- The Public Investment Corporation Amendment Act will ensure greater transparency into the dealings of the state-owned asset manager.
- Among other things, the Amendment Act says organised labour must be part of the board and that the deputy finance minister or another deputy minister from the economic cluster must be appointed as the chair of the PIC board.
- The Act requires the PIC to report the investments of workers' deposits, whether listed or unlisted, and to list all big deals that require the finance minister's approval.
President Cyril Ramaphosa has signed the Public Investment Corporation (PIC) Amendment Act, which promises to bring greater transparency into the dealings of the state-owned asset manager.
The National Assembly adopted the Amendment Bill in February 2019 and then refereed to the Council of Provinces, but it has taken two years for it to be signed into law.
The amendments that were enacted into law with immediate effect by Ramaphosa also sought to improve governance and accountability at the PIC following revelations of rampant mismanagement of PIC funds.
The Mpati Commission report released in March 2020 detailed improprieties by the PIC senior management during former CEO Dan Matjila's tenure in great detail, including its failure to abide by due processes and the board's interference in investment decisions.
The Amendment Act seeks to prevent a re-occurrence of these governance failures, among other things, by diversifying the board to include someone from the department of finance, representatives of the Government Employees' Pension Fund (GEPF) as well as three representatives selected by organised labour in the Public Service Collective Bargaining Council.
The Act also states that the finance minister must designate the deputy finance minister or any other deputy minister in the economic cluster as the chairperson of the PIC board.
As far as the PIC's investment activities are concerned, the Amendment Act requires that, every year, the asset manager must report the total number and details of requests made to the finance minister to approve any significant transactions requiring such approval in terms of the Public Finance Management Act. The PIC will also be required to indicate which of those material transactions were approved by the minister.
A report reflecting all investments of deposits, whether listed or unlisted, must also be submitted to the finance minister annually, and be published on the PIC's website. In addition, the Act guides the PIC to invest in ways that will ensure the sustainability of the depositors' funds and to support job creation, industrial development, export growth, sustainable development and investments that will boost SA's economy.
A great day for workers
The Congress of South African Trade Unions (Cosatu) said on Wednesday that - while the enactment of these amendments was "long overdue" - it will be a critical tool in the fight against corruption, state, and corporate capture.
The fact that the Amendment Act prescribes how the board should be constituted was critical as the existing law gave the finance minister the power to appoint directors as he saw fit, said Cosatu. It added that this was the first time that workers would be represented on the PIC board in its history.
It said that the representation of organised labour on the board would help ensure that workers have oversight and a say on how their hard-earned funds will be invested. The labour federation expected workers to have more power as the Act also compels the PIC to receive a mandate from its depositors on how they want their funds to be invested.
"This will address previous situations where the former PIC management disregarded the views of the GEPF and the Unemployment Insurance Fund," Cosatu said.