Mushtak Parker
LONDON: The world is mired with mitigating the ravages of new Covid-19 variants and vaccine accessibility and inequality, but the new year has witnessed two landmark developments in taking back ethics and accountability into democratic politics and corporate governance, whose impact will reverberate beyond national borders.
South Africa and America are leading from the front.
Almost unnoticed a few days before the US Capitol siege by pro-Trump extremists – an assault on democracy incited by the outgoing president himself – the US Congress on January 1 passed the historic Corporate Transparency Act into law. It effectively bans anonymous shell companies in the country – paving the way for a new global standard on beneficial ownership transparency.
To Transparency International (TI), which helped craft the law, the Bill’s passage “is the most significant anti-corruption reform in a generation”, marking the culmination of over a decade of civil society campaigning and coalition-building.
“We are inviting businesses, academia, civil society and other stakeholders to help make anonymous companies a thing of the past everywhere by joining our call for public access to beneficial ownership information.”
Hitherto, the US has been one of the easiest places to set up anonymous companies – legal vehicles routinely abused for corruption, money laundering, terrorism and other grave crimes.
In South Africa, on January 2s, it was President Cyril Ramaphosa’s turn to sign the Political Party Funding Act 2018 which regulates public and private funding of political parties.
In what Ramaphosa called “a historic development for transparency and accountability in South Africa”, the act comes into force on April 1, perhaps giving a new dimension to the first national elections scheduled under the new dispensation – nationwide local elections later in the year.
This latest piece of legislation is the natural adjunct to the country’s 1996 Constitution and Bill of Rights – commended internationally as one of the most progressive in the world.
“The implementation of the Political Party Funding Act,” assured the President, “will have far-reaching consequences for good governance and ethical political activity. It will strengthen the confidence of citizens in the democratic political process and enable them to assert their right to information.”
That’s easier said than done! Some 27 years into a post-apartheid era, the Rainbow Nation’s widely acknowledged democratic gains in the first 18 years of ANC rule largely under President Nelson Mandela, started degenerating into debilitating deficits thanks largely to state capture, cronyism and corruption under the Zuma presidency.
The country is still reeling from the economic, governance and societal impact of that kleptocracy.
The Covid-19 outbreak has merely served to exacerbate an already dysfunctional democratic polity with its allegations of pandemic profiteering, pandering to party factionalism, and still defined by the politics of race, inequality, misogyny and shocking violence against women.
While Team Ramaphosa has declared war on corruption and profiteering, what transpires on paper in the statutes often is not translated into transformative policies with transparent oversight and effective implementation.
For South Africa, according to TI, is the 70th perceivedly most corrupt country out of 180 surveyed. As such the right to freedom of information, and vibrant civil society activism assume an even greater importance as additional checks and balances.
Yet the latest Political Party Funding Act underlines the resilience of South African democracy which deserves a chance to be rolled out and tested.
How unfortunate that Ramaphosa omitted to mention it in his Virtual State of the World Address to the World Economic Forum Davos last week.
Many countries have “money politics”, including the supposedly advanced democracies. The ANC has long grappled with this dilemma. The late ANC intellectual Seddick Isaacs, a supporter of a strong opposition and apolitical civil service, was puzzled how “streetwise revolutionaries” who fought in South African streets against apartheid, and who carried banners calling for “Poverty Eradication” and “The Freedom Charter”, got entrapped in money politics. “I think it is to do with ANC party development,” he once explained to me.
“In the West, parties are funded by all sorts of political donations. South African parties are following this. South Africans are too forgiving. This idea of forgiveness has now permeated into fraud by political party members.”
Ramaphosa has opted for a twin approach to party funding – a Represented Political Party Fund from public finances, and the Multi-Party Democracy Fund, which funds parties from private sources, “to ensure that all represented political parties receive sufficient funds for their work in a fair and equitable manner”.
Under the act, all donations must be disclosed by parties and donors to the Independent Electoral Commission; no donations can be accepted from foreign governments or agencies, foreign persons or entities, organs of state or state-owned enterprises; and donations are confined to political party purposes.
There are grey areas which may easily be open to abuse and political influence – parties may receive funding from foreign entities for training, skills or policy development.
Pretoria stresses that the act “reinforces initiatives like the online publication of all Covid-related contracts of government departments and public entities, with plans to expand this to all areas of government procurement.
“This commitment to transparency is also evident in the process which led to the appointment of the new National Director of Public Prosecutions, and in the publication of the ministers’ performance agreements”.
South Africa features a vibrant adversarial media landscape and independent civic groups.
The Fourth Estate as political party financing police – now there’s a thought!
* Parker is a writer and economist based in London.
** The views expressed here are not necessarily those if IOL.