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Cosatu memorandum to Eskom 18-04-08 |
Memorandum to Eskom on the possible job losses due to the reduction and/or possible cut in electricity supply to economic sectors of our economy
17 April 2008
The Congress of South African Trade Unions is gravely concerned at the threat to jobs arising from Eskom’s ‘load-shedding’ policy, and the earlier announcements in the mining sector of imminent retrenchments due to the recent decision of Eskom to reduce electricity supply to major mining companies by 10%.
Eskom’s unilateral decision to reduce electricity usage to mining companies and more recently the failure to support any new major construction initiative has prompted the COSATU Central Executive Committee (CEC) to take a decision in opposing job losses as a result of the energy crisis.
In addition a number of affiliates have been advised by industry employers that any significant reduction in energy supply in key industrial and retail sectors of our economy may likely lead to additional job losses.
COSATU CEC discussed the major national crisis caused by the shortages in electricity supply. Already it is public knowledge that thousands of mining jobs are on the line. This comes at the time when unemployment is just under 40% and poverty at around half of the population, with inequalities growing.
We are adamant that workers should not be asked to pay for government's failure to invest in electricity in the late 1990s.
Its plans to privatise Eskom and do nothing when it was warned about the amount of investment that would be required to meet the expected rise in demand for power in the future.
COSATU and the organised labour acknowledges that the current power-cuts and power shortages is a national crisis and affects all South Africans. We will work actively and constructively to help manage the power-shortage and to find a lasting solution.
Accountability questions
However, we believe it is important to also find out the cause of the problem, including the political and managerial shortcomings that have led to a situation where the entire country is affected and the pain of the power-cuts are deep.
Why indeed was the necessary investment not made by government some ten years ago when the first indications were given that we would run short of electricity-capacity?
Why were large bonuses paid to the Eskom management when it is clear that some of the top team had been prepared to steer the ship of Eskom to this disaster, without making a big effort to draw all our attention to the impending crisis?
Why were coal-stocks allowed to be run down to the critical extent that it has been reported in the media?
Why have more energy-intensive investment projects like the additional smelter been approved by government, when it could have been clear that we were running short of capacity for the economy and the society's needs?
Why was the first load shedding managed incompetently when senior management should have been aware that problems were inevitable and ought to have had a crisis plan ready?
Answering these questions will go some way to removing the growing anger we are facing on the shop floor and create the basis for a positive, forward-looking effort to resolve the crisis. It can also help to ensure that never again will we have such a huge failure of our governance and managerial systems on a critical infrastructure area.
Intervention required
1. As an absolutely basic principle, we should ensure that the costs of the power-cuts are not borne by the poorest in the society, that workers are not retrenched as a result of the power-cuts and that the electrification programme to poor households is not compromised.
2. The package of proposals needs to include short-medium-and long-term measures including:
i. Increasing the public sector generating capacity on an urgent basis which should include developing alternate energy sources
ii. Reducing demand on an equitable basis and without compromising the core development goals.
iii. Ensuring that the cost of electricity for poor communities remain low.
3. We call for a significant financial contribution by government required for:
i. New investment in power-generation,
ii. Shifting to solar water-heating and compact fluorescent lighting, including through regulations to make energy-saving devices compulsory and subsidies to ensure that the poor are not prejudiced, and
iii. Supporting the development of a capacity to locally manufacture these energy-saving units.
4. The criteria for power-cuts/load-shedding are currently very damaging and inequitable. We cannot sacrifice the mining industry in an effort to manage the crisis. The criteria should be urgently reviewed and new agreed criteria should be put in place, which should include:
i. Avoiding disruptions at hospitals, emergency services and other essential services.
ii. Favouring employment-absorbing economic activities in relation to power-usage and
iii. Not damaging the socio-economic goals of the society
In this context, we should be prepared to review projects with a high power-usage and low employment density. The smelters have been identified as a key area of concern.
5. An energy efficiency campaign should be launched, that mobilises the whole of society, led by concrete commitments from government departments, with a view to changing mind-sets and behaviour of consumers and industrial users. In this context we are also prepared to launch a labour campaign to save electricity and to train our shop stewards to be energy stewards to help mobilise workers around the joint programme.
6. We have taken note of a call for the setting up of stakeholder councils at national and provincial level. We support these calls but wish to make the point that the proposed National Council should report on a regular basis to both the Presidency and to Nedlac. It should not be accountable to one line department. Significant policy issues should be referred to Nedlac for consideration. The role of the national council should be:
i. To develop proposals for short, medium and long-term solutions to address the electricity emergency
ii. To develop and communicate core messages
iii. To enable communication between stakeholders and government
iv. To monitor implementation of programmes (e.g. rollout of bulbs) and provide feedback on challenges being experienced and possible solutions.
The membership of the council should be nominated via Nedlac and comprise organised business, government, labour and civil society. The Council should report regularly to both the President and to the Nedlac structures. The Council should meet at least once a month for the rest of this year and then evaluate its work programme.
7. We believe that a pledge, made jointly by all stakeholders, is a useful means of showing our joint commitment to work together to address the electricity emergency. Such a pledge should cover our joint commitments to implement electricity savings, educate our constituents on conservation support a sustainable increase in public-sector power generation capacity, find alternatives to retrenchments and job losses and work in a disciplined, structured way together to address the crisis.
COSATU DEMANDS;
1. An end to unilateral decision making by Eskom on power cuts and supply that affects all South Africans. This is a national crisis and cannot be left in the hands of a utility.
2. Any decisions taken regarding the energy crisis, such as load shedding, rationing and prices must lie in the hands of National Government in consultation with stakeholders. Decision making must be through genuine and meaningful consultation with all stakeholders, where informed decisions regarding the shortage of energy and how this can be addressed, are taken. As COSATU, we will work actively and constructively to help manage the power-shortage and to find a lasting solution.
3. COSATU, as an absolutely basic principle, believes that the costs of the power-cuts should not borne by workers and the poor in the society, that no workers should be retrenched as a result of the power-cuts and that the electrification programme to poor households must not compromised.
4. We demand the following short to long term measures;
4.1 Increasing the public-sector generating capacity on an urgent basis which should include developing alternate energy sources
4.2 Reducing demand on an equitable basis and without compromising our core development goals.
4.3 Ensuring that the cost of electricity for poor communities remain low.
5. COSATU demands an end to the existing criteria used in power-cuts that are damaging and inequitable. We cannot sacrifice the mining industry or any other major industry in an effort to manage the crisis. The consequences of such a decision will inevitably lead to serious job losses, increasing poverty and an absolute failure to meet our developmental objectives. The criteria should be urgently reviewed and a new, agreed criteria should be put in place
6. COSATU demands an immediate cessation of the reduction of electricity supply to mining companies and any other economic sector without a national debate on whether a 10% reduction in electricity supply is feasible or not. The supply of electricity should be normalised to allow companies to continue at maximum output levels without impacting on development and jobs.
7. COSATU demands a moratorium on all potential job losses that may arise from the reduction in the supply of energy.
8. We demand an immediate moratorium on any electricity price increase until further and adequate discussion is held with all stakeholders on alternative funding mechanisms to meet Eskom's infrastructure and investment plans.
9. We demand an immediate investigation into the bonuses being paid to Eskom bosses at a time when we have a national crisis.
10. COSATU demands an immediate Energy Summit to address these issues that would identify an agreed upon strategy that would deal with rationing, prices, funding and decision making.
Signed on Behalf of Eskom
Signed on behalf of COSATU