18 June 2019

South Africa: Cosatu Argues for Worker Representation On PIC Board

SA's largest trade union federation, Cosatu, has argued for worker representation on the board of state-run asset manager the Public Investment Corporation, saying this would help keep looting in check and increase workers' trust.

Matthew Parks, the federation's Parliamentary coordinator, was on the witness stand at the judicial commission of inquiry into the PIC on Tuesday.

The commission is investigating allegations of wrongdoing at the corporation, which manages about R2.2trn in investments on behalf of public servants. Hearings resumed in Pretoria on Tuesday after a three week break.

Parks told the commission that the trust of workers had been abused for far too long. "[Workers] really want to have representation on the PIC board," he said. The asset manager had failed to keep workers updated on the scope and reasoning behind its investments, he said.

While Cosatu has representation on the board of the Government Employees Pension Fund, it does not have members on the PIC's board. The PIC invests on behalf of the GEPF, as well as the smaller Unemployment Insurance Fund and a fund overseeing compensation for injury in duty.

Parks urged President Cyril Ramaphosa to sign the PIC Amendment Bill into law. The bill has been passed by Parliament. It requires the PIC to submit reports to Parliament which include all its listed and unlisted investments. It also requires the chair of the PIC to be appointed on the recommendation of the National Assembly.

Make investments public

Parks on Tuesday said all PIC investments should be made public and no senior PIC executive should be allowed to conclude investments without oversight.

Board representation for workers would provide oversight and boost trust, he said.

In the past there were fears that PIC money would be raided to bail out SOEs.

"We had a Cosatu central executive meeting meeting in September 2017 where the then-finance minster Malusi Giagbe came to us and said he cannot guarantee he will not use PIC money to bail out SOEs [state-owned enterprises]. That was at the height of state capture."

In Cosatu's 18-page affidavit, which accompanied the union's submission, it described the desire to fund SOEs via the asset manager as "provocation and lunacy".

The inquiry continues.


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