The Congress of South African Trade Unions notes the release of the PIC Commission of Enquiry’s report. Whilst welcoming the spotlight and many of the findings the Commission has made with regards to the outrageous industrial looting that has taken place at the PIC over many years, the federation is deeply aggrieved with regards to three fundamental flaws in the Commission’s report.

We welcome many of the findings of the report into corruption in PIC investments. However, the federation is aggrieved that out of the PIC’s investments in 1, 200 companies, the PIC Commission looked at less than 1% of these investments.  Given the levels of looting at the PIC, this a fundamental blunder and tantamount to a get out of jail free card for those whom the Commission chose not to scrutinise.

Secondly it is shocking that in many areas of dubious investments, the Commission meekly requested the relevant law enforcement and regulatory authorities investigate to see if any laws and regulations were broken and to then take the relevant actions. This defies the very purpose of the Commission which was to do precisely that.

The report alleges that COSATU sought a donation from the PIC. It further states that the controversial former CEO of the PIC, Dr. Matjila, solicited donations on behalf of the federation. Yet the Commission does not indicate when, by whom and for how much these donations were. Nor does it indicate if such donations were received by the federation.

Most shockingly the Commission did not bother to contact COSATU for its response to this untested allegation. This is despite COSATU having made an oral and written submission to the Commission on the challenges, governance model and legislative framework and mandate of the PIC. 

The Federation wrote to the Commission several times to request it be furnished with the details of this strange and bizarre allegations made against it by the former CEO. The federation was not given an opportunity to present its responses and the Commission never responded to our letters. This was a gross failure on the part of the Commission.

The Commission made sweeping recommendations to the governance model and legislative framework of the PIC. The report proposes that the PIC like a private investment fund appoint its own board. It is opposed to having cabinet, treasury, GEPF and labour representation on the PIC Board. This is an indirect violation of the PFMA which governs the governance and legislative requirements for state-owned entities, of which the PIC is one. This recommendation is an unashamed attempt to privatise the PIC through the back door.

Government and Treasury need to be represented on the PIC Board because the investment funds GEPF, UIF and COIDA are defined benefits for which government stands guarantee in the event of a shortfall. The PIC is the largest investment fund in the continent and if used strategically can play a key role in growing and transforming the economy.

There have been numerous incidents of the PIC not accounting to the GEPF, which at 87% of the PIC investments is its most critical depositor.

The PIC invests workers’ hard-earned pensions, wages and insurance; therefore, they have a right to oversee how this money is invested and spent.
The trust between the PIC and workers and pensioners has been shattered and needs to be rebuilt. The Commission’s nonsensical subtle privatisation proposals are unacceptable and if advanced by government will be strongly opposed and rejected by workers.

Lastly, the Commission has opposed the investment guidelines enshrined in the PIC Amendment Bill. The Commission claims these will be a burden to the PIC. Yet it fails to explain why. The investment guidelines were inserted by brave MPs in the 5th Parliament at the insistence of organised labour in response to the unbelievable investments made by the PIC. Many of these saw the PIC incurring losses in the hundreds of billions, they were little less than money laundering and theft.

The investment guidelines compel the PIC to invest in a manner that ensures the sustainability of the investment funds for example pensions. They further require where possible for these investments to be done in a manner that promote job creation, local economic development, boost manufacturing and exports, support sustainable development and key economic infrastructure in South Africa.

These are fundamental to growing our economy in a way that benefits workers to whom the PIC funds belong. COSATU will not allow the attempts to privatise the PIC and the continued looting of workers’ deferred wages. The federation will ensure that workers are represented on the PIC Board, that it invests in ways that benefit workers and that corruption is dealt with.

It’s unfortunate that the Commission report leaves much to be desired. This report is not ideologically neutral, and its recommendations are political. It is, unfortunately, following in the footsteps of other commissions that have disappointed like the Seriti Commission and the Farlam Commission. This was a missed opportunity by the Commission.  

Issued by COSATU
 Sizwe Pamla (Cosatu National Spokesperson)

Tel: 011 339 4911
Fax: 011 339 5080
Cell: 060 975 6794