By Sinawo Thambo
Security companies contracted by state institutions or municipalities must be audited
It is a cold winter morning in the pothole-ridden streets of Bloemfontein, Nkululeko, who is employed by the municipality through a tender, returns from a demanding night shift as a security guard. His job is thankless one where he protects the government’s inanimate objects from criminals who survive poverty by destroying public infrastructure.
The only solace for Nkululeko, who confronts the freezing nights of Botshabelo unarmed daily for measly remuneration, is that should he one day meet an untimely death, fall ill or be involved in an encounter that leaves him wounded beyond the symbolic wounds of poverty, is that the money his employer deducts every month from his salary will to pay for those rainy days.
The only comfort he draws is that his two children will have their education and basic needs paid for by his pension if one day he were to return from those lonely nights in a body bag.
Little does he know that in the greater scheme of things, his pension fund is an empty shell, because of a collusion by the government and the most despicable running-dogs of capital stealing it for personal benefits.
This scandal is one of the greatest heists and raids of the retirement funds of the poor in the history of SA. According to a report by the Financial Sector Conduct Authority (FSCA), 3,262 private security companies and municipalities have been deducting statutory amounts from the salaries of security guards and employees, ostensibly to pay for health, pension fund and provident fund benefits.
The trick is that these pension funds, namely the Private Security Sector Provident Fund (PSSPF) are victims of noncompliance by private security companies, and looting by pension fund administrators and asset fund managers under Treasury’s watch.
On the January 12, EFF rang the alarm. The theft of this money is rooted in the corrupt tendering system, wherein private security companies are given operational licences despite not being in compliance with Section 13A of the Pension Funds Act. They are awarded contracts by the government, state-owned enterprises and municipalities, despite objective evidence that they are deducting money from workers, but not paying it towards workers’ pension funds.
The second point, which reveals aspects of organised financial crime is the levels of co-ordination between the crudest agents of capital, in misusing the pension monies of workers in instances where the money is actually paid towards pension funds. This is because pension fund money is managed by pension-fund administrators, who collaborate with asset managers to mis-invest the money of workers towards various commodities or to provide loans that are never repaid.
Of greatest concern, however, to the working and middle-class is that Treasury has been complicit in this jeopardising of the lives and livelihoods of vulnerable security guards.
Treasury is responsible for legislation and regulation that pertains to the awarding of tenders by government and state institutions.
One of the critical requirements when applying for, and awarding a tender, is that all companies involved must be in compliance with the laws of SA, and in this case, labour laws become relevant. The relevant legislation in this case, is Section 13A of the Pension Fund Act, which states that “an employer of any member of a fund must make its monthly contribution payments no later than the 7th day of each month, after the month for which such a contribution is payable”.
If we are to read the FSCA report, there are private security companies and local government municipalities that have been in contravention of this law for over 240 months.
Any company that does not comply with this statute ought not be awarded any tenders by the state as they are not in compliance with the law.
It is the EFF that wrote a letter to finance minister Enoch Godongwana not only alerting him of this crisis, but providing a guide on how to ensure the financial security of these workers and protect the integrity of government institutions and municipalities from being complicit in the fraud, theft and breaching the labour laws of SA.
In a letter written to Godongwana on February 22, the EFF proposed that an audit of all security companies which are contracted by state institutions or municipalities must be conducted to ascertain which companies are contracted by the government and are not in compliance with their pension obligations, using the FSCA report as a point of reference.
Godongwana has not acted on this matter even though it was brought to his attention more than six months ago.
The EFF has in a recent statement stated that it will use its presence in the National Assembly to ensure there is accountability on what has happened with the R6bn of security guards. One measure the organisation has said it will explore is the establishment of an ad hoc committee which would include members and expertise from labour, law enforcement and finance, to trace the money, and arrest those culpable for this gross injustice.
Thambo is a Member of the EFF Central Command Team and MP
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