Six months after the implementation of the Political Party Funding Act, 6 of 2018, on 1 April 2021, the Electoral Commission has published the first 2021/22 Quarterly Disclosure Report in terms of the Act and its regulations. This first report was done on 9 September 2021, a month before the expiry of a stipulated six-month period granted to the Commission during the first year of implementation.

For the first quarter of the 2021/22 financial year, three political parties made declared qualifying donations, the total value of which was just over R30 million – R30 008 841.74 to be exact.

“This Act has introduced a new era of transparency within South Africa’s electoral democracy by, among others, mandating all registered political parties to disclose to the Commission all donations above R100 000 per annum,” says Electoral Commission Chairperson Glen Mashinini.

The Act put specific restrictions on sources of funding for political parties, including proscription of donations by government departments, state-owned entities and foreign governments and agencies. Further restrictions have also been put on the amount and purpose for which foreign entities can make direct donations to registered political parties.

Which parties made declarations?

“Two represented political parties and one unrepresented political party made declaration of qualifying direct donations,” says Electoral Commission Chief Executive: Party Funding, George Mahlangu. These are the African National Congress (ANC), the Democratic Alliance (DA) and Action SA. The ANC and the DA declared individual donations received of R10 720 000.00 and R15 983 751.48, respectively. Action SA declared total direct donations amounting to R3 305 090.26.

Value of donations in-kind?

“Of the total amount declared across the three political parties, total value of donations in-kind is R855 685.41, made of R499 595.15 for the DA and R356 090.26 for Action SA. No in-kind donation was received and declared by the ANC,” Mahlangu he adds.

Donations from foreign sources

Two foreign entities made direct donations to their political parties of choice during this period. It is worth reporting that the donations were compliant with requirements set out in section 8 (4) of the Act, that such donations must only be for the purposes of “training or skills development of a member of a political party; or policy development by a political party”. There was therefore no breach or contravention of the Act detected in this regard. The Commission can therefore confirm that there is generally a fair level of understanding and compliance with what the Act seeks to achieve.

George Mahlangu, the Electoral Commission’s Chief Executive: Party Funding

How was compliance encouraged?

Electoral Commission Chief Electoral Officer Sy Mamabolo indicates that all registered political parties, both represented and unrepresented, were sent constant reminders to submit their declarations before the due date of 31 July 2021. “Although not all political parties responded, a significant number of them, especially among the represented parties, reported in writing that they did not receive qualifying donations, i.e., donations above the threshold amount of R100 000,” he adds.

Did all parties and donors submit qualifying declarations as required by section 9 of the Act?

Section 9 of the Act requires that both political parties receiving donation and their donors (if a juristic person or entity) must declare such donations.

In this regard, three (3) of the donors have failed to comply with section 9 (2) of the Act. These are donors for one of the represented political parties. Although the political party has made the declaration and therefore complied from its end, the donors did not comply with the provisions of the legislation. This means that the record includes what are referred to as single legged donations.

“In this regard, the Commission has issued a directive in terms of section 15 of the Act for the Party to further pursue the donors for compliance. Failure to comply may lead to the specific donors being investigated and punished for non-compliance in terms of section 14 (3) of the Act,” indicates Electoral Commission Vice-chairperson Janet Love.

Lessons learnt and remedies

1. Despite section 9(2) of the Party Funding Act, 2018 providing that only juristic persons are required to declare their donations, there have been instances were some natural persons have declared their donations. This is not mandatory; however, it is welcomed.

2. In terms of section 9(1)(a) of the Party Funding Act, 2018, read with regulation 9 of the Presidential Regulations, only amounts above the prescribed threshold of R100 000 are required to be disclosed. Some of the parties have declared amounts that are equal to and not above this prescribed threshold. Such disclosures form part of this report.

3. Some donors have not done online declarations on their end. In such cases, proof of donation in the form bank deposit or electronic funds transfer (EFT) slips and declarations that were made from the political parties’ side were used to confirm source of such funds. The Commission will look into ways of making it less cumbersome for donors to submit declarations so as not to inadvertently discourage direct donations.

4. There were no prohibited donations reported or declared by political parties and/or donors as defined in terms of section 8. This is a good indication that there is a reasonable understanding and compliance with the legislations.

5. There is high level of willingness to comply with the legislation from among the political parties, especially the represented parties. This was largely demonstrated by the levels of interaction with the Commission in cases where parties were uncertain about what the legislation requires of them.

6. Some of the political parties and donors waited until the end of the quarter or until they were reminded before they could make their disclosures. In future, the Commission will encourage parties to make prompt declarations to avoid bottlenecks or finding out in the last minutes that their declarations were not compliant.

7 . Some of the political parties submitted on the Online Party Funding System (OPFS) their complete bank statements, which reflect details that the Commission does not have interest in. Parties will be encouraged to reserve those for their auditors.

Multi-Party Democracy Fund

In the first quarter of the 2021/22 financial year, the Multi-Party Democracy Fund received a single contribution from a member of the public, Mr. Paul Malcolm Graham, to the value of R2 000.

The money in the Fund will only be distributable on the day it reaches a total of one million rand. The effect of this this is therefore that, to date, there have not been any allocations from the Multi-Party Democracy Fund.

“The Commission appeals to the South African public and corporates alike to open their purses and support multiparty democracy. The sustainability of the Multi-Party Democracy Fund is a critical step towards a healthy democracy as envisaged in our Constitution,” concludes Mamabolo.

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