Political parties will soon be required to make private funding information public when the May 2020 law in this regard comes into force.
The Promotion of Access to Information Act 2000 (PAIA) gives effect to the constitutional right of access to information. PAIA recognises that the pre-1994 government system resulted in a secretive and unresponsive culture in public and private bodies.
In 2018 the Constitutional Court declared PAIA unconstitutional insofar as it failed to provide for disclosure of private funding to political parties. Parliament was ordered to amend PAIA in order to address this failure.
This resulted in the PAIA Amendment Act. On 26 May 2020, President Cyril Ramaphosa assented to this PAIA Amendment Act, which will come into force as soon as the President has determined the commencement date by proclamation in the Government Gazette.
The amendment provides that information on the private funding of political parties and independent candidates must be recorded, preserved and periodically published.
The head of a political party is required to:
- Create and keep records of donations exceeding a prescribed threshold (currently set at R100 000) that has been made to that political party in any given financial year;
- Create and keep records of the identity of the persons or entities who made such donations; and
- Make the records available on a quarterly basis and keep the records for a period of at least five years after creation.
Donations include donations in kind. A donation in kind means:
- Any money lent to the political party other than on commercial terms;
- Any money paid on behalf of the political party for any expenses incurred directly or indirectly by that political party;
- The provision of assets, services or facilities for the use or benefit of a political party other than on commercial terms; or
- A sponsorship provided to the political party.
It excludes services rendered personally by a volunteer.
This is a step forward toward enhanced public transparency, which means that voters will be in a better position to effectively exercise their right to make political choices, in line with the Constitutional Court’s guidance on the issue.
The amendment should also facilitate weeding out corruption between political parties and private donors.
Where donations often form an integral part of companies’ social responsibility initiatives, companies should take a risk-based approach when making donations and conduct appropriate anti-bribery and corruption due diligence. Doing so allows the company the benefit of discovering the reputational standing of the recipient and whether the recipient has links to a political party.
It will be interesting to see how the amendment will affect political party funding, given that donors will presumably reconsider the size and frequency of donations, now that the light of transparency will shine on political donations.