COSATU's Support for PIC Amendment Bill: Protecting Workers' Monies

1. COSATU Submission: Public Investment Corporation Amendment Bill12 March 2019

2. COSATU Interest in the PIC Bill • COSATU, its 16 affiliates, almost 2 million members & 10 million dependents strong support for Bill; • PIC is workers’ monies (87% GEPF, 7% UIF, 4% COIDA); • PIC owns 12.5% of JSE shares and is largest investment fund in SA and Africa; and • PIC is too large to fail.

3. Context of PIC Bill & COSATU Concerns • Explosion of state capture and looting, including at the PIC; • Collapse of SOEs due to looting and mismanagement: • Retrenchments, tax hikes and possible PIC bail outs; • Looting of pensions, e.g. Fidentia and Transnet; • PIC failure to meaningfully account to GEPF & UIF; • Need to restore trust in the PIC; and • Minister Gigaba’s address to COSATU CEC, 2017.

4. PIC Bill Drafting • 2 bills: • DA bill rejected; and • ANC bill passed overwhelmingly by SCOF and NA. • Extensive public participation processes: • More than 4 public hearings; • 2 years of consultations; • Systematic addressing of Treasury & PIC issues; • Active involvement of unions; and • Numerous COSATU concessions. • New job threats: • 10% job cuts by 2019; and • Longer term plans to cut Eskom jobs by 50%.

5. PIC Act, 2004 • 4 and a half pages Act to protect R2 trillion fund; • Ministerial appointment of PIC Board: • No union representation; • Ministerial directives to PIC: • No checks and balances; • No transparency and accountability provisions; • No depositor mandating requirements; and • No investment guidelines.

6. PIC Amendment Bill: Board Chairperson • Minister to appoint Deputy Minister Finance; or • In consultation with Cabinet, another economic cluster Deputy Minister. • ANC motivations: • GEPF is defined benefit and fiscus must cover any shortfall. • Important economic transformation role of PIC. • Political accountability and oversight.

7. PIC Amendment Bill: Board Union Representation • 3 union representatives on Board of 13: • To give workers a voice in how their money is spent; • Key anti-corruption and oversight measure; • Selected by Public Service Bargaining Council; • 2 from majority unions, 1 from minority unions; • Accountability to unions and workers; • Not dependent on Ministerial favours; • Will be subject to same criteria as all board members; • COSATU concessions; and • PSA and FEDUSA pull out of PIC stance.

8. PIC Amendment Bill: Transparency & Accountability • Regulations: • Tabling at Parliament for noting and comments; • In line with standard practise; • Annual Reports for Minister to table to Parliament: • All listed investments; • All unlisted investments; • All Ministerial directives.

9. PIC Amendment Bill: Depositors’ Mandate • “The corporation must, when investing a deposit on behalf of depositors, invest to the benefit of the members or beneficiaries of the respective depositors. • The corporation must act in accordance with the instructions of the depositors, and…seek to invest to— • Ensure its security and financial sustainability;”

10. PIC Amendment Bill: Investment Guidelines “The PIC must, as far as possible, seek to invest to— • Ensure its security and financial sustainability; • Create and protect local jobs; • Industrialise the economy of the Republic, by building the manufacturing sector and boosting exports; • Promote sustainable development; • Be in line with the Republic’s development objectives; • Strive to build a capacitated developmental State; • Transform the economy and society; or • Prioritise investments in the Republic.”

11. Resistance to PIC Bill • Beneficiaries of looting & PIC governance crises; • DA, COPE etc; • Treasury officials covertly; • Reasons: • Chair should not be DM: Finance; • No worker representatives; • Oppose reporting on listed & unlisted investments; • Depositor mandates; and • Investment guidelines.

12. Resistance to PIC Bill • PIC Commission of Enquiry: • Repeated attempts by Treasury to stop bill; • Pre-empting Commission outcomes; • Commission an extension of executive; • Executive undermining of constitutional role of Parliament; • Committee not executive bill; • Future Commission recommended amendments to Act welcome; and • Urgency of now and dangers of delays.

13. Resistance to PIC Bill • Treasury: • Was part of entire SCOF processes; • All issues addressed and included in bill; • New issues now being raised covertly; • Undermining of ANC, SCOF and NA mandate; • Fears of assertive Parliament (e.g. tax interventions); • Treasury failures to hold PIC accountable and stop looting; • Treasury drafted fatally flawed PIC Act; and • Treasury refusals to engage workers.

14. Way Forward • Kill anti-corruption PIC bill: • Amendments, reject, delays, quorums etc; • Green light to looting and anarchy at PIC; • Massive political fall out. or • Pass anti-corruption bill PIC by March 28; • Rebuild trust and confidence; • Accelerate fight against corruption; • Stabilise and clean up PIC.

15. Conclusion • Adopt PIC Bill by March 28; • No amendments now; • COSATU and workers overwhelming support; • Excellent ANC anti-corruption bill; • Key weapon to fight looting of pensions; • Need to stop PIC looting and governance mess; • Cannot afford to delay further; • Unmanageable political fall out if bill defeated; • Don’t betray workers and pensioners.