Labour federation Cosatu was reluctant on Tuesday to take a side in the debate over whether the tradition of appointing the deputy finance minister as chairperson of the Public Investment Corporation (PIC) board should continue.
Cosatu parliamentary co-ordinator Matthew Parks told the PIC Inquiry that many state-owned entities (SOEs) had failed under independent chairpersons. The inquiry, chaired by retired Justice Lex Mpati, resumed public hearings in Tshwane on Tuesday after a three-week break.
Parks said Cosatu does not believe that appointing an independent chairperson will be a panacea to the PIC’s challenges as many SOEs with non-political appointees were mismanaged during former president Jacob Zuma’s leadership.
“We’ve seen it many times in our SOEs. We’ve got private sector people on board and they’ve been the worst thing ever,” he added.
Parks noted that some SOE leaders appointed from the private sector had been successful but Cosatu is more concerned about ensuring labour representatives serve on the PIC board rather than how the chairperson is appointed.
The PIC Inquiry, tasked with investigating allegations of corruption and mismanagement at the R2-trillion asset manager, has heard that the tradition of appointing the deputy finance minister as board chairperson exposes it to political interference.
The PIC is the continent’s largest asset manager and most of its funds are managed on behalf of the Government Employee Pension Fund (GEPF).
Commissioner Gill Marcus asked Parks about the process of appointing the chairperson.
“To me, it’s much more a question than whether it’s a deputy minister and can you hold them accountable. Are your laws strong enough to make that accountability possible? Is there clarity on the role, and function, and skill, and expertise that’s required in a chair of a body of this nature?” she said.
Parks said there could be benefits to having a political appointee lead the PIC. As a Member of Parliament, it may be easier to hold the deputy minister accountable.
He said PIC leaders were unresponsive earlier in 2019 while Cosatu was calling on the asset manager to help save the embattled Edcon group. Mondli Gungubele, who was PIC chair and deputy finance minister at the time, was helpful in addressing the urgent situation, Parks said, noting that the requests were within the law.
Parks said workers have lost faith in the leadership of the PIC and it was important for labour representatives to be appointed to its board. The PIC Amendment Bill, which has been passed by the National Assembly and National Council of Provinces, will see trade union representatives appointed if it is signed by President Cyril Ramaphosa.
“Our approach right now would be to plan for the worst, not to rely on trust, or friendship, or comradeship, especially when it comes to workers’ money,” said Parks.
“I think we raised it much more firmly in the last two years when we saw what was going on and I think for workers it’s a very emotional debate that workers are paying thousands of rand every month, hard-earned wages is going here, but they’ve got no say, no voice, no eyes and ears how it’s being managed,” he added.
The PIC is mandated by the GEPF to make investment decisions on behalf of pensioners. While labour representatives sit on the GEPF’s board, Parks said it had been difficult to hold the asset manager accountable in recent years.
Parks said the labour sector was worried as reports emerged of alleged dodgy PIC investments and claims the state wanted to use PIC funds to bailout SOEs.
“We were in a very difficult and dangerous situation, chair. Members were almost on the verge of rebelling. They thought we want to pull out,” he said.
“In short, our view, chair, is that the PIC is basically workers’ money. We have been quite alarmed by what we’ve seen in the newspapers over the last few years about looting and mismanagement at the PIC.” DM
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