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Challenge to secretive appointments process for FSCA

- Lee-Anne Bruce

Civil society organisations apply to court to prevent the appointments process for South Africa’s top financial sector regulator from proceeding in secret

[UPDATE: The Court subsequently dismissed the application. The judgment is available here.]

Today, after 18 months of failing to get a response from the Minister of Finance, civil society organisations Open Secrets and the Unpaid Benefits Campaign, represented by the Centre for Applied Legal Studies, have applied to the Gauteng High Court (Pretoria) on an urgent basis to call for a transparent process to select the new Commissioner and Deputy Commissioners of the FSCA.

We have asked the Court to interdict the shortlisting, interviewing and selection of candidates – as directed by Minister of Finance Tito Mboweni – until public participation has been provided for, to allow members of the public as well the media to have full access to these processes. We believe this is essential to protect the Constitutional imperatives of openness, transparency and accountability and the right of the public to participate in these processes. The Minister is opposing the application.

As the oversight body for the financial sector, appointments to the FSCA have far-reaching consequences for all people in South Africa. Therefore, the independence and transparency of the FSCA is a particularly crucial safeguard of its ability to act in the public interest. The FSCA has a specific mandate to scrutinise the conduct of actors, including big business, in the financial sector and ensure that customers are treated fairly. Given its importance, it is crucial that the public be able to see and scrutinize the appointment of the people at the helm of the FSCA, to ensure that this leadership will serve the public and regulate financial companies without fear or favour.

This court application is a last resort after over 18 months of writing to the Minister of Finance, Tito Mboweni, asking basic questions about the appointment process, including an explanation for the excessive delays in these crucial appointments, and to urge the Minister to make proper provision for public access and participation in the process. Minister Mboweni has to date never responded, other than sending an acknowledgement of receipt showing a disregard for efforts by civil society who have pressed for stability and leadership with integrity at this key regulatory body.

It was thus with dismay that we noted, a year after the appointments should have been made, Treasury announced a new Shortlisting Panel had been constituted, and that the appointments process would go ahead without proper public consultation, effectively in secret. To facilitate a faster appointment process, Minister Mboweni amended the regulations, but with no provision for media and public participation or scrutiny of the process. It is important that these positions are filled as a matter of urgency, however, for the appointment process to be fair and transparent, the public must have access to this process. Secretive, rushed appointments could do great harm, as we have seen in some of the appointments made in instances of state capture.

Minister Mboweni cannot continue to act as if the public has no right to be a part of key appointments at regulators whose function is to serve the public. The people of South Africa have a right to know, to a transparent and accountable government, and to public participation, as key aspects of participatory democracy as envisaged by the Constitution. This was confirmed with regard to the appointment process for the National Director of Public Prosecutions (NDPP) in 2018. The High Court (Pretoria) held that the interview process had to be transparent and open to the media to allow the public to assess the integrity of the candidates and their fitness for the position.

If the Minister is serious about issues of governance and integrity then strengthening  regulatory bodies such as the FSCA should be at the top of his agenda and not relegated to an afterthought. It is an indictment that key appointments should be delayed by over a year, and then conducted in hastened secrecy. This risks undermining the public’s trust in the appointments and in our democracy. 

We have asked the Court to remedy the situation by providing the following relief:

  • To put a halt to the appointment process until public participation has been provided for, and for any scheduled interviews to be made public;
  • Alternatively, to ensure that the media and public be granted access to the interviewing of shortlisted candidates;
  • To declare as unlawful and set aside the Minister’s decision to conduct the appointment process under a veil of secrecy, without any public participation or oversight; and
  • To order that the appointment process must continue in a transparent manner with the appointment process thus far being declared as unlawful and set aside.

Open Secrets is a non-profit organisation which exposes and builds accountability for private sector economic crimes and related human rights abuses through investigative research, advocacy, and the law.

The Unpaid Benefits Campaign is a membership based organisation and a coalition of groups of former workers, community organisations, advice offices, NGOs and individual activists, campaigning for the payment of the estimated R50+ billion in pensions, provident or compensation funds held by the private sector.

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