and skilled staff and the IEC should seek assistance from sister organisations in government. R2K was interested in knowing what partnerships would be developed. It was important that the fiscus properly funded the IEC’s function to ensure adequate resources, financial and human. Mr Galant noted that a politician had spent over R400 million on an internal election campaign while the cost of getting addresses for every voter had amounted to less than half that, R200 million.
Right2Know was also interested in protection for whistleblowers. The proposed Regulations made no mention of whistleblowers. The Regulations also made no reference to how the IEC would deal with foreign entities that were permitted to offer support in terms of foreign training, etc. How was that to be controlled? Section 10 of the Act seemed to regulate the public aspect of political party funding but what about intra-party funding? Right2Know suggested that, given how much money was involved in intra-party funding, those funds should also fall within the rubric of the legislation.
Right2Know commended the IEC on the regulations and appreciated the public submission process.
The regulations were silent on the content of the first submission of information by political parties. Perhaps for the first submission, it could be a 12-month report and retrospective. Mr Galant was keen to find out what had happened to the R1 million given to a political party, which it had then wanted to give back but could not because the money had already been spent. The Act stated that no money could be given by SoEs but where was the line between public monies and private monies considering organisations such as the PIC, which had public money heavily invested in the individual who had made the R1 million donation. Would the Regulations be adequate to ascertain the difference?
Commissioner Love stated that earlier in the day there had been some thinking about some of the questions that Mr Galant had raised. Political parties had indicated that for them to get to the point of being able to provide the information required of them, they had to put systems in place, so retrospectivity was not possible. Those challenges were real. Besides which, the law was generally averse to retrospective requirements. She was not clear why he wanted retrospectivity.
Commissioner Love noted that Mr Galant had mentioned section 10 and asked if that would that apply to internal party processes. He was answering his own question as it was implied that if one was elected to a position in a political party, it was for political purposes. Political parties did not have mascots so she did not know why he was asking that. In fact, political parties themselves were looking at those internal funding mechanisms. Did he have a different approach?
As for a policy on whistleblowers, did Right2Know have any suggestions on what the key elements of such a policy would be?
Mr Galant replied that his call for retrospectivity was a reaction to some of the things that had been reported but he understood the reluctance to request retrospective reports. He also accepted that the law was reluctant to allow retrospective reporting. What period was the first report from political parties going to cover? In March 2019, he had been trying to get insight into how much had flowed into the election process as there was no past history of how much money actually sloshed around in political processes. He hoped it would become more clear in the future.
The question of the internal funding arose because the thinking about the Act had been about how political parties themselves ran elections and campaigns before an election. In the past few months, there had been concern about internal monies in political parties so he was pleased to hear that it was in the ambit.
Right2Know was concerned about the lack of protection for whistleblowers in SA generally as well in the Act and how Regulations could provide for the protection of whistleblowers. He wanted to highlight the vulnerability of whistleblowers and how even state organs did not treat whistleblowers correctly or in line with democratic principles. Where huge sums of money were involved, things became dangerous and people lost their lives. The PetroSA situation was one example. The protection for whistleblowers was critical.
The Chairperson thanked Mr Galant for the input.
The Chairperson requested Mr George Mahlangu, the newly appointed Chief Executive of the Political Party Funding Unit, to make a few remarks at the end of the public hearings.
Mr Mahlangu expressed his deepest gratitude to every person and organisation that had participated in the public hearing on the Regulations for the Political Party Funding Act. Since publishing the draft regulations, the IEC had received 4 300 submissions from civil society organisations to political parties and public sector organisations.
The Commission welcomed the participation and support shown over the past two days. The central theme of the public hearing had been overwhelming support and a desire to see implementation as a matter of urgency. That boded very well for the partnership that would be needed with civil society and the business community and others to implement the legislation to support democracy in South Africa. The Commission appreciated the offers of support and assistance, including the offer to develop of capacity within the Commission offered by Business Leadership South Africa and Business Unity South Africa.
The Commission would immediately review the submissions and might request one-on-one bilateral meetings with some presenters.
Without putting a specific date, Mr Mahlangu said that he was envisaging that the law would be operational by the time of the local government elections in 2021.
Mr Mahlangu noted the milestones achieved by the Commission since the signing of the Act by the President in January 2019: the drafting and publication of the draft regulations, an extensive public participatory process, securing of start-up funding from National Treasury, and the recruitment of the Chief Executive – himself.
The current processes included the finalisation of regulations, forms and format of disclosure; the online system of reporting by donors – there would be no manual system; the establishment of a Liaison Committee with Political Party Treasurers so that everyone would be on the same page. Training would be done after the finalisation of the Regulations. An extensive communication strategy was being developed and the Commission was building capacity to achieve the goal of what the legislation sought to achieve.
Mr Mahlangu added that all submissions would be available on the website of the IEC.
The Chairperson thanked everyone for the impressive experience for the Commission which was seeing democracy evolving and history in the making. Valli Moosa had pointed out that what was before the Commission was unfinished business of the Constitution. After 25 years of democracy the country was demonstrating that its commitment to democracy. He thanked Mr Mamabolo and his team that had made the public hearing possible. He thanked the team for ensuring that once again, the IEC delivered. He thanked the Commissioners because it showed once again that they were a team-driven organisation.
The Chairperson particularly thanked the Vice-Chairperson, Commissioner Love, who was the Chairperson of the sub-committee on the funding of political parties and whose hard work had made it possible for so much ground to be covered in the hearing. He thanked each of his fellow Commissioners: Judge Pillay, Dr Masuku and Mr Moepya. He appreciated their sterling work. The IEC remained committed not to fail the nation and would find the necessary balance to implement the Political Party Funding Act.
The hearing was adjourned