COSATU welcomes ban on public figures doing business with state

The Congress of South African Trade Unions has been at the forefront of the fight against corruption for many years. We have always argued that this scourge is not confined to the public service or politicians, but invariably involves collusion between people in both the public and private sectors who get together to fix tenders or manipulate the price of services.

It becomes particularly toxic when public figures are themselves, or their close family members, owners or partners in private companies which do business with public bodies.

That is why we have repeatedly argued for a guiding principle, to be observed and enforced at all times, that public servants and representatives must choose between public service and private business and never get involved in both at the same time, even if that business does not deal directly with government.

The federation therefore welcomes two important new moves announced this week, which should, if properly enforced, go a long way towards meeting the demand we have been making.

A revised code of conduct for MPs will prohibit any elected public representative from doing business with the state, and they must declare all their business interests, including shareholdings and directorships. "Through its enhanced oversight function," said African National Congress (ANC), chief whip Stone Sizani, "this Parliament will intensify the fight against corruption, crime, greed, and violence against women and children."

The ANC is also prioritising the passing of the Public Administration and Management Bill, which would, among other things, make it illegal for public servants to do business with the state.

COSATU urges government to ensure that these two important measures are fully enforced, and that we start to turn the tide on this huge problem, the scale of which is illustrated by the serious allegations in the Mail & Guardian (25 July 2014) that ANC Gauteng chief whip, Brian Hlongwa, was involved in a R1.4bn tender fraud, when serving as Provincial MEC for Health.

He is alleged to have received R2.6m from companies called 3P and Regiments, abused his position of authority and misused his powers. Other benefits he allegedly received include a spa treatment, payments for renovations to his home and a trip to Cuba.

As the ANC correctly say, Comrade Hlongwa must not face a "trial by media", and has to be assumed innocent until proved guilty, but the charges are so serious that they must be fully investigated, especially in the context of the series of crisis in the Gauteng health department when under his watch.

Last year Section27 noted a "sharp deterioration" in healthcare in the province, characterised by shortages of medicines, collapsing infrastructure, broken equipment, inadequate provision of staff, and the misuse and misallocation of funds.

COSATU is also concerned at a report in the City Press (27 July 2014) that alleges that "nineteen members of President Jacob Zuma's new Cabinet ... have private business interests", though there is no evidence that any of these companies have been doing business with the state.

The report quotes the Companies and Intellectual Property Commission (CIPC), which claims that 19 of the 72 Cabinet members are directors of active companies.

The Cabinet's biggest businessman in the cabinet is Deputy President Cyril Ramaphosa, who is an active member of two companies and holds at least 40 directorships and is estimated by Forbes magazine's list of Africa's richest people to be in 29th place, owning R7.4 billion.

His spokesperson, Ronnie Mamoepa, told City Press on that the Deputy President's interests were still in the process of being placed into a "blind trust", and when this happens he will no longer be involved in their day-to-day operations.

But what concerns COSATU is that he goes on to say that Comrade Ramaphosa "will still benefit financially from his business interests in companies including Lonmin, Bidvest, Mondi, MTN Group, Standard Bank, Coca-Cola and McDonald's. The profit goes to the beneficiaries of the trust. It only means he will not be involved in day-to-day operations."

This clearly does not amount to choosing between public office and private business. A comrade in such a leading position ought to be setting an example by getting rid of all these investments and drawing no extra income than his Deputy President's salary.

Others who have business interests include Bheki Cele, deputy minister of agriculture, forestry and fisheries,  Mzwandile Masina, deputy minister of trade and industry, who owns a firm called Masina Civil and Construction, Enver Surty, deputy minister of basic education, Pamela  Tshwete, deputy minister of water and sanitation, and Ayanda Dlodlo, deputy minister of public service and administration. 

They, and all other ministers and MPs, have until 15 August 2014 to declare all their business interests to Parliament, but simply declaring one's interests is not good enough. In COSATU's view the ministers should not be running companies at all while holding public office, even if they are not doing business with the state. It a clear breach of COSATU's principle.

The heart of the problem is that there is an inbuilt, underlying conflict of interest between capitalist businesses and the working class. Workers are exploited and abused every day by employers who are seeking to maximize their profits. They are involved in bitter disputes to claim a bigger share of the wealth produced by the labour, and safer and healthier working conditions.

The ANC has always been biased towards the working class and the poor, and its leaders should therefore not be tied to business interests which are inevitably biased towards the capitalists and the rich. It is essential therefore that ANC political leaders who formulate and implement policies, particularly on such areas as labour relations, incomes policy and broad economic policy have to be, and to be clearly perceived to be, mandated purely by the ANC Conference and Manifesto policies, and in no way influenced by the impact of policies on their business investments.

That is why the COSATU policy of choosing to be either a public figure or a private business person, and not the two at the same time is so fundamental.

Statement issued by Patrick Craven, COSATU national spokesperson, July 29 2014

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