COSATU Submission on the Green Paper on E-Commerce Submitted to the Department of Communications, 30 March 2001

Introduction

COSATU welcomes the opportunity to comment on the South African Green Paper on E-commerce. We support the need to examine the full range of issues raised by the growing role of information and communications technologies in the economy. Further, we support the need to examine the impact of this small but growing knowledge sector of the economy on the broader range of developmental issues affecting workers and citizens, the poorer and more marginalised sections of our society. From this should flow appropriate regulation and intervention.

We trust that the call for public submissions on this Green Paper means that the voice of organised labour will be heard along with that of organised business - and that the views of workers and their representatives will be accommodated in subsequent policy development.

This submission represents an initial formal intervention by COSATU within the e-commerce Green Paper policy and legislative process. The federation intends to participate fully in the processes subsequent to this Green Paper, and to make further submissions where appropriate.

COSATU's submission covers the following main issues:

• the e-commerce process;

• general comments on issues relating to the entire Green Paper, including:

  • the definition of e-commerce;

  • the overall approach to e-commerce within the Green Paper;

  • principles governing an approach to e-commerce;

  • the role of government in relation to e-commerce;

  • the question of regulation of e-commerce; and

  • an international perspective on e-commerce;

  • specific comments on the principal sections of the Green Paper.

In general the submission does not specifically respond to individual questions posed within the Green Paper, but focuses on the overall themes, in the context of which COSATU's position in respect of the main questions emerges.

E-commerce Process

We must raise our concern at the outset at the flaws in what was purported to be a participatory process: “consultative, transparent and [balancing] the interests of the broader spectrum of stakeholder” (p 10) (1).

However, even from the outset the demarcation of the 12 theme areas around which working groups were formed itself reflects an overwhelming bias in favour of legal, contractual and business issues, and a lack of attention to issues of concern to organised labour. The sub-title of the document, "Making it your Business", reflects this bias.

No theme area, for instance, focuses upon the range of workplace issues affecting workers either within or impacted on by the so-called "knowledge economy". The issues of prime concern to organised labour - jobs, working conditions, skills - only find expression in relation to the theme euphemistically entitled "Maximising Benefits". Here, apart from one paragraph on jobs (p 70), the paper pays scant attention to the impact of e-commerce on the lives and livelihoods of workers and working people, on trade unions and the workplace, on job losses and job creation (2).

Further, the constitution of the working groups reflects a lack of active engagement with a broader range of civil society constituencies, in particular the trade unions. A representative of organised labour participated in only one of the working groups. The participation from other civil society groups, NGOs, consumer organisations was not a great deal better. This failure to seek out and ensure the participation of the broader spectrum of civil society can only reinforce the perception of an approach to e-commerce that is very narrowly business-orientated.

Despite the inherent bias and participatory weaknesses of the process, COSATU did participate in one of the working groups (3). Unfortunately however, most of its comments and inputs were either excised from the final draft or vitiated in their presentation. Further, none of our suggestions for background reading or reference organisations was included.

It remains our view that a full understanding of the range of issues relating to electronic commerce, and the development of effective policy interventions, can only be achieved by active attempts to solicit, accommodate and address the full range of views from all stakeholders. This applies in particular to the trade union organisations representing those employed in the e-commerce sector as well as the broader socio-economic interests of workers and the poor. The consequence of the relative failure to achieve this is a Green Paper which ignores or downplays a number of critical issues.

General Comments

Definitional Difficulties

The definition of e-commerce ventured in the paper is so wide as to encompass any form of electronic or computer-mediated interaction between individuals or organisations (4).

This all-embracing definition of e-commerce is, however, belied by the Green Paper's emphasis on electronic transactions of a commercial, profit-making or contractual nature. The focus is overwhelmingly on business-to-business (B2B) and business-to-consumer (B2C) transactions, with government-to-citizen (G2C) interactions tacked on in the final section.

An entire range of issues presupposed by the original wide, information society style definition are thus sidelined, ignored or dealt with in passing - including those related to social development, service delivery, empowerment, skills and human resource development, job creation, job displacement, unionisation, the workplace environment, citizen and consumer issues, equity and social exclusion.

COSATU believes that there are two options for ensuring that the full extent of the issues relating to e-commerce are covered.

• The preferable option would be to expand the content and coverage of the Green Paper to ensure that all the issues relating to the information society and the knowledge economy – as reflected in the definitions - are adequately covered in the content of the Green Paper. In particular, a number of labour, equity and social issues will need to included. The Green Paper itself should therefore be transformed into a more holistic green paper on the knowledge economy.

• The alternative would be retain the narrow commercial focus on commercial issues, reflect this in the definitions used, and cluster issues dealing with each cluster of issues in separate policy processes. This would entail separate processes on other relevant non-commercial issues. Certain sections within the current Green Paper which deal with these in a limited way, such as those on e-money and e-government are obvious candidates, could then form part of these broader processes.

COSATU prefers the first option. The latter approach holds the twin dangers of lack of consistency within an overall holistic approach, and of certain clusters of issues being accorded lesser status or overlooked. This would require the development of an overall national information society policy, which COSATU has long advocated, and a commitment by government to accord all the necessary processes equal status.

Even within the narrow definitional scope of the current Green Paper and its associated economic, legal, taxation, contractual issues, we believe there would need to be far greater emphasis on the broader range of information society, labour, social development, access, empowerment, equity and citizen issues.

Approach to e-commerce

Related to the Green Paper's overly broad definition of e-commerce is the rosy optimism with which e-commerce is regarded throughout. A list of "benefits" and "achievements" (pp 9, 10) is presented without any reference to the potential pitfalls, failures and negative impacts associated with e-commerce - such as job losses, the labour market skills gap, the creation of a two tier labour market, the phenomenon of the digital divide, de-personalisation, electronic surveillance and monitoring. For instance, it is claimed that e-commerce allows "small business…to compete on an equal footing" (p 9) without any suggestion of how this might be so.

The point is that, without any understanding or appreciation of the potential negative impacts of e-commerce, policy interventions to maximise its benefits are likely to be one-sided and ineffectual.

Worse, the paper offers no real demonstration or analysis of how and where e-commerce can contribute to economic growth and social development (5). This failure to appreciate the dynamics of e-commerce leads to the Green Paper remaining entirely silent on measures or interventions to strengthen its potential to promote economic growth and job creation.

We, therefore, recommend that this aspect of the Green Paper be further developed, with the inclusion of specific intervention strategies to promote the development of e-commerce in line with the national objectives of job creation, social development, basic needs delivery and the ongoing democratisation of our state and society (6).

Principles for the development of e-commerce

We agree with the need to identify a set of principles (section 1.2, p10) governing a comprehensive national approach to electronic commerce, but believe that the list presented in the Green Paper is lacking in certain key respects:

• National policy should seek to exploit the potential contribution of e-commerce to economic growth along a high-skill high-wage path (7). This needs further to be closely linked to the development of a job-creating industrial strategy (8).

• E-commerce policy should promote the ability of information and communications technology to enable social development, including basic needs and service delivery. (It is important, whenever hard choices and trade-offs between the two need to be negotiated, to recognise these first two principles as separate but closely linked objectives, rather than to blur them into the fuzzier “quality of life” (p 10) objective of the Green Paper.)

• The objectives of job retention and job creation need to be a specific e-commerce policy principle, especially in the light of the job displacement potential of the technologies.

• Human resource development, ranging from school-level education, through up-skilling of the work-force, to broader issues of empowerment, needs to be a key focus of e-commerce policy.

• Far greater extension of access through affordable rollout of telecommunications and e-commerce infrastructure to ensure universal service, including through telecentres.

• The promotion of social equity, addressing disparities with regard to gender, race, disability, class and location, needs to be another key policy principle. Without equitable access to e-commerce, its rollout can only serve to deepen the digital divide.

• The protection of worker rights needs to ensured, so that e-commerce is not used to cut costs through what is euphemistically referred to as 'job displacement', and is not used to undermine the right to organise and bargain collectively. By extension, protection of the rights of citizens, consumers and individuals also needs to be assured.

The role of government

Although it does speak of government “participation” (p 11), the Green Paper's vision of the role for government within e-commerce is limited to that of facilitator for market forces: “developing the enabling conditions for growth of e-commerce by preventing and removing barriers” ( p 11).

As COSATU has repeatedly made clear, we believe that government must not be ashamed of its role. Its interventions must go beyond "facilitating".

• It is incumbent upon government to provide vision, leadership and direction.

• Government must provide regulation where necessary against negative impacts, to resolve conflicts of interest, to protect vulnerable individuals and groups, and to promote desirable social outcomes.

• It must intervene actively and strategically in order to promote the development of e-commerce in line with the principles outlined above. This would include ensuring that social benefits accrue from e-commerce, that job creation occurs, and that sustainable economic growth is supported.

There is ample evidence worldwide to suggest that most examples of successful ICT development have been as a consequence of government playing a strategic role in promoting and developing the sector. Ireland's success in the IT sector is a case in point, owing less to a free-market minimalist approach, but rather due to strategic state intervention to upgrade the industry over time.

Regulation and self-regulation

The issue of regulation, self regulation and regulatory structures arises at several points in the Green Paper. Although a number of areas where regulation and regulatory structures are necessary are identified, the approach generally adopted is that of self-regulation through the establishment by industry of regulating structures. We do not support a laissez faire self-regulatory approach, which has failed internationally given that business's interest is in profit maximisation and not the broader public interest. Almost by definition, regulation is necessary where opposing interests are at stake - an extreme example being the profit motive of the web site child pornographer as opposed to the socially desirable need to protect the rights of children. But there are many other likely conflicts between these two objectives which may be anticipated.

COSATU therefore recommends that wherever regulatory structures or codes of conduct are proposed - such as with regard to national certification (p 42), an industry code of practice (p 48), consumer protection (p56), domain names (p 60) - there needs to be a proper regulatory framework driven by the state, with broadly representative structures which have stakeholder representation, including labour.

The kind of structures we have in mind are very different from the kind of industry-led e-Commerce Regulator proposed by business (9), whose e-commerce courts will in all likelihood be largely preoccupied with resolving inter-company disputes and litigation. Whilst we support an e-commerce structure (or structures) with teeth, we believe it is essential that the interests of those who are vulnerable to untrammelled e-commerce are effectively represented. In particular, this means the interests of workers in the sector, or in sectors where the value equation is likely to be affected by e-commerce, and the voice of civil society / freedom of expression / consumer protection groups.

Further, ensuring that the interests of all stakeholder groups are presented and addressed needs to go beyond the mere formalism of the structure to include active measures ensuring the presentation of the full range of viewpoints. Such structures should have sufficient powers to monitor and enforce compliance. There should be clarity as to whether there will be an overarching regulatory body, and as to how these structures will relate to the work and jurisdiction of ICASA.

International perspective

It is regrettable that the Green Paper's international perspective regarding e-commerce seems largely based on international bodies dominated by the economies of the developed world, such as the OECD, the WTO and World Bank. A number of international labour bodies, such as the International Confederation of Free Trade Unions (ICFTU), Union Network International (UNI) and the Trade Union Advisory Council to the OECD (TUAC) - all of which have made specific interventions with regard to e-commerce - are unfortunately overlooked, as are contributions from international NGOs and consumer groups.

The Green Paper thus appears to move from a starting point which adopts the dominant neo-liberal conception of globalisation, in which “individual countries [are expected to] bow to the demands of the dominant capitalist countries and companies, rather than pursuing a development path suited to the needs of their people” (10).

COSATU has on several occasions spoken of the need to combat this aggressive imperialist form of globalisation and its accompanying general disregard for national interests, partly through defining national economic and social development strategies based on internal needs, resources and priorities. Our recent support of the Treatment Action Campaign in their case against the PMA drug profiteers illustrates both the dynamics of globalisation and the need of developing countries to oppose the dominant paradigm.

It is therefore our view that any relationship with those international bodies or multi-lateral institutions dealing with electronic commerce needs to be tempered with:

• an awareness of the specific interests which they represent;

• the need to ensure that our national socio-economic goals and objectives are not undermined;

• a strategy to safeguard and advance the interests and needs of the developing world.

This implies a South African approach that demands that such international multilateral bodies be made more transparent, representative (not only of all countries including those from the developing world, but also of all social sectors - including particularly workers and their trade unions) and accountable. For these reasons, we feel more comfortable with international structures aligned to the United Nations, rather than those of Bretton Woods pedigree.

Further the international benchmarking of e-commerce must include benchmarking in relation to international human rights conventions, the relevant ILO conventions, and the social clause on world trade.

Lack of sensitivity to the power dynamics of globalisation is also evident in the Green Paper's characterisation of the African perspective on e-commerce (p 2). The massive internal digital divide between South Africa and rest of continent seems to be overlooked. The fact that there are more phone lines and internet hosts in South Africa than in the entire rest of the continent cannot but bedevil any attempt to build an equitable platform for e-commerce.

It is therefore our view that any South African approach to e-commerce must be based on a comprehensive strategy both to strengthen regional economic development within SADC and to build the necessary ICT infrastructure. This needs to be combined with efforts to ensure continental integration and to promote an African voice on international e-commerce forums.

Specific Issues within the Green Paper

We now turn to a number of specific issues pertaining to the various chapters of the Green Paper, responding to them and to the questions posed where these are of particular relevance to our constituency.

Legal Framework, Contracting and Trade Laws

Our earlier criticism of the Green Paper's ambit (see 3.1 above) as tightly focused on commercial transactions and contracts is borne out by the prominence accorded to legal issues in the paper (sections 2 and 3, pp 14 -21).

While the United Nations Commission On International Trade Law Model Law on Electronic Commerce contains a number of useful definitions and provisions with regard to data messages, digital signatures (11) and electronic contracts, it fails to address a number of key citizen, labour and consumer issues.

COSATU believes that any legal framework governing e-commerce must also address the following issues:

• the protection and extension of existing employee rights and legal safeguards (as contained in the LRA, BCEA and other legislation) into the electronic sphere;

• the effective protection of workers from employer electronic surveillance and monitoring;

• the right of workers for reasonable access to employer infrastructure (as set out in COSATU's Online Rights for Shopstewards (12) campaign and in the Online Rights for Online Workers (13) campaign of Union Network International);

• adequate health, safety and environment protection for workers;

• protection of the legal rights of citizens to privacy, protection of personal information, and freedom from surveillance;

• the protection of consumer rights in respect of electronic transactions, including online purchases.

We further believe that a national e-commerce legal framework needs to enshrine the principle of predominance of local law, especially where national legislation and regulation provides greater protection or clarity.

On the question of digital signatures, our earlier comments on self regulation and regulatory structures (see 3.5 above) apply. We are in favour of compulsory adherence to standards either legislated or promulgated by an appropriate representative structure to ensure transparency, accountability, and hence legitimacy.

Taxation

We agree with the Green Paper that the key question is to ensure that e-commerce does not undermine the integrity of the tax system, erode the national tax base, or open tax loopholes, thereby “reducing fiscal revenue” (p 22). However, we feel that the Green Paper does not go nearly far enough in identifying measures to ensure that this does not happen.

As we have indicated previously (14), COSATU supports the move towards a residence basis of taxation, because this:

• potentially limits opportunities for tax avoidance and evasion;

• broadens the tax base to bring in additional revenue for higher social and infrastructure spending;

• potentially makes the effective revenue burden slightly more progressive.

However, we disagree with current international practice whereby online delivery of goods is classified as “services” (p 24). This clearly opens an avenue for tax avoidance, encouraging online delivery of goods as a means of avoiding VAT and customs tariffs. Any e-commerce taxation regime therefore needs to protect the integrity of the tax system by ensuring that VAT and any other duties and taxes which currently apply to “offline” transactions, remain applicable and are collected.

Further, we believe that e-commerce opens the possibility of broadening the tax base. Accordingly we would like to see active consideration given to the feasibility of implementing a so-called “bit tax” (15) on electronic transactions. Of course this could be set at a rate which would not impede the expansion of the use of information technology. Mechanisms to ensure it targets commercial and contractual transactions, thereby excluding non-profit use and making it less regressive, would need to be investigated. Such a tax would also need to harmonised with existing e-commerce taxation. But its intention should be to broaden the tax base, reduce avenues for avoidance and support progressivity.

In addition, we believe that active consideration needs to be given to the introduction of a “Tobin” excise tax (16) on cross-border currency transactions (electronically transmitted) to help tame currency market volatility through deterring currency speculation and to restore national economic sovereignty.

The taxation section of the e-commerce Green Paper also needs to recognise the existence of the universal service levy applied to telecommunications operators. COSATU supports not only the continuation of this levy, but also its extension to all value-added network service providers including those engaged in e-commerce. In addition, we believe that the current low cap applied to the universal service fund should be removed, and would like to see its far more effective utilisation as a means for overcoming the digital divide.

The measures proposed here should be seen in conjunction with and as an extension of other proposals tabled by COSATU to increase the progressivity of the tax system (17). Finally, in line with the proposals tabled under The People's Budget 2001, it is essential to ensure effective and properly prioritised expenditure of taxation revenue.

Multi-lateral Trade

Many of the issues dealt with in relation to multi-lateral trade and e-commerce are very technical. However, COSATU feels much more careful consideration needs to be given to the impact of simply adopting so-called international best practice for developing countries like South Africa. We do not believe adequate consideration has been given to the implications for domestic economic growth and social development. Further, as a developing economy, South Africa needs to be able to seek exemption from the relevant WTO and other regulations where this is in the national interest or in order to achieve socially desirable goals.

For this reason, and for the reasons outlined in the previous section, we do not support the moratorium on imposing customs duties on electronic transmissions (p 30). Nor do we support zero tariff rating on IT products (p 31). However, further discussion is needed on an appropriate tax regime which is conducive to the development of information and communications technology without undermining the integrity of the tax system. The role of tariffs extends beyond merely raising revenue for the fiscus to actively supporting industrial policy against unfair competition and electronic dumping. We therefore support both the retention of existing tariffs and duties, and their extension where necessary, particularly to protect developing countries and to promote the development of viable domestic information technology industries.

We support the delivery of cross-border electronic services being treated under GATS as mode 1 cross border transactions (p 31). This would make such transactions subject to the regulations of buyer country, which usually affords better consumer protection. However, consideration needs to be given as to how to ensure the necessary protections if there are no applicable regulations in the buyer country, or if these offer substantially less protection.

Intellectual property rights

Consistent with our earlier comments on multi-lateral institutions, COSATU believes that more attention should to be given within the World Intellectual Property Organisation (WIPO) to protecting the needs and interests of developing countries. This should include the protection of indigenous knowledge (including that of traditional healers, for example) and our bio-diversity heritage.

In order to facilitate the transfer of technology and knowledge to developing countries, the intellectual property rights regime should not allow the patenting of algorithms, since this has the effect of blocking the development of second-generation technologies based on existing principles. Likewise the principle of reverse engineering must be protected to facilitate generic production of established technologies (18).

COSATU also supports the protection of the non-profit, fair use principle, which would allow limited, selective duplication of content for private, academic, non-commercial use.

Again the Green Paper fails to address intellectual property rights in relation to intellectual property produced by workers, from musicians to computer programmers. The adoption of appropriate codes to protect the rights of workers regarding their intellectual property output, and to ensure they are adequately remunerated, needs to be developed, either through regulation or via collective bargaining.

Privacy and consumer protection

COSATU agrees that privacy and consumer protection issues are a key cornerstone of any e-commerce policy. Accordingly, we support a clear set of consumer and citizen protection principles along the lines of the examples quoted from the EU, Australia, and the OECD (pp 47 - 49). However, these need to be enshrined in legislation, or through enforceable regulations.

COSATU further supports the need for effective protection of the privacy and secrecy of communication for both individuals and groups. We believe that the Interception and Monitoring Act of 1992 needs to be re-examined to ensure that it affords adequate privacy protection of electronic communication. We agree with the position adopted in the Green Paper that key coding and message decryption only be allowed subject to judicial warrant (p 44).

However, a major omission is the Green Paper's failure to address specifically any of the issues relating to workplace surveillance and the rights of employees to privacy. COSATU supports effective protection of workers in this regard, both through appropriate legislation and regulation and where applicable subject to negotiated codes of conduct. A number of sample codes are listed on the LabourStart Online Rights for Online Workers page. Further, COSATU believes that the right of workers to organise via e-commerce infrastructure, including the right to communicate with the union of their choice, needs to be included in such a code.

In line with our previous comments on self regulation (see 3.5 above), COSATU believes that the envisaged national certification authority (p 42) and the proposed industry code of practice (p 48) need to have effective representation from interest groups outside business, such as freedom of expression, labour and consumer groupings, and be subject to legislated requirements.

In terms of the Promotion of Access to Information Act, information and communication technology can play a key role in giving ordinary people access to information from the state and the private sector required for the exercise or protection of rights. There needs to be a clear elaboration of how e-commerce and related technology can advance these objectives.

The Green Paper fails to consider the difficult questions of the protection of citizens against hate speech, child pornography, offensive content, and whether current legislation is adequate to ensure this within the electronic environment. Despite the highly contentious issue of censorship, we believe that workers and citizens should have legal recourse against racist e-mail messages or hate speech web sites, as well as against unsolicited "spam" e-mail messages.

Infrastructure, Access and Convergence

It is not the intention of this submission to deal extensively with the issues of telecommunications deregulation, privatisation and the introduction of competition. These will be the subject of a specific submission to the Department of Communications. However, since the Green Paper raises the issues (pp 54,5), it is appropriate to summarise COSATU's position.

It is our view that, in the context of ambiguities in the policy and regulatory framework for telecommunications, the introduction of unregulated competition within the sector will slow down the extension of services to the poor even further. Competition in basic telephony will make cross-subsidisation of poor areas more difficult. Meanwhile, the IPO for Telkom has already led to asset shedding and job losses, despite the need to expand telecommunications in our country.

Before embarking on restructuring, Government must establish clear objectives for telecommunications. These objectives should include:

• Universal service for all within five years – that is, every household wanting access to telecommunications must be linked up to the telephone network.

• Affordable tariffs, based on the system of progressive block tariffs developed for municipal services. Other countries have seen a substantial decline in basic telephone costs, which should be replicated here.

• Improvements in internet, long-distance and value-added services to support a more productive economy.

• The greatest possible contribution to employment in the sector, both by improving telecommunications throughout the economy and by protecting jobs at Telkom. Given the need to expand basic telephony, especially in rural areas, Telkom should see growing employment in the next few years.

To achieve these objectives requires that Telkom continues to take responsibility for extending telecommunications in historically deprived areas. Targets should be set in terms of the percentage of the population with access to telephones, ultimately reaching universal service by 2006.

Additional operators should be licensed to deliver high-level services to business. However, all should pay a levy that will contribute to the extension of basic telephony (see 4.2 above). This universal service levy should be made available to Telkom as a ring-fenced and audited subsidy for this purpose.

Finally, the regulatory system must be tightened and strengthened to ensure that telecommunications meets national goals. Regulations must be geared, not to the “public interest” in a vague sense, but to quantifiable national targets for affordability and universal service. COSATU therefore supports a single regulator, adequately financed and empowered to promulgate, monitor and enforce regulations. While there can be some autonomy, the regulator – as per international practice – should not be completely independent of government and should be mandated in terms of overall public policy.

Thus, affordable access for all through infrastructure rollout and the achievement of universal service needs a lot more attention as the bottom line for electronic commerce. This needs to be closely linked to the clear measures and firm targets to bridging the digital divide especially in relation to questions of race, gender, disability, class, geographical location. The achievement of equity in this regard needs also to be linked to questions of literacy and language. It also requires substantial human resource development.

Domain naming

The Green Paper needs to be far more critical of ICANN, the international domain name authority, which is dominated by the developed world and the USA in particular, heavily weighted in favour of the private sector, and lacks accountability, inclusivity and transparency (19). South Africa should lobby for a far more representative structure, perhaps associated to UN, which will include representatives from the developing world, from organised labour and from civil society, NGO and consumer groups.

Domestically, COSATU support the government's intention to establish a clear policy framework and structure to oversee domain name allocation (p 60). Again we call for this to be a properly representative and accountable structure (see 3.5 above). We further believe that such a policy framework should also address the question of restrictive DNS-based access practices, such as the prohibition currently implemented by M-web against .za subscribers.

Electronic Payment Systems

We agree that electronic money and electronic payment systems are critical to e-commerce, but believe these would be best addressed through a process of structured public interaction with the SARB's Position Paper on Electronic Money (20), which predates the Green Paper.

Any such process should include consideration of the role of electronic payment systems such as smart cards in facilitating the rollout of banking facilities to the poor and unbanked, via the PostBank inter alia.

Maximising Benefits

Our previous comments relating to the overly rosy conception of electronic commerce (see 3.2 above) are again of relevance to this section of the Green Paper. Maximising benefits is not enough: the paper also needs to consider how to minimise negative impacts and outcomes.

The Green Paper correctly raises the issue of the digital divide (p 67), but unfortunately conceives of it in very general terms of “information haves” versus “information have-notes”. Such a generalised approach undercuts any examination of the various axes of that divide, or of their causes and consequences. This in turn mitigates against developing specific policy interventions or concrete measures to address them. We have in mind issues such as the need to achieve universal service through affordable rollout of ICT infrastructure, coupled with effective human resource development initiatives (see 4.8 above).

The question of e-commerce market development (p 68) is dealt with in very narrow terms of promoting international competitiveness, and of promoting SMMEs and PPPs. SMMEs are uncritically assumed to be a job creation panacea in the absence of any hard evidence or cost-benefit analysis (21). Other models such as co-operatives are not considered at all. No mention is made in the Green Paper of the need to develop the domestic market for e-commerce goods and services, or of promoting regional market integration and development through structures such as SADC.

None of the issues raised by labour through the working group in relation to labour market issues has survived in its original form. These included the questions of:

• Job Creation;

• Job Protection;

• Human Resource Development;

• The Nature of Work;

• E-commerce and Unionisation.

The complex and controversial questions of job losses, job retention and job creation need considerably more attention than the single paragraph they are accorded in the Green Paper. The job destroying-impact of ICTs, and by extension that of e-commerce, is the subject of extensive and detailed literature (22) and cannot be lightly swept under the carpet with bland calls for more “research” (p 70) and platitudinous reassurances that new jobs for “infomediaries” are being created.

It is clear that certain categories of jobs will be displaced or destroyed by the introduction of e-commerce, particularly through disintermediation in the retail and wholesale trade (23). Whilst others may be created, they are fewer in number, subject to a time lag, and further up the value chain - leading to the phenomenon known as the 'skills gap'. The alleged trickle-down job creation impacts of e-commerce (p 70) are too vague and uncertain to be taken seriously. These phenomena require that detailed research be undertaken in this area, leading to specific, concrete measures for active intervention to protect existing jobs and create new employment.

Even if e-commerce leads to net job creation, the losers and winners are unlikely to be the same people (24). In South Africa, ICT-induced job losses are compounded by a racial dimension, with unskilled black workers being displaced and opportunities opening up for skilled white, often male, graduates. Further, with the current massive unemployment rates (25), most of those who lose jobs are unlikely to find another one.

It is surely clear from the above that specific, active measures to minimise job losses and maximise job creation are an urgent priority as ICT and e-commerce diffuse across the economy. COSATU reiterates its call for measures to promote job security for those in existing employment in the sector, an ongoing sustained onslaught to up-skill the work force, effective retraining and redeployment schemes, with the safety net of a social plan as the measure of last resort.

Further examination of the impact of e-commerce upon employment needs to examine its effect upon the nature of work. Already a small but growing portion of the workforce in Europe is engaged in one form of tele-work or another (26), from the glamorous stereotype of the telecommuter clutching a laptop to the more sweatshop home-working environment. Unions have begun to describe and call for measures against the phenomenon of the two-tier labour market, with a shrinking core of stable full-time jobs surrounded by a growing periphery of contingent, part-time, outsourced employment (27).

In addition, there are the issues raised earlier (see 4.5 above) of ensuring employee protection from electronic surveillance and of protecting the right to organise in the new e-commerce environment. Related to this is the need to examine South Africa's labour relations legislation in terms of its adequacy with respect to e-commerce, another key issue not addressed in the Green Paper.

The Green Paper also fails to address changing structures of worker representation within an e-commerce environment, where the blurring of firm boundaries is accelerated, giving rise to increased levels of sub-contracting and the creation of complex network production relationships. This undermines the clear, stable relationship between worker and employer enshrined in current legislation, and weakens the ability of the union to represent its members, who become extremely vulnerable to volatility in the labour market, and subject to greater inequality of conditions and remuneration. The protection of such contingent workers through industry-wide enforceable collective bargaining agreements is essential.

Electronic commerce therefore clearly raises a number of policy challenges in relation to the changing nature of work, and even potentially the changing role of trade unions - all of which were tabled (and subsequently excised) during the drafting of the Green Paper. It remains COSATU's firm view that such issues need to be addressed squarely in any national e-commerce policy process. We will continue to raise them until they are addressed in the relevant legislative instruments, and appropriate policy measures put in place (28).

The Green Paper is similarly weak when dealing with education and human resource development. Its characterisation of education remains in the realms of vague wish-fulfilment terms. Despite their growing significance, we question whether “distance education, virtual campuses and technological training” (p 70) will ever constitute the dominant mode (i.e. over 50%) of education delivery. If they were to do so, the devastating impact on the jobs of thousands of teachers, and the wasted investment in current school infrastructure would surely be massively disruptive, not to mention the negative impact on learners of removal from the benefits of collective learning environments (29).

Similarly the section on Human Development (pp 69, 70), whilst raising a number of key areas in which skills development is required, ignores the growing phenomenon of the skills gap, much less proposes specific measure to overcome it. Unless this growing shortage of highly skilled personnel, coupled with persistent high levels of structural unemployment at the lower end of the labour market, is recognised, job creation and skills development initiatives will be ineffectual.

E-government

COSATU is not convinced that e-government, critical though this will be in the future, should be dealt with within an e-commerce policy framework. It is our view that a specific process to examine electronically-enabled governance and electronically-facilitated service delivery needs to be convened.

The starting point for any such process needs to be consultation with the public sector unions, and to ensure their participation in shared agreements and outcomes. It is their members whose jobs may be drastically affected by e-commerce-driven restructuring, through job displacement, training requirements and redeployment. It is their members who will be at the delivery coal face of e-government.

This critical issue seems, however, to have escaped the drafters of the Green Paper in all their proposals for electronic service delivery.

The central objective for such a process should be that of ensuring improved service delivery, with “Batho Pele / People First” as the guiding principle. COSATU unions are on record as calling for just such an approach (30). In this context ICTs and the principles of e-commerce need to be viewed as potential enablers and facilitators in the achievement of a people-centred service delivery approach, rather than as its drivers.

The Green Paper does report a number of interesting e-government initiatives, but gives little consideration of the critical barriers of access, literacy, language. Unless the digital divide is addressed, e-government will mean only elite government. For this reason it is entirely fallacious to benchmark South Africa against the electronic government standards of developed countries like the USA and the UK (p 73).

Much more elaboration is needed of the potential role of e-commerce and information and communication technology in general in service delivery, for example in the healthcare sector.

This is further compounded by the Green Paper's characterisation of citizens as "customers" or "consumers" rather than as active participants whose basic needs have to be met in the context of South Africa's ongoing democratisation. If e-government is to succeed at all, it has to ensure that it does not undermine the strength and vibrancy of civil society but rather empowers an active citizenry.

Conclusion

We welcome this opportunity to respond to the Green Paper on E-commerce as developed by the Department of Communications. We will be available for further interaction in the process.

The spread and convergence of information and communications technologies, together with the rise of electronic commerce, presage what is likely to become an increasingly important facet of our economy in the future. It is therefore imperative that South Africa develops a clear overall information society policy framework, underpinned by clear policies in e-commerce and related areas. It is equally important that intervention strategies and concrete measures are implemented to ensure the socially desirable development of e-commerce.

Throughout this submission, we have sought to table the issues that are of concern to our constituency, the workers of South Africa, with the hope of making the information economy a satisfactory environment in which to live and work.






Some Useful References

The following are a sample of some of the main web pages and documents, highlighting a labour approach to e-commerce specifically. Accordingly not all URLs referenced above are necessarily included.

• Andrew Bibby, Negotiating the new economy: The effect of ICT on industrial relations, 2001

• Andrew Bibby, Trade unions and Telework, 1996

• EMERGENCE Project - Estimation and Mapping of Employment Relocation in a Global Economy in the New Communications Environment

• Jan Furstenborg, Dealing with e-Commerce in the social dialogue between Uni-Europa Commerce and EuroCommerce, UNI, 2000

• ILO, World Employment Report 2001: Life at Work in the Information Economy, 2001

• Philip Jennings, Speech to the OECD Forum on Electronic Commerce, UNI, 1999

• Labour and Society International, Online Rights for Online Workers - Privacy at Work

• James Love, Notes from OECD E-commerce Conference in Ottawa, CPT

• Roland Schneider, Electronic Commerce: Developments and Challenges, TUAC

• UNI, E-commerce pages

• UNI, Online Rights for Online Workers campaign

Footnotes:

1. Page references throughout are to the printed version of the Green Paper.

2. For recent examples see: John Evans, Digital workplaces, unions and trust: Social protection and representation are as important as ever in the new economy, Trade Union Advisory Committee, 2001, and Andrew Bibby, Negotiating the new economy: The effect of ICT on industrial relations, 2001.

3. Charley Lewis of COSATU's Information Technology Unit was a member of the Maximising Benefits working group.

4. The Green Paper defines e-commerce as ““The use of electronic networks to exchange information, products, services and payments for commercial and communication purposes between individuals (consumers) and businesses, between businesses themselves, between individuals themselves, within government or between the public and government and, last, between business and government” (p 9 or click here).

5. A recent paper by Sagren Moodley, E-business and Supply-chain Management in the Automotive Industry (University of Natal, 2001), despite some shortcomings in relation to labour issues, offers the kind of process analysis upon which an effective intervention strategy can be based.

6. Concrete intervention measures should be linked the Department of Trade and Industry's SAITIS project to develop an ICT industry strategy for South Africa.

7. COSATU's core economic policy document, Social Equity and Job Creation - The key to a stable future, 1996, makes a number of specific concrete proposals in this regard.

8. See COSATU's 1997 Submission to the Public Hearing on Industrial Policy. A SACTWU document entitled “More And Better Jobs For All – New Policies For The Fashion Industry”, 2000, represents a concrete intervention linking the development of an industrial strategy in the clothing and textiles sector with extensive use of e-commerce.

9. See Response to the Green Paper on E-Commerce, ECASA & KPMG, March 2001.

10. Willie Madisha, COSATU President Address to the COSATU 7th National Congress 18 September, 2000

11. Simply put, a 'digital signature' is an electronic means of uniquely verifying the identity of the sender of a message.

12. See the Declaration on Organisational Renewal, COSATU Special Congress, August 1999, which calls for a "campaign to ensure dedicated access for each shop steward to computer, internet and e-mail facilities at each workplace".

13. See the web pages of Union Network International and LabourStart for more information.

14. See COSATU Letter of Support for the Residence Basis of Taxation, Sent to the Portfolio Committee on Finance, 5 October 2000.

15. The introduction of a bit tax was proposed by none other the 1999 United Nations Human Development Report. For a short summary of the concept click here.

16. For more information click here.

17. See COSATU's Submission to the NEDLAC Public Finance and Monetary Chamber on Increasing the Progressivity of Elements of the Tax System.

18. The analogy with the current furore over generic medicines is apt, since analysing the formula enables patent medicines to be duplicated.

19. This is partly evidenced by its recent rejection of a substantial ICFTU proposal to establish a dotUnion top-level domain.

20. Published in April 1999.

21. See Claire Horton et al, The Importance of labour Regulations for Small Business Growth and Job Creation, NALEDI, 2000 for a critique of the prevailing SMME paradigm.

22. Some important recent works include: Aronowitz S & DiFazio W, The Jobless Future, University of Minnesota Press, Minneapolis, 1994; Braverman H, Labor and Monopoly Capital: The Degradation of Work in the Twentieth Century, Monthly Review Press, New York, 1974; Heeks R & Slamen-McCann A, Job and Skill Impacts of New Technology in the East Asian Electronics Industry, Institute for Development and Policy Management, University of Manchester, U K; ILO, World Employment Report 2001: Life at Work in the Information Economy, International Labour Organisation, Geneva, 2001; Klotz U, The Challenges of the New Economy, Gewerkschaftliche Monatshefte, No 9, 1999; Rifkin J, The End of Work - The Decline of the Global Labor Force and the Dawn of the Post-Market Era, Tarcher / Putnam, New York, 1995; Zuboff S, In the Age of the Smart Machine: the Future of Work and Power, Basic Books, New York, 1988

23. See Jan Furstenborg, Dealing with E-commerce in the Social Dialogue between Uni-Europa Commerce and EuroCommerce, UNI, 2000.

24. This point was made by Paul Osterman in The Impact of Computers upon the Employment of Clerks and Managers, Industrial and Labor Relations Review, Spring 1986. He also showed that job creation lags job losses by a cycle of some two years.

25. Recently released figures from Statistics South Africa show that the broadly defined unemployment rate is not up to 37.3% in 2000 from 36.3% in 1999, while the narrowly defined rate has also increased from 23.3% in 1999 to 26.7% in 2000.

26. According to eWork 2000: Status Report on New Ways to Work in the Information Society, European Commission, Brussels, September 2000, tele-work is growing exponentially in Europe , with 9 million tele-workers, accounting for 6% of the labour force at the end of 1999.

27. Dagg A (1997) Worker Representation and Protection in the "New Economy", in Report of the Advisory Committee on the Changing Workplace, Human Resources Development Canada, Hull, 1997.

28. See Andrew Bibby, Negotiating the new economy: The effect of ICT on industrial relations, 2001, for a recent summary of developments and issues.

29. See David Noble, Digital Diploma Mills: the Automation of Higher Education, Monthly Review, February 1998 for a tertiary-level foretaste.

30. See for example the COSATU Campaigns Report “Unions Committed to Service Delivery”, April 2000, and COSATU's Submission on Transforming Public Service Delivery - 22 August 1997.

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