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Shopsteward Volume 26 No. 2

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Media Centre  |  COSATU Press Statements

COSATU statement on State Capture and Corruption

26 September 2017

The Congress of South African Trade Unions and the South African Communist Party are very happy with response from the workers regarding tomorrow’s National Strike against State Capture and Corruption. Workers, communities and civil society organisations have made it very clear that they will be joining the COSATU marches tomorrow, all across the country.

We continue to urge all workers across the board to put petty sectarian differences aside and join the strike tomorrow. This is a legally protected strike under Section 77 of the Labour Relations Act that allows all workers in South Africa irrespective of their union affiliation to withdraw their labour and join the strike tomorrow.

This strike is about sending a message to both government and private sector that as workers and citizens, we are tired of corruption. We are standing up tomorrow against the cancer of corruption that is eroding our gains and also undermining our democracy.

The recent poverty and unemployment statistics are shameful and represent a crisis of leadership in this country. South Africa is currently struggling with the real unemployment rate of 38%, with close to 10 million people struggling to get jobs and 17 million people on welfare. The recent data by Statistics South Africa report shows that out of a population of 56 million, around 13, 8 million people are now living below the food poverty line of R17.38 per person per day .It also shows that more than 30 million people out of 56 million are by and large poor.

According to Minister of Economic Development corruption costs the SA gross domestic product (GDP) at least R27bn annually, as well as the loss of 76 000 jobs that would otherwise have been created. The 2015 -2016 Auditor General’s Report shows that irregular expenditure has increased by nearly 40%. It also shows that fruitless and wasteful expenditure in 2015-16 was 14% higher than in 2013-14 at R1, 3 billion.

The Auditor General’s report also shows 1 648 instances of suppliers submitting false declarations of interest as part of the procurement processes was reported, but 47% of the municipalities did not investigate any of the cases reported to them . The report also shows that 2 015 reported instances of employees not declaring interests had an even lower investigation rate, with 64% of the municipalities not investigating any of the cases. In 2015-16, poor and non-compliant consequence management practices were found to be at 61% of the municipalities – an increase from the 53% in the previous year. Municipalities with poor consequence management practices are often prone to corruption or fraud, as a result of municipal officials not being held accountable

The report also shows that in municipalities unauthorised expenditure remained almost at the same level as in the previous year at R12, 77 billion.

The biggest corruption case in the private sector was revealed in a report by the U N Conference on Trade and Development last year. The report showed that South African mining companies under invoiced the taxman to the tune of R1 trillion between 2000-2014. This is made worse by the fact that JSE listed companies are continuing with their investment strike. They are now sitting with more than R 700 billion in cash deposits in South African banks.

South Africa is currently losing roughly R147 billion from the money that is illegally taken out of the country per year. This is the money that can accommodate all South African students at a university level for free. We cannot sit back and do nothing when we see a repeat and continuation of what has collapsed many African countries after independence. Our martyrs did not sacrifice their lives so that greed and corruption can reign supreme.

The latest scandal involving the disgraced auditing and consultancy firm KPMG is a stark reminder of the collusion between the private and public sector in swindling South Africans and destroying our economy and jobs.

Thousands of jobs at KPMG are now at stake because of the corrupt and greedy tendencies of those who are at the top. The rot that we see in both the public and private sector is being hidden, abetted and endorsed by firms like KPMG. This shows that we have become a kleptocracy and that there are no angels in both the public and private sector.

COSATU has noted with grave concern the reports that the Gupta network is trying to infiltrate and ultimately hijack the PIC so that they can lay their grubby fingers on the workers retirement savings. We are also concerned to learn that the Minister of Finance Malusi Gigaba is going ahead with his attempts to use workers retirement savings to bailout the captured State Owned Entities. We have already written to Minister Malusi Gigaba asking for an urgent bilateral meeting to discuss the issues that have emerged recently, including the reported attempts by the Gupta network to capture the PIC. When the minister made his presentations to the CEC, the meeting rejected his plans and made it very clear that it opposes the attempts to invest workers retirement savings to the captured.

We want to see a Judicial Commission of Enquiry investigating the looting of these SOE’s. We also want to see people prosecuted and sent to jail before we can even discuss the possibility of worker’s money invested in these state companies.

We will not allow the PIC to be looted the same way that Eskom and other SOE’s have been looted. We will not allow our members retirement savings to be handed over to Ms Dudu Myeni’s airline, South African Airways. Ms Myeni has been nothing but a one woman tornado that has created havoc and chaos, wherever she has been deployed. Currently, she is working with Minister Nomvula Mokonyane to collapse Umngeni Water by tearing the rulebook to shreds and running the entity like a Spaza shop. She cannot be entrusted with workers retirement savings. Rigorous conditions should be put in place before any entity is granted funding from the PIC.

Few months ago, the 17 million beneficiaries of social grants were facing a bleak future because of corruption and bureaucratic bungling by the Sassa and the department of Social Development. COSATU finds it shocking therefore to learn that the Minister of Social Development Ms Bathabile Dlamini has asked the parliamentary speaker to rein in what she calls “onerous” requests by a committee overseeing the state welfare agency’s efforts to end a contract with Net1 Technologies to distribute the payments. This misplaced conceit is deeply shocking considering that it took the intervention by the Constitutional Court to resolve the bungling by Sassa and the department. We call on the people’s representatives in parliament to do their job and for the Parliament’s Standing Committee on Public Accounts and the Portfolio Committee to continue to demand accountability and transparency from Sassa. All those entrusted with the taxpayer’s money should account or step aside because they are not doing the public any favours.

We cannot fight corruption and state capture if we do not acknowledge that the capitalist system itself is a deeply corrupted system. The current economic system as symbolised by the NDP reproduces rather than address our triple crisis of unemployment, poverty and inequality. The government’s neoliberal policies have weakened the state and allowed the private sector to be in charge of policy formulation. The Treasury continues with its restrictive fiscal policy which is obsessively focused on achieving budget-deficit targets and the Reserve bank continues to pursue its inflation target thus excessively restricting the economy on a low-growth path.

The current economic trends have unleashed very harsh conditions, especially for the working class and the poore have already lost 120 000 jobs this year, 2017. According to Statistics South Africa, of the 546 000 people, who have just joined the ranks of the unemployed since last year, approximately 58% were young people aged 15-34. This means that in terms of the expanded definition, we actually face a crisis of 70% youth unemployment.

South Africa is not a poor country but its citizens are poor because of poor governance, state capture and corruption.

The country’s fifth administration as led by the ANC President Jacob Zuma has and continues to preside over economic contraction and job-losses. Corruption has become endemic under this administration. The revelations by the Public Protector report on State Capture was damning when it revealed that this current South African Administration has been captured and that there is a network of the predatory elite that is engaged in the looting of state resources. This calls for all of us as workers and citizens to stand up and push back against this rot.

This strike is about mobilising against the predatory elite. We are pushing for an appointment of a Judicial Commission of Inquiry that will help unearth the extent of this rot and help us to ultimately dismantle this network. There must be a process to identify all those involved in state capture and they all need to be blacklisted. The Asset Forfeiture Unit must seize the assets of those who are found guilty. We demand that private and public sector institutions should refuse to deal with the predatory elite, in particular cancel all commercial dealings with the implicated individuals. The monies that will be recovered should be re-directed to implement projects addressing the plight of workers, the working class and the poor.

Lastly, we warn all those employers who will try to intimidate workers from participating in tomorrow’s strike, especially the vulnerable workers. We urge all workers to report the incidents of intimidation and coercion to the nearest COSATU offices. This is a legally protected strike and all workers are encouraged to join the marches that will be taking place across the country. The time to reclaim the electoral mandate that we gave to the ANC is now. There is no Messiah who will come and rescue us from State Capture and the cancer of Corruption, but it is our collective effort that will put a stop to it

ISSUED BY COSATU

Sizwe Pamla (National Spokesperson)
Tel: 011 339 4911
Fax: 011 339 5080
Cell: 060 975 6794

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