INAUGURAL CENTRAL COMMITTEE (Part 2)
INAUGURAL CENTRAL COMMITTEE (Part 2)
Industrial policy is not confined to promoting exports. Such a policy will have limited success. We reject GEAR and free market purity as inappropriate to address the socio-economic and political ills of South Africa. Market forces on their own will not build efficient and dynamic industries nor maximise the national social and economic interests.
An activist, developmental and interventionist state is needed to carry out the task of social and economic transformation. Recognising historical imbalances in social and economic power relations, this democratic state must pursue a sustained programme to shift the balance of power in favour of the working class and the rural poor, who constitute the main motive forces for fundamental transformation.
An interventionist policy should both build efficient and dynamic industries and address national social and economic interests.
The industrial policy that the new democratic state pursues must integrate Southern Africa as part of our reconstruction and development strategy.
While the mining industry has declined relative to manufacturing and services, it will remain vital to the South African economy for years to come. Our trade and industrial policy must have a long-term social plan approach that anticipates the gradual downscaling of mining and manufacturing as well as other sectors.
The objective of industrial policy should be a significant increase in the number of quality and sustainable jobs and full employment. Other objectives include:
To achieve these objectives, we should negotiate and campaign at national, regional, industry and company level around the restructuring of the economy and industries. Particular attention should be paid to:
In defence of jobs: Strategies must be put in place that protect and restructure existing industries, lay the groundwork for new areas of employment and include a social plan.
We should vigorously oppose attempts by business and government to establish Export Processing Zones (EPZs) as they downgrade labour standards.
Investment incentives such as tax holidays and Industrial Development Zones (IDZs) should ensure positive net job creation, not simply displace existing jobs without creating additional jobs. Capital intensive projects in IDZs or Spatial Development Initiatives (SDIs) should only be permitted on the basis of realisable up and downstream job creation and monitoring mechanisms to ensure this. SDIs and IDZs should not become EPZs with a different name.
The following principles should underpin our engagement on IDZs and SDIs, which should include negotiations in Nedlac:
These issues will be further discussed in Cosatu structures, including a meeting of Cosatu regions.
SMME’s can play a crucial role in social and economic development. A coherent national policy on SMME’s should be based on job creation, economic empowerment for the participants and fostering of good labour practices in the SMME sector.
We do not support SMME development through sub-contracting since this does not generally create new jobs, but displaces existing unionised labour with jobs that offer lower labour standards. SMME development should prioritise new products or services.
Government needs to play an active role in providing and facilitating SMME access to financial support. Incentives to SMMEs should not be at the expense of workers.
SMMEs should be used as a tool for collective empowerment instead of self-enrichment.
Cosatu should meet with black business organisations to discuss the implementation of fair and progressive labour practices and policies.
The high price of raw materials is a major restriction on the ability of higher value-added industries to become internationally competitive, e.g. Iscor’s steel. Government can change this through its ownership (IDC) and policy approaches such as: import/export controls on strategic materials (energy, steel etc.); transport costs and efficiency; environmental and design regulations; minerals and energy policy and infrastructural development. Government interventions should be biased towards meeting people’s basic needs.
We reject the current relaxation of the local content provision as it has led to the collapse of a number of industries. An industrial policy must have a local content provision in the final product.
General investment policy
Key policies which can boost productive investment and encourage employment creation include:
The Multilateral Agreement on Investments (MAI), which originated in the Organisation of Economic Development (OECD) and may soon be part of the agenda of the World Trade Organisation (WTO), is designed to further strengthen the power of transnational corporations throughout the world. It poses a grave threat to the ability of nation-states to serve their citizens, and can further relegate the status of developing countries to that of "wholly owned subsidiaries" of multinational corporations.
MAI represents a serious threat to the sovereignty of independent nations. Its provisions amount to an international bill of rights for multinational corporations.
Cosatu should join the growing international campaign against the MAI. Government should be urged to use its upcoming chairpersonship of the Non-Aligned movement (NAM) to mobilise further opposition to the MAI, and to support the view that an entirely new investor agreement be negotiated, with full participation from developing countries and civil society and based on respect for fundamental worker rights, and the sovereign right of parliament to pursue national development goals.
The IDC’s primary mandate should be job creation. It should be reorientated to focus on capital intensive mega-projects to incorporate labour intensive projects as well.
In addition to the allocation of funds from the investment portfolio of the IDC, the full pre-tax profit of the IDC should be applied to job creation ventures. Private sector investments in partnership with the IDC should be required to invest in job-creating investments.
State procurement policy should:
Trade agreements, bilateral agreements, ministerial declarations, and/or protocols must not negate industrial policy provisions of the industrial policy.
Companies tendering for public and private contracts should be required to report on compliance with a Worker Rights Index, which should include: no employment of scab labour during legal strikes; participation in existing centralised bargaining institutions; contribution of a minimum 4% of payroll to training programmes agreed to with the trade union movement; and implementation of a 40-hour working week.
Cosatu should lobby government to remain a non-signatory to the WTO Procurement Policy and take a stronger stand against it at WTO debates. The government should also:
We are experiencing job losses through illegal goods entering our markets and the dumping of goods on our markets. Finances should be made available to increase staffing and develop systems to collect more taxes and prevent illegal goods entering the country. Customs and excise institutions should be transformed to reflect the country’s population, increase efficiency and meet the economy’s needs.
Cosatu must develop greater capacity to co-ordinate policy formation and engagement on industrial development issues, including the Nedlac trade and industry chamber team, parliamentary office and affiliates. Resources should be made available at Nedlac to ensure this.
Affiliates should set up industrial policy departments or teams, to develop industrial policy, participate in Cosatu industrial policy processes and engage with employers, Nedlac and government. Cosatu and affiliates should develop industrial policy teams to drive the development of policy in each sector. These should cover both the public and the private sectors.
Naledi should set up an industrial development research capacity, guided by a union reference group, including developing a longer-term strategy and vision.
Cluster studies should be needs driven, linked to RDP initiatives such as housing delivery, and should not be export-driven at the expense of the domestic market. Affiliates should prioritise proactive participation in the cluster study process, including defending worker interests and ensuring workplace transformation. Affiliates should meet with the DTI sectoral bureau for their sector, to discuss plans and processes for sectoral industrial strategy. Sectoral industry plans should include a strategic trade policy (including appropriate tariff policies) to foster sectoral growth. Cosatu should secure funding for training and capacity building for union representatives participating in these structures. Cosatu and affiliates should develop report-back and mandating mechanisms throughout these processes.
Tariff reduction without supporting policies in affected sectors leads to job losses. An immediate moratorium on any further reductions should be imposed, particularly in sectors geared towards the support of the RDP. Tariffs should not be reduced at a rate faster than that required by our obligations to the World Trade Organisation. Where this has occurred and has resulted in job losses, tariffs must be increased to the obligatory rate.
Government should use tariffs strategically to protect jobs and promote industrial development. Tariff reduction should be preceded by active industrial policies to promote efficiency.
A tripartite forum should oversee an audit of the effects of tariff reductions on particular sectors or industries; make proposals to renegotiate the WTO agreement; and assess the impact of foreign policy on trade agreements.
The Social Plan with social adjustment packages should be implemented at sectoral level, especially in industries facing tariff reductions and downscaling. Social adjustment programmes to transfer workers into new jobs must be introduced if tariff reduction leads to retrenchments.
Current EU and SADC negotiations on tariffs for sensitive industries exclude labour representatives. Cosatu strongly condemns this, and the revision of mandates without any discussion with affected workers. Cosatu calls for an immediate review of these negotiations to ensure no job losses in South Africa as well as trade union representation in the negotiations, particularly from affected sectors.
Cosatu should network to ensure international solidarity action and campaign against trade relations unfavourable to the poor countries.
An active trade policy should target incentives and supply-side measures, e.g. skills training, to industries that create jobs directly or up or down-stream.
Both import substitution and export promotion should be pursued. Production for the export market tends to be less labour intensive and create fewer jobs than production for the domestic market. Expansion of import substitution:
Any anti-import substitution bias in existing industrial policy should be worked out of the system.
Unfairly subsidised imports into South Africa should be stopped. Increased use of anti-dumping and safeguard duties should take into account national interests, prioritising the protection of domestic industry facing job losses.
Rules of origin provisions should be implemented in South Africa and, in the event of an SADC single market, in the region.
A social clause should be implemented to discourage countries from competing on the basis of labour repression, exploitation and poor or non-existent health and safety standards, e.g. through EPZs.
Employment impact assessments should be mandatory before trade agreements are signed.
Parliament should be given an effective overseeing role on trade negotiations. The trade union movement should be represented in international trade negotiations, including direct representation of labour on the negotiating committees concluding bilateral and multilateral trade deals.
The WTO should become a tripartite structure, and should require countries to comply with the social clause. Trade unions internationally should form a common front in dealing with the WTO.
All state and parastatal institutions related to industrial policy need to be restructured and reoriented. This should go beyond changes in composition and representivity and should position these institutions as tools in meeting the objectives outlined in our vision.
Cosatu should initiate discussions with the relevant ministries (Trade and Industry, Finance, Labour, Agriculture) and institutions such as the IDC, DBSA, NPI, Land Bank and Nosa about their restructuring (or in the case of NPI and Nosa, their possible closure) and labour representation on their boards.
Resourcing should be linked to their impact on employment creation, which they should report on publicly. The national and provincial tender boards need to be restructured to ensure representivity. A commission of enquiry should be set up to investigate existing contracts and government employees guilty of colluding with parties in awarding tenders, should be criminally charged.
Industrial development and relevant institutions should assist in developing efficient and dynamic cooperatives.
Growth and development in South Africa and the Southern African region are integrally linked. There is a need to expand the regional market and develop mutually beneficial relations within the SADC community and externally. Regional integration should not focus only on economic policy, but also social development.
A regional reconstruction and development plan for Southern Africa must be developed through a regional summit of governments and unions. Cosatu should propose a Regional Development Bank.
SA needs to play an active part in increasing regional economic growth through the collective action of public enterprises (e.g. transport, utilities). Cosatu should support a programme of infrastructural development projects in the region, such as the Maputo corridor, based on clearly defined criteria.
Sectoral industry policies in SA should take into account potential cooperation in the region.
The SA government should initiate negotiations on minimum standards for the region. Cosatu should campaign for an SADC based on improved social and labour standards, and the setting up of a Southern African Development, Labour and Economic Council (Sadlec). This should include labour and community representatives and should serve as a forum to negotiate social and economic policies for the integration of the Southern African region.
Regional co-operation should be underpinned by trade union solidarity. Governments should contribute to a regional solidarity fund for labour movement programmes in the region.
Cosatu affiliates should establish firm links with their counterparts in the region. This should include developing ideas on mutually beneficial industrial development across countries; and setting up regional company shopsteward councils to build solidarity. Cosatu should assist unions in the region to develop their organisational, research and educational capacities.
The CC also adopted resolutions on competition policy, energy policy, fisheries and food security.
Labour market policy should redress past discrimination and facilitate workplace democracy. This should include closing the wage gap, training and education of the workforce, and the creation of sustainable jobs which pay living wages.
The labour market is already flexible in terms of wages and employment, as demonstrated by the International Labour Organisation (ILO) study of the South African labour market. Workers in South Africa have limited institutional protection; retrenchments are not difficult; there is an increasing trend towards casual and atypical employment; and most wages are determined at plant or enterprise level.
The following is a summary of some of the key resolutions adopted on the labour market.
Policies aimed at reforming the labour market and creating new job opportunities must acknowledge that both unemployment and low wages contribute to poverty. Wage flexibility as a means of poverty alleviation — and particularly if new jobs are seen as the central mechanism of redistribution — simply means exchanging one source of poverty (low wages) for another (unemployment). Creating new employment opportunities along with higher wages requires a long-term strategy and depends on the successful accumulation of productive investment in sectors of the economy which produce jobs, and on the structural transformation of the apartheid-era labour market.
Labour productivity has been rising and unit labour costs have been declining since 1992. Strong union presence, worker rights and labour standards compel management to seek productivity improvement through increasing management effectiveness, innovation, increased investment in training and skills and worker participation.
Increasing the competitiveness of the South African economy requires a strategic approach to entering changing world markets. It also requires public investment in cheap and efficient infrastructure, communities, people and skills, as well as a comprehensive restructuring of the management structure and how production is organised.
At a broader level, a different approach to promoting productivity as part of a broader strategy of redistribution and employment creation is clearly required. Labour has proposed the need to negotiate a National Productivity Framework in order to achieve this objective.
Such an agreement should cover the goals and methods of improving the productivity levels of managers, workers, raw material and capital. It should cover equity issues such as the distribution of productivity gains, and the reorganisation of relations on the shop floor. It should also deal with job security and job creation.
A defining characteristic of incomes in South Africa is the wage gap between blue collar and low-paid workers on the one hand and management and high-paid employees on the other. South Africa is ranked 41 out of 49 countries in terms of management efficiency, but 6th in terms of the remuneration of top management.
A significant reduction of the management wage bill would contribute substantially to the reduction of labour costs. However, the management: worker ratio is increasing. Management functions should be devolved to the shopfloor, and a portion of management salaries that are saved should be redistributed to shopfloor workers.
There is no evidence that wage increases won by union members are the main source of inflation. To the extent that rising incomes generate inflationary pressure, this can as plausibly be explained by high and rising management incomes. Redistributing part of these incomes to workers will tend to increase demand for local goods and reduce poverty.
Increases in basic wages should not be linked to productivity increases since the major portion of productivity improvements are the responsibility of management. At the same time, as producers and stakeholders, workers should share the benefits of productivity improvement, either through wage increases or through gainsharing agreements.
Cosatu should campaign for minimum wage settings for vulnerable and less organised sectors of the economy using bargained wage levels as yardsticks. This should take into account existing inequities, disparities in incomes and the struggle for a living wage.
The minimum wage is defined as "a regulated monetary wage at national/ sectoral level taking into account the cost of living which must be regularly reviewed". It should take the form of a social wage incorporating health care, transport, pensions, etc.
Government must set up and abide by minimum wage agreements arrived at during collective bargaining. It should also monitor and prosecute those who disregard the agreed minimum wages.
Outsourcing should not downgrade conditions of employment of workers in the same industry. Employers should be compelled to consult with registered unions, either prior to the decision being taken or alternatively give at least six months notice prior to outsourcing, whichever provides the longer notice period.
The state should set an example and abide by agreements on outsourcing to ensure maintenance of agreed labour standards. Where outsourcing takes place, outsourced companies should be covered by collective bargaining agreements of the core operations.
In the long-term, labour brokers should be banned as they don’t create jobs but profit from the extreme exploitation of workers by individuals representing their own interests instead of the goals of socio-economic transformation.
However, in the meantime, labour brokering and independent contracting should be regulated, and workers in these sectors should enjoy the full rights and benefits of full-time workers.
Compliance with existing regulations must be monitored with the assistance of the national registers, including ensuring companies use only such registered labour brokers. Unregistered labour brokers should be prosecuted and heavy fines imposed on them.
Cosatu should campaign for the prohibition of scab labour in legislation and must call on government to put an end to the use of scab labour through:
Child labour is still rife in South Africa, especially in the farming industry. No person under 16 years of age should be entitled to work. The Alliance should campaign to eradicate child labour.
Child labour in the entertainment industry should be rigorously controlled through legislation and heavy penalties should be imposed upon any employers who contravene child labour regulations.
Cosatu will campaign to highlight the plight of the children and to pressurise government to ratify and implement ILO Conventions on child labour.
Cosatu should push for an amendment to the SA Schools Act, which makes insufficient provision to avoid child labour.
Decreasing working hours has potential benefits such as more leisure time for workers, improving the quality of existing jobs, increasing productivity and creating more jobs.
Reduced working hours should be accompanied by measures to ensure firms expand their workforce.
A 40-hour working week must be introduced for all workers. Cosatu will continue to struggle to have this legislated. All affiliates should start coordinating their collective bargaining work in this area.
In the short term, Cosatu should campaign and discourage overtime work to ensure full-time employment is created. This should run alongside the campaign for a living wage, so that workers do not have to rely on overtime as a way to get an additional income.
Cosatu remains committed to a full overtime ban in the long term.
Cosatu will push for improvements in the LRA, with the following priorities:
When challenging the unfairness of retrenchments, affiliates should demand compensation for loss of future earnings and personal belongings.
The LRA should be amended to strengthen protection for workers against retrenchments. These should:
Cosatu will resist any efforts to change LRA provisions which automatically extend agreements to non-parties.
Cosatu remains opposed to workplace forums as currently provided for in the LRA. We reiterate our demand that all workplace forums should be constituted by shopstewards and all issues related to consultation and joint decision-making should be discussed as collective bargaining issues. Unions should be able to attain this through a simple majority in the workplace. The LRA should be amended to this effect.
The Basic Conditions of Employment Act (BCEA) should be urgently implemented in order to extend basic protections to all South Africa’s workers for the first time. The Act should not permit downward variation of standards.
The Ntsika report on small business states that there is no special dispensation for small business in other countries.
Cosatu will push for an effective programme promoting full compliance with the BCEA and other legislation by all employers (including so-called emerging businesses).
Some BCEA provisions will affect women workers negatively. For example, downward variation will undermine maternity and child care rights.
Cosatu rejects the BCEA’s variation model and will campaign for all rights to be extended to casual and temporary workers.
Cosatu will campaign for the closure of the apartheid wage gap to a ratio of at least 1:8 over an agreed period. This should include a framework which sets targets for wage equity in the private and public sectors.
The Employment Equity Bill should be broadened to include mechanisms for monitoring the closing of the wage gap in each company, and between all levels of the workforce, including top management.
The top 58 companies should publicly agree to release information on the pay of their individual executive directors, particularly their CEO’s. Information on the minimum wage payable to workers in their companies should also be made available. In addition, there should be a reporting requirement for all listed companies on the JSE.
There is a need to challenge the sexual division of labour and stereotypes that limit women's access to certain positions in the economy, as well as to encourage employment of women in our sectors and abolish gender bias in promotion and recruitment procedures.
Employers should implement affirmative action programmes to redress the sexual division of labour by employing females in typical male jobs. Education and training in companies should target women and ABET should be run during working hours with paid education leave.
Affiliates should demand representation on company recruitment and promotion committees to ensure that affirmative action which addresses the sexual division of labour is taken into account by employers.
Workplace affirmative action is not sufficient to substantially alter women’s place in the labour market. Broader access to education, skills and career paths is necessary to achieve this. Cosatu and affiliates should draw up a programme of negotiation at bargaining council level, in industry training boards and with training institutions, for increased industry-wide access for women to all training institutions and careers. This programme should include the issue of affirmative action for women applicants to industry training programmes and institutions.
Cosatu should commission Naledi to do research on women’s position in the workplace and in the labour market to inform and implement affirmative action strategies.
The state and employers should help set up childcare facilities to facilitate women’s full participation in the workplace and ensure parental rights agreements.
Labour market discrimination begins before women actually enter the labour market, in the family and at school. Cosatu could encourage members to help their children think beyond "traditional" gender roles in the labour market. Sadtu should encourage its members to challenge the way schools discriminate against female students, and to encourage their students not to be constrained by gender expectations in their choices of subjects and careers.
Cosatu should support implementation of CEDAW, Beijing Platform of Action and the Women’s Charter as well as participate in the process towards the formation of a new women’s movement, which should have a strong working class bias.
Sexual harassment must be outlawed. The code on sexual harassment (agreed on in Nedlac and to be attached to the LRA) must be widely circulated and members educated on the content of the code. Affiliates should put in place effective mechanisms to help women workers use the provisions of the code, which should also apply to Cosatu and its affiliates.
In the past, Cosatu resolved to struggle for an integrated education and training system which ensures that workers have national recognition for their knowledge and skills. Since then we have moved towards the achievement of our goals. The CC resolution focussed on what we have to do to ensure we attain our objectives.
Cosatu resolved to ensure that workers gain access to quality education and training at all levels of the NQF. This requires transforming the nature of the programmes; ensuring that workers get Paid Education and Training Leave; utilising the 1% levy on employers; negotiating other funding mechanisms; as well as childcare and other types of support; and well trained educators/trainers/teachers. The resolution also stressed the need for Recognition for Prior Learning (RPL) to take place in a way that benefits workers. This means that all programmes in both the private and public sector must be jointly negotiated between the union and employers.
The fight to ensure workers gain access to education and training is critical to counter moves by some employers to achieve higher levels of education through retrenching workers without ABE. Cosatu condemned this approach and resolved to use all avenues to stop this.
Cosatu also built on its commitment to ensure workers receive recognition for their skills and resolved that work must be re-organised to ensure that skills and knowledge acquired are used in the workplace, and that workers’ skills and knowledge should be recognised through the grading system. The CC agreed that in addition to skills, other factors could be recognised on the grading system and that Cosatu must more seriously address a gender perspective on these issues. These items should be taken up in all bargaining forums.
Finally, it was agreed that we need to develop our organisational capacity to ensure our continued effectiveness and influential participation in the transformation of education and training at all levels.
A resolution on the social sector prompted one of the Central Committee’s most exciting and challenging debates.
Many union members first became familiar with the idea of a social sector through Cosatu’s September Commission last year. The CC readily adopted a resolution on broad social and macro-economic policy which listed the social sector as a component of a transformed economy.
But when it came to defining the social sector and setting out a vision and strategy to build it, delegates were concerned to make their voices heard. The debate was even more critical since it was agreed that a common approach to the social sector would underpin Cosatu’s stand on union investment companies.
The resolution up for discussion listed retirement funds, cooperatives, collective Esops and union investment companies as possible components of the social sector.
But how should the social sector be defined and how does it relate to social ownership and Cosatu’s socialist vision?
Fawu fired the first salvo, lamenting that Cosatu no longer referred to social ownership and nationalisation raised at the federation’s 1992 economic policy conference. Retirement funds, cooperatives, collective Esops and union investments did not necessarily constitute social ownership in the context of socialism, Fawu said. At present, retirement funds were driven by capitalist interests and invested in the capitalist sector. However, if elements of the social sector were geared to promote social ownership, Fawu would support this.
"All the elements of the social sector should be designed to drive social ownership as a strategy for development," Fawu said.
Cosatu general secretary Mbhazima Shilowa explained that the concepts "social capital" and the "social sector" had emerged in September Commission discussions and were informed by a class perspective. The commission had pointed to not just private sector capital and the state sector, but also capital which is collectively owned and which could be used to drive social transformation and social ownership.
Shilowa agreed with Fawu that, at present, retirement funds and some cooperatives, instead of being used as social capital for development, were being sucked into serving the private sector’s agenda.
This collectively owned capital and resources could develop either in a capitalist-orientated direction or in the direction of social transformation and socialism. "The point is," Shilowa said, "that we need to ensure their orientation towards the latter."
What you call it is not fundamental, said NUM. The key question is social ownership as distinct from individual, private ownership. "Do collective social investments or community-union owned companies constitute social ownership?" NUM asked, adding that socialism should not be seen simply as state ownership, as was the case in the former Eastern bloc countries.
NUM said collective Esops should not be seen as part of the social sector and TGWU agreed. How, then, should the social sector be defined, remained the question. "Social ownership can take various forms. It is about a community, a union or a collective of workers running, controlling and owning that entity and the fruits of that being shared collectively," TGWU said.
Shilowa pointed out that the September Commission had referred to the social sector as "enterprises and capital collectively owned — or partially owned — by organisations in civil society such as trade unions or community trusts".
"We can’t continue to invest collectively owned capital as if it is private capital," Shilowa said. If used strategically, social capital could be used to restructure the economy and redefine property and social ownership.
"But is can also go the other way. It is a contested terrain. It can become a base on which private capital is strengthened. But this is no reason for the trade union movement to shy away from it."
"In building the social sector," added deputy general secretary Zwelinzima Vavi, "we are all agreed that we need to move towards social ownership — including of the means of production. We are talking about community and union-owned companies and building a cooperative movement."
But Samwu was still not entirely comfortable and expressed concern that engagement in the social sector could distract workers from the goal of socialism.
"Investment is taking place in capitalist companies which are driven by the need to maximise profit. These collectively owned companies are not that different," Samwu said.
"We must be very careful how we position ourselves as a trade union movement engaging in that terrain. It can confuse our members. We are fighting against capitalism but we are participating in that capitalist system.
"The social sector should inform us in our strategy to build socialism." The question we must ask, Samwu said, is does engagement in the social sector take us closer to socialism or distract us?
Vavi provided an answer: "Building a social sector, promoting social ownership, including of the productive sector of the economy is part of building socialism now."
Sactwu entered the debate: The principle in understanding the social was that the means of production should be owned by the people. Retirement funds should be owned by workers as this is workers’ money.
The issue Sactwu wanted addressed was: "How do we control these institutions in a manner that is different from capitalists but at the same time ensure that people do not suffer when they reach retirement?" One way to do this, the union suggested, was to invest a certain percentage in the social sector while ensuring that the funds continued to grow.
They proposed that Cosatu adopt social ownership as a policy and "open up a major front of struggle in the social sector".
"It is important to start creating socially owned institutions and take over the economy of this country," Sactwu said, adding that the list components of the social sector could also include collective savings clubs and clinics.
Sactwu said Fawu had made the correct points but drew the incorrect conclusion. "Identifying components of the social sector doesn’t imply that we control them or that they have no problems. But we disagree with the conclusion of not engaging with it. All the tools at our disposal have their own problems. The question is how do we transform them?" For example, Old Mutual was under private capital’s control but could be identified as a part of the social sector where labour needed a programme to push for social ownership.
Other key questions were: how to ensure the growth of collectively owned social capital; how to ensure social sector components had a different character from companies owned by private capital and where they needed to be changed. This was a front of struggle and engagement, Sactwu concluded.
"As we engage in struggle," said Nehawu, "we need to continue to thoroughly theorise on the issue of the social sector, the companies, enterprises and institutions owned by collectives or organs of civil society."
The creation of a social sector through union investment companies, cooperatives and so on were all part of an attempt to build an alternative to capitalism and change the patterns of investment and ownership in the economy. "It is a means of socialising the economy," Nehawu said.
"We see the formation of the social sector as part of the struggle to build socialism. Over time this sector can expand in such a way that it begins to roll back the private sector." The federation’s commitment to socialism has to be matched with practical activity that seeks to build socialism now, Nehawu said.
When the discussion resumed on the third day of the CC, consensus on the social sector was clearly beginning to emerge, with delegates making the following points:
Many are more orientated towards serving private sector interests. We have ownership but not control over how these investments are deployed.
Trade union investments should be a critical instrument in transforming South Africa’s capitalist economy into a socialist and worker-controlled economy. Within this overall strategic objective, union investments will be aimed at the following short to medium term objectives:
Union investment companies should be guided by Cosatu’s vision and investment code, and have clear roles and functions.
A process should be set in motion to guide, coordinate and supervise Cosatu and affiliate investment companies to the maximum benefit of all Cosatu members, the working class in general and the country as a whole.
Union investment companies must be seen as vehicles to amass social capital as part of the programme to build socialism.
A Cosatu trade union investment council should be set up to lead this process. This investment council will include two representatives from each union and one from each union investment company and will be politically accountable to Cosatu. The council should receive reports from each union and its company and give political leadership to union investment companies.
Where possible, all unions and companies will cooperate on investments and ensure all union members benefit from this. Cosatu and its affiliates should aim to have one collectively owned investment company with divisions in various sectors.
The ultimate responsibility for unions investment companies and their activities rests with unions and their worker leaders. Appropriate corporate governance and political structures must therefore be created.
Through the union investment council, Cosatu should ensure better coordination among union investment companies and the investment companies of other MDM organisations.
The public sector is the main way to realise people’s constitutional rights to access to housing, health care, education, food and water, transport and a social safety net.
The public sector is a major economic agent and a developmental tool. It is a major consumer, producer of goods and services, investor and employer. Cosatu rejects the concept of a "lean state". We call for a full audit of needs of communities, personnel numbers, skills levels and distribution. This should inform any decision on public service right-sizing, restructuring, reallocation of resources and budget cuts.
The public sector should become a model employer by extending labour standards, closing the wage gap, providing training and skills, using labour intensive technology where possible, and establishing workplace democracy and participation.
Public-Private sector Partnerships (PPPs) are an interim necessity where the state does not have the capacity to deliver services. PPPs must enable the state to mobilise resources, build capacity and develop skills so that the state can eventually take over this service delivery.
We reject the argument that most state services or providers of public goods should be privatised in order to be efficient. Private operators demand profits, which adds to the cost of services.
The public service should be restructured to ensure efficient and effective delivery of quality services and meeting basic needs.
Sectors that address essential needs such as water, electricity and key local government services should remain within the public domain. Sectors such as housing, public transport and waste removal, which are essential to meeting basic needs, but which are currently private sector dominated, should be brought into the public arena.
Strategic sectors such as ports, energy and development finance institutions (DBSA, IDT) should be owned and controlled by the state.
A code of conduct for public service workers needs to be agreed on and published. It should also place obligations on management and government. Government and labour should negotiate a National Framework Agreement to transform the public service based on the terms of reference in Cosatu’s submission to the Presidential Review Commission. This includes an approach to public service rightsizing, the role of the public service transformation forum and service delivery.
Cosatu should also push for:
Apart from broad public sector transformation and sectoral transformation, it is important to also develop and implement strategies for transformation at the micro-level — the hospital, the school, the local police station, town council and post office.
Labour faces new challenges thrown up by changes in the labour relations dispensation, including:
These new challenges include:
Cosatu should set up a national public sector coordinating structure, accountable to the relevant constitutional structures, to:
Societies devastated by war or economic depression have used public works to alleviate unemployment and develop the economy. The RDP calls for a co-ordinated public works programme in order to create jobs. The state has a major role to play in employment creation through ownership, public sector and policy development such as industrial strategy, training and investment in basic infrastructure.
Cosatu should campaign for an accelerated public works programme (PWP) that provides electricity, piped water supply, sanitation, child care facilities and health care, clinics and transport infrastructure to deprived communities. Programmes to provide roads and major dam and canal works, and to address telecommunication inadequacies should also be put into place. This entails a major upgrade of urban infrastructure and development of rural infrastructure.
Such a programme will not only increase employment in the short term, but is crucial to improved economic performance, national output and productivity levels.
We are concerned about the high proportion of PWP funding consumed by consultants and specialists. Consultants should only be used when no reasonable alternative exists, and all consultant fees should be capped and publicly disclosed.
PWPs should target women and youth for employment, emphasise rural infrastructural development and training and apply ILO conventions on employment.
The key sources of finance are the fiscus, the corporate sector and prescribed investment requirements on the retirement and long-term assurance industry.
Local governments should draw up infrastructure investment plans as part of their overall local economic development plans. These plans should be linked to urban development plans to avoid fragmentation and lack of co-ordination and should have definite targets and timeframes for infrastructure delivery, especially to the poor.
Cosatu should develop proposals for public works schemes based on community needs. These should be negotiated in Nedlac with the involvement of the relevant unions. Unions should be represented on the structures governing schemes and wages should be negotiated by Cosatu and the relevant affiliate. Public works schemes should use labour-based construction methods and should not displace existing jobs.
In the Freedom Charter, the ANC as a liberation movement propagated the nationalisation of the commanding heights of the economy. The ANC-led government is contemplating privatisation of strategic sectors of the economy and is violating the National Framework Agreement on the restructuring of state assets.
Any restructuring of state-owned assets must work in the interests of the working class and be in line with the objectives of the mass democratic movement. Restructuring should focus on efficient, effective, affordable and acceptable delivery of quality services, and the basic needs of all the people of South Africa
Any restructuring of state assets should be based on consultation and agreement with the labour movement and local communities and should ensure transparency and full information disclosure.
The ANC should ensure mandates from its Alliance partners on privatisation policy.
Cosatu is opposed to privatisation, particularly in the following strategic sectors: electricity supply; public transport; telecommunications; postal services; water supply; mineral rights; social services (education, health and social welfare); security services and housing.
The government should play an active role in terms of ownership and regulation in the financial services; eco-tourism; mining and agriculture.
State asset restructuring should be based on an integrated approach to different sectors and linked to industrial policy, economic development and job retention, creation and enhancement objectives. A restructuring programme should promote the following goals:
An urgent review of the National Framework Agreement (NFA) process is necessary, especially in light of the failure of certain Ministers to adhere to the terms of the NFA and other government breaches of the agreement. Labour should issue an ultimatum for government to adhere to the NFA.
Cosatu should develop a position on the National Empowerment Fund (NEF) Bill to be tabled in parliament and should ensure this is discussed in NFA structures.
Cosatu must also investigate the establishment of a financial parastatal. In transforming parastatals, labour should push for worker representation on boards of directors of parastatals and all companies in which the state is the majority shareholder.
Apartheid created local government structures along racial and ethnic lines. A plethora of legislation such as the Group Areas Act supported this racially skewed approach to spatial planning. This has resulted in uneven capacity to deliver services and infrastructure between white and black areas.
A new institutional framework has been developed in the form of a White Paper on Local Government. Our vision for local government is informed by the following:
The Constitution defines the primary role of local governments as the provision of essential municipal services — water, sanitation, electricity, etc. — to all citizens. The secondary role is to promote economic and social development, and to participate in national and provincial development programmes. Cosatu supports the developmental vision for local government outlined in the constitution and the White Paper.
The recognition of local governments as a distinct sphere of government has implications for service delivery. Municipalities can decide to deliver services themselves; ask another municipality or parastatals to deliver services on their behalf, enter into partnerships with the private sector or privatise municipal services. Cosatu believes that essential municipal services should be provided by local government or the public sector in general. Both provincial and national government should enhance local government capacity to deliver essential services.
We caution against private sector involvement in direct service delivery without addressing local government capacity. Private operators require profits, adding to the cost of service provision. A private sector-driven approach to service delivery will deny services to the majority of the poor and will concentrate services in affluent areas. Local government service delivery must be informed by:
PPPs must be based on consultation with workers and communities, lay down strict criteria and be monitored and regulated. Government should ensure public participation in developing a regulatory framework, which should include:
Local governments should be discouraged from adopting policies that contradict national policy, such as attracting investment by eroding labour standards. Local government should draw up local economic development plans with clear objectives, targets, and timeframes, which should be directed towards:
We call on central government to increase funding to local government.
South Africa has huge infrastructural backlogs in urban and rural areas. The poor bear the brunt of the shortage of infrastructure such as roads, clinics and schools. The Consolidated Municipal Infrastructure Programme (CMIP) administered by the Department of Constitutional Development is an important capital grant that can top-up municipal resources for infrastructure investment.
The Municipal Infrastructure Investment Framework (MIIF) guides local government infrastructure investment programmes. However, it proposes relatively low basic service levels over a ten year period, based on the argument that there are insufficient funds available. But it overplays the net capital cost to the fiscus without factoring in the benefits of higher service levels. These include improvements in public health and the environment and macro and micro-economic multipliers.
The MIIF also does not take into account possible cross-subsidisation or progressive tariffs in wealthier areas. Its emphasis on cost recovery effectively ties infrastructure and service provision to income levels. The MIIF therefore has contradictory goals of providing universal services while meeting predetermined fiscal deficit targets.
Government must open the MIIF to public discussion so that appropriate service levels are set.
Cosatu should:
