(Bloomberg) -- South Africa’s main labor group is pushing parliament to adopt proposed changes to laws regulating the continent’s biggest money manager, which oversees state workers’ pensions, to make it more accountable and give unions representation on its board.
Parliament’s finance committee is processing the Public Investment Corp. Amendment Bill, but the Congress of South African Trade Unions fears the state’s decision to appoint a commission to investigate the fund manager’s governance and operating model could derail its adoption. The commission will also consider possible changes to the PIC’s founding legislation, memorandum of incorporation and investment decision-making framework.
If the new law isn’t passed by the time the current parliament adjourns before the 2019 elections, it could take several more years for the new legislature to process it, according to Matthew Parks, Cosatu’s parliamentary liaison officer. The commission’s recommendations could be accommodated in another amendment bill, he said.
“There is not much work left to do on the bill,” Parks said in an interview in Cape Town. “If we don’t get it done this term, we must forget about it.”
The PIC oversees about 1.93 trillion rand ($134.3 billion) in assets.
Mandatory Disclosure
Cosatu, which has about 800,000 members and is part of the country’s ruling alliance, wants unions to be able to select their own representatives on the PIC board and for the fund manager to be given a “developmental investment mandate” that will require it to protect and grow workers’ money and support economic growth and job creation. It also wants mandatory public disclosure of the PIC’s investments, regulations and ministerial directives.
The current laws regulating the PIC were adopted in 2004. They give the finance minister a blank check to make board appointments, and don’t oblige the fund manager to disclose its dealings to anyone, Parks said. Cosatu doesn’t object to the deputy finance minister chairing the PIC’s board, which has been a long-standing practice, he added.
President Cyril Ramaphosa this month agreed to appoint the commission to investigate the PIC after the United Democratic Movement, a small opposition party, demanded that Chief Executive Officer Dan Matjila be suspended amid claims he used its funds to support the business of a woman with whom he was romantically involved. Matjila has denied the allegation.
