COSATU Submission to the IEC: Political Party Funding Act Regulations 1 August 2019

1. COSATU Submission to the IEC: Political Party Funding Act Regulations1 August 2019

2. Objectives • Welcome Political Party Funding Act & Regulations’ progressive objectives; • Crisis of corruption and capture; • Crisis of public faith in parties and political system; • Many ruling parties today in South Africa at different levels; • Fears of intimidation; and • Important intervention by Bill.

3. COSATU Supported Clauses in Act & Regulations • Equitable and proportional representation based party funding; • Prohibitions of funding parties by: • Foreign government and state agencies; • South African state organs and state owned companies; and • Proceeds of crime.

4. COSATU Supported Clauses in Act & Regulations • Party funding statements to include all donations and be subject to auditors; • Powers of Commission: • Access to all party funding information; • Powers to subpoena and sanction; • Party responsibilities; • Commission reports to Parliament; • All donations.

5. COSATU Opposed Clauses in Act • Principle of expanding public funding of parties in climate of austerity, service delivery, and state and SOE job cuts and as a reward to parties not to be corrupt; • Section 9 Disclosure of donations to political party; • R100 000 threshold.

6. COSATU Proposed Amendment to Schedule 1 of the Regulations Section 19 (2) (a) provides for a sentence of up to 5 years for offenders violating Sub-Section (1) (a) of the Act. • Yet this does not appear to have been captured in the Regulations’ Schedule 1. • Instead the sentencing provisions have been reduced and limited to 2 years in the Regulations.

7. COSATU Proposed Amendment to Schedule 1 of the Regulations • Amend Schedule 1’s penalty provisions to be in line with the penalty provisions of the Act: • Sentencing provisions for offences under Sub Section (1) (a) must amended to be in line with the Act’s provision of up to 5 years.

8. COSATU Proposed Amendment to Section 4 (3) (e) of the Regulations Section 4 (3) provides for: “The Commission shall make a final determination in respect of such request, after taking into consideration the following– (a) The reason for the request; (b) The amount Donated; (c) Confirmation from a recognised financial institution of the Contributor’s bank account; (d) The source of the monies for the Donation and all supporting documents; (e) Assessment of political exposure of the Contributor, if applicable”

9. COSATU Proposed Amendment to Section 4 (3) (e) of the Regulations • There is no definition in the Act or Regulations as to what constitutes “political exposure”. • There is no cross-reference to another Act which may have such a definition e.g. the Financial Centre Intelligence Act etc. • Section 4(3) (e) is consequently extremely vague and open to interpretation and possible abuse.

10. COSATU Proposed Amendment to Section 4 (3) (e) of the Regulations COSATU Proposal: • COSATU is therefore calling for a clear and concise definition as to what constitutes political exposure to be drafted and inserted into the Act and/ or Regulations.

11. Conclusion • Support progressive objectives of Act and Regulations; • Support progressive transparency and accountability clauses; and • Support powers and reporting requirements of commission. • Remain opposed to expanding public funding of parties in light of corruption and austerity crises in state fiscus; and • Need to scrap the R100 000 disclosure threshold principle and amount.

12. Conclusion • Need to amend Schedule 1 of the Regulations to ensure the Act’s 5 year sentencing provision is provided for. • Need to provide clear legal definition as to what constitutes political exposure for persons applying for their donations not to be publicly disclosed by the Commission.