Cosatu expresses deep concerns over allegations of corruption and mismanagement at the Public Investment Corporation, urging for transparency and accountability to protect workers' pensions.
Image: IOL / File
The Congress of South African Trade Unions (Cosatu), workers and pensioners have been deeply concerned by recent allegations of corruption, state capture, political interference and questionable investments surrounding the Public Investment Corporation (PIC).
Workers paid a heavy price over the years for state capture and corruption with many losing their jobs, others robbed of their pensions and other third-party payments, public and municipal services run into the ground, and investment needed for growth shifted elsewhere.
Whilst President Cyril Ramaphosa’s administrations have made substantial progress dismantling the state capture and corruption networks that have done so much damage to the nation, we dare not be complacent nor ignore the reality, that the PIC like many other state institutions continues to battle this cancer. During the dark decade of state capture, the PIC was a prime target for these criminals to feast upon.
It is important to appreciate that despite the recent negative headlines clouding the PIC, that under the past two Boards, important progress was made tackling corruption and enhancing transparency.
Despite our concerns about some of the PIC’s investments, we commend the doubling of its asset base from R1.8 trillion in 2020 to over R3.6 trillion, a feat few other investment funds, public and private, have achieved.
It is equally critical to reassure millions of workers whose pensions and insurance funds are invested through the PIC, that their benefits are safe as these are defined benefits schemes and thus protected from stock market fluctuations and even corruption. This does not mean that we will turn a blind eye to corruption or normalise the abnormal.
PIC officials, politicians, businesspersons, tenderpreneurs and their families are warned that these monies belong to workers and pensioners.
They are Government Employees’ Pension, Unemployment Insurance and Compensation of Occupational Injuries and Diseases’ Funds. They are not a private slush fund.
The PIC’s core mandate is to ensure that public servants can retire in comfort and dignity and that workers on maternity, parental or adoption leave, or who have lost their jobs or been injured, affected by disease or even died at work, are assisted in their moment of need.
The PIC’s secondary mandate, more so given that it is the largest investment fund in the nation and continent, is to invest its funds in a manner that not only secures workers and pensioners’ needs, but also stimulates inclusive economic growth, creates decent jobs, invests in critical economic infrastructure; supports SMMEs, emerging entrepreneurs and measures to empower the historically disadvantaged, plus sustainable development.
As we seek to boost economic growth from the paltry 1% it has been stuck at for than a decade and tackle our debilitating 43.7% unemployment rate, the PIC needs to be focused on these core national objectives and not be distracted by corruption and state capture.
Cosatu intervened during the decade of state capture to protect the PIC and with the support of the African National Congress at Parliament overhauled what was then a shockingly weak PIC Act that literally provided Ministers for Finance and the PIC Chief Executive Officer a blank cheque for the board’s appointment, its investment decisions and whether or not to disclose these to the public.
As a result of Cosatu’s efforts and the support of Parliament, the PIC Act now sets clear criteria for the appointment of Board members including for workers to select three representatives through the Public Service Coordinating Bargaining Council. These were key to ensuring that people with capacity and integrity are appointed and that workers have a say in how their funds are spent.
The Act now provides a progressive developmental investment mandate to the PIC to constrain the dodgy investments that were a mark of many investments during the state capture era.
The PIC is now required to publicly disclose its full portfolio, listed and unlisted investments. This is key to institutionalising transparency, the most powerful weapon against state capture and corruption. It is worrying that the PIC has not fully adhered to this key provision of the PIC Act. The new Board needs to ensure this legal requirement is fully complied with.
With the resignation of the Board, it is urgent that Treasury, with the approval of Cabinet move swiftly to call for public nominations for the new Board and put in place a collective of persons with integrity, capacity and authority.
If the PIC is to be safeguarded from corruption, then the new Board must ensure that current investigations into the Acapulco deal and the suspended CEO be allowed to continue. Sweeping allegations of serious wrongdoing under the carpet cannot be allowed.
President Ramaphosa needs to authorise the SIU investigation into this particular deal and in fact all PIC investments with the support of the Auditor-General and the Hawks. Lifestyle audits should be conducted for all persons involved with PIC investments. These will be key to assuring workers and pensioners that the cancer of corruption will be dealt with.
Protections need to be put in place for the whistleblowers who have taken great risks to their careers and lives to report alleged corruption and state capture.
It is also important that the Board be given the necessary support by government and protected from political and any other interference.
We have witnessed politicians and other commentators flagging various legislative reforms needed to ensure the PIC is marked by good governance and clean administration. These are important.
However, politicians would do well to remember that the PIC is the custodian of workers’ deferred wages and just as Cosatu was intrinsically involved in the drafting and passing of the 2019 Amendment Act, so will the Federation insist upon participating in the drafting of any further amendments.
These amendments must build upon the 2019 reforms. Cosatu will not agree to any weakening of the PIC’s necessary checks and balances.
Cosatu and workers must and will continue to be vigilant over the PIC to ensure that workers’ monies are used to benefit workers and are protected from looting.
Zingiswa Losi is the president of Cosatu.
Zingiswa Losi is the president of Cosatu.
Image: Independent Newspapers
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