Introduction
Recently the issue of political party funding has re-emerged on the South African political landscape. Up to now, it has been a relatively minor issue in South African politics, despite its major impact on political accountability and democracy. The issue is complex with no universally accepted model for political party funding that ensures accountability and transparency while maintaining the ability of political parties to carry out their function. There have been a number of legal efforts in South Africa to compel political parties to disclose their sources of private funding, although they have so far been unsuccessful. But with a parliamentary commission having now been set up, calls from within the ruling African National Congress to amend the law and a crucial court case on the topic coming up the issue is now salient. This brief aims to provide an analysis of what has led to this point.
South African developments
In order to effectively inform and represent their constituents political parties require sizeable financial resources. In order to do this certain parties receive public funds and all parties are allowed to raise funds privately. Public funding stems from Section 236 of the South African Constitution which requires legislation that allocates funds on a proportional and equitable basis. This exists in the form of the Public Funding of Represented Political Parties Act of 1997 (PFRPA). The Act regulates how public money is allocated to political parties and the requirements associated with this money. Money is only allocated to political parties which are represented in the National Assembly or a Provincial Legislature. The Act dictates how the money may be utilised and who receives it. Parties may use this money for “any purposes compatible with (their) functioning as a political party in a modern democracy”. They must then account for how this money is spent to the IEC. Parties may not use these funds to pay any elected representative. They must keep these funds in a separate account which must be audited annually. The Chief Electoral Officer is responsible for the management and administration of these funds.
The Act allocates money according to a formula where 10% is shared equally between the parties and 90% is proportionally allocated according to the party’s share of seats in the National Assembly and Provincial Legislatures. Being the largest party, the African National Congress (ANC) was the greatest beneficiary receiving R75.5 million in 2016, while the Democratic Alliance was second with R27.5 million and the Economic Freedom Fighters third with R10.5 million. The smallest parties to receive any funding, the Pan African Congress and the African People’s Convention, received R138 138. They each have a single member of parliament.
While there are some issues around the public funding of political parties, the main area for concern has been private funding. With limited public resources available, all political parties must rely on raising some money from private donors. There are obvious concerns about the influence that donors to political parties can have on eventual government policies. Internationally, there are a number of mechanisms that have aimed to regulate private funding. However, there are no regulations relating to private funding of political parties in South Africa, and this has led to a number of attempts to compel political parties to disclose their private donors.
The first of these attempts was made by the Institute for Democracy in South Africa (IDASA). IDASA launched a case in 2004 in an attempt to compel the four main political parties, the ANC, the Democratic Party (now the DA), the African Christian Democratic Party (ACDP) and the Inkatha Freedom Party (IFP) to disclose their funding sources. The parties responded with concerns that they would lose donors if they did this as donors would not want their donations to be public information. This was especially important for opposition parties who claimed that their donors feared losing out on government business and relationships if they were found to be funding opposition parties. The Western Cape High Court found that political parties were private entities and therefore did not need to disclose their sources of funding. The case was not appealed. There was a commitment from political parties to make legislative changes, although this is yet to occur.
A second case was launched by the Cape Town civil society organisation, My Vote Counts (MVC). The core constitutional issue in the My Vote Counts case centred on the intersection between the right to vote (Section 19(3)) and the right to access information (Section 32). Section 32 grants everyone the right to access information held by the state that is required for the exercise and protection of rights. MVC had hoped that the court would rule that parliament had failed in its constitutional obligation and compel it to remedy this by legislation compelling political parties to disclose the sources of their private funding. The majority judgment dismissed the case on the basis that the Promotion of Access to Information Act (PAIA) was the appropriate legislation and that MVC should have challenged the constitutional shortcomings of PAIA in the High Court given the circumstances. There was however a minority judgment that held that the combination of those two rights required regular, compulsory disclosure of parties’ sources of private political funding. This minority judgment held that this information was essential for the exercise and protection of the right to vote. MVC subsequently made a request under PAIA in the lead-up to the 2016 Local Government Elections that requested that parties disclose their funding sources, but all parties refused to do so. The organisation has now taken the case to the High Court in order to challenge the validity and constitutionality of PAIA.
Recently, ANC chief whip in Parliament, Jackson Mthembu, announced that it is necessary to re-examine the legislation surrounding the funding of political parties. The move had been endorsed by resolutions, calling for greater transparency in party funding, at both the ANC’s 2007 and 2012 elective conferences and Mthembu said that it was “better late than never” to begin to tackle the issue in earnest. The party’s Treasurer General, Zweli Mkhize, later penned an opinion piece in which he acknowledged that there could be concerns that private funders utilised their donations to exercise undue influence on political parties. Specifically linking this to the notion of state capture. Parliament has now set up an ad hoc committee on political party funding. The period for public comment closed on 21 July, despite a request for an extension by MVC and Corruption Watch, and the committee is expected to conclude its work by 30 November.
Conclusion
The topic of regulation of political party funding has finally emerged as a serious issue in terms of accountability and transparency. The way in which these issues are managed will have an impact on the trust that South Africans have in political parties and their faith in the political process. The results of a parliamentary commission and an upcoming court case will therefore have important consequences for the quality of democracy in South Africa.
Rafael Friedman
Researcher
rafael@hsf.org.za
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