Trade union pension and provident funds control billions of rands, the oversight of which is too often carried out by small networks of political and business cronies who didn’t struggle to be poor.
The growing list of scandals involving the theft of workers’ retirement savings reflects an apparent belief among union leaders and their corporate enablers that they are entitled to a little extra benefit, skimmed off the top of employee benefits.
In some instances, this means simply collecting commissions from steering investments toward fund managers eager for this lucrative line of business. The result is investment choices that are not made with workers financial interests front and centre, and underperformance that slowly eats into their chances for dignified retirement.
More and more often, however, it is more blatant than that. The looting of close to R700-million intended for retired mineworkers and their wives and orphaned children in Fidentia Asset Management is the most prominent example, but it is far from unique.
Now a scandal of comparable scale is unfolding in the clothing and textile industries, where more than R400-million formerly held by five provident funds may have gone up in smoke. As we report in this edition, workers are in a ferment over their unions failure to communicate with them about what exactly is going on.
At this stage, it is unclear whether there has been deliberate malfeasance. An investigation into the liquidated Canyon Springs Investments 12, co-owned by deputy economic development minister Enoch Godongwana, should help to determine that. But what is crystal clear is that with the say-so of the South African Clothing and Textile Workers Union, workers’ savings were squandered in a series of failed investments by companies apparently set up to “empower” their owners.
‘Fundamental rule’
A fundamental rule with retirement money is that it should be conservatively invested in large, stable vehicles with a proven track record. Why did Sactwu breach its fiduciary responsibility to members by departing from this prudential rule?
There are allegations that the Trilinear Empowerment Trust, in which industry provident funds were consolidated, is not registered with the Financial Services Board and that the loan agreement between Trilinear and Canyon Springs remained purely verbal for two years, while the latter received millions of rands in loans ultimately drawn from workers deferred earnings.
It beggars belief that Godongwana, whom we have always regarded as among the most credible of ANC policy leaders, did not know where the millions in loans to his company came from and Trilinear has publicly scoffed at the idea.
As a former trade unionist himself, and now the deputy minister in a portfolio supposedly advancing workers’ interests, he has a lot to answer for.
Pension and provident funds exist for one purpose and one purpose only — to provide for workers and their families when they are no longer able to provide for themselves. The latest pension-fund scandal highlights the enormous risks involved in viewing them as a piggy bank for other social aims, however laudable, or worse, for outright self-enrichment.
Down with demagogues
It is 35 years since the youth of Soweto rose up against Bantu education and, with it, the machinery of the whole apartheid system. Of course 35 is also the age limit for membership in the ANC Youth League, which kicked off its conference on the June 16 holiday this week. The date serves to emphasise in both generational and political terms the gulf between the league’s top echelon and 1976 leaders like Joel Netshitenzhe and Murphy Morobe.
It is a common refrain that media interest is the primary fuel for the populism of the league and its president, Julius Malema. Ignore them and the nobler tradition of 1976 will have space to assert itself, the logic goes.
The fact is, however, that in a single-party-dominant system like ours, the youth league is a conveyor belt of future leaders. What the memory of the uprising demands is that we reflect on the character of that leadership.
Will Malema’s race-baiting demagoguery prevail and, with it, the culture of bum-baring defiance? Or will the many within the youth league whose Âpriorities are education, jobs and skills find a way to gain more control of what they rightly see as a lever of power?
It is an urgent question for all of us.
The youth of Soweto went to war unarmed to ensure that they had choice in the system of education and governance they were subjected to — and that future generations would be able to live in conditions of freedom and equality.
On the bleakest analysis their heirs are split between those who parrot struggle history and sing the old songs to legitimise their path to tenderpreneurial wealth and those who are entirely alienated from politics, past and present, anxious simply to get on with their lives.
The reality is more complex. Even at its worst the youth league speaks to the real crisis in youth unemployment and poverty and it is a message we have to hear, however alien the language. Offering a viable alternative path, and crucially one that resonates with Julius Malema’s core audience, is a task that ought not to be left to the youth league, or indeed the youth. The sacrifice of Hector Pieterson and his comrades demands more.