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The Private Business Interests of South Africa’s Elected Officials


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In all modern democracies some elected officials hold private business interests. People invariably occupy more than one social role, elected officials prove no different. However in transitional democracies there often exists a significant overlap between the political and economic elites, with many elected officials holding private business interests. In the post-2009 election period, the South African press have highlighted the issue of potential conflicts of interest existing in government. One report revealed that 42% of President Jacob Zuma's new executive is registered with the Companies and Intellectual Property Registration Office (CIPRO). This clearly illustrates the overlap between the public and private lives of elected South African officials in the country's young democracy.
Holding private business interests while being employed as a public official may result in a conflict of interest; yet any attempt to prevent officials from possessing these interests is nonsensical. Preventative measures would prove nightmarish to implement and monitor and furthermore, officials possess the democratic right to possess outside interests. Simply put, conflicts of interest will occur. Their occurrence does not automatically imply that corruption will ensue. If effective and efficient monitoring and oversight measures are in place to manage conflict of interest situations, corruption can be avoided. Whilst the media's emphasis of the many private business interests held by elected officials may serve to prick the ears of the public and in this way encourage them to hold officials to account, the concern over the volume of interests held by elected officials is misplaced. Attention should instead be given to whether or not the correct oversight measures exist to ensure that conflict of interest situations do not lead to corruption.

At all three levels of government the annual process of financial and asset disclosure is used as a means to expose existing or potential conflict of interest situations. The idea is that if these interests are exposed, the potential for corruption diminishes. Whilst this sounds good in theory, in practice a different picture emerges. Research undertaken by the ISS Corruption & Governance Programme has found that while private business interests are indeed being declared, very little examination of these disclosures takes place. In all seven of South Africa's provinces that have Provincial Registrars, who are tasked with keeping a register of members' financial interests, these individuals are not permitted to investigate private business interests that they may regard as suspicious of their own accord. Before taking any type of investigatory action, these Registrars are legally compelled to wait for a formal complaint against an elected official to be lodged, or for their respective ethics committee to give the mandate concerning any investigations to be undertaken.



The irony is that those with the most contact with financial disclosure forms, who see them year in and year out, are essentially left out of the oversight process. Their role becomes that of ensuring simple compliance, elected officials submit disclosures and their box is ticked off on a checklist, no proactive oversight of the forms appears to occur. This is not surprising as there is no incentive for Registrars to examine disclosures over time for irregularities, with the knowledge that they are unable to investigate of their own accord.



The oversight at national parliamentary level of disclosure forms unfortunately does not prove to be much different. At this level, it is the Joint Committee on Ethics and Members' Interests that undertakes the investigation of any irregularities on the part of members of parliament. Investigations by this committee have only occurred following complaints made by fellow parliamentarians, or after the media has kicked up a fuss. Once again, the Registrar of Parliament, who is the most familiar with the disclosures, is not equipped with suitable investigatory powers that would allow for effective oversight.


At local level certain metros do not even have an individual/office assigned to assess the declarations that are made each year. Designated officials exist to collect these forms and to once again ensure that they have been received however, once received they seem to be stored away never to be seen again, unless one of the councillors becomes involved in some or other media hype.


One might assume that given the substantial powers awarded to members of the executive at both the provincial and national level, that these officials would be thoroughly vetted in terms of their annual disclosures. This is not the case. Although provincial executive members are legally required to declare both to the legislature and to a designated official in their respective Premier's Office, many of them declare only to the legislature, as such these provincial executive members are often overlooked. The inability of many Provincial Parliamentary Registrars to institute investigatory proceedings of their own accord does not bode well for effective oversight. With respect to the Presidency and other National Executive members, it is the Public Protector who would investigate any irregularities. Investigations only occur after an official complaint has been made; once again no pre-emptive examination of the disclosure forms seems to occur.


Given that government oversight of disclosure appears weak, much responsibility rests with members of the public and with the media. Effective oversight then depends in part on the ability that ordinary citizens have to gain access to disclosure forms for review. Attempts made by the ISS Researchers to test the implementation of the access to information act, delivered varied results. Certain institutions were very forthcoming whilst others declined to provide access to their disclosure forms. Weak internal government oversight measures together with the difficulty experienced by ordinary citizens in gaining access to disclosure documents for review, suggests that much needs to be done to prevent potential or existing conflict of interest situations from ending in corruption.


Elected Officials at all three levels of government have private business interests. Research generated as part of an ISS project on Conflicts of Interest shows that in 2008 approximately 59 percent of National MP's held shares and 45 percent directorships in companies. At the provincial level, approximately one third of all MPL's held outside interests from 2004 to 2008.


Attempting to prevent elected officials from holding outside interests would be near to impossible. Instead of highlighting the extent of an individual's business interests, it might be more beneficial to focus on the following key points: firstly, the weak nature of oversight in the current disclosure framework and secondly, the difficulty experienced when attempting to gain access to disclosure documents. If effective oversight of disclosure forms is not undertaken then the purpose of disclosure, which is to expose conflicts of interest and to prevent these situations from ending in corruption, is not fulfilled. Declarations of private business interests are then only completed for process sake, trumping the need for real probity.

By: Rosemary Vickerman, Commissioned Researcher, Corruption and Governance Programme, ISS Cape Town




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