PIC does a stunning “about turn” on transparency

24 April 2018

The National Treasury, Public Investment Corporation and Government Employees Pension Fund have done a stunning “about turn” and decided to oppose a provision aimed at promoting transparency in the Public Investment Corporation Bill [B1-2018], which is currently before Parliament.

The Public Investment Corporation Amendment Bill [B1-2018] is a Private Members Bill, submitted by myself on 17 January 2018, which proposes to amend existing legislation inter alia by inserting the following clause:

Amendment of section 10 of Act 23 of 2004

1. Section 10 of the principal Act is hereby amended by the addition after subsection (2) of the following subsection:
‘‘(3) A report reflecting all investments of deposits, whether listed or unlisted, must annually be—
(a) submitted to the Minister for tabling with the annual report of the department; and
(b) published on the website of the corporation.’’

The Public Investment Corporation Amendment Bill [B1-2018] effectively “legislates” the convention which began on 18 October 2016 when former Deputy-Minister of Finance, Mcebisi Jonas, finally agreed to disclose detailed information about “unlisted investments” made by the Public Investment Corporation.

However, a memorandum outlining the National Treasury, Public Investment Corporation, and the Government Employees Pension Fund’s response to the Public Investment Corporation Amendment Bill [B1-2018], states that:

This proposal is not supported. The PIC as asset manager should not be compelled to disclose information about another entity, i.e. its clients and that are also the assets owners (e.g. the GEPF) without consent.

This is a major setback for the campaign for greater transparency at the Public Investment Corporation, which is responsible for investing R1.928 trillion on behalf of its clients, most importantly the Government Employees Pension Fund.

We now need to know:

- whether the Minister of Finance, Nhlanhla Nene, was consulted and authorized the move to oppose proposals contained in the Public Investment Corporation Amendment Bill [B1-2018] providing for more transparency at the Public Investment Corporation; and

- why the Government Employees Pension Fund, which is responsible for managing the savings of tens of thousands of public sector workers, can explain why it does not want information about investments, made on its behalf by the Public Investment Corporation, to be disclosed to Parliament?

In the end, it is imperative that particulars of investments, especially “unlisted investments”, be disclosed because the expectation that the information will be disclosed, is a major disincentive to "rent seekers", with political influence, who may want to raid the Public Investment Corporation.

That is why:

- we will submit a parliamentary question probing whether the finance minister was consulted and authorized the department to oppose proposals, contained in the Public Investment Corporation Amendment Bill [B1-2018] providing for more transparency at the Public Investment Corporation; and

- we will not back down and will continue to fight for more transparency so that the Public Investment Corporation does not become a “piggy bank” for the governing party in South Africa.

Issued by David Maynier, DA Shadow Minister of Finance, 24 April 2018