Western Cape High Court to Hear Challenge Against Political Funding Act on Monday
By Karabo Marifi
The Western Cape High Court is set to hear a significant constitutional challenge against the Political Funding Act (PFA) on Monday, 17 February 2025. The case, brought by advocacy organisation My Vote Counts (MVC), argues that the Act does not go far enough in ensuring full transparency and accountability in political party funding.
MVC wants the court to declare parts of the Act unconstitutional, contending that its provisions limit the public’s right to access information about political donations, potentially allowing undue private influence on South African politics.
This legal battle will test the boundaries of financial transparency in South Africa’s democracy, with the court’s ruling likely to have lasting implications on how political party donations are regulated.
Understanding the Political Funding Act (PFA)
The Political Funding Act (PFA), formerly known as the Political Party Funding Act, was signed into law in 2019. It was introduced to enhance transparency and accountability in the funding of political parties and independent candidates.
The Act mandates that:
• Political parties and independent candidates must disclose both public and private donations.
• Donations above R100,000 per year must be declared.
• Public funding is distributed to political parties based on electoral performance.
• The Independent Electoral Commission (IEC) is responsible for overseeing compliance.
The PFA aims to limit the influence of private, undisclosed funding and safeguard South Africa’s democratic integrity by preventing external forces from manipulating election outcomes through secret donations.
Why My Vote Counts Is Challenging the Act
While the PFA was hailed as a step towards greater transparency, My Vote Counts (MVC) argues that it has critical loopholes that undermine its effectiveness. The organisation’s primary concerns include:
1. The R100,000 Disclosure Threshold
• Donations below R100,000 remain undisclosed, meaning political parties could still receive millions in smaller, hidden contributions.
• MVC argues that this loophole allows donors to split large contributions into smaller amounts to avoid public scrutiny.
2. Lack of Full Disclosure
• The Act does not mandate political parties to disclose the identities of all donors, which could allow businesses, interest groups, and even foreign entities to secretly influence political decisions.
• South Africans have a constitutional right to know who funds political parties, as this influences policy decisions and governance.
3. Potential for Corruption
• Without full transparency, there is a risk of “hidden deals” between private donors and politicians.
• The fear is that certain donors could dictate policies or expect government contracts in return for their financial support.
4. Accountability Issues
• The Independent Electoral Commission (IEC) is responsible for enforcing compliance, but with limited resources, oversight mechanisms remain weak.
• Critics argue that more stringent laws and lower disclosure thresholds are needed to ensure accountability across all political parties.
Legal Precedents Supporting MVC’s Case
The South African courts have previously ruled in favour of greater transparency in political party funding.
Constitutional Court Ruling (2020)
In 2020, the Constitutional Court affirmed that South Africans have the right to access information about the sources of political party funding. The ruling stated that financial transparency is vital for a functioning democracy and that hidden donations undermine public trust in the electoral system.
Western Cape High Court Ruling (2018)
Before the enactment of the PFA, the Western Cape High Court ruled that the right to vote is directly linked to knowing who funds political parties. This judgment reinforced the need for clear and transparent regulations on political donations.
MVC’s challenge builds on these precedents, arguing that while the PFA was a step forward, it does not fully comply with constitutional transparency standards.
South Africa’s Political Funding Landscape: What’s at Stake?
Political party funding in South Africa has historically been opaque, with large donations often going undisclosed before the PFA was enacted. Critics argue that private donors, including businesses and foreign governments, have long been able to exert influence without public knowledge.
The R100,000 Loophole
• Donors who contribute less than R100,000 per year do not have to be disclosed, meaning that a party could receive hundreds of smaller donations from the same entity without the public knowing.
• In other countries, such as the United Kingdom and Canada, all political donations are declared—regardless of the amount.
Foreign Influence
• Foreign entities are not allowed to directly donate to political parties.
• However, some businesses with foreign ownership have been known to channel funds into political campaigns.
• Critics argue that full disclosure is needed to ensure that no foreign government or entity influences South African elections.
The Role of the Independent Electoral Commission (IEC)
The IEC plays a crucial role in ensuring compliance with the PFA. However, enforcement has been inconsistent, and some parties have missed deadlines for financial disclosures without facing serious penalties.
• In 2023, the IEC reported that several political parties failed to submit funding disclosures, yet they continued to operate without consequences.
• Enforcement mechanisms need to be strengthened, with harsher penalties for non-compliance.
MVC argues that without clear and consistent enforcement, the PFA remains ineffective, allowing political parties to manipulate donation records.
International Comparisons: How Does South Africa Compare?
Many democratic nations have stricter laws on political donations. Some key examples include:
• United Kingdom: All political donations above £500 must be disclosed.
• United States: Political donations are publicly accessible, with major contributions recorded by the Federal Election Commission.
• Canada: Political parties must declare all contributions, ensuring full transparency.
MVC argues that South Africa lags behind these nations, with its R100,000 threshold allowing too many undisclosed transactions.
Potential Outcomes of the Court Case
The Western Cape High Court’s ruling could result in major changes to the Political Funding Act.
1. If MVC Wins:
• The court may order Parliament to amend the PFA.
• The R100,000 threshold could be lowered or removed entirely.
• Political parties may be forced to disclose all donations—regardless of the amount.
2. If the Government Wins:
• The PFA will remain unchanged.
• Critics argue this would allow political parties to continue receiving undisclosed funding.
• Transparency activists may have to lobby for future amendments through Parliament.
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