Johannesburg — Big South African companies cite corporate governance concerns for ceasing political support

COMPANY donations to political parties are a diminishing resource, according to a snap poll by Business Day, and parties fear that publicly exposing these donors will dry up the pool of funding even further.

The political landscape in SA and internationally is littered with examples of politicians who have bent the rules to accommodate rich donors.

The corruption trial of New National Party officials Peter Marais and David Malatsi, who are accused of taking money from a developer to approve an environmentally suspect golf estate project, is testament to this.

Of 19 companies surveyed by Business Day, only two donate money to political parties, and those that have ceased making political donations cite corporate governance concerns.

Of seven mining companies, four banks, two life assurers, five industrial firms, a beverage company and a technology company, only Absa Bank and AngloGold donate money to political parties although some used to donate money in the past.

Political parties are opposing a high court application by the Institute for a Democratic SA (Idasa) to get them to reveal the sources of their funding, and the response to disclosure from corporate SA is divided.

AngloGold became the first big company two weeks ago to detail its funding of political parties. The group will give R3m to four political parties over the next two years, 30% each to the African National Congress and Democratic Alliance, and 20% apiece to the United Democratic Movement and the Inkatha Freedom Party.

Absa group executive Douglas Ramaphosa says his group donates to political parties that get more than 3% of the total votes in the general election.

"As a matter of policy we are not in a position to reveal the extent of our donations to political parties without their consent," he says, especially since many political parties may bank at Absa.

It is clear that corporate SA does not speak with one voice on the issue of company donations to political parties.

In the banking sector, Nedcor, Standard Bank and FirstRand do not donate money to political parties. In the mining sector, GoldFields says it does not make donations to political parties, a practice also followed by BHP Billiton, Impala Platinum and ARMGold .

On the industrials side, petrochemical powerhouse Sasol, steel company Iscor, construction group Aveng, chemicals producer AECI and petroleum company Shell all say their policy is not to donate to political parties.

SA's largest information technology company, Dimension Data, says it does not make donations to political parties.

Old Mutual and Sanlam confirm they too do not make political party donations.

This means that although most of these companies are channelling more money than before to community and social investment political parties are seeing less of the pie.

GoldFields, for example, donated R14m to various community, education and environmental projects in its last financial year, none of which found its way into the political domain.

Even the R1,6m AngloGold is donating to political parties, represents only 10% of its social responsibility spending budget.

And the pool of party funding is shrinking too. Sanlam spokesman Frans van Rensburg confirms that the company used to donate money to political parties until 1998, but halted all funding after that.

But Van Rensburg says this policy is coming up for review in the new year.

AngloPlat spokesman Mike Mtakati says the company had donated money to political parties in the past, and is "reviewing our policy in this regard" .

Nedcor's head of corporate governance, Selby Baqwa, provides insight into the thinking behind steering clear of this potential minefield. Baqwa says Nedcor's policy is to remain "strongly apolitical", a principle which extends to funding.

"This includes projects that are specifically undertaken under the auspices of political parties," he says.

But the companies that continue to donate to political parties believe it is important that they continue doing so, as it is part of corporate social responsibility.

Absa says its funding is "aimed at strengthening democracy in the country" as a "multiparty democracy augurs well for an economically prosperous and vibrant SA".

AngloGold says it wants to "play its part in supporting the operation of the country's democratic political system".

But while most countries recognise that business provides financial support to parties, secrecy around the issue creates the possibility that companies could be accused of trying illicitly to secure favours from politicians in power.

In the absence of clear policies or rules on disclosure in SA, many companies may steer clear of donations for fear of accusations that they may be getting "backhanders" in exchange for paying for expensive election campaigns and party administration.

Idasa wants private donations to be regulated for this very reason. As Idasa's Richard Calland points out, the gap in regulation "amounts to a charter for influence peddlers and mischief makers" as "he who pays the piper plays the tune".

19 COMPANES ARE:

Nedcor, Absa, Standard Bank and FirstRand (4)

Anglo American, Impala Platinum, AngloPlat, AngloGold, ARMGold, BHP Billiton, Goldfields (7)

Sasol, Iscor, Aveng, AECI, Shell (5)

Dimension Data (1),

Sanlam, Old Mutual (2)