Labour federations and unions move to secure PIC funds
The country’s main labour federations and trade unions have agreed on a number of measures to safeguard funds managed by the Public Investment Corporation (PIC).
The resolutions, which were presented to Parliament on Tuesday, could be developed into a bill by the standing committee on finance before the end of 2017 after it received a buy-in from all parties in the committee.
"Consideration should be given to engaging with National Treasury on the processing of the legislative amendments," read the committee meeting’s resolutions. These include the representation of trade unions of the Government Employees Pension Fund (GEPF) members on the PIC board.
Labour has been up in arms for months over the use of public-sector workers’ pension funds for investment purposes by the PIC following suggestions by Finance Minister Malusi Gigaba that it could be used to bailout struggling state-owned enterprises.
According to the list of resolutions seen by Business Day, the PIC Act of 2004 would need to be amended to ensure the inclusion of trade union representatives. Union federation Cosatu parliamentary officer Matthew Parks said another legislative reform was needed to ensure the GEPF could not be moved from the PIC.
The move was necessitated by calls and proposals in the committee by the Federation of Unions of SA (Fedusa) that GEPF move its investment portfolio to private fund managers. Parks said the federations and unions, which included Solidarity, rejected the move and wanted to ensure, even years down the line, that this option was not viable.
"The law is silent on moving the GEPF from PIC right now; we said there should be a law saying the GEPF must remain in the PIC to ensure sustainable investment in developmental ventures," he said.
Fedusa general secretary Dennis George said the proposals made by the labour formations would go a long way in ensuring workers’ pensions were not only protected, but that the PIC used its funds in programmes in the country’s best interests.
Labour would, however, have to wait another day to hear if their opposition to the deputy finance minister chairing the PIC board would also be incorporated into the changes. This was despite the committee admitting that the PIC memorandum of incorporation does not require that the board chairperson be the deputy minister of finance.
"Contradictions were raised about this, that [PIC] cannot account to the finance minister, and yet you are chaired by the deputy minister of finance," Parks said. The committee would review the resolutions at a November briefing where further decisions would be taken.
Meanwhile, Corruption Watch has written to Gigaba requesting that it be allowed to attend the PIC annual general meeting on November 17. The civil society organisation said it was concerned about reports of instability and in-fighting in key governance structures of the PIC.
"This appears to be rooted in rumoured corruption and in the nature of the relationship between the shareholder, the board and the management of this key institution," the letter to Gigaba read. "This has given rise to fears relating to the possible misuse of state pensions."