SA Public Investment Corporation set to gamble with state pensions





SA’s Public Investment Corporation set to gamble with State Employee Pensions

27 February 2014


The senior investment officer for the PIC, Dan Matjila told Reuters “Shale will be a game changer here and we will be the biggest investor.”

The PIC manages 1.4 trillion rand of South African public employee retirement funds.

Treasure Karoo Action Group CEO, Jonathan Deal, said “We challenge the PIC to defend its choice of shale gas in South Africa as an investment for the pension funds of South Africa’s state employees. We are prepared to state categorically that the PIC has not done their homework on this issue. They see it as an opportunity to make money, but we see it as an opportunity for them to lose the hard-earned savings of the people that they are supposed to protect.”

“Shale gas losses in the United States between 2011 and 2013 ($6.8 billion) have cost just 3 multinational corporations including Royal Dutch Shell the dollar equivalent of R68 billion rands. Moreover, unless there is some secret document from which the PIC has developed its bullish appetite for shale gas, we have strong cause to believe that the PIC has relied on the infamous Econometrix report paid for by Shell and released in March 2012. If indeed the PIC has another, and more credible source of information, they must make it public – as they are working with public funds. We suspect moreover, that Challenger Energy, one of the applicants to mine shale gas in South Africa which has been making a noise about looking for partners and which is represented by a highly placed local BEE businessman, could become part of this investment.”

According to Head of Environmental Affairs at AfriForum, Julius Kleynhans, the proposed high risk investment may pose an even bigger risk on water resources. “Political pressure ‘similar to the case of e-tolls’ may pose detrimental risks to valuable natural water resources. The Karoo is a semi-arid area and it is evident that water resource management is not nearly up to standard throughout South Africa – with substantial negative economic consequences. One cannot risk this critical resource ‎for short-term economic gain.  Having regard for the status quo around water issues in South Africa – including what it is presently costing the country to deal with water pollution and shortages, we are not confident that the Departments of Minerals and Water Affairs have the necessary infrastructure to manage responsible utilization and development in the country,” argued Kleynhans.

TKAG concluded that “To gamble with the pensions of teachers, policemen and policewomen, nurses and other state employees smacks to us of the same attitude that lead to the investment in the Etolls. In 2013 the biggest bank in the Netherlands made a principal decision not to finance shale gas or lend any money to any company involved in fracking. TKAG is not a financial organisation, but our research on shale gas is solid, and we believe that the PIC is taking a very big gamble, and that the holders of those pensions need to stand up and put a stop to it – if our government can’t do their sums.”

CONTACT JONATHAN DEAL 023-358-9903/076-838-5150

JEANIE LE ROUX 072-959-1818


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