The Democratic Alliance (DA) has written to the Chairperson of the Portfolio Committee on Employment and Labour to urgently request that the Unemployment Insurance Fund (UIF) and the Compensation Fund appear before Parliament, alongside the Public Investment Corporation (PIC), to account for their continued use of public funds in the failing entity, Daybreak Foods.
This follows confirmation that both the UIF and Compensation Fund have each extended a further R150 million to Daybreak Foods, as reported to the Standing Committee on Finance last week.
The UIF and Compensation Fund initially invested R400 million each in 2016 to purchase Daybreak Foods. Nearly a decade later, they have not made any return on this investment. Instead, the loans were converted into equity.
Today, their investment is effectively worthless. Years of alleged mismanagement and reported looting have crippled Daybreak Foods, culminating in the near-total shutdown of its operations. The company has now entered business rescue despite having received more than R1.4 billion in support over time. Its survival now depends on securing a private sector partner.
This raises an important question: why are entities entrusted with safeguarding workers’ contributions continuing to inject funds into a collapsing business?
Both the UIF and Compensation Fund record substantial annual surpluses. Yet instead of returning these funds to the fiscus, they have retained billions and channelled money into poorly performing investments, including unlisted equities and job creation schemes that have consistently underdelivered. At the same time, these funds are underdelivering on their actual mandate in supporting the workers of South Africa.
If these entities wish to continue holding vast sums of public money, they must be held to the highest standards of transparency and accountability.
Parliament must now intervene to ensure that every rand entrusted to these institutions is protected and used in the best interests of the South African public.