Financial interests of councillors: do municipalities make them public?

Financial interests of councillors: do municipalities make them public?

Item 8 of the Code of Conduct for Councillors provides that each councillor must, within 60 days of his or her election (or appointment as a local representative to the district council), declare to the municipal manager, in writing, interests and gifts.

Councillors must declare interests and gifts
Councillors must declare any of the following financial interests –

(a)  shares and securities in any company;

(b)  membership of any close corporation;

(c)  interest in any trust;

(d)  directorships;

(e)  partnerships;

(f)   other financial interests in any business undertaking;

(g)  employment and remuneration;

(h)  interest in property;

(i)   pension; and

(j)   subsidies, grants and sponsorships by any organisation.

The same applies to gifts above a prescribed amount (R 1000). A declaration of gifts received by a councillor must contain a description of the gift and indicate the value and source of the gift. Any change to the financial interests of a councillor must be declared in writing to the municipal manager annually. Each municipality has its own internal rules on how exactly this works in that municipality.

The council must decide which financial interests and gifts must be made public
The law requires more than just the declaration of interests to the municipal manager. Item 8 also provides that the council “must decide which of the financial interests must be made public, having regard to the need for confidentiality and the public interest for disclosure”. In other words, the municipality may not keep all this information from the public. The council must decide which interests must be made public, similar to what happens with Members of Parliament and Members of Provincial Legislatures.

It is important that councillors declare their interests to the municipal manager. This enables the municipality to avoid conflicts of interest in making procurement or staffing decisions. But it is equally important that these interests are made public. Councillors are elected representatives that wield significant power and influence. The public is entitled to know what financial interests they have, and which gifts they have received.

But do municipalities comply?
The question arises, do municipalities do this? Do municipalities publish the financial interests and gifts of their councillors? The Code of Conduct allows for some discretion: not everything needs to be made public, depending on how the municipal council assesses “the need for confidentiality and the public interest for disclosure”. But surely some of it ought to be made public?

We set out to do a small survey of municipalities. We examined the websites of these municipalities to assess whether there is any information on the website, in the municipality’s annual report or in any other documentation, that makes the interests and gifts of the councillors accessible to the public. Nine municipalities were selected for the enquiry. They are listed below with their abbreviations.

Metropolitan Municipalities District Municipalities Local Municipalities
Manguang = M Sarah Baartman = SB Ba-Phalaborwa = BP
City of Tshwane = CT King Cetshwayo = KC Dr JS Moroka = DrJ
City of Cape Town = CPT Dr Kenneth Kaunda = DrK Khai-Mai = KM


The question posed was this: to what extent do these municipalities publish their councillors’ interests on their respective websites? We used a ranking system to assess each municipality. The ranking worked as follows:

  • If the municipality publishes councillors’ interests (1) within a reasonable time, (2) with information that seems complete and (3) easily accessible on the municipality’s website, it earns three points. This translates into a rating “very good”. To assess whether or not the information is easily accessible, we used the following yardstick: can a member of the public reasonably be expected to find this information within 30 minutes or less and without a deep analysis of the entire website?
  • If the municipality publishes councillors’ interests but only meets two of the above three requirements, it earns two points. This translates into rating “good”.
  • If the municipality publishes councillors’ interests but only meets one of the above three requirements, it earns one point. This translates into rating “poor”.
  • If the municipality does not publish any councillors’ interests on its website, it earns 0 points, which translates into a rating “very poor”.

Findings
What follows is a brief overview of what we found. It is important to note that these findings reflect the situation as at June 2022, i.e. approximately eight months after the 2021 Local Government Election. As stated earlier, the Code requires councillors to declare their interests within 60 days of election or appointment. Therefore, it is reasonable to assume that by June 2022, their councils would have decided on the publication thereof.

  • Sarah Baartman District: by June 2022, councillors from the most recent (2021) cohort had not had their financial declarations published on the municipal website.
  • Mangaung Metropolitan Municipality: by June 2022, councillors from the most recent (2021) cohort had not had their financial declarations published on the municipal website. A full list of councillors was mentioned, however less than 75% of their financial interests were reported.
  • Tshwane Metropolitan Municipality: by June 2022, councillors from the most recent (2021) cohort had not had their financial declarations published on the municipal website.
  • King Cetshwayo District Municipality: when we consulted the website of the municipality in June 2022, it did not contain any register of councillor’s interests.
  • Ba-Phalaborwa District: by June 2022, councillors from the most recent (2021) cohort had not had their financial declarations published on the municipal website. The most recent publication by the municipality concerning councillors’ financial interests was 2021. While this is quite recent, it does not include information pertaining to the most recent cohort of councillors.
  • Dr JS Moroka Local Municipality: by June 2022, councillors from the most recent (2021) cohort had not had their financial declarations published on the municipal website. The councillor’s financial interests are not published on the website. Even if they are available, the public cannot be reasonably expected to find them.
  • Khai-Ma Local Municipality: by June 2022, councillors’ declarations from the most recent cohort (2021) were not available. The most recent financial declarations were from 2018-2019. From the information that was published in 2018, less than 10% of councillors’ financial declarations were included. From this 10%, only one-quarter of their interests were actually declared.
  • Dr Kenneth Kaunda District: by June 2022, councillors’ declarations from the most recent cohort (2021) were not available. The most recent financial declarations were from 2018. The transparency register was also not clearly indicated in the annual report table of contents and thus the public could not be reasonably expected to find it.
  • City of Cape Town Metropolitan Municipality: the declarations from the most recent cohort (2021) were not available in June 2022. The most recent financial declarations were from 2018. The 2018 information did seem complete, however. The website offers complete access to each councillor’s respective PDF document titled Declaration of Interests. It is free to access and can be downloaded immediately without any administrative barriers. Furthermore, the Declaration of Interests can be found easily on the City’s website.

The above findings are summarised below:

Criterion fulfilment SB M CT KC BP DrJ KM DrK

CPT

 Total
1 (a) reasonable time NO NO NO NO NO NO NO NO NO 0
1 (b) completeness NO NO NO NO NO NO NO NO YES 1
1 (c) accessibility NO YES NO NO YES NO YES NO YES 4
Total Points Scored 0 1 0 0 1 0 1 0 2 9/27
Transparency Rating Very Poor Poor Very Poor Very Poor Poor Very Poor Poor Very Poor Good

Out of the sample of nine, zero municipalities scored very good and only one, namely the City of Cape Town Metropolitan Municipality, achieved a transparency rating of good. The other eight municipalities are divided into either poor or very poor. This suggests that it was difficult, at least in June 2022, for the public to gain insight into what the financial interests of councillors in these municipalities were.

What to make of these findings
These findings are based on a small sample, so they may not be representative of all 257 municipalities. Also, they record the situation as at June 2022: of course, the websites of these municipalities may have been updated in the meantime with information on councillor’s interests. However, this does not negate the fact that, in June 2022, the situation in these municipalities was not in line with what the Code of Conduct for Councillors demands. By June 2022, the councillor interests of the councillors elected on 1 November 2021 should have been processed.

At the very least, this limited research project suggests that –

  • compliance by municipalities with item 8 of the Code of Conduct for Councillors is not a given; and
  • more research is needed to assess compliance with this requirement and, if compliance is indeed low, the reasons for that.

In 2021-22 financial year, local government had an estimated expenditure budget of a staggering R539,13 billion. Municipal councillors wield enormous power over that expenditure. The law provides that the public has a right to know the financial interests of their councillors and the gifts that they have received. It sets out a mechanism for the council to weigh the privacy of councillors against the public interest.

However, it seems that, in practice, the tendency is to keep all information related to councillors’ interests from the public.

 

By Wouter Smulders & Jaap de Visser