POLITICAL PARTY FUNDING III - THE IMPLICATIONS WHICH FOLLOW FROM OUR LEGAL FRAMEWORK

This is the third part of a six brief series. The first provided a background to the current debate on political party funding, and the second dealt with the legal position. This brief suggests a framework within which law might develop. The fourth deals with international experience. The fifth will deal with submissions made to Parliament by political parties and the sixth with submissions made by civil society organisations.

Introduction

It must first be underscored that the majority judgment of My Vote Counts[i] remains the legal position. Furthermore, its arguments cannot be said to be palpably wrong. But there remain disquieting elements to the judgment, and one should enquire whether a court might take a different approach in the future; and more importantly, whether the judgment should be challenged. 

Analysis

One of the key elements of disagreement is whether the Promotion of Access to Information Act (PAIA) covers the entire field of section 32 of the Constitution[ii]. This stems from the ambiguous nature of the phrase “national legislation must be enacted” in section 32 which does not clearly indicate whether a single piece of legislation is envisaged or whether there might be a plurality of legislation which gives full effect to the right. Perhaps the constitutional drafters intentionally left the phrase ambiguous in order to allow Parliament to decide which approach would be more effective. If this is the case, Parliament has evidently decided that one Act will fulfil the obligation.[iii] Additionally it can be plausibly argued that the courts have shared this belief in several cases.[iv]

But on the other hand, the fact that PAIA is the legislation principally intended to honour the section 32(2) obligation does not necessarily mean it is the only legislation intended to give effect to the right. Quite plainly, PAIA is the core legislation intended to facilitate the right. Meanwhile on the penumbra, gaps in providing access to information concerning specific rights might be filled by separate legislation where section 32 is not the central concern of that legislation. One has to question whether a single piece of legislation can ever be expected to give full effect to the right of access to information, given the remarkably extensive nature of protections granted in our Bill of Rights which cover numerous ‘spheres’ and interests, and that Parliament cannot be expected to envisage every evolving judicial interpretation of the extent of these rights protections. It seems more reasonable and pragmatic to allow various laws to address specific rights and to ‘plug the holes’ in access to information where necessary. This would allow Parliament more freedom to produce legislation which evolves along with changes in material conditions regarding specific rights. It would also reduce unnecessary costs in litigation as well as in amendment of a single Act every time the Act is declared insufficient and has to be revised.

There is support for this interpretation in the constitutional text itself.[v] Section 25(6) requires of Parliament a similar obligation to section 32, to enact legislation to provide legally secure land tenure holding. However, by contrast, section 25(6) specifically prescribes “an Act of Parliament” should address this discrete issue. The language of section 32 is shared by sections 9(4) and 33(3). The fact that the language in each of these three obligations differs from section 25(6) is telling. It suggests this difference was intentional. It might differ on the basis that these three obligations are intended to address a far broader set of potential issues.

Finally, the contention that section 32 would have fallen away had the obligation not been fulfilled is not necessarily true. Quite plainly, PAIA was enacted in time. If one likens the scenario to the construction of a dam, then obviously a ‘dam’ was installed as required by the specific date. However, the problem is that the dam ‘leaks’ in certain places at the moment - it does not perfectly perform its purpose but further construction could improve it. However, no one is contending that there was never a dam there to hold the water back in the first place. PAIA was enacted and fulfilled the obligation before the allocated deadline, albeit imperfectly. One must give attention to the nature and extent of the rights protections that PAIA was intended to provide, as well as the significant protection that it does provide. This is essentially the line taken by Cameron J in the minority judgment.

Consequences of the judgments

Within both Institute for Democracy in South Africa[vi] and My Vote Counts,[vii]obiter suggests that PAIA may be invalid. The result is that the legislation should be tested for the extent of its inconsistency. Hence, another case would now have to work its way via a high court before the Constitutional Court would consider making an order in terms of section 172(1)(a) of the Constitution. This has real time and cost implications for an issue which has repeatedly garnered national concern. Also, one should be aware that in the process of multiple courts assessing the precise extent of the Act’s inconsistency, the courts may in effect, end up suggesting very specific amendments for the legislature to make. So, contrary to the professed concerns of the majority in My Vote Counts,[viii] the courts effectively may prescribe to the legislature the amendments to be made far more exactly than the minority judgment would have done.

In fact, the minority judgment envisaged a very circumspect order by simply highlighting a deficiency in the legislation for Parliament. The legal value of this approach is that it maintains the conceptual distinction between orders made in terms of section 167(4)(e) versus section 172(1)(a), and the differing obligations on the state which flow from this. It is also conceptually cleaner. Consider a constitutional requirement for legislation to address issues x; y and z. Legislation which is inconsistent with the Constitution, might include laws concerning x; a and z. This plainly conflicts with the Constitution and should be declared invalid to the extent of its inconsistency. On the other hand, legislation which fails to fully fulfil a constitutional obligation might for instance be enacted concerning matters x and y; but not yet matter z. Can we really say it is inconsistent with the constitution?

We could – but it would only be in a sense which is unsatisfactorily general and vague. It would be more precise to locate this ‘inconsistency’ in the problem that Parliament has failed to fulfil a constitutional obligation to a certain extent. It is not that its existing legislation is necessarily flawed, it is simply that the courts have identified a plain gap in the legislative scheme as judged against the Constitution.

Furthermore, it conforms more closely to the growing jurisprudence surrounding mechanisms for “constitutional dialogue” between the various branches of government which has been espoused by former Chief Justice Ngcobo.[ix] These approaches actually augment the separation of powers, guaranteeing the courts are not overly-prescriptive whilst ensuring that issues are addressed appropriately as soon as they arise.

But it must be emphasised that this is simply a suggestion of a preferable legal interpretation and does not represent the current legal reality.

Public vs private

It is proposed that the most suitable interpretation of the difficulty regarding the classification of political parties as ‘public’ or ‘private’ bodies is to follow the line suggested in the My Vote Counts minority judgment.[x] Political parties are conceptually problematic to place – it is difficult to definitively place them within either the ‘public’ or ‘private’ category as defined in PAIA at any one time. At certain times, parties take on private forms, such as when campaigning for support in an election. At other times, such as once they are effectively represented in Parliament and govern the deployment of Members of Parliament – they arguably take on a more public form. They also receive significant amounts of public funding. Political parties seem to a distinct type in their own right.

This approach would highlight potential shortfalls in PAIA. Alternatively, it might open space for developing our jurisprudence around where entities take on either private or public form, depending on the circumstances as per section 8 of PAIA. This is illustrated by the ruling in Mittalsteel South Africa Ltd (Formerly Iscor Ltd)[xi]. The SCA held that the applicant could be considered a ‘public body’ when it performed particular functions, as determined by the ‘control test’, indicating whether the state ‘controlled’ the entity, but this is informed by the particular function at hand.[xii]

Why it might be desirable for Parliament to handle the issue

In Institute for Democracy as well as both the minority and majority judgments of My Vote Counts, the courts expressed a reluctance to open the records of private funding of political parties to public scrutiny, instead preferring to pass the baton to Parliament. There are several reasons why this attitude is to be commended.

For one, the effect of an order to this effect is that (unless it is impeccably tailored) it would essentially operate retrospectively – requiring parties (which had reasonably considered themselves to be private entities) to disclose funding (to an unspecified backdate), which was provided to them on the basis that it would not be subject to public scrutiny. Furthermore, the order could be expected to lack the certainty and clarity required to properly regulate the disclosure of party political funding. To illustrate, it is doubtful an order would be sufficiently detailed to address manifold issues like whether contributions in the form of loans should be disclosed.[xiii] Such an order clearly violates, for instance, Fuller’s requirements for the requisite legality of laws[xiv].

The question regarding disclosure of funding is a highly technical issue that must be comprehensively and intricately addressed from the outset, avoiding past mistakes made on this front internationally. Of course, there are several reasons given for seeking greater transparency. For example, once provided secrecy, government and parties might be influenced to adopt policy decisions which best support the ‘business’ of growing and sustaining their parties; rather than in the interests of the people.[xv] For example, if funded by arms conglomerates, they may advance policies which involve extensive international peace-keeping efforts; rather than focusing on urgent domestic development. In these situations, there is a two-way relationship of influence and appeasement. 

Likewise, there are numerous considerations for why it might actually be preferable for private funding to remain secret, especially in the contemporary South African context. The legislature will have to weigh fully the implications of both approaches when deciding the best way forward.

Here are some of the most pertinent arguments for non-disclosure. Firstly, past experience has shown that, globally, the more tightly governments try to regulate funding disclosure, the more inventive agents become to create and exploit loopholes which ensure that parties receive the funding they require without being linked back to the ultimate source of funding.[xvi] Secondly, Sarakinsky convincingly notes that disclosure of party funding can significantly weaken budding multi-party democracy. There will be a disincentive for private entities to support parties which adopt distinctive or ‘radical’ policies in favour of more broadly supporting either the ‘governing’ or ‘opposition’ block. Fear of public reaction and retribution often encourages private entities to veer toward neutrality or even overly favouring the governing party, thereby simply entrenching or enhancing the existing status-quo, rather than facilitating the multi-party co-operative governance the Constitution envisages.[xvii] Indeed, donors might fear personal victimisation and violence leading to fewer contributions from private individuals, and an even greater shift towards parties relying on contributions made by large corporations, associations and governments.

Sarakinsky also highlights that the manipulation of when disclosures of private funding are made can be used to “peddle influence” from government to ensure favourable kickbacks.[xviii]  Likewise, parties might utilise calculated disclosure at certain times that they are funded by various ‘clients’ merely to advance their election campaigns rather than ensuring transparency. Disclosure might be made only when there are significant troubles elsewhere which sufficiently distract the public.

If disclosures are to be made only once they surpass a certain monetary value, or else only above a certain portion of parties’ total incomes,[xix] numerous critical questions emerge. These include:

Which of these two avenues is more preferable?

Who or what body determines this threshold? 

How will these thresholds be adjusted to match changing socio-economic circumstances?

More importantly, what body can be created to properly monitor and facilitate this process to ensure the requisite balance between transparency and secrecy?

How would the independence, security and integrity of such an institution be adequately protected?

Most importantly, one has to consider where the funding for each of these approaches to regulating private funding will be sourced. One would have to ensure that the additional burden (which it can be assumed might be imposed on taxpayers) remains at a reasonable level relative to the outcome sought.

Conclusion

Evidently, there are numerous procedural, policy and value-judgments which will have to be made to decide the best method of regulating the disclosure of private financing, or even in choosing not to do so. This article has suggested that our Constitutional scheme and values arguably make the case that there should be transparency in private funding. This would also follow relatively common practice around the world.[xx]  

One would hope for the introduction of at least some openness on this issue which might curb the worst excesses of unrestrained shadow dealings. But the manner and extent of this disclosure is better left to Parliament. The judiciary should not place itself in a position of controversy and delegitimise itself in the eyes of the other branches of government, since at this stage there appears no immediate necessity to do so. Certainly, representatives composing the political parties democratically chosen for Parliament are better placed to determine a practically workable solution to the regulation of party funding than a judiciary trained solely in legal reasoning.

Ryan Holtes is an Associate Researcher at the Helen Suzman Foundation.

This article first appeard as an HSF Brief.

Sources:

[i] My Vote Counts NPC v Speaker of The National Assembly and Others 2016 (1) SA 132 (CC).

[ii] Constitution of the Republic of South Africa, 1996.

[iii] Supra note 1 at 199.

[iv] Ibid at 186.

[v] Supra note 2.

[vi] Institute for Democracy in South Africa and Others v African National Congress And Others 2005 (5) SA 39 (C).

[vii] Supra note 1.

[viii] Ibid at 190.

[ix] See Sandile Ngcobo ‘South Africa’s Transformative Constitution: Towards an Appropriate Doctrine of Separation of Powers’ (2011) Stellenbosch Law Review 1.

[x] Supra note 1 at 174-175.

[xi] Mittalsteel South Africa Ltd (Formerly Iscor Ltd) v Hlatshwayo 2007 (1) SA 66 (SCA).

[xii] Ibid para 22; 27-28.

[xiii] Ivor Sarakinsky ‘Political Party Finance in South Africa: Disclosure Versus Secrecy’ (2007) 14 Democratization at 199.

[xiv] Fuller;s requjirements are (1) laws should be general; (2) they should be promulgated, that citizens might know the standards to which they are being held; (3) retroactive rule-making and application should be minimized; (4) laws should be understandable; (5) they should not be contradictory; (6) laws should not require conduct beyond the abilities of those affected; (7) they should remain relatively constant through time; and 8) there should be a congruence between the laws as announced and their actual administration

[xv] Pierre de Vos ‘The End of Democracy?’ in Constitutionally Speaking Blog, available here.

[xvi] Supra note 13 at 199.

[xvii] Ibid at 120.

[xviii] Ibid at 121.

[xix] Clarence Tshitereke ‘Securing democracy: Party finance and party donations – the South African challenge’ (2002) 63 Institute for Security Studies at 3.

[xx] Ibid at 2-4.