THE Congress of South African Trade Unions (COSATU) has admitted that the management of workers’ money through its Kopano Ke Matla investment arm was not done with good governance and cost millions of rands, posing a risk to its financial credibility with members.
A 2013 financial services board report revealed, R123 million of workers’ pension money was paid to its Kopano employee benefits company despite it not having any capacity to invest or manage it.
COSATU’s Kopano employee benefit fund had its operating license revoked by the Financial Services Board (FSB) last year after its directors were implicated in alleged money laundering and irregular payments of up to R50 million.
The FSB report also questions why the payments were made from the investment arm to the benefit fund and why the directors were paid up to R50 million despite doing almost no work.
COSATU deputy general secretary Bheki Ntshalintshali says the transfer of 4,000 workers’ pension money to the federation’s employee benefit fund was wrong and indefensible.
He admitted: ‘The manner in which they secure the servicing of that provident fund of workers from the former Debtswana and the latitude they have with spending and the disappearing of money; nobody can defend that.’
The National Union of Mineworkers (NUM) says it creates doubt among its affiliates, with NUM general secretary Frans Baleni saying they would think twice before investing in the future.
Baleni warned: ‘Where there is no good governance, there’s no way we can channel finances to an institution with a doubtful reputation.’
The FSB recommended criminal charges against the Kopano employee benefit fund trustees, but this has not happened yet.
The NUM says it is also aware of a campaign to drain the federation’s finance through court action.
The NUM said: ‘We are seeing the Americanisation of the labour movement where unions with a big purse can actually buy other unions and drain COSATU financially so that it can collapse.’
Ntshalintshali says the disunity in COSATU and action needed to fix this will come at a heavy price.
He said: ‘While we know we are going to overcome it, I think we are going to pay dearly in the next few months in trying to build unity in the federation.’
Meanwhile, Walter Theledi, SAMWU General Secretary, has issued a statement warning that the Public Administration Management Act fails to tackle corruption and undermines collective bargaining:
‘The South African Municipal Workers’ Union (SAMWU) is disappointed by the enactment of the Public Administration Management Act by President Jacob Zuma in December 2014.
‘Although SAMWU agrees with some of the content of the legislation, we however view the Act as unconstitutional and will definitely erode the gains that organised labour has made through collective bargaining as envisaged by the Labour Relations Act.
‘The Act seeks among other things to promote high standards of professional ethics in public administration, to promote efficient service delivery and to facilitate the eradication and prevention of unethical practices in the public administration. All this is to be achieved by putting in place basic values and principles which would govern public administration.
‘The Act further seeks to develop capacity for officials, we hope that Chapter 4 of the Act will be used as a tool to empower and develop the lowest paid workers particularly municipal workers some of whom are paid as little as R50/day.
‘SAMWU has and continues to be proponents of ethical and transparent government especially in our sector – local government.
‘We hope that the enforcement of the Act will trickle down to all spheres of government starting with national government.
‘We are however of the view that National Government should set a precedent of dealing with state resources. As such, we are concerned by the enforcement of this Act.
‘Although the Act provides for the creation of an Integrity Unit which will be responsible for the enforcement of this Act, there seems to be no willingness by the state to put in place monitoring mechanisms of other legislation in the country.
‘Certain legislations are in place such as the Ministerial Handbook, however we still have incidences where one man buys a R1 million BMW at the state’s cost while another spends R5 million on luxury vehicles in a single year, this being done while the Ministerial Handbook stipulates that these people may only purchase vehicles not exceeding 70% of their annual salaries.
‘The signing of this Act is but a realisation of most arguments that SAMWU has advanced for a long time. The Act requires officials seeking employment or already employed in the public administration to disclose their financial interests including that of their spouses for any shares, sponsorships, benefits and immovable property.
‘Failure to make such disclosure by an employee would constitute misconduct. The Act further makes it illegal for any public administration official to do business with the state.
‘SAMWU has and continues to be of the view that no official should do business with the state as this plays a role in corrupting officials.
‘We are however concerned that the Act only targets officials not acknowledging that in any corrupt relationship there is a corruptee and a corruptor.
‘In the interest of Public Administration Management, the Act should be extended to political office bearers. Truth of the matter is that politicians are responsible for most of the corruption witnessed in government. They are in pole position to influence the direction that government business goes. History has taught us that this is how many politicians have managed to enrich themselves.
‘The country needs an act that is cut across and is inclusive of everyone who is involved in the supply chain and procurements that all spheres undertake, including political office bearers.
‘The 2012/2013 Auditor General’s report into Municipalities has shown that most municipalities received the audit outcomes they received as a result of contracts being awarded to companies which officials had interests in.
‘One cannot measure the prevalence of the problem but clearly doing business with the state has become profitable for some individuals. For the state to enjoy sound and healthy finances especially in local government, there should be an overhaul of the manner in which municipalities conduct their business, local government should re-municipalise.
‘The provisions of municipal services though contracts and tenders has neither been in the interest of service delivery nor kind to the public purse. If anything we have only seen privatisation of municipal services and the emergence of tenderpreneurs who charge municipalities ridiculous amounts compared to the costs that municipalities would have incurred if they were rendering such services on their own.
‘Overall our view is that this Act is unconstitutional on the basis of its selectivity between political office bearers & public servants. Furthermore the Act seeks to give power to an integrity unit to preside over disciplinary matters.
‘The Basic Conditions of Employment Act is clear that such matters are subject to negotiations at bargaining councils.
‘The laws of this country must apply to all equally and there is no reason why politicians should receive preferential treatment.
‘We should note that the LRA takes precedence over any labour matters. The LRA further gives a platform for the establishment of bargaining councils and the Act undermines their existence.
‘Our fear is that by virtue of secondments, those who refuse the secondment may be victimised or even worse dismissed for refusing to move to another sphere of government.
‘The act further undermines the recruitment and selections policies that already exist in all spheres of governments.
‘We are further concerned that the Act may be used to lure skilled personnel from local government to other spheres of government.
‘SAMWU has long maintained that there should be devolution of powers, that certain functions performed by provincial government should be returned and/or handed over to local government as they are primary functions of municipalities.
‘Provincial government tend to attract skilled personnel who are at the end of the day not utilised to the best of their abilities by provincial government whereas they can service communities better if they were employed by local government.’
