EXPLAINED: The Political Party Funding Act
The new Political Party Funding Act comes into effect on 1 April. What does the act aim to achieve and what are the implications for political parties, individual party members and donors?
JOHANNESBURG - The new Political Party Funding Act comes into effect on 1 April.
According to the legislation, political parties cannot receive funds from foreign governments or their entities, South African government departments and state-owned entities, among others.
Last week the Independent Electoral Commission (IEC) addressed a workshop on the new act. The IEC explained that it had the power to suspend or withhold payments from political parties should there be irregular donations.
The IEC provided the following information about the new act.
WHY IS THE ACT IMPORTANT?
The Political Party Funding Act (PPFA) is enacted to fulfil the obligation placed on Parliament by Section 236 of the Constitution, 1996, which states that for “the funding of political parties participating in national and provincial legislatures on an equitable and proportional basis" so as to "enhance multi-party democracy".
Before this Act, the relevant legislation was the Public Funding of Represented Political Parties Act 103 of 1997.
HOW DOES THE ACT ACTUALLY WORK?
- The Act provides for, and regulates, the public and private funding of political parties, particularly the establishment and management of money to fund represented political parties sufficiently, namely; the Represented Political Party Fund (RPPF) for the funding of political parties represented in national and provincial legislatures from public funds.
- It also provides for and regulates the establishment of the Multiparty Democracy Fund (MPDF), which will accept private contributions and disburse these to political parties represented in national and provincial legislatures.
- It also prohibits certain donations made directly to political parties and regulates disclosure of donations accepted.
- It determines the duties of political parties in respect of funding and provides for powers and duties of the Commission.
- It provides for administrative ﬁnes and creates offences and penalties in case of transgressions.
- The Act repeals the Public Funding of Represented Political Parties Act, 1997.
WHY THE THRESHOLD ON CONTRIBUTIONS?
- The thresholds have been set in order to make it possible to monitor compliance. Open-ended values would have made it impossible for the commission of to identify transgressions where they occur.
- It is important to note that the Act does not put a threshold on contributions to the Multi-Party Democracy Fund but on direct donations to political parties.
WHO IS ALLOWED TO DONATE TO POLITICAL PARTIES?
Subject to certain conditions, any local or foreign person can donate to political parties, but the following entities may not:
- Foreign governments or foreign government agencies;
- Organs of state; or
- State-owned enterprises.
Private foreign entities can only make direct donations to political parties up to a maximum of R5 million and specifically for the following purposes:
- training or skills development of a member of a political party; or
- policy development by a political party.
WHAT DOES IT MEAN FOR POLITICAL PARTY MEMBERS?
- Donations from R100,000 and upwards must be disclosed.
- The act prohibits a political party member to receive a donation other than on behalf of a political party for party political purposes.
WHAT ARE THE CONSEQUENCES FOR TRANSGRESSIONS, FOR EXAMPLE, IF SOMEONE DOES NOT DISCLOSE DONATIONS?
The act gives the Electoral Commission the powers to institute proceedings and to request the Electoral Court to impose administrative fines.
Those convicted of any of the defined offences may be sentenced to a fine or to imprisonment.
WHAT MECHANISMS ARE IN PLACE TO MAKE SURE TRANSGRESSIONS DON'T HAPPEN?
The act gives the Electoral Commission the power to monitor compliance by political parties and to undertake investigations.
WILL THE DONORS BE PUBLICLY LISTED?
The act mandates the Electoral Commission to publish the donations disclosed to it on a quarterly basis.
WHAT ACCOUNTABILITY MECHANISMS ARE IN PLACE TO TRACK USE OF THE FUNDING?
The act requires political parties represented in the National Assembly and provincial legislatures to submit audited financial statements for funding received from the Represented Political Party Fund and the Multi-Party Democracy Fund.
Section 7 of the act outlines the purposes for which money from funds may be used, and clearly stipulates that the money paid from the funds "may be used by that represented political party for any purpose compatible with its functioning as a political party in a modern democracy, including:
- the development of the political will of the people;
- bringing the political party’s inﬂuence to bear on the shaping of public opinion;
- inspiring and furthering political education;
- promoting active participation by individual citizens in political life;
- exercising an inﬂuence on political trends;
- ensuring continuous and vital links between the people and organs of state; and
- complying with the provisions of this act.