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

COSATU and its affiliates express strong support for the Public Investment Corporation (PIC) Amendment Bill, aiming to address concerns of state capture, accountability, and transparency in the management of the PIC, which holds workers' investments.

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

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  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.

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