Volume 9, No.3 - September 2000

Accelerating Transformation

COSATU's engagement with policy and legislative processes during South Africa's First Term of Democratic Governance First Term Report of the COSATU Parliamentary Office.

This document being presented to Congress describes how COSATU has tried to influence government policy since 1994. It is like an encyclopaedia, with statements of COSATU policy on virtually every topic members could want to know about.

It analyses where the federation has succeeded and failed and suggests ways to make COSATU's voice more powerful in future. Summarising COSATU's achievements, the document declares: "The character and extent of COSATU's engagement during this period has been widely underestimated. This document will show that… the voice of organised workers has consistently been raised on a broad range of social, economic and labour questions.

"In some cases, this engagement has resulted in concrete victories, partial gains, or defence of progressive measures introduced by government. While there have also been serious setbacks, interventions by the organisation have probably had a significant impact in limiting the inroads by forces with an agenda hostile to our new democracy.

"Who can say what the situation would be if COSATU had not made the interventions described in this document?" The Parliamentary Office put COSATU's views on over 100 pieces of legislation, as well as the country's constitution.

Labour Laws

Of crucial importance to COSATU has been its input on various items of labour legislation:

• The Labour Relations Act, 1995
• Amendments to the Compensation for Occupational Injuries and Diseases Act, 1997
• The Basic Conditions of Employment Act, 1997
• The Employment Equity Act, 1998
• The Skills Development Act, 1998

Labour's demands, says the report, "were backed up by the approach of the RDP, which supported centralised bargaining, the untrammelled right to strike, a limitation on lockouts, strong representative trade unions and the democratisation of workplace decision-making.

"In September1995, the Labour Relations Act was the first piece of transformative labour legislation passed by government. COSATU in its public response heralded the passage of the Act as a major breakthrough:

'For us it represents a resounding victory for workers, a radical departure from the past and… a new dispensation for the management of industrial relations. It also demonstrated the determination of the ANC and its allies to lead the process of transformation at the workplace. Some of the last-minute changes would not have been effected without the support of the ANC.

" 'The only area of regret is the fact that we did not achieve an outright ban on the use of scab labour. But neither did we lose this one. If anything, we were able to erode employers' use of scab labour in an employer initiated lock-out and where an area has been declared a maintenance service'.

"History will judge whether this upbeat assessment is justified. What is certain is that the LRA represented one of the most progressive pieces of labour legislation achieved by worker struggle anywhere in the world. COSATU could be justifiably proud of this achievement, registered against massive odds.

"The main benefits of the LRA include:

1. Strengthening workers organisational and trade union rights;
2. Protecting workers in legal strikes;
3. Promoting centralised bargaining and therefore unity of workers into powerful industrial unions;
4. Covering all workers, including historically excluded public service, farm and domestic workers;
5. Protecting workers rights to take solidarity action;
6. Establishing a legal right for unions to embark on socio-economic strike action.

" COSATU has continued to campaign for amendments to improve and strengthen these labour laws. These are some of the comments made by COSATU on some of the other major items discussed in Parliament:

Abortion:

"The Termination of Pregnancy Bill does not introduce abortion in South Africa, nor does it force or coerce women to terminate pregnancies. It recognises the reality that there are a wide variety of factors, which lead women to decide to terminate their pregnancies. Further, it seeks to end the unnecessary loss of life, and pain and suffering resulting from illegal abortions.

" HIV/Aids

"The scourge of Aids, which needs to be countered by not only the correct policies, but also a massive social movement, is a critical challenge facing the whole society. COSATU has embarked on a wide range of initiatives not only to ensure that workers are mobilised to combat the pandemic, but also to ensure that unfair discrimination is not perpetrated against HIV and Aids sufferers. This campaign needs to be intensified.

" Housing:

"While accepting that there was a role, albeit limited, for the private sector, COSATU's 1997 Policy Conference proposed inter alia, to campaign for the following:

• The public provision of housing on a rental and purchase basis;
• The establishment of a housing parastatal to co-ordinate housing delivery;
• A 5% prescribed assets investment, and levy on companies dedicated towards housing;
• The establishment of housing brigades in communities to help fast track housing delivery;
• To campaign against high interest rates.

Social Security:

"A view is commonly held in the developing world and South Africa that only advanced capitalist states can have comprehensive social security systems. However, in the current debate about enlargement of the European Union, Eastern European countries which operate under a primitive form of capitalism, are being expected to construct social security systems as a condition of entry into the EU…

"An active, interventionist state is necessary if we want to achieve our goal of economic development - in other words, to overcome poverty and redistribute power, wealth, income and economic opportunity from a small minority to the majority of citizens.

" The Public Sector:

"COSATU's approach to public utilities is that they cannot be equated with privately owned enterprises. As publicly owned assets, they are held in trust by the state, on behalf of the public, with the overriding goal of advancing the public interest.

"Public sector delivery of municipal services should be the preferred model of delivery, since the public sector is driven by the ethos of providing services on an equitable basis, rather than by profits.

" GEAR:

"'GEAR itself was nothing more than a knee-jerk reaction by government officials to perceived pressure from the private sector, epitomised by the depreciation of the Rand in early 1996.' (COSATU document submitted to the ANC's 1997 Policy Conference.)

"The unilateral approach to the formulation of macro-economic policy by technocrats in government undermined the possibility of a negotiated, consensus-driven approach to broader economic policy, or the social partnership some saw as being the outcome of Nedlac processes…

"The fact that throughout this debate the RDP remained hegemonic revealed an area of weakness within the RDP itself - that in relation to macro-economic policy, it is an 'elastic' document which allows for a range of potentially conflicting interpretations…

"An examination of… GEAR's targets vs actual results clearly shows two things: that government has consistently met, or 'improved on', only two of GEAR's targets - the budget deficit and inflation, as well as tariff reductions. And that all the other critical targets - growth, investment, employment, interest rates have been consistently missed.

"Particularly disturbing is the fact that Statistics SA registers a net loss of over 395 000 private sector jobs between 1996-99 alone. If agriculture and the public sector were included, the figure would be closer to 500 000.

" The Budget:

"COSATU's analysis of the 2000/1 budget argues that it continues a trend since 1996 of annual declines in real per capita spending on social services and infrastructure. Given population growth of just over 2 % a year, the result has been a decrease of over 10 % in spending per person.

Tariffs:

"COSATU has consistently raised concerns about the approach to tariff liberalisation and export orientation. Concerns with the strategy of trade liberalisation and export orientation, include job losses arising from the eroding of domestic industry, a promotion of capital intensive rather than labour intensive industries, and a lack of focus on growing the domestic market.

" Economic policy:

"Economic policy has arguably been the area of greatest contestation during the first term. It would be fair to say that the economic policy debate currently stands at an impasse both in terms of process and in content.

"Although COSATU has made more interventions on economic questions than in any other area, it is also the area in which its submissions, with significant exceptions, have resulted in the fewest policy or legislative changes.

"Policies which have been pursued during the first term have undermined productive economic activity and made the economy vulnerable to speculators. The federation has argued for a fundamental review of the restrictive monetary policy pursued by the SA Reserve Bank, on the basis that it is incompatible with the country's developmental challenges.

" The Tripartite Alliance:

"COSATU's tradition of independence in the context of joint action has been tested in practice many times during the transition, especially when there have been tensions within the alliance and disagreement with government. The pressure to break the alliance by opposition parties and sections of the mass media has been relentless. The role of COSATU, its relationship to government and the Alliance is an ongoing debate within and outside the ranks of COSATU.

" The document sums up COSATU's achievement thus: Significant achievements:

• The negotiation of a worker-friendly constitution;
• The negotiation of progressive labour legislation at the level of Nedlac,
• Successful defense of these laws in the parliamentary process,
• The improvement of the Employment Equity Act, BCEA and COIDA at the level of parliament;
• Amendment of social security policy and placing of the universal income grant on the agenda;
• Legal amendments securing a minimum 50% representation of workers on boards of retirement funds; inclusion of certain progressive provisions in the Competition Act;
• Negotiating largely progressive legislation and policy on local government and water issues;
• Defence of progressive health legislation;
• Pro-worker amendments to the Equality Act and Access to Information Act. Partial gains: ·
• Amendments to the Small Business Act;
• Interim amendments to the Insolvency Act;
• Action against collusion by banks on interest rates;
• Limited shifts in housing policies to accommodate the demand for public rental housing;
• The inclusion of some COSATU demands in public works, procurement and migration policy documents (although some of these await finalisation);
• Mobilisation for progressive taxation, and defence of elements of the tax legislation against attempts to make them more regressive, including retention of VAT zero rating and resistance against increasing the VAT rate;
• Maintenance of Secondary Tax on Companies; introduction of Capital Gains Tax; and increasing the progressivity of income tax. Actions to block problematic legislation or policies, or limit the damage of proposed measures:
• The blocking of legislation (and the drafting of an alternative bill) dealing with employers' access to the pensions surplus;
• Restricting exemptions of lenders from interest rate limits under the Usury Act;
• Limiting the extent of reduction of Child Maintenance Grants;
• Opposing a totally flawed Money Laws amendment Bill;
• Limiting the negative elements of policies and legislation on the public sector in terms of downsizing. Significant setbacks:
• Macro-economic policy, which has had destructive effects not only in the area of fiscal and monetary policy, but many other areas of government policy, including social delivery, industrial policy, public sector, local government, and now labour policy;
• The BCEA Ministerial Determination on Small business;
• Attempts to block extension of the UIF to public service workers;
• Failure to introduce a bill to empower parliament to amend the budget;
• Introduction of a MTEF which entrenches GEAR parameters on a rolling basis;
• Reduction of corporate tax;
• Reduction of skills levy to ½%;
• Failure to introduce national health insurance;
• Continuation of tariff liberalisation and trade agreements with negative job impacts;
• Unilateral privatisation/ restructuring of state enterprises;
• Corporatisation of Eskom via Eskom Bill;
• Restructuring of energy sector without consultation on energy policy;
• Failure to implement pensions top-up agreement for low income earners;
• Failure to restructure government pensions fund to release resources for delivery;
• Inflation targeting based on a restrictive target;
• A Procurement Act which excludes worker-friendly measures contained in the Green Paper;
• Private sector driven transport and housing policies.

Drawing from its experience of the first term, the report looks ahead at prospects for the second term of democratic government: "Looking back over the period since the second democratic elections, there are mixed signals as to the direction and pace which transformation is likely to take during the second term of governance..

"The key policy debates have far from been concluded during the First Term. Many critical areas, including labour law amendments, national health insurance, pensions legislation, energy policy, social security policy, and financial regulation are due to be discussed in the coming period.

"…The expectation by some that the initial period would complete the major pieces of transformative legislation, and that the policy and legislative challenge would tail off, has not been realised. The forthcoming period will continue to raise major challenges for COSATU's engagements with processes of governance.

"In terms of the Alliance, there were promising signs during the early part of the Second Term - notably the Manifesto with its emphasis on delivery and accelerated transformation, and the Accelerating Change document which addressed the need for a more politically driven approach to governance with the ANC and the Alliance broadly at the centre of policy.

"Neither of these have as yet been satisfactorily followed through. In the case of the Manifesto, while there has been some implementation, there has been little movement on a number of key commitments, while the proposals of Accelerating Change seem to have dissipated.

"The workings of the Alliance itself have been uneven and problematic over the past period, and the Alliance has not been given the space to drive governance in any meaningful way. The co-ordinating structure set up by the extended officials meeting could potentially improve this situation.

"For this to happen requires sufficient political will, commitment to a new role for the Alliance, and shifts both in the style of governance and policy direction. The extent to which the Alliance begins functioning effectively will be one of the major determinants of COSATU's success in engaging with governance during the second term."