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Challenge to secretive appointments process for financial regulator

- Lee-Anne Bruce

CALS represents Open Secrets and the Unpaid Benefits Campaign in a challenge to the secretive process for making appointments to the FSCA

Open Secrets and the Unpaid Benefits Campaign (UBC), represented by the Centre for Applied Legal Studies (CALS), have approached the Gauteng High Court to set aside portions of the regulations that were made in terms of the Financial Sector Regulation, relating to the appointment process of the Commissioner and Deputy Commissioners of the Financial Sector Conduct Authority (FSCA).

This forms part of ongoing efforts by both organisations to ensure that the FSCA and other key public institutions intended to regulate powerful private sector corporations act in a manner that serves broad the public interest. Leadership appointments are key to achieving this.

The FSCA is the oversight body for the financial sector, which has a duty to act in the public interest, and therefore has far-reaching implications for all people in South Africa. Because of its role in safeguarding the public interest, it is crucial that the appointment process for the leadership of the FSCA is open and transparent, which the Constitution also demands. Given the pervasive role of the financial sector in state capture and corporate fraud,  South Africa needs a regulator that will serve the public and regulate corporations without fear or favour – an appointment process that is transparent and open helps to ensure that this is so. As the Zondo Commission has shown with devastating clarity, we cannot and should not simply trust public officials to act in the public interest, and that secretive appointment processes have catastrophic consequences for people in South Africa and our democracy.

Our application in the High Court seeks a review of the regulations to ensure that they are constitutionally compliant. Open Secrets and the UBC argue that the process as set out in the regulations does not provide for an appointment process that is transparent, open and one that facilitates meaningful public participation. In our application, we ask the court to set aside the regulations in so far as they do not provide for these constitutional requirements.

We are not asking for the recent appointments to the FSCA to be set aside, as that process was already hugely delayed by Minister Mboweni despite numerous reminders over two years by our organisations to prioritise this. Instead, we seek a forward-looking decision that declares for all future processes that:

  • Meaningful participation is required, which is more than a retrospective ‘tick-box’ exercise. The public must be afforded an opportunity to meaningfully engage and influence decisions.
  • Minister Mboweni, though he might not want to engage with the public he serves, must do so as a constitutional check on the exercise of his power as a public official. The public is not passive- we have a voice and Minister Mboweni is constitutionally obliged to listen to us and apply his mind to what we have to say. He cannot delegate or outsource this.

Therefore, Open Secrets and the Unpaid Benefits Campaign approached the Gauteng High Court in Pretoria, asking the court to review and set aside the regulations in so far as they do not provide for meaningful public participation and transparency in the appointment process.

It is unfortunate that Minister Mboweni chooses to only engage civil society through court processes. We hope that this litigation will change his mind generally about how he engages with the public, and specifically about how he makes appointments and better acts in the public’s interest.

Read our heads of argument here. 

For inquiries, please contact:

About the organisations: 

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 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.

The Centre for Applied Legal Studies (CALS) is a human rights organisation based at the Wits School of law. CALS uses a combination of research, advocacy and litigation to advance social justice. 

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