- Church and human rights groups in Zimbabwe have warned against new elections saying the situation in the country is ‘highly volatile, uncertain and tense’ after a bloody presidential run-off election two years ago.
In a press statement, the group, which include the Zimbabwe Council of Churches, the Evangelical Fellowship of Zimbabwe, the Christian Alliance and the Student Christian Movement of Zimbabwe, state that, "The polarised environment does not favour the holding of elections as violence would most likely erupt."
The group, whose comment comes after President Robert Mugabe's call for ZANU-PF supporters to prepare for elections in 2011, argues that the political environment remains highly volatile, uncertain, and tense in that country.
To read the article titled, “Church and human rights groups warn over elections,” click here.Source:All Africa
TAC and SECTION27: The ANC should Not Be Scared of Independent Campaigns Against Corruption and for Service Delivery, Human Rights and Public AccountabilityStatement by the TAC and SECTION27, co-hosts of the Labour/Civil Society conference
The Civil Society Conference held on 27-28 October 2010 will hopefully come to be seen as a historic turning point in South Africa. It may mark the revival of co-ordinated community based activism that aims to achieve social justice and better the lives of the poor in South Africa. It was attended by more than 50 independent organisations that believe in social justice and that fight for it every day.
Civil society is therefore taken aback by attacks on the motives of the conference emanating from the ANC’s National Working Committee (NWC) on 1 November 2010. We are surprised by the insinuations that the conference is part of a plot against the ANC. We expect better of the post-Polokwane ANC. This is conduct reminiscent of the paranoia of the Mbeki era. It is a conduct that suggests the ANC, or some of the people who hide under its flag, have something to fear.
Why did the conference take place?
Over recent years, for the most part, civil society organisations have worked separately on a multitude of struggles for service delivery, human rights and public and private accountability. The purpose of the conference was therefore to:
- attempt to rediscover unity amongst civil society organisations,
- find common causes and common strategies in our various campaigns for social justice.
Fortunately in the democratic South Africa we don’t need anyone’s permission to meet. The ANC is a liberation movement and political party that most of us still support. It is not big brother.
The conference was neither anti-ANC nor anti-government. It stayed clear of debates about party politics and sought to be inclusive of various strands of political opinion amongst campaigners for social justice. But it did discuss the politics of service delivery, corruption and the major political challenges facing the country. It gave special attention to our deeply vulnerable and poor health and education systems. The conference was pro-poor, pro-justice and pro-democracy.
We welcome the fact that COSATU participated and played a leading part in the conference. COSATU vociferously draws attention to the wrongs of our society and has called for a new economic growth path. The conference was an opportunity to learn about and debate COSATU’s ideas.
COSATU represents organised working people. But they are tied through unemployment, poverty and squalid conditions to the issues for which civil society organisations fight daily: the fact that millions of people in South Africa are still homeless; declining life-expectancy due to HIV/AIDS and the enormous problems facing our health system; the terribly low levels of education that millions of children receive exacerbated by inequality between well-resourced private and former Model C schools and government schools; the need for accountability to communities especially by local government; the inadequate sanitation and insufficient access to electricity and other basic services endured by so many; and the high levels of crime.
The Conference was not a once off event. As stated in the Conference Declaration, we have agreed to further meetings at Provincial and district level and on key campaigns. This includes debating and developing a Social Justice Charter in coming months, which we hope the ANC will support.
The Conference also agreed to intensify human rights education and organisation among the poorest of the poor – people who are ignored by politicians and elites, and insulted by shameless sights of conspicuous consumption that mark out the new and old elite. (Please note: Commission reports from the conference will be issued in coming weeks.)
We believe the ANC NWC should have welcomed the conference. It should particularly have welcomed the affirmation of the Constitution and rule of law that is at the centre of the Conference Declaration. It should welcome an additional ally in the fight against corruption.
Effective government depends on a vigilant, capable civil society that knows the law, protects human rights and can act against what is wrong. The Civil Society/COSATU Conference did not challenge the ANC-led alliance; it only challenged the alliance to deliver.
In conclusion therefore let us state that:
1. As progressive social justice organisations committed to the poor and constitutional rights, we will continue to engage both the ANC and the government. Where necessary we have also used the courts. The conference commits us to continue to do so.
2. That we call on ANC to reconsider its ill-advised statement and provide effective leadership to society and instead affirm and support our objectives.
3. That we call on civil society and COSATU not to be intimidated by this statement but to work patiently, harder, and with discipline in taking forward the conference decisions.
SECTION27Date published:03/11/2010Organisation:TAC and SECTION27
- Press Release
6 August 2010
A free press is essential to democracy, transparency and the attainment of equality
We are organisations that campaign for social justice. The success of our work is dependent on respect for the Constitution, especially the Bill of Rights. The right to free expression and freedom of the press and other media are essential components of democracy. That is why they are contained in the Bill of Rights. They are one of the essential means by which all people in South Africa, especially the vulnerable, exploited and poor, can hold government and the powerful private business sector to account.
This week Mzilikazi wa Afrika, a Sunday Times journalist, was arrested in Rosebank Johannesburg. The circumstances, manner and cause of his arrest all seem to point to intimidation by the state and attempts to suppress freedom of expression.
The arrest follows the exposure by the Sunday Times of questionable dealings by the National Police Commissioner, Bheki Cele. It comes during a national debate over proposed legislation to curtail press freedom, i.e. proposals for a new Protection of Information Act, changes to the Criminal Procedure Act and the ANC's proposals to establish a media tribunal.
We therefore unequivocally condemn the arrest of wa Afrika.
The media in South Africa, as anywhere else in the world, is very powerful and influential. We are not blind to its many shortcomings. The quality of journalism in South Africa is often mediocre. Newspapers, magazines and television sometimes make serious errors, permit unethical advertising and sometimes make false charges against individuals.
We are concerned that the main media houses are overly concentrated in the hands of a few large corporations and consequently primarily represent the interests of a relatively small affluent portion of the population, thereby paying insufficient attention to the interests of poor and working class people.
There is undoubtedly a need for a better, more equal and more socially responsible media. There is a need for an informed public debate about the media, which the media should listen to. There is a need to democratise the media. There is a need for civil society oversight of the SABC to ensure that it is truly a public and politically independent broadcaster. There is a need to re-examine the institutions that are meant to govern the media and protect people from it abusing its power. There is a need to strengthen and enforce media ethics and to examine how this can be done.
But having said all this we restate that the non-negotiable starting point for this discussion is agreement that a free press plays a critical role in holding government, the private sector and their media competitors to account. Draconian anti-media legislation will make this impossible.
Over recent years there have been many occasions when serious media investigation and publication has helped to root out corruption and, expose wrongdoing and unethical conduct. This is vital to the reconstruction of SA. Thus the exposure and ultimate conviction of corrupt former Police Commissioner, Jackie Selebi, was a direct result of investigative work by the Mail & Guardian and others. Thabo Mbeki's deadly AIDS denialism was justifiably the source of media condemnation. The media's role in highlighting campaigns for social justice is also critical, for example the shortage of school libraries, the rollout of an unsafe circumcision device in Kwazulu-Natal, the failure to provide private toilets in parts of Khayelitsha, the harassment faced by sex workers and hate crimes against foreigners, women and gays and lesbians.
Unfortunately, we believe the crackdown on the media being encouraged by parts of government, some in the ANC and probably influential ‘tenderpreneurs’ and predatory elites is not aimed at improving the quality and responsibility of the media, or making it more equal. Instead it is aimed at hiding corruption, frustrating accountability and covering up service delivery failure. These are problems that now permeate every level of government; at national level, in all nine provinces and in most districts.
The Constitution was won by the sweat and blood of people who opposed and defeated apartheid censorship and repression. A brave, even if unfree, media played a part in this. We therefore wish to issue a warning to the Cabinet and all those groups and individuals that we will campaign against all attempts to undermine press freedom and the Constitution. We are committed to equality, social justice and honest government. We will defend the Bill of Rights. We will not be intimidated and we will not stand by and let the erosion of our fundamental freedoms happen.
Released by (in alphabetical order): Abahlali baseMjondolo, AIDC, Anti Privatisation Forum, Equal Education, Landless People's Movement, Lesbian and Gay Equality Project (LGEP), Rural Network, Social Justice Coalition, SECTION27, Students for Law and Social Justice, SWEAT, Treatment Action Campaign, Unemployed People's Movement, Western Cape Anti-Eviction Campaign.
Abahlali baseMjondolo, together with with Landless People's Movement (Gauteng), the Rural Network (KwaZulu-Natal) and the Western Cape Anti-Eviction Campaign, is part of the Poor People's Alliance - a national network of democratic membership based poor people's movements.
Abahlali baseMjondolo http://www.abahlali.org
Khayelitsha Struggles http://www.khayelitshastruggles.com/
Western Cape Anti-Eviction Campaign http://antieviction.org.za/
To contact Abahlali baseMjondolo in Durban please email abahlalibasemjonfolo [at] telkom.sa.net or phone 031 - 304 6420
To contact Abahlali baseMjondolo in Cape Town please email abmwesterncape [at] abahlali.org or phone Mzonke Poni on 073 246 2036
To contact the Western Cape Anti-Eviction Campaign, also in Cape Town, email aec [at] antieviction.org.za or phone Ashraf Cassiem at 076 186 1408.
To contact the Landless People's Movement in Gauteng email Bongani Xezwi at bongani.xezwi [at] gmail.com or phone Maureen Mnisi on 082 337 4514.
To contact the Rural Network in KwaZulu-Natal contact email ruralnetwork.kzn[ at] gmail.com or phone Reverend Mavuso on 072 279 2634.
AbM Facebook Group:http://www.facebook.com/group.php?v=wall&gid=19659923423
AEC Facebook Group:http://www.facebook.com/pages/Western-Cape-Anti-Eviction-Campaign-AEC/8432492420
Abahlali baseMjondolo Solidarity Campaign Network UK
Abahlali baseMjondolo Solidarity Group Namibia http://respectnamibia.ning.com/groups/group/show?id=3153753%3AGroup%3A60...
Solidarity with Abahlali baseMjondolo in Italy http://clandestino.carta.org/category/mondiali
Solidarity with the Poor People's Alliance in Germany http://akkrise.wordpress.com/sudafrika/
Land & Freedom!Date published:06/08/2010Organisation:Social Justice Organisations
- Global Witness and Partnership Africa Canada (PAC) have ‘categorically rejected’ charges that they asked for one percent of the revenues generated by the sale of the Marange diamonds.
Global Witness campaigner, Annie Dunnebacke, denied such an offer was made by her organisation or any of the other NGOs, adding that the offer to place the one percent proceeds in a protection fund is ‘outrageous’.
Dunnebacke points out that, “The violence that continues to plague Zimbabwe’s Marange diamond fields – and the government’s blatant disregard for KP rules – indisputably signify that no exports should take place now.”
To read the article titled, “NGOs deny asking for one percent of revenues from Marange Diamond Exports,” click here.Source:Idex Online
- The Freedom Charter signed and sealed in June 1955 stated that the people shall share in the country’s wealth and more importantly ‘The mineral wealth below the soil, the banks, and monopoly industries shall be transferred to the ownership of the people as a whole”. There has been rekindled talk for the nationalisation of South African mines by sections of the ruling party who believe that the time is now ripe to put this item onto the African National Congress agenda for the 2012 Centenary Conference and for this ultimately to become government policy.
How will nationalisation be good news for NPOs in South Africa?
As things are today it is not government policy nor is it, according to various reports, the ANC’s national executive committee’s immediate concern. Yet, should this proposal be taken to the next level of debate we need to ask what would be the deal for the nonprofit sector and how will the ruling party engage with the sector on this vital issue?
There are an estimated 160 000 nonprofit organisations operating in South Africa comprising of non-government organisations (NGOs), community-based organisations (CBOs), faith based organisations (FBOs), education institutions, sports clubs, etc, that employ more than one million people. A further five million citizens volunteer their talents and energy towards the implementation of good works in communities through these structures. Collectively they can stimulate the economy in raising funds and self-generated income by R18 billion per annum. There is no doubt that this is a powerful and important force for the fulfillment of social justice and the safe-keeping of democracy.
Nonprofit organisations play a crucial role in society. These organisations, whether large or small, meet a diverse range of social and spiritual needs by caring for the sick and vulnerable, responding to disasters, developing communities, protecting the environment or educating youth and adults. They are a source of inspiration and their enthusiasm for a better world is contagious. A smart government would consult and seek their wisdom on such a contentious issue as nationalisation.
Currently a high number of NPOs secure a portion of their income through corporate social investment (CSI). During 2009 (as stated in 12th Edition of The CSI Handbook) over R5.1 billion of private sector funding flowed towards NPO projects and programmes for education, job creation, health, community development, food security, arts and culture, sport, housing, the environment and many other services. Of this total it is stated that the mining and quarrying industries contribute on average 20 percent and spend significantly more on CSI than any other industrial sector. The mining sector is obliged by law to support local economic development (LED) in the communities in which they operate and from where they draw their labour. LED initiatives are frequently integrated with CSI budgets.
CSI in South Africa has shown a steady annual 10 percent growth over the past 14 years and there is no doubt that government’s Broad-Based Black Economic Empowerment (B-BBEE) scorecard has enthused more support, a trend that we can expect to continue, according to experts.
President of the Southern Africa Institute of Fundraising, Zai Miller, stated that “The affects that nationalisation might have on CSI is something we haven’t considered as we don’t think the government will take this idea further, but NPOs need to ensure we remain relevant if this does gain support.”
For the benefit of taking this argument forward let us assume that the monies accrued by nationalised mines could run into billions of Rands. How will government allocate funds and more specifically how could funds flow to NPOs? Could it be via various government ministries such as education, health, social development and then contracting of NPOs for service delivery? Or through a distribution point such as the National Development Agency? Or will it be so big that it requires the establishment of an NPO Ministry?
Or could this mean that a majority of NPOs will simply fall away as government steels up its structures and acquires sufficient resources to address all our social issues and competently provide all that is needed to address poverty and inequality making altruistic services from the voluntary sector redundant?
So who is doing the blustering and why?
The key proponent for this move towards nationalisation of the mines is ANC Youth League president, Julius Malema, who has stated that mining companies don’t plough enough back into communities and that he believes this can be done more expediently through the State machinery.
The nonprofit sector will need to challenge his thinking and so, logically, will the mining houses.
CEO of Tshikululu Social Investments, Tracey Henry, a management agency of CSI funds for nine companies, mostly in the mining and financial sectors, that managed CSI grantmaking funds of R495 million on behalf of client companies during 2009, said that “Anglo American alone, disbursed R80 million in CSI funds during 2008 to more than 250 community projects and a further R400-odd million was spent by the company on other CSI initiatives via their operations. This is a substantial investment towards economic transformation in the country”.
Other empowerment initiatives of the company include the Anglo Zimele enterprise development unit, supporting the creation of 228 businesses with a collective turnover of R1.3 billion and jobs for more than 10 400 people. Procurement deals are made with HDI’s (historically disadvantaged South Africans) to the tune of R24.6 billion a year.
Another mining champion for development is African Rainbow Minerals that contributed R60 million towards community upliftment and social investment in 2009. Of this, R19.3 million was spent on CSI, R22 million on Social and Labour Plans (SLPs) and R28 million on local economic development (LED), according to their 2009 annual report.
The above examples of good corporate citizenship demonstrate that Malema’s concerns are unfounded and that the ‘people’ are already benefitting from resources below the earth.
When asked about Malema’s proposal at a foreign investors meeting, Minister Susan Shabangu of the Department of Mineral Resources said “Not in my lifetime … it’s not going to happen” and she further argued that for the state to become involved in such a precarious industry it will have to be efficient, it will have to demonstrate competency.
History is fraught with good and bad stories. Did NPOs benefit?
The risks and advantages of nationalisation are constantly debated around the world but it seems that mining is the riskiest and dirtiest of all. Probably due to an ongoing need for reinvestment in new equipment and technology and pressure from labour movements for higher safety standards. Trillions of Rands have already been plunged into the growth and development of mining, which is never ending.
For more than 150 years the French Government has had an on-off-on romance with nationalisation. They have coupled with various sectors like banking, car manufacturing, telecommunications, electricity supply, the Paris’s underground Metro system and more. But State-owned mines are now history as demands for crippling subsidies put a strain on the French economy. Efforts were successful to coerce the private sector in taking these millstones from around their necks. Today France is rated as the number one country on the United Nations Human Development Index (HDI) and it is to be noted that this country has a rapidly growing and very feisty NPO sector.
Another good example of nationalisation for people development is Sweden, a social democratic welfare state that is also a monarchy. They nationalised an iron ore mining company, LKAB, in 1950. All surpluses from this vibrant globally active enterprise enriched the Swedish socialist system for better education, health care, social services, public transport, pension funds and so forth which makes it a desirable country to live in and rated as number seven on the UN HDI. Since the economic downturn LKAB has been seeking to raise capital for new ventures and in order to do this they restructured last year into a public company. Sweden also has a vibrant and active nonprofit sector mostly in the arts, culture and recreation areas but higher education institutions such as Umeå University, one of the oldest in the country, have dynamic fundraising programmes.
In Africa we have learned many lessons about the challenges of nationalisation. In Botswana the State has benefitted through ownership of mines that has assisted in the development of the people but more needs to be done in meeting the needs of communities and alleviating poverty. The NPO sector remains small in that country but it is lively and reliant on the private sector and individuals for donations. Other countries like Zambia, Uganda and the Democratic Republic of Congo tell us that this model just isn’t a good fit in the mining industry where the deepest and most sophisticated mines require the highest level of expertise in engineering, management, marketing and care of assets.
A number of state-owned and public enterprises work closely with community-based organisations. The Eskom Development Foundation, Transnet and Telkom Foundation have demonstrated a commitment to social-economic development and spent R222 million on CSI last year engaging numerous NPOs.
A very old state-owned enterprise, *Komatiland Forests (KLF), with a bi-line stating “Growth through Partnership”, neatly sums up their philosophy for engagement with NPOs. They have a very inspiring corporate social investment policy and last year spent R8 million on CSI, a further R2 million on bursaries for students and they also offer in-house Adult Basic Education and Training (ABET) and wellness programmes for employees. According to Hazel Banda, who manages their CSI Fund within the Human Resource Department, “We work extensively with NPOs and communities in close proximity to our operations and our CSI allocation is integral to our operational budget.”
An ideal model for a developmental state seems to be something along these lines where the State, the private sector and civil society take equal responsibility for meeting social needs.
Research indicates that nationalisation can be a solid move in some countries but it has a limited life cycle and is dependent upon the choice of commodity such as the Venezuelan experience in the Orinoco oil fields. This has not addressed poverty on the ground but it has enabled the State to balance its books and create a number of jobs.
As a nation we need to ask: can we take this step of nationalisation when so many other burning issues are on the agenda for development of our people? If this call by the ANCYL is a move to fight poverty, then it lacks substance and shows no real evidence to support its attempt.
Should the nationalisation proposal be taken seriously, then the NPO sector will need to be consulted by government (and for that matter the ANC) on such a drastic and risky move as it and millions of beneficiaries stand to go into free fall. We can’t afford a dip of R1 billion in annual CSI spend either temporary or permanently.
NPOs will need to forearm themselves and be well-prepared with questions for engagement on this subject. Some of these questions to be tackled could include:
- How will nationalisation be good news for NPOs?
- Will the current level of CSI be increased or even maintained?
- Will community/social development funds become a regular budget item of a state owned and managed enterprise?
- Will surpluses derived be ploughed into Treasury to booster budgets in government departments - social development, health, education, environment, arts and culture, etc. for partnerships with NPOs?
- Will surpluses derived be managed through a distribution point such as the National Development Agency to NPOs?
- Will there be a new independent NPO Ministry?
- And finally: Is it possible that some NPOs will be compromised and so close down?
- Ann Bown is a consultant at Charisma Communications. Bown is a consultant to the nonprofit sector on matters of sustainability, fundraising and public relations.
With the State of the Nation Address by President Zuma and the Budget behind us, and the plethora of state of the province addresses for good measure, South Africa can truly said to be in its Season of Promises.
There are promises of better government from the President, a fight against corruption and a pledge to launch the equivalent of a moral rearmament programme. There is a focus on greater spending in the budget on social grants, health and education, not forgetting the provinces that conscientiously walk in national government’s fiscal shadow. But what does this all mean, specifically for the thousands of NGOs that continue to work tirelessly on the ground?
It is widely accepted that civil society in South Africa provides a substantial number of services that government is unable to fulfil. Thus, while increased spending on socio-economic and educational matters is welcome, the reality remains that countless organisations in civil society are fulfilling socio-economic imperatives because the government is simply unable or unwilling to do so.
As has been noted by some NPOs already, there was no acknowledgement of this role, or relief for CSOs in the budget. To be sure, there are instances in which government gives financial support to NPOs, such as a R12 million grant to 44 NPOs operating in the health care sector in the Northern Cape. This sounds good, but it equates to an average of just less than R273 000 per annum per organisation. That is small beer in the budget of most NPOs and will not go a long way towards enabling those organisations to provide the type of critical service they doubtlessly give.
It is a tragedy that administrations at national and provincial level seemingly live with the delusion that they are meeting the critical needs of people on the ground on the one hand and, on the other, fail to recognise that civil society is providing public services that ordinarily (and sometimes even statutorily, such as in the case of education and health) will be the responsibility of government.
The question is, therefore, why donors should be subsidising the state in the provision of basic services? People are already paying tax for these services and there is, frankly, not such a huge shortage of money. It seems to go astray between the taxpayer and the beneficiary. Besides corruption, there seems to be a huge amount of wastage or the money is simply not used. The government is meant to be the caretaker of these funds but there appears to be little care in ensuring that they are used properly or used at all. The number of departments that did not achieve clear audits, including the Presidency, shows how little concern there is for tracking money, providing paper trails and exposing corruption.
Donor funding is currently focusing on the basic provision of services – in reality the responsibility of the state. This has skewed the view of civil society from one that is vibrant and innovative, producing new ideas, new research, defending human rights, making a contribution to policy, advocating for systemic change and social justice, whether relating to the environment or gender as examples. Instead, philanthropy remains caught in the trap of service delivery, where organisations are seen as the sum total of their projects with indicators, outputs and measurable outcomes such as plates of food provided, rather than as living, thinking, advocating and dynamic structures.
Notwithstanding the fact that the Seasons of Promises have failed to live up to expectations, civil society has worked tirelessly, with many people doing so voluntarily, to address the failure of government service. That civil society organisations are able to make such a major contribution to our country is due to the support of local and foreign donors and philanthropists, and the hard work of ordinary people on the ground. Yet government continues to marginalise our non-profits from the mainstream. Whilst the unions and business are included in Nedlac, where is civil society? When the President travels abroad with his entourage, where is civil society? Is this the forgotten sector that carries the can or is this deliberate marginalisation with civil society viewed as a potential threat? Where will organised criticism of the government come from in future – beyond the realms of opposition parties in what is becoming the stifled institution of parliament.
Perhaps there is a recognition that the organisations really working on the ground may have something to say when there is no change in people’s circumstances despite the Season of Promises.
This current Season of Promises has also introduced a new element for this time of the year - the suggestion by the president of the need for a new moral code for South Africa.
Civil society, in both the apartheid years and in the post-1994 period has never departed from its commitment to the values and norms of a moral society. This is perhaps most obviously illustrated in the work of the faith-based organisations that form part of it, but has also been present in the social, health, educational, human rights, job creation and economic and empowerment programmes run by various civil society organisations. It is appropriate therefore to point out that, in spite of the falls from grace that occur in any organisation because of human behaviour, it is not civil society that stands accused of wide-spread fraud, corruption and graft. Civil society has stood firm on these issues: it is not they who have confused the culturally acceptable practice of polygamy with the damaging and disrespectful practice of promiscuity. It is not civil society that has forgotten that this is the 21st century and that over-population has contributed to global warming – that fathering more than 20 children is a disservice to everyone in this world.
Some form of moral renewal is doubtless necessary in a country in which public figures berate one another with scant regard for human and race relations, and in which the rich get richer and the poor get poorer at an alarming rate. It is critical that civil society participate in this quest and that, of all sectors, they have a leading role as they are the organisations and individuals who keep the institutions of care, education and other social entities operating at the grassroots level.
- Shelagh Gastrow is the Executive Director of Inyathelo – The South African Institute for Advancement. This article was first published on Daily News website and it is republished here with the permission of Inyathelo – The South African Institute for Advancement.
- The Department of Home Affairs in Zambia has disclosed that more than eight Zambian NGOs are under investigation for alleged money laundering and other illegal activities.
Minister Lameck Mangani says the government, through the registrar of societies is also scrutinising some NGOs that have drifted from the mandate for which they were established.
Mangani, who states that the Drug Enforcement Commission commenced investigations of the NGOs late last year following concerns on how the funds were being managed, is also urging NGOs to maintain high levels of accountability. Once the investigations are concluded, the erring NGOs will be prosecuted.
To read the article titled, NGOs under probe,” click here.Source:All Africa
- 1. Introduction
The King Code of Governance Principles (the Code) and the King Report on Governance for South Africa were published on 1 September 2009 and became effective on 1 March 2010. Like the first and second reports, this third report is aimed at promoting good corporate governance in South Africa and was compiled by the King Committee under the chairmanship of Professor Mervyn E. King. The King Committee has received both local and international acclaim for its contribution towards corporate governance.
In its first two reports the King Committee did not make any effort to explain its relevance to civil society organisations (CSOs). The King Committee was noticeably more concerned with the governance of commercial companies. CSOs were left in the dark as to the relevance and applicability of the first two codes.
King III has now boldly declared that it applies to ‘all entities regardless of the manner and form of incorporation or establishment and whether in the public, private sectors or nonprofit sectors’.3 The principles contained in the report have purportedly been drafted so that ‘every entity can apply them and, in doing so, achieve good governance‘.4 The accuracy of this statement is questionable.
Although King III is a very important document in the history of corporate governance in South Africa, it must be recognised for what it is: a code suited for commercial entities that may find limited application in CSOs.
This article briefly explores the potential implications of King III on CSOs.
2. The development of the King Codes
In 1992 the King Committee was established with the specific aim of researching and making recommendations into corporate governance in South Africa. The first King report was published in 1994. King I recognised that companies do not act independent from society. For this reason the highest standards of corporate governance were encouraged through enterprise with integrity. This entailed that a wide range of stakeholders’ interests are to be considered as it relates to the fundamental principles of good financial, social, ethical, and environmental practice. The second King Report (King II) was released in 2002. Without deviating from the principles of its predecessor, King II was more focused on introducing the idea of corporate citizenship and the notion of a triple bottom line. The latter involved the exercise of the corporate governance function with due regard to the company‘s actions on people, planet, and profit.
Some of the recommended practices of the King II report were incorporated into the Companies Act 71 of 2008 and some have become regulatory prescriptions to companies listed on the Johannesburg Stock Exchange. King III now states that ―Good governance is not something that exists separate from the law and it is inappropriate to unhinge governance from the law. 5 The argument is that with time governance practices eventually becomes the standard against which the board is measured. Should a court have to look at an incident in respect of governance, such standard (governance practices) will be used to measure the conduct of directors. The insinuation is clearly being made that components of King III stand a good chance to attain the standard of law. King III further argues that: ― Corporate governance practices, codes and guidelines therefore lift the bar of what are regarded as appropriate standards of conduct. Consequently, any failure to meet a recognised standard of governance, albeit not legislated, may render a board or individual director liable at law.
There is no doubt that some of the principles contained in King III would eventually become law. This raises the question whether King III lays a proper foundation that could inspire legislation that will govern CSOs.
3. Is King III an appropriate standard for civil society governance?
King III is not legislation. The fact that King III suggests that organisations should ‘apply or explain’ why they are not applying it, creates the illusion that it has the same authority as legislation. Given this insistence that King III applies to all entities, some funders may view it as the standard of governance for all CSOs in South Africa. King III, whether appropriate or inappropriate for CSOs, can in effect play the role of a gatekeeper for donor support.
King III is heavily skewed, in language and meaning, towards the commercial sector. This is highlighted by the fact that the report speaks overwhelmingly to business and commercial enterprises and assumes that trading activities are the sole means of sustaining all entities. King III is seemingly unmindful of the fact that a large number of CSOs in South Africa do not generate their own income through trading activities. It can only be deduced that this assumption is a consequence of a neglected consideration of the nonprofit sector.
King III is heavily associated with the Companies Act. Throughout the Report consistent reference is only made to the Companies Act of 2008 as the Act regulating the establishment of entities in South Africa. Now, one can only deduce that the intention was to speak to the governance of companies that have been and will be registered in terms of the companies’ legislation.
Given these factors alone there is reason to be concerned with the impact that King III may have on the enabling environment of CSOs — in particular on community-based organisations, as the Cinderellas to our sector.
It is claimed that King III was necessary in light of the new Companies Act 71 of 2008 and changes in international governance trends. This poses two very important considerations. First, not all CSOs are established in terms of the Companies Act and King III is seemingly not cognisant of the tens of thousands of voluntary associations that operate in terms of common law in South Africa. Second, an increased expectation of a high level of sophistication has now been imposed by King III on smaller community-based organisations. This seemingly academic approach has placed less emphasis on the local context.
The more sophisticated NGOs would be better placed to keep in step with the latest tunes. That however is not the reality for the majority of community-based organisations, which comprise the overwhelming component of CSOs in South Africa.
The Nonprofit Organisations Act, No. 71 of 1997 (the NPO Act) is one of the key pieces of legislation for the non-profit sector in South Africa. It provides for the establishment of a Nonprofit Directorate which has, amongst others, the function “To ensure that the standard of governance within nonprofit organisations is maintained and improved.”7 It is clear that the King III report was compiled without involvement from the NPO Directorate. This is an important factor, as the NPO Act is in particular aimed at ― creating an environment in which nonprofit organisations can flourish.8
4. The implications of King III for civil society governance
It is not difficult to see how some CSOs would snugly embrace King III and would most probably gain competitive advantage in implementing it. The authors of King III claim that it has been prepared so that ‘every entity can apply them and, in doing so, achieve good governance‘. This is hardly evident from the Report. A number of principles contained in King III cannot realistically be applied to all legal entities. The following are such examples:
- Audit Committees: Principle 3.1 of King III recommends that the board should voluntarily appoint an effective and independent audit committee consisting of at least three members. It further suggests that ‘there should be a basic level of qualification and experience for audit committee membership’.9 This audit committee should collectively have an understanding of a wide range of issues, namely: integrated reporting, internal financial controls, external audit process, corporate law, risk management, sustainability issues, information technology governance, and governance processes within the company.10 This expectation is out of sync with the reality of most community-based organisations in South Africa. In addition, the preparation of audit reports is not a legislative requirement for all companies in terms of the Companies Act of 2008.11
- Internal Audit: Principle 7.1 of King III provides that the board should ensure that there is an effective risk-based internal audit. The Report further suggests that the internal audit function ‘should adhere to the Institute of Internal Auditors’ Standards for the Professional Practice of Internal Auditing and Code of Ethics at a minimum’.12 The implication is that all CSOs should introduce the standards of a professional practice as a minimum requirement into its internal audit function.
- Remuneration: Principle 2.25 of the Code states that ‘Companies should remunerate directors and executives fairly and responsibly‘.13 The Report further states that ―The Board should promote a culture that supports enterprise and innovation with appropriate short-term and long-term performance-related rewards that are fair and achievable.14 King III has not taken into account that nonprofit boards are, due to the nature of nonprofit organisations, predominantly volunteers and are not getting paid for serving. The payment of nonprofit board members may have detrimental consequences for the nonprofit sector.
- A lack of financial resources
- The availability of proficient board members to ensure compliance with King III.
- The additional financial burden or potential mission drift that may result from having to now also consider matters pertaining to business that do not form part of their main objective
- Many of the recommended practices ignore the fact that CSOs derive income through soliciting funding from a donor. Whether cash-strapped CSOs would be able to mobilise additional resources to implement King III remains to be seen.
King III has introduced a code on governance that largely considers governance practices from a market-based perspective. It has not taken into account that the nonprofit sector does not operate primarily on the premise of supply and demand. The Code accordingly lacks principles on key areas that are central to civil society governance.
King III has not mentioned the issue of resource mobilisation, being a key responsibility of nonprofit boards. It is premised on the assumption that business is a means of sustaining all entities. King III does not take into account that a large part of CSOs have come into existence due to market failure. Accordingly, a number of organisations caring for the poor and needy (who are unable to pay for services) have to rely on donations and fundraising.
King III provides no guidance on how CSO boards should go about recruiting new board members. Recruiting new board members to volunteer their time serving on a CSO board is very different from offering someone a salary to become a director of a commercial company. Nonprofit directors carry similar responsibilities as for-profit directors, but are ordinarily not remunerated. The motivation to serve on the board of a nonprofit is therefore different compared to a for-profit. The commercial director is motivated primarily by financial gain whilst the CSO director will not ordinarily receive financial payment. The recruitment of directors to serve on nonprofit boards is therefore a central component of nonprofit governance – an aspect that King III has simply ignored.
King III does not take into account that different models of CSO governance have evolved over time. King III has, however, impliedly given recognition to the existence of different commercial models. King III does not offer guidance on some of the governance challenges faced with different CSO governance models. In one CSO model, for example—the constituent model—board members are appointed with the mandate of representing a particular constituency on the board. This governance model is widespread in the South African CSO sector and is also being promoted by the South African government. One of the shortfalls of this governance model is that it is not aimed at ensuring individuals with diverse governance skills are represented on the board. King III is unmindful of these unique challenges and offers no guidance on them.
Developments in the marketplace continue to have impacts on the development of legislation affecting the nonprofit sectors across the world. Legislatures often do not take into account the implications of such legislation on nonprofit organisations. The confusion following the applicability of the Sarbanes-Oxley Act to nonprofit organisations in the United States, shortly after its introduction, is an example of this.
CSO accountability should be promoted through laws and codes. The intention of this article is not to argue for lesser standards of governance and accountability of CSOs, but for suitable standards. Governance standards should not be introduced on the assumption that marketplace standards are suitable for CSOs. This form of legislative development is detrimental to the unique character of CSOs and will corrode the values underlying the nonprofit sector.
At least two prominent institutions have blamed weak corporate governance arrangements for the current global financial crisis. The Organisation for Economic Cooperation and Development concluded that: ―...the financial crisis can be to an important extent attributed to failures and weaknesses in corporate governance arrangements. When they were put to the test, corporate governance routines did not serve their purpose to safeguard against excessive risk taking in a number of financial service companies. 5 In a similar vein, the United Nations found that: ―...it is equally urgent to recognize the root causes for the [global economic] crisis and to embark on a profound reform of the global economic governance system.‖16 It is likely that the global financial crisis will result in further legislative and governance reforms. King III illustrates how commercial entities and CSOs can easily be thrown together and measured with one measuring tape. This is clearly inappropriate in the South African context and the consequences of it remain to be seen. A governance code aimed at promoting good governance will overburden and may potentially stifle the growth of CSOs.
1 Peter S.A. Hendricks was admitted as an attorney in 1999 in the Cape High Court of South Africa. He has numerous skills and wide experience in nonprofit law and governance. His law firm PSA Hendricks & Associates has a focus on service and support to nonprofit and commercial entities with a social mission.
2 Ricardo G. Wyngaard has provided legal advice, training, and assistance to the nonprofit sector since 2000. He has participated in a number of legislative reform and research initiatives on nonprofit legislation and is currently running a solo law practice focusing on nonprofit law and governance (www.nonprofitlawyer.co.za).
3 The King Committee, (2009) King Report on Governance for South Africa, Institute of Directors, p. 17
5 Ibid, p.7
6 Ibid, p. 8
7 Section 5b(ii) of Nonprofit Organisations Act, No. 71 of 1997
8 Section 2 (a) of the Nonprofit Organisation Act, No. 71 of 1997
9 The King Committee, (2009) King Report on Governance for South Africa, Institute of Directors, p. 57
11 The draft regulations of the Companies Act of 2008 are more in line with a threshold approached adopted by the California's Nonprofit Integrity Act of 2004 which requires charities with gross revenue of $2 million or more to appoint an audit committee, which amount excludes grants received from government.
12 The King Committee, (2009) King Report on Governance for South Africa, Institute of Directors, p. 93
13 Ibid, p. 48
15 The Corporate Governance Lessons from the Financial Crisis, Organisation for Economic Co-operation and Development, 2009
16 The Global Economic Crisis: Systemic Failures and Multilateral Remedies, United Nation
- This article first appeared in the International Journal of Not-For-Profit Law, volume 12, Number 2 February 2010. It is republished here with the permission of the authors; Peter S.A. Hendricks, PSA Hendricks & Associates and Ricardo G. Wyngaard, Ricardo Wyngaard Attorneys .
- The Johannesburg Equality Court has found the African National Congress Youth League (ANCYL) president, Julius Malema, guilty of hate speech and harassment.
Magistrate Colleen Collis ordered Malema to make an unconditional public apology within two weeks and pay an amount of R50 000 to a centre for abused women within one month, for saying president Jacob Zuma’s rape accuser had ‘nice time’.
Meanwhile, Sonke Gender Justice, an organisation which took Malema to the Equality Court, has extended a hand of friendship to Malema outside court after the judgement.
The organisation’s Mbuyiselo Botha, who expressed Sonke’s willingness to work with the ANCYL in addressing problems young people face in their lives, argues that, “We want him to say he apologises for the hurt and the pain he caused."
To read the article titled, “Malema guilty of hate speech,” click here.Source:Mail and Guardian
- The release of the King III Report on Corporate Governance on September 1 last year and its imminent application has rekindled and invigorated the national discourse on corporate governance and social responsibility. Although this is a positive step, there is a need to orientate the debate towards the responsibilities of the Non-profit Organisation (NPO) sector in a more meaningful way than has been hitherto by King III.
The problem with King III in its present form is that in failing to mention specifically the role of governance in the NPO sector, it inadvertently views NPO activities within the same prism as that of the corporate sector. This is a mistake given the vast inherent differences between the two sectors.
Indeed, it represents a misunderstanding of both the role of civil society organisations, as well as their footprint on the Southern African and global landscapes.
Perhaps the most obvious difference between the two sectors is that the corporate sector exists to achieve the maximum amount of profit possible, whereas the NPO sector, by definition has to channel any resources it generates towards the benefit of the organisation and the work that it does.
But there are other differences too. Directors of an NPO freely and voluntary give of their time to fulfil an altruistic purpose; in the corporate sector, directors do not freely give of their time, and expect the highest possible remuneration for their investment. As well illustrated by exposes the world over – South Africa being no exception – such remuneration is sometimes astronomical in its largesse.
The corporate sector could also generally be described as a more homogenous industry than the NPO sector. The latter ranges from small and informal community-based organisations (CBOs), to church and faith-based organisations, to so-called Big International Non-Governmental Organisations (BINGOs), which operate on a multinational level, utilising large budgets and exercising considerable control over policy formation and state action. In addition, the majority of NPOs are trusts and voluntary associations. The claim by King III that it covers all entities regardless of founding constitutions is spurious. Trusts and voluntary associations have their own body of law including aspects of common law as well as guidance from international principle and practice, especially taking into account the degree of funding of South African NPOs that comes from abroad.
A key issue in the non-profit sector is the general principle of participative decision-making. The sector is accountable to various constituencies including the general public (as NPOs are established for public benefit), to donors, to their beneficiaries and partners and in the case of voluntary associations – to their members. Hence, the sector would expect to be consulted before codes and measurement tools relating to its governance were established. The Institute of Directors represents its members whose profile does not resemble most organisations in the non-profit sector. It has a clear mandate to undertake its task for the for-profit sector, but has no mandate from the non-profit sector and nor has it been accountable to that sector.
Is there a need then to have an NPO governance framework? We at Inyathelo – the South African Institute for Advancement, a non-profit organisation aimed at building South African civil society, and many others with whom we work and have close associations, think that there is.
This is particularly pertinent considering the work NPOs do. Very often, this involves the provision of public services – the building of schools, for instance, or providing emergency access to medicine in natural disasters. Governance of the organisation and its funding are critical to donor and beneficiary confidence besides the necessary oversight of organisations by their boards on behalf of the public (as they are public benefit organisations).
There is therefore a need for the South African non-profit sector to explore the development of a Good Governance Code or Charter that speaks to, among others, the specific governance and risk management needs of NPOs. Such a Code needs to be aware of the multi-layered and multi-textured nature of NPOs. Different standards need to be set for CBOs with limited resources, to BINGOs which are effectively able to wield the same positive power that a group of governments could collectively maintain.
Besides the clear principles of good governance such as oversight of the organisation’s direction and affairs; fiduciary responsibility which recognises the duty to act for the good of others and ensuring the responsible and ethical management of an NPO, such a Code could gauge questions of local inclusivity and consultation in the design and implementation of NPO programmes and recommend access to information for those affected by the programmes.
This Code needs to be separate from a corporate governance framework that has, as its driving force, the interests of the commercial sector.
As we at Inyathelo have previously noted, procedures such as ‘integrated reports,’ ‘audit committees’, ‘corporate citizenship policies’ and ‘business rescue proceedings’ will not find place with small CBOs, which have neither the resources nor the technical know-how to discern which of the principles in King III apply to them.
It is futile indeed for NPOs to shape themselves solely into the governance mould required for the corporate sector. This is so because essentially NPOs have long since bypassed that mould.
For NPOs, social responsibility is not a question of ‘apply or explain,’ as it is for the corporate sector under King III. Rather, the application of altruistic values and the provision of social capital are inherently present.
The question is then how are NPOs applying these values, and it is this complex algorithm which needs to be solved through thorough input from the NPO sector and not the top-down approach that King III, with all its corporate and government muscle seeks to impose.
- Shelagh Gastrow is Executive Director at Inyathelo: The South African Institute for Advancement