Electoral Commission of South Africa v African Independent Congress and others

The Electoral Commission of South Africa and the Chief Electoral Officer applied to the Electoral Court for an order imposing administrative penalties on 492 registered political parties for failure to comply with their obligations under section 12 of the Political Party Funding Act 6 of 2018 read with Regulation 10 of the Regulations. The Act, which commenced on 1 April 2021, requires all registered political parties to keep proper books of account, have them audited by registered auditors, and submit audited financial statements (AFS) and auditor's opinions to the Commission within six months of the financial year end (by 30 September annually). The respondents included: (1) the 1st to 6th respondents - represented political parties with seats in national and/or provincial parliaments; and (2) the 7th to 486th respondents - unrepresented political parties. The Commission had conducted nationwide workshops to raise awareness of the obligations, issued general notices, engaged in correspondence with parties, and issued directives under section 15 requiring compliance. Despite these efforts, all respondents failed to comply. Only three respondents (338th, 348th, and 388th) filed answering affidavits; several others responded by letter or email; the majority did not respond at all. Respondents cited various reasons for non-compliance including: lack of financial resources to afford registered auditors; unfairness of the Act not distinguishing between represented and unrepresented parties; dormancy and non-functionality; ignorance of obligations; and non-receipt of documents.

• Whether the respondents failed to comply with their obligations under section 12 of the Political Party Funding Act 6 of 2018 read with Regulation 10
• Whether the Electoral Court has power to condone non-compliance with peremptory statutory provisions
• Whether subjective impossibility (such as lack of funds) constitutes a valid excuse for non-compliance with statutory obligations
• Whether the Electoral Commission has discretion to excuse non-compliance with the Act
• Under what circumstances the Electoral Commission may approach the Court for administrative penalties
• Whether a proper case is made out for imposing administrative penalties on the respondents
• Whether the Court has discretion not to impose administrative penalties despite finding non-compliance

1. Declaration that the respondents failed to comply with their obligations under section 12 of the Political Party Funding Act 6 of 2018 read with Regulation 10. 2. The 1st to 6th respondents (represented political parties) each to pay an administrative penalty of R40,000 to the Commission. 3. Respondents in Categories B and D each to pay an administrative penalty of R40,000 to the Commission. 4. Respondents in Categories C, E and F (excluding the 336th respondent - Our City Masters) each to pay an administrative penalty of R10,000 to the Commission. 5. No order as to costs.

1. Section 12 of the Political Party Funding Act 6 of 2018 read with Regulation 10 imposes peremptory obligations on all registered political parties to keep proper books of account, have them audited by registered auditors, and submit audited financial statements and auditor's opinions to the Electoral Commission within six months of financial year end. 2. Courts have no inherent power to condone non-compliance with peremptory statutory provisions unless such power is expressly or impliedly conferred by statute. The use of "must" in section 12 and Regulation 10 indicates the provisions are mandatory. 3. Subjective impossibility (such as lack of financial resources to engage auditors) does not constitute a valid excuse for non-compliance with statutory obligations. The law only recognizes objective impossibility (where it is impossible for anyone to perform) as an excuse. 4. Section 18 of the Political Party Funding Act confers discretion on the Electoral Commission to institute proceedings for administrative penalties (using "may") and discretion on the Electoral Court to impose such penalties (also using "may"). 5. When exercising discretion to impose administrative penalties under section 18(2), the Electoral Court must consider all relevant factors, be guided by the need to give effect to the purpose and objectives of the Act, promote prevention of future non-compliance, and serve the interests of justice. 6. Differentiated administrative penalties are appropriate based on the status of the political party (represented vs unrepresented) and the nature and circumstances of non-compliance. 7. Where a party has substantially complied with its obligations (albeit not in the exact prescribed format), is non-functional and dissolved, has no income to report, and shows no prospect of reoffending, the Court may exercise its discretion not to impose an administrative penalty, as doing so would elevate form over substance and not serve the objectives of the Act.

1. The Court noted with concern the staggering number of political parties (492) that failed to comply with their section 12 obligations and the large number who did not even respond to the application, describing this as undermining the important objectives of the Funding Act "to the peril of South Africa's constitutional democracy." 2. The Court observed that the indiscriminate application of section 12 to all registered parties (whether represented or unrepresented, large or small, active or dormant) was "an election made by the legislature" and could not be questioned absent a constitutional challenge. 3. The Court noted that dormant political parties have the option of deregistering and re-registering when active and able to meet their statutory obligations. 4. The Court declined to enumerate specific circumstances under which the Commission should exercise its discretion to excuse non-compliance or institute proceedings, noting that doing so might "impede the Commission from exercising its wide discretion by considering the circumstances of each case" and might "have an unintended effect in that the circumstances enumerated by this Court may be regarded as exhaustive." 5. The Court observed that the Commission should draw guidance from judgments of the Electoral Court to determine whether to approach the Court to enforce non-compliance. 6. The Court commented that the objectives of the Political Party Funding Act relate to safeguarding political rights, empowering voters to make informed decisions through transparency about who funds political parties, and preventing corruption by ensuring funders cannot exert improper pressure on parties once elected to public office. 7. The Court noted that customarily cost orders are not made in the Electoral Court and found no reason to depart from this practice.

This is the first significant judgment interpreting and enforcing the Political Party Funding Act 6 of 2018, which came into force on 1 April 2021. The judgment is significant because: (1) It establishes that the disclosure and accounting obligations under section 12 are peremptory and apply to all registered political parties without distinction between represented and unrepresented parties; (2) It confirms that courts lack inherent power to condone non-compliance with peremptory statutory provisions absent express or implied statutory authorization; (3) It reaffirms the principle that subjective impossibility (such as lack of financial resources) does not excuse non-compliance with statutory obligations; (4) It clarifies the respective discretions of the Electoral Commission (to institute proceedings) and the Electoral Court (to impose penalties) under section 18; (5) It provides guidance on how the Electoral Court should exercise its discretion when imposing administrative penalties, balancing strict enforcement to promote compliance with the important transparency objectives of the Act against considerations of substantial compliance and proportionality; (6) It sends a strong message about the importance of political party funding transparency in South Africa's constitutional democracy; (7) It demonstrates the Court's willingness to adopt a flexible approach where there has been substantial compliance and the party shows no prospect of reoffending, thereby avoiding elevating form over substance. The judgment is important for electoral integrity, transparency in political funding, and anti-corruption efforts in South African democracy.