Hon Chairperson, the Public Investment Corporation, the PIC, is a key component of the financial services sector and as a financial services provider for the government of the Republic and
bodies, councils, funds or accounts established by law, plays an important role in the financial security of South Africa.
The Public Investment Corporation oversees over R2 trillion as an asset manager. The Public Investment Corporation Amendment Bill, which is a committee Bill, amends the Public Investment Corporation Act of 2004 in order to promote transparency and good governance within the PIC. The Bill also amends the Act to require the PIC to invest in accordance with the instructions of the depositors; and, in doing so, the PIC must seek investments that will meet certain guidelines.
The Bill further provides for greater transparency in operations of the PIC through the publication or tabling of various directives, regulations and reports.
The Bill seeks to provide greater transparency and better governance in the PIC as follows. The Minister must appoint 10 nonexecutive board members, including a representative of the National Treasury, two representatives from the largest depositor and one representative of any depositor whose assets under management by the PIC are at least 10%; and two representatives of the trade union whose members are the majority of the members in the Government Employees Pension Fund; and one representative from another trade union as decided by the Public
Service Co-ordinating Bargaining Council, based upon proportional representation.
The Minister of Finance must designate the Deputy Minister of Finance or, in consultation with Cabinet, any other Deputy Minister within the economic cluster to chair the PIC board. The board must include two executive members, one of which must be the CEO, or of a similar designation. All board members should have the necessary knowledge and expertise, including those representing the unions. The Minister must progressively comply with the appointment of board members according to these requirements, taking into account the rights of current members of the board.
[Inaudible.] ... the PIC must invest in projects that will benefit the beneficiaries of the depositors and act in accordance with the instructions of the depositors, and, in doing so, seek to invest according to certain guidelines. The PIC's investment policies must also consider these guidelines. The Minister must table a report annually to Parliament on all investments of deposits ... and request approval of any significant transactions in terms of the Public Finance Management Act and must table regulations on the PIC in Parliament.
On 26 February 2019, the NCOP referred the Public Investment Corporation Amendment Bill to the Select Committee on Finance for consideration and report. The committee called for public submissions on the amending Bill, and, on 6 March, the committee received a briefing on the amending Bill by the chairperson of the Standing Committee on Finance, the hon Yunus Carrim. Public hearings on the Bill were held on 12 March, and eight written and oral submissions were tabled in the public hearing.
Hon Chairperson, His Excellency President Ramaphosa, during the state of the nation address, called upon us to restore the integrity of state institutions. As the Select Committee on Finance we have acted in synergy with this injunction. The PIC is a state-owned asset manager which oversees about R2 trillion mostly on behalf of government workers. This Bill is a transitional Bill. We look forward to the Bill the Minister of Finance will introduce in 2019. We want to congratulate the commission. Three experts serve on this commission, which is led by Judge Mpati. The commission is doing wonderful work and we appreciate this.
Lastly, the Minister and the PIC must report to Parliament in various ways. That is the balance. The chairperson of the PIC board must act in terms of the norms, values and principles of the PIC. Parliament must
play its oversight role over the PIC including the Minister and Deputy Minister of Finance.
Yes, we must all fight corruption. We must take our measure of responsibility just in doing that. We cannot afford for the PIC to fail. The Select Committee on Finance, having considered the Public Investment Corporation Amendment Bill, B4 of 2019, reports that it has agreed to the Bill without amendments. The DA did not support the Bill. Thank you, Chair.
Declarations of vote: