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Shopsteward Volume 26 No. 2

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Central Exec  |  Reports

Secretariat Report to COSATU's Inaugural Central Committee

22 - 25 June 1998

1. Introduction


1.1 In September 1997, we held our 6th National Congress. In recognition of the many challenges we face, as well as the need to continuously develop and review our policies, we amended our Constitution to provide for a new decision-making structure - the Central Committee (CC). In previous years, we regarded policy conference decisions as recommendations to the CEC. Now, the CC is the highest decision making body between congresses. Decisions taken by this body are binding on all organs of the Federation and its affiliated unions. This new approach gives us an opportunity to continue to involve our shopstewards in policy formulation better than at any other time in the history of COSATU. It therefore means that affiliate leadership will not be able to disregard or absent themselves from the CC in the hope that they can renegotiate decisions of the CC at the CEC.


1.2 This CC is the first one to be convened by the CEC since the change in the Constitution. While the CEC has powers to decide on the agenda and policy matters for deliberations by the CC, the agenda for this inaugural one is based on the 6th National Congress conclusions on GEAR and COSATU's approach to the forthcoming general elections.


1.3 In a declaration on GEAR, it was resolved that: "…COSATU should convene a Special Central Committee within the next six months, to concretise our anti-GEAR campaign, and develop an alternative macro-economic strategy that will effectively underpin our transformation objectives." In another resolution dealing with the Alliance as well as COSATU's approach to the 1999 general elections, Congress resolved that: "…COSATU should convene a Central Committee in 1998 to finalise and endorse proposals on key policies for the election manifesto/platform."


1.4 It is in this regard that we are placing before you resolutions on socio-economic policy, most of which were tabled at the 6th National Congress as well as proposals to give effect to the resolution on our support for the ANC in the 1999 general election. The socio-economic policy resolutions are a product of the Resolutions Committee comprised of all COSATU affiliates whose meetings were convened and chaired by the Deputy General Secretary.


1.5 The socio-economic policy resolutions should be debated taking into account our existing policies. At the same time, the CC has been mandated by the 6th National Congress to adopt and develop a macro-economic framework for the Federation guided by the needs of the country, particularly the working class. As outlined elsewhere, this CC has been delegated by Congress to adopt resolutions on socio-economic issues. We cannot therefore adopt one position in a resolution that differs with what may be in the Social Equity document or other existing policies and hope to implement both. If the new resolution is inconsistent with existing policy, it will by implication supercede all existing ones. This we raise not to block new policies from being developed, but merely to ensure that there is no confusion as to the status of the resolutions we adopt with regards the macro-economic issues. Taking into account the large number of resolutions before the CC, we appeal to all delegates not to waste time on spelling and grammatical amendments, but on real policy proposals.


1.6 While we are a trade union federation we are also a social movement whose positions extend beyond that of our members. We see ourselves as part of the democratic forces committed to social transformation in our country. As revolutionaries, our policies should be based on a correct analysis of the current political and socio-economic situation, objective balance of forces, limits and possibilities as well as our commitment to the National Democratic Revolution led by the African National Congress. We have to match our responsibilities as a progressive trade union movement, as part of the Alliance and as a social movement, with the outcome of this CC. This is not a new challenge to the federation. Contrary to the propaganda of big business, their spokesperson inside and outside of parliament and the commercial press, all of whom have always defended apartheid and its privileges, we have always balanced our role as a defender of our own members with our responsibility to bring about meaningful transformation that benefits the country as a whole.


1.7 Furthermore, as agreed at the last Congress, we should locate our resolutions within a socialist context. Contrary to those who see our views as being out of touch with the dictates of the current situation, there is no contradiction between the National Democratic Revolution and the struggle for socialism. As Lenin said: "…The outcome of the revolution depends on whether the working class will play the part of a subsidiary to the bourgeoisie, a subsidiary that is powerful in the force of its onslaught against the autocracy, but impotent politically, or whether it will play the part of the leader of the people's revolution." This places a responsibility on the entire democratic movement to lead the revolution in a decisive manner. The movement as a whole needs to play vanguard role to the South African population as a whole.


1.8 This is particularly so in the South African context where political and economic power remained for so long in the hands of the few. Some of these disparities remain up to today. Those who amassed the country's wealth through exploitation of our people, starvation wages, cheap labour system, denial of trade union rights, remain opposed to redistribution of wealth in our country. We should make it clear that as the liberation movement, we seek to assert political and economic power in our country through proper use of our ascendancy to political power. The South African working class can rise to the challenge of ensuring that we build hegemony around the transformation process, which is not merely cosmetic, but real. On the other hand, failure to seize the moment for transformation can lead to other forces imposing their own agenda. This we cannot allow.



2. Current Situation


Political Situation


2.1 We meet at a time when our country faces many challenges. While the 1999 general elections are still a year ahead, political parties have already started campaigning for these elections. Those opposed to transformation are mobilising their forces and members to oppose the ANC. While the opposition seems to be directed at the ANC, the real target is all South Africans whose lives have been dramatically changed by the victories we scored since 1994 and who stand to benefit from transformation. The opposition has overnight become self-appointed spokespersons for the poor and the unemployed. Every day we hear of how the policies of the ANC are leading to the marginalisation of all South Africans. These opposition parties are just using us as a cover. They are not concerned about all South Africans but their own narrow constituencies. Holomisa's charges against the federation and its affiliates are not only malicious, but are aimed at sowing division among our own ranks. While he can produce no shred of evidence where any of the COSATU National Office Bearers have benefited financially from COSATU's involvement in investment companies, he decided to throw whatever mud he can come across in the hope that it will stick with the electorate.


2.2 The Democratic Party and the National Party are all warning against the ANC getting an overwhelming majority in the elections since this will lead to 'authoritarian rule' by the ANC. Indeed Martinus Van Schalkwyk has made repeated calls on the opposition to focus its efforts on blocking the ANC from receiving a two third majority. We have bad news for him. We intend to increase the ANC majority in all provinces as well as in the national legislatures. The new National party and the DP are the same parties whose implementation and support for apartheid policies denied us our political rights, bled our economy, led to job losses, poverty and inequalities, denied us basic services, took away our land and paid us slave wages which prevail in most industries up to today. Despite protest by the DP workers know that the PFP which is a forerunner to the DP has always been a party of the bosses. We should see their opposition to the ANC is a continuation of what they have always believed - that the ANC must be kept out of power at all costs. None of these parties raised a concern when the Republicans (USA) gained an overwhelming majority in the House of Representatives. Neither did they warn the British electorate that authoritarianism would creep in through the overwhelming majority of the Labour Party (UK) in the House of Commons. The CC should send a powerful message to all of them. We know the ANC. It is our organisation. We were together in the trenches while the NP, IFP and DP were defending and implementing apartheid. We have remained together in the trenches for transformation of our country, while these other parties with their newfound allies continue with their opposition to national liberation and economic transformation. We can say without any fear of contradiction that, while there have been areas of disappointment with the performance and policies of the ANC-led government, overwhelmingly there have been significant changes to the lives of the majority. It is precisely for this reason that we have all the intentions to return the ANC to power with an overwhelming majority. The ANC remains the only organisation whose programme and policies has had the potential to benefit the majority of South Africans.


2.3 At the same time as they warn against the increasing power of the ANC, the opposition political parties engage in meetings and calls aimed at building unity amongst themselves. Their primary aim is to put together a coalition which they believe will have the capacity to prevent us from achieving an overwhelming majority and, by implication, block any hope we may have of achieving a truly non-racial, non-sexist, democratic and prosperous South Africa. They have told themselves that they have the capacity to retain the Western Cape as a National Party ruled province and KwaZulu-Natal as an IFP ruled province. Further, they believe that they can wrest control of the Northern Cape and either win Gauteng or ensure that, even if the ANC emerges as the majority party, its margin should be such that it has to govern at the mercy of opposition parties. We are aware of the fact that the NP has put aside a lot of money to concentrate on Gauteng and the Northern Cape, which they believe they can win. COSATU has news for these parties: We intend to increase our majority in the Northern Province, Eastern Cape, Free State, Mpumalanga, North West, Gauteng and the Northern Cape. We also intend to win in the Western Cape and KwaZulu-Natal. Their war chest for the elections will prove to have been money down the drain.


2.4 These opposition parties have been blunt in their opposition to transformation in areas ranging from the economy, jobs, dealing with poverty and inequalities as well as all legislation of a transformatory nature. The racist white parties, such as the NP, DP and the Freedom Front, as Tony Leon said, "…are not ashamed to represent only the interests of whites and big business." But it is not only these parties which have opposed transformation. The Pan Africanist Congress of Azania and the Inkatha Freedom Party also play in the same league. While they profess to be on the side of the oppressed and exploited majority, their positions on progressive legislation have been no different to their counterparts in opposition. The IFP's Ben Ngubane said as much when opposing the Employment Equity Bill. In fact, he went on to label it a racist piece of legislation.


2.5 When they are in townships or areas where they hope to gain black votes, all opposition parties accuse the ANC of failing to implement the RDP. They paint a picture of parties committed to the RDP against the ANC's betrayal of the RDP. In parliament, they call on the government to implement GEAR! All legislation that stems from the RDP has been rejected and attacked by these same parties, without exception. In Soweto, the PAC laments the slow pace of transformation and calls on the people to continue to struggle for change. In parliament, the same PAC accuses the ANC of racism for calling on the judiciary to transform. They come to the defence of Judge de Villiers whose only claim to fame was to summon Comrade Mandela to appear in court to defend an Executive decision to institute a commission of inquiry into rugby and then hand his judgement in 30 seconds with no explanation at all. As I speak to you today - more than two months from that decision he has yet to take the country into confidence as to why he made such a stupid ruling. Maybe he fears the fact that it has to go to the constitutional court for a ruling. While they lament the high interest rates, they oppose any call to revisit the extent of the independence of the Reserve Bank in policy formulation. The same opposition calls on the government to bring down the budget deficit and reduce the number of public servants. When this means the axing of teachers, police and nurses and the running down of services, they blame it on the ANC. It is a known fact that some of the marches in the Western Cape by parents and children were at the instigation of the NP. While SADTU' concerns are aimed at improvement in the entire education system, their concern are about the preservation of privileges accumulated over many years under apartheid rule.


2.6 In March this year General George Meiring was forced to resign after he had submitted to Comrade Mandela a report which Chief Justice Mohammed and his commissioners described as "fantastic" and devoid of any substance. We must ask why this report on an alleged coup was drawn up. It is our view that this is part of a strategy to sow division and confusion within the democratic movement. As General Siphiwe Nyanda said, we are fortunate that we are not a Banana Republic, otherwise all those accused of the plot would be in jail or would have been killed. Maybe this is what Meiring and his crooks were expecting. What they ignored was the government's commitment to the rule of law and to investigate any allegations before acting on them. At the same time as they feed us with wrong information, they have failed to detect and apprehend those who are planning the theft of weapons from military bases. It is very easy to see why they would ignore such serious activities. Those who steal weapons are advancing their strategy to destabilise the country and to stop or delay transformation. While we should avoid exaggerating the threat of counter-revolution, the fact remains that these forces have not been entirely defeated. The theft of weapons from army bases, the failure or unwillingness from some in the intelligence and in the police service to act against those who are engaged in criminal activities all point to the fact that counter-revolutionary forces are at play. The same can be said of the violence that accompanies the formation of splinter unions such as the Mouthpiece - which has openly proclaimed itself to be aligned to the UDM. We can all rest assured that they will apply the same tactics that were used by the IFP's UWUSA - aided by the apartheid regime - against our affiliates, particularly in the run up to the 1999 elections. Together with the NUM, the ANC and government we need to develop a strategy of how we stop them on their tracks. They may even try to ferment violence on the basis of the collective bargaining process, which is under way. Taxi violence in many parts of the country is not an isolated incident and tends to coincide with important events such as the general elections. Left alone, counter-revolutionary forces have the potential to reverse the gains that we have made since 1994. We are committed as a federation to ensure that through the implementation of the 6th National Congress resolution on crime, we help to bring violence to an end. Mayer Kahn, whose appointment by the government should understand that it is in his interest to work closely with us as well as the community to bring crime, levels down.


2.7 The democratic movement also faces its own challenges. In certain areas, our organisations - ANC, SACP and COSATU - on the ground are very weak. This needs to be rectified as a matter of urgency. COSATU members need to implement the resolution of the 6th National Congress to help build a strong ANC and the SACP. We cannot have a strong COSATU and a weak ANC or SACP and still hope to lead the transformation process. The membership of the ANC does not reflect the fact that it is in alliance with an organisation which has more than two million members. The same goes for members of the legislatures. Instead of being in constituency offices, they spend less time listening to and addressing the concerns and needs of our people. As the elections approach, rivalry for positions may lead to the individual assuming the primacy over the collective of the movement. While we do not deny comrades the right to want to advance to other positions that are available at this point and time, we believe that the movement is best placed to decide on strategic areas of deployment. After all this is what the COSATU 6th National Congress and the 50th ANC National conference had in mind in deciding that strategic deployment in parliament or the civil service should be openly discussed by the organisation. In line with the congress resolution, the CC should make a strong call on our members to help build strong ANC as well as effective election machinery. We must not allow our structures to disintegrate. The ANC members of the various legislatures have in most instances failed to use the constituency offices to build a strong base for the ANC, not through manipulation but by dealing with issues pertinent to their communities - crime, service delivery, unemployment, water, housing, transport etc. We expect of them to explain what government is doing at various levels, where the blockages are, our successes as well as the new approaches we may be thinking as part of opening up the blockages. Instead, we seem to have spent more time building individual power bases. There are instances where branches of the ANC have been launched solely for purposes of attending Provincial or National Conferences. There is no doubt that the aim is not to have more members for the ANC, but to advance individual agendas. This we have to bring to an end, as it merely helps to weaken the progressive forces.


2.8 At the 5th National Congress - which took place soon after the 1994 elections - we outlined a platform of issues, which were a priority for COSATU. We said that specific constitutional, policy and legislative measures were needed to entrench and advance rights and programmes, which were of special concern to workers and the poor. This meant entrenching in the constitution a framework of fundamental worker rights, on which legislation would be based. We went further to elaborate a vision of comprehensive legislative reform, which entailed consolidated labour legislation for workers in all sectors of the economy, to set a minimum floor of rights (BCEA); fundamental organisational rights within a framework of strong sectoral bargaining structures, which entrench workers' right to strike and extend bargaining power into key areas of distributional, production and investment issues (LRA).


2.9 Furthermore, we developed an additional package of legislative measures designed to enable trade unions to drive the process of industrial restructuring. Apart from the LRA, these included the introduction of a new qualifications framework and measures for expanded training and access to all strategic information. Through the RDP, we envisaged a programme of extensive legislative and institutional reform in areas such as the public sector, health, housing, social security, public works, transport and land. The same would apply to macro-economic policies. These would be outlined taking into account the social needs of the country, limits and possibilities to change. The aim will not be to retreat but to ensure that every move we make has been well thought out and is fully understood by our constituency.


2.10 Contrary to the view that nothing has happened since 1994, significant gains have been made since the first democratic elections. A decisive majority for the ANC created the potential for a strong national government to actively implement the programme for transformation outlined in the RDP. Notwithstanding current attempts by Meiring and company, threats by counter-revolutionary elements in the security establishment and the ultra-right against the democratisation process were largely contained. The campaign of counter-revolutionary violence waged before the elections has been warded off. The process of drafting a new constitution was successfully completed, with significant advances in some areas of socio-economic rights, worker rights and deepening of democracy. Although some areas of the constitution remain defective, these remain an area of struggle. There is however no doubt that what we have is one the most progressive constitutions in the world.


2.11 Most communities in rural areas now have access to water and electricity. Some communities have had their land returned to them. Most South Africans, particularly pregnant women, children under six years of age and the unemployed, now have access to better health care. Important policy and legislative breakthroughs were made and implemented in certain areas, particularly health, labour, water, land, education and training. There are institutional mechanisms for workers and society to influence policy formulation and legislation. The ANC-led Alliance made all of these possible. Despite complaints and pressure on the ANC to accept the lockout clause in the constitution, this did not materialise as the entire movement stood firm. During the LRA campaign, President Mandela joined tens of thousands of workers in a march to protest against the intransigence of employers.


2.12 Labour legislation has been a major focus for COSATU. The introduction of these legal reforms constitutes a major advance for workers and the labour movement. These essential labour laws are the LRA of 1997, which was successfully negotiated in NEDLAC and steered through the parliamentary process with our full participation. The Basic Conditions of Employment Act of 1997 and the Employment Equity and Skills Development Bills currently before parliament are a major advance away from apartheid legislation. Other important pieces of progressive legislation driven by the ANC include legislation to make health care more accessible and reduce the price of drugs, legislation to extend telecommunications and the Termination of Pregnancy Bill.


2.13 there are however a number of issues which have not been resolved in the Constitution, or require follow up. As part of the continued process of transformation, we need to develop a strategy to take forward the labour, socio-economic and other rights contained in the Constitution, and to oppose any litigation by employers and other reactionary forces. Already an attempt was made to entrench the lock out clause by employers, which was unsuccessful. There are currently two pending cases against bills passed by Comrade Nkosazana Zuma, the Minister of Health. Legislation required implementing the Constitution, including on access to information, procurement procedures and transparent budgeting procedures should be passed as a matter of urgency. Otherwise these gains will remain paper victories. On the basis of our proposal for a Workers Charter to be included in the constitution, section 234, was adopted which allows parliament to adopt charters of rights in line with the Constitution. As part of the election campaign, we need to make this a reality.


2.14 At the same time, the transition has thrown up serious challenges for the Alliance - particularly in relation to issues of governance, mass mobilisation, policy formulation, building organisation etc. The challenge facing COSATU is to put forward workable proposals to ensure involvement in processes of governance and transformation; develop political strategies to deal with forces opposed to transformation; and ensure that the Alliance has a powerful programme or platform to lead the transformation process.


2.15 Furthermore, the Alliance has encountered serious difficulties in implementing the transformation agenda. The reasons for this are many and complex, relating to internal and international factors, objective constraints as well as subjective errors in the way we have approached the transition.


2.16 Opposition parties, including the PAC, have opposed most legislation of a transformatory nature. The PSA and other staff associations of the old order have always used the courts to stop any changes and in defence of the status quo. These range from promotions of blacks or low paid workers, affirmative action and the closing of the wage gap. This does not only refer to traditionally white unions within FEDUSA, but extends to some of the unions, which were operating in the bantustans. Some of those who were part of the old order are threatened by the transformation process under way. It would therefore be simplistic to look at it as resistance by white workers only. It is an attempt by all of those who benefited under apartheid to preserve the status quo. It is precisely for this reason that some of the people in the former homelands would want to throw their lot with such discredited characters as the NP, DP, IFP and Holomisa's UDM. Employers who at one point seemed to have embraced the spirit of give and take in negotiations with ourselves and the government have become very arrogant. They are now bolder in their challenge to the transformation as can be seen from their actions around the BCEA, Skills Development Bill, Employment Equity Bill and Competitions policy.


2.17 As outlined earlier, while objective problems and constraints have been encountered in attempting to transform the state and implement our programme of transformation, the democratic movement has also failed to seize the initiative to effectively direct and drive the process of change. Elements of the apartheid era ruling class have used their power, which is still entrenched in the bureaucracy, media, and key centres of the economy, to shape the transition in their own image. These elements talk the language of democracy and transformation, but walk the path of perpetual opposition to democracy. A case in point is the call by the SA Foundation and the DP's call for a two-tier labour market under the guise of catering for new entrants.


2.18 We also need to acknowledge the fact that in certain areas we have not done as well as we should have. This applies particularly to housing and transport. Our housing policy remains driven by the private sector. We need to re-examine this issue in favour of public housing for rental and selling. We can also use the subsidy to assist groups of people in a community rather than direct it to individuals. The same goes for transport. We need a public transport system, not one where everything is being handed over to the private sector.


2.19 In order to regalvanise our forces, the Alliance and its constituent members need to build on the rich traditions of the 1980's. These years saw a variety of mass formations mobilised under one umbrella to achieve the common goal of ending apartheid tyranny and securing national liberation. Now, under new conditions, we need to harness that tradition to build and strengthen a mass movement for transformation. Such a movement is essential to take forward programmes in areas such as public sector transformation, housing, health, literacy, rural development and others. It will also be critical in neutralising those forces attempting to block or derail the transformation process.


2.20 The Alliance needs to discuss, together with other mass formations, the development of such a programme, as well as fora which would help to take this process forward, including the possibility of convening an MDM Summit on transformation. This we should do way before the start of real campaigning. At the same time we need to continue with political education among our ranks as a way of empowering our members in order for them to defend the revolution.


Socio-Economic Situation


2.21 The CC takes place at a time when workers are facing an all out attack from domestic and international business. Despite the economy growing and most companies posting enormous profits, almost all industries are facing retrenchments, through such gimmicks as restructuring of industries, outsourcing - sometimes under the guise of black economic empowerment - and contracting out of both private and public services. All of these are being carried out in the name of globalisation and international competition which some in our country have opportunistically accepted as gospel.


2.22 As workers, we know that this is nothing else but a new form of exploitation and oppression by the bourgeoisie. Their concept of globalisation masks their commitment to a neo-liberal agenda, which seeks, to strip countries of their sovereignty and right to chart their own social and economic path suited to their conditions of development. This in turn subjects us to the dictates of the IMF, World Bank, G7, the multinationals and the market which, as we all know, is not neutral but an imposition of business' will on society. While these forces claim to accept democracy, in reality they only accept the dictates of the market. They are opposed to a strong government except in so far as it may relate to passing laws that suppress trade unions, bring wages down, privatise services, maintain law and order and open the economy to their own brand of competitiveness. We are all expected to bow down in front of these unelected institutions for our salvation. Their spokesmen tell us - for they are mainly white males - that we have to conform to their dictatorship or we will be forever marginalised. The working class and society in general should reject these assertions, which are aimed at ensuring that we accept the current agenda of multinationals, financial markets and the G7 as inevitable. Accepting their assertions as inevitable is tantamount to accepting that capitalism can solve the problems of society. The reality is that most of the problems that we find ourselves in stem from the ills of capitalism the world over. As South Africans, we do want trade with the outside world. However, unlike these converts of the markets, we do not only want free trade, but fair trade. The same goes for those who are unemployed, particularly youth and women. They do want jobs. It is however a fallacy perpetuated by the business community, the World Bank and the commercial media, that these people want any type of job, irrespective of wages and other basic conditions of employment on offer. We have to assert the right of workers to better quality jobs at a living wage. In this way, we will ensure that workers in South Africa do not become economic slaves in the name of job creation. At the same time as we oppose their approach, we need to intensify our support for socialism. Our policies as a trade union movement must be guided by our long-term vision. Even where compromises are made, they should not in turn undermine or compromise our socialist agenda.


2.23 During public debates between the democratic forces and those opposed to transformation, there seems to be consensus that unemployment in our country remains unacceptably high. The unfortunate part is that this is where the consensus begins and ends. There is no agreement on the causes of unemployment or on the steps that should be taken to eliminate unemployment. The bourgeoisie, their representatives inside and outside of parliament and orthodox economists want us to believe that it is employed workers and the ANC-led Alliance that is destroying jobs and causing unemployment. It is as if jobs were plenty during apartheid rule. The reality is that the majority of those who are unemployed have been job seekers long before the ANC came to power. Some of them are victims of retrenchment by employers as part of their strategy to undermine the unions.


2.24 Business and their spokesmen further claim that, if there was no regulation of the labour market, if the government was to privatise all public sector functions, if the state was to abandon its insistence on the need for training of workers and affirmative action, if the state was to allow for workers to be hired and fired at the whim of the employer, the economy would be able to create jobs. They would want the government to lift all tariff protections regardless of the impact of this on jobs. While they are opposed to a living wage for workers, they are determined to preserve and defend the obscenely high wages of senior management, as can be seen from their opposition to our proposals for the progressive reduction of the wage gap to a ratio of at least 1:8. These self-proclaimed "concerned citizens for the unemployed" present no evidence to back their call for workers to finance their opulence, even though the commercial media always repeats what the business community and their representatives in parliament are saying as facts. Were we to follow their demands, we would end up with, not so much the absence of regulation as they often claim, but with regulation by their markets.


2.25 Despite the said propaganda, we know that the problem of unemployment is part of the legacy of apartheid, its economy and capitalism that we inherited. The profit motive and capitalist greed by employers is what leads to unemployment in our country. Instead of resources being used for investment, they are used to pay obscenely high wages to management as well as profits to shareholders to the detriment of those whose labour power produced such profits. When industries face problems, their immediate response and solution is to retrench, contract out and outsource services as was the case recently in mining, Iscor, clothing and textiles, finance, food and the retail sector. At the same time, they want to employ workers as temporary workers or casuals to avoid paying better wages as well as other benefits workers should be entitled to. This is the root cause of their opposition to the LRA and the Basic Conditions of Employment Act. This is what those who call for labour market flexibility mean when they assert without and conclusive proof lies that labour is expensive in South Africa. To them, it is far better to have someone earning even as little as R10.00 per week in the name of job creation. This is tantamount to legalised slavery or distribution of poverty and must be rejected.


2.26 With so many workers facing job losses and unemployment, we find it shocking to say the least that the government and its parastatals - particularly transport and forestry - intend to also join the retrenchment path of the private sector! While we acknowledge the pressures on the government, we remain of the view that it is wrong to ask those who have for years borne the brunt of oppression and exploitation to accept that the old apartheid budget should be used as a yardstick for investing in transformation, reconstruction and development - a point asserted by the ANC President in his "two nations" address to parliament. We believe that now is the time to extend basic services to communities which for many years were denied them simply because they were black. We are amazed at the fact that the government has come with concrete figures of workers to be retrenched when it has failed to determine the exact numbers of "ghost" workers as well as the total number of all public servants. Furthermore, we have yet to be furnished with the skills audit and the required services to communities linked to the required number of workers necessary to deliver quality services. We are left with no option but to conclude that the 55 000 likely to be retrenched are victims of the neo-liberal agenda aimed at appeasing the domestic and international bourgeoisie's demands for a "slim state". While we appreciate the fact that "the state is not an employment agent", as articulated by President Mandela, we do however believe that the state is an agent for transformation. The CC must therefore pledge to defend those workers in the public sector who are threatened with retrenchment. We welcome the agreement - brokered by the Alliance - between SADTU and the government on the transformation of education. We hope that this is not just a temporary truce but a commitment to resolve the thorny issues of how to deliver quality education without unnecessary disruptions. We also wish to acknowledge the fact that there are indeed Provinces such as the Eastern Cape where lasting solutions to the issue of temporary teachers seem to have been found. At the same time as we defend our jobs in the public sector, we will be available to engage with the government as an employer and as part of the Alliance on how best to deploy such workers in a way that maximises their economic productivity and provides quality services to our citizens. This is precisely what the recently postponed conference on service delivery was supposed to achieve. We need to convene this conference as a matter of urgency. The reality is that more schools with no teachers do not help transformation. The same goes for clinics and hospitals. Without nurses and doctors, they serve no purpose. More police stations with no policemen and women as proposed by Meyer Kahn and the DP will not in itself bring security. If any cuts have to take place, it is at the top where people are just pushing paper and doing no productive work.


2.27 As COSATU, we are aware of the historic role a progressive trade union Federation such as ours should play in the transformation of our country. It is in this regard that we have combined our role as a defender of worker rights and interests with that of the broader liberation movement. The same however applies to broader society, which should accept that much as we have a responsibility to our country as a whole, we also have a responsibility to our members. We reject with contempt the view that we are only concerned with the interest of employed workers. As our submission to the TRC has shown, we dedicated ourselves to the liberation of our country while business spent their lives defending apartheid and reaping the fruits of its economy. Our credentials for the defence of the exploited masses in our country are beyond reproach.


2.28 We therefore have to state very clearly to business and their protege's that central to our challenge is the transformation of the economy, the creation of jobs and the elimination of poverty and inequalities. This after all is in line with what Comrade Thabo Mbeki said in parliament that unless we want to continue as a two nation country - the haves and the have nots - we have to go for radical transformation. This is backed up by surveys that indicate that, despite trade unions and government strategies to uplift and improve the standard of living of all South Africans, poverty remains widespread in South Africa. Even the UN report on South Africa (1997) confirmed our position that the gap between the rich and poor is widening. The wage gap between highly skilled and blue-collar workers is increasing. The real wages of South African workers has been going down, contrary to the spurious myths perpetuated by the bosses and the media. Training is becoming less of a priority and is off the bosses' agenda, despite their rhetoric. While they have agreed to a levy for training, they are now trying to reduce even this low 1% base by requesting that overtime, allowances and benefits should not be calculated as part of the wage bill. In this supposedly united "rainbow nation", jobs continue to be lost at an alarming rate. Rural communities, youth and women continue to be the worst hit victims of this stagnation. This was confirmed by the recent report on poverty. All because of the fact that employers in our country have yet to embrace the spirit of the new South Africa in its totality. The only part of the new South Africa that they seem to have embraced is the opportunity that comes with it to be able to do business with the outside world.


2.29 Our approach should be guided by the challenges of the transition, the needs of our members and to ensure that the movement's tasks of transforming our country in line with RDP objectives succeed. Those from the white-owned media who want us to adopt macro-economic policies, which are disastrous to our country and the economy as a "sign of maturity", should be told in no uncertain terms to go to hell! For them maturity is about accepting their economic policies despite their failures world-wide. Their aim is to make the poor pay for the transition, while they continue in their own old ways under the guise of "international competition" and so-called sound economic policies. Indeed, as Comrade Thabo Mbeki said, they even reject the notion of a solidarity tax/fund to ensure effective transformation. Taking into account the apartheid legacy of deprivation and economic mismanagement, this amount to the quarantining of the apartheid economy and rejection of the transformation agenda. It also demonstrates beyond any measure of doubt that business and those who have resources, including the new elite, merely pay lip service to transformation. I t is more a case of 'everyone for him/herself and God for us all'!


2.30 As we meet in this CC, communities and public sector workers continue to bear the brunt of the ill-conceived GEAR as it continues to be implemented all round with the verbal support of big business and the opposition. This is in spite of the Alliance Summit, the 50th ANC National Conference and the ANC NEC lekgotla, which called for continued review of the economic framework so that it is in line with RDP goals and objectives. The NEC decision that we need to address the social deficit in our country seems to have been ignored. The above approaches are arrogantly regarded as mere guidelines by some in government, when in fact they are meant to be policy of the ANC.


2.31 According to the government and business, GEAR is succeeding because the deficit reduction programme is on target. Exchange controls have been lifted despite the fact that more and more money is now being invested abroad, interest rates remain high and tariffs are continuously reduced. The failure to create jobs is being ignored. The same goes for the absence thus far of a coherent industrial policy capable of reconstruction and development. In so far as some in the media call for a review of the GEAR strategy, this is raised cynically to say that the government should either implement GEAR regardless of the consequences or abandon all the areas that do not work such as job creation, labour market reform and infrastructure development. The same papers have in recent months begun to mount propaganda to the effect that it is unrealistic to expect the GEAR strategy to produce jobs in the short term. They are now suggesting that jobs may only begin to be created in the year 2000 and beyond and that the poor should wait for the benefits to trickle down. The working class in particular and society in general are expected to tighten their belts and wait patiently for the year 2000. This we believe is linked to their strategy to prolong that, which was said to be a short-term strategy to a life-long strategy! This indeed is tragic since some within our ranks are now making the content of GEAR principles around which the broad movement's policies should be based. To an extent that it was said to be a detour in order to realise our objectives in the long term, it has become the only route to sustainable economic development.


2.32 On the other hand, for the majority of South Africans, particularly the working class, the implementation of GEAR continues to have profound negative impact in the following areas:


· Contractionary fiscal and monetary policy, which stifles economic growth and employment creation and continues to undermine the RDP's commitment to growth through redistribution of wealth and income;


· High interest rates and phasing out of exchange controls encourage financial speculation and outflow of capital;


· Current tariff and trade policy, which is undermining significant sections of our industry, leading to massive job losses including factory closures;


· Ideologically driven deficit cuts which are undermining massive public works and a direct state role in housing, transport, health and infrastructure development;


· Pledges on the reduction of the public service combined with overemphasis on private-sector driven development encourages privatisation and contracting out of public economic activities. This may lead to us running down the public service and further job losses coupled with excessive reliance on the private sector to create jobs, despite its dismal record in this regard.


2.33 As outlined above, most South Africans - particularly the working class - are agreed that the South African economy has performed poorly since 1996. It has even failed to sustain the beginnings of the economic turn-around experienced in 1994 and 1995. Currently the economic situation is characterised by very low growth rates, substantial job losses, and restrictive macroeconomic policies.


2.34 Despite increases in the growth rate of the economy following the democratic elections of 1994, this trend has reversed itself since 1996, with declining rates of growth. In 1996, the average growth rate was 3,2 percent, falling to 1,7 percent in 1997. The trend has continued into the first quarter of 1998 in which an annual growth rate of 0,7 percent was reported by the Reserve Bank (Business Day 26/5/1998). This is well below the forecasted growth rate of 3,8 percent for 1998 contained in the GEAR strategy, which was presented to the country by the government in June 1996 and welcomed by both the domestic and international bourgeoisie. The irony is that those who supported the government's GEAR strategy never came to the party. Instead they have been asking the poor and low paid to finance their party, although we remain uninvited guests.


2.35 While economic growth was extremely low, growth still occurred. This stands in contrast to the employment situation in which jobs have been continually shed over the past two years. At the end of 1997, the Reserve Bank declared that employment levels were at their lowest point in 16 years and that the employment level was "roughly equal to that of 1981". (Sunday Times 7/12/1997). Over the past year and a half, an estimated 116 000 jobs have been lost in the South African economy which is currently experiencing unemployment rates of 30 percent. This figure appears conservative and may have downplayed or undercounted the recent job losses, particularly in the mining and metal sectors.


2.36 The negative impact of the decline in employment has affected workers in some sectors more severely than it has affected others. According to the Central Statistical Service, from June 1996 to September 1997, sectors which experienced particularly large job losses were mining (an estimated 17 100 jobs lost), manufacturing (an estimated 63 500 jobs lost), and social services which mostly include public sector jobs (an estimated 24 400 jobs lost). Two sectors showed some job creation - wholesale & retail trade and financial services. In these two sectors, however, job creation involved a decline in the proportion of full-time work and an increase in the proportion of part-time work. Yet we are told by the Financial Mail and the business community that we should postpone the jobs summit until after the general elections which are only likely to take place in July 1999. What they have not offered is a moratorium on retrenchments and real measures to create jobs. This is what the country wants and not delaying tactics. We welcome the position of the ANC and government that now more than ever we need to move to the summit with renewed speed in order to address the current crises.


2.37 In July 1997, exchange controls were relaxed yet again, permitting individuals, corporations, and institutional investors to take an increasing portion of their investments offshore. According to the Reserve Bank, in recent years, inflows of foreign direct investment (FDI) have been matched by outflows of foreign direct investment. Not only has the of exchange controls encouraged additional outflows of investment, but deals struck with the Reserve Bank, such as Gencor taking R25 billion of its asset base offshore, will also push outflows to higher levels. Furthermore, domestic economic conditions are preventing the attraction of much higher levels of long-term foreign direct investment. In such a situation, the Reserve Bank uses higher interest rates - which choke economic growth and prevent effective job creation - as a strategy for defending the value of the Rand by attempting to influence short-term and speculative flows of capital. During the month of May 1998, the Reserve Bank is believed to have spent between R26 billion and R30 billion in defence of its policy of high interest rates and low inflation. Imagine what the country could have done with this amount of money had it been put to productive use. On top of this we are seating with interest rates which are not only high in terms of international norms but also as high as at least 13 years ago. No credible reason has been given for this action by Stals except that newspapers have been clutching at straws. Some blame it on Kgalema’s purported call for the need to among others revisit the political independence of the Reserve Bank. Others blame it on the SACP and COSATU. Still others blame it on the investigation of the way in which the Reserve bank gave a lifeboat to ABSA’s predecessor. Yet Stals and others claim that the reason is because of the attack by speculators on the Rand. The irony is that speculators borrow their money from the same South African Banks. It is clear that iron man Stals and his private sector governors have no vision beyond defending the Rand and inflation. We must also condemn as reckless the call by some newspapers that Stals must increase the interest rates even further. One newspaper went as far as to urge him to follow his counterpart in Russia where interest rates were at one point raised by 150%!


2.38 At the same time as there is an intensified call for the state to move out of production and service delivery, the 1997 World Development Report has pointed to an important role for the state in stabilising and managing the economy. Three areas of active involvement are stressed in the report.


· First, the state must provide a macro-economic and micro-economic environment which promotes efficient economic activity;


· Second, the state must provide an effective institutional infrastructure - such as a good legal system and mechanisms for maintaining social peace - which encourage a stable social environment;


· Finally, the state must ensure that basic needs are met, in terms of education, health care, public investment necessary for economic production and protection of the environment.


2.39 This vindicates our position that in order to guarantee that the South African government, at all levels, is able to play these critical roles, it must actively be involved in the management of the economy. This recent push for a strong, effective state has been accompanied by a call to revisit the neo-liberal economic policies, which inform structural adjustment programmes and many macro-economic stabilisation packages world-wide. Even Joseph Stiglitz, Chief Economist and Vice President of the conservative World Bank recently called for a revision of macro-economic policies internationally in an address made as part of a United Nations programme. Stiglitz questioned the wisdom of the so-called "Washington Consensus" policies of the World Bank and the IMF, arguing that they are neither necessary nor sufficient to bring about economic development. He went further and pointed out the following facts:


· Moderate inflation is not necessarily harmful;


· Budget deficits can encourage spending with high rates of social return;


· Advocates of privatisation have overestimated the supposed benefits;


· Liberalisation of markets can actually lead to a less stable, and not necessarily better, financial system.


2.40 While these shifts are important in as far as they vindicate our positions, we should be under no illusion. The World Bank, IMF and the G7 will be willing to adjust only in order to defend the status quo. They just want to put a human face to the inhuman face of capitalism. On the other hand, such positions may make it possible for us to push transformation and development much faster. The government and the progressive movement now need to reassert within the realms of possibilities the important role of a developmental macro-economic strategy that takes into account the social deficit created by apartheid legacy and capitalism.


2.41 In contrast to the gloomy picture of job losses and jobless growth is that profitability has been improving, particularly since the democratic elections. For instance, in 1994, the operating surplus of incorporated businesses - a measure of corporate profits - was 12,6% of GDP and the total income of incorporated businesses was 28,7 % of GDP. In 1997, the operating surplus had risen to 14,2 % of GDP and total income to 34,3% (Reserve Bank of South Africa, Quarterly Bulletin). This increase in profitability was made possible by the fact that the productivity of workers has increased faster than wages during this period. Yet, every day the commercial media, neo-liberal economists and business, as well as their lackeys in parliament tell us that productivity has remained low. What is clear though is that these productivity increases have not translated into substantially higher levels of investment and new jobs at a living wage, but have simply supported the recent jobless growth in the economy. In fact, if one takes account of the extent of retrenchments, the increase in productivity is much higher than the figures reflect.


2.42 In June 1998, both GEAR and the Labour Market Commission proposed the need for a Presidential Jobs Summit to tackle the unemployment situation in South Africa. The date for the summit has been shifted from time to time due in part to the need to ensure that consensus is reached in NEDLAC prior to the summit, as well as the absence of proposals from the government and business. While business has released its document, it should be seen as an opening shot rather than real proposals. The real proposals are contained in the recent South African Foundation document, which repudiates all NEDLAC agreements, repeats the earlier call for a two-tier labour market and calls for the deregulation of the South African labour market. Just as we suspected that business and certain publications – notably the Finance Week, F&T Weekly and the Financial Mail – we are now being told that the summit should be postponed until after the elections. In an editorial, Peter Bruce of the Financial Mail said: "…We believe, however, that a jobs summit so close to a general election is in nobody's interest, will achieve little and should therefore be shelved". He went on to state that "…It is important for government to rebuff this line of argument and restate faith in the basic approach contained in Gear. Deputy President Thabo Mbeki, Gear's éminence grise and a master of the Big Idea, has to explain to people the need to cross the "desert of reform". He must articulate the vision and direction of Gear as a long-term strategy for growth and employment generation, and explode calls for what amount to short-term gratification. Instead of a jobs summit, perhaps a better idea might be to convene a low-key gathering of key players, after the election and under the new President's chairmanship, to focus on a few target areas. Among these should be lifting restrictions on small business; identifying other sectors, such as tourism, which can be promoted to increase employment; targeting the reduction of unit labour costs; a more flexible capital market for budding entrepreneurs to access venture capital; and a concerted training drive to develop skills.


2.43 On the same week that this editorial was published, business through Raymond Parsons made it known to the media that indeed they wanted a postponement of the summit for almost the same reasons as outlined by Bruce. While we should not brand every coincidence as a conspiracy this is more than a coincidence. In an article in the Business Day (19/06/1998), it was reported that: "… Two months ago business called on government to hold the summit sooner rather than later. However, there has recently been concern that the changed economic circumstances after in relation to the financial crisis should result in a delay in the summit. Sources said numerous business leaders, including Anglogold CEO Bobby Godsell, had appealed to Mboweni. The SA Chamber of Business (Sacob) sent a letter to Mboweni last week urging him to convene a meeting of the steering committee dealing with the matter in the National Economic, Development and Labour Council (NEDLAC) to review the timing and consider "other possible courses of action". Sacob said the review process should also consider "possible interim measures which would underscore the commitment of the social partners to address the unemployment problem - even if it was decided to postpone the job summit". As if this was not enough, Comrade Thabo was further given this advice, by peter Bruce: "…We ask government, and especially Deputy President Thabo Mbeki, who has adopted the summit as a policy cornerstone after his recent debates on reconciliation in parliament, to shelve the project until after the election. Because the unions and the ANC are part of the same ruling alliance, it is inevitable that the business component of any summit would be isolated. Business leaders worry that should a summit fail to make any concrete progress towards job creation, they would be blamed, especially in the heat of electioneering. They are right to be concerned, especially as they know that, this time, a great deal more thought is expected of them than went into the ill-fated growth strategy they presented to the nation in 1996. Get it right and jobs will follow.


2.44 Our message to all of them must be a simple one. Go to hell! There shall be a jobs summit sooner than you think. You may as well prepare your proposals. In a radio interview, Comrade Tito Mboweni confirmed that the government remains committed to the summit, which should take place by no later than the end of July. It is clear that their concern has little to do with the economic problems but their fear that their prescriptions, which have caused misery in our country, may not fly!


2.45 President Mandela in his state of the nation address to parliament characterised the forthcoming Presidential Jobs Summit as the biggest challenge since the 1994 general elections. Most of us in various fora have also promoted this idea of a Jobs Summit as indicative of our commitment to the reduction of unemployment. This has created high expectations from the country for tangible results from this summit. While there is no specific resolution dealing with job creation, we have to factor this into all policy proposals that are before you.


2.46 As Labour we have proposed that the agenda for the Jobs Summit be based on measures:


· for job creation;


· to support the unemployed;


· to put a hold to job losses;


· to formalise the informal sector.


2.47 In addition, we have tabled detailed proposals on strategies that are necessary for employment creation. More have been incorporated based on discussion that will take place at the CC. Without going into detailed proposals, it is important to take note of some of the essential proposals that have been submitted. Furthermore we should take account of the report of the NEDLAC Executive Council meeting, which described the South African economy as "fundamentally not a labour absorbing one," and asserted that "an ambitious and co-ordinated policy programme will be required to address key constraints and pursue opportunities."


2.48 The Labour document asserts among others the following:


· To ultimately address the ongoing crisis of unemployment, current economic power relationships must be challenged and transformed;


· The economy must be developed to reach and sustain full employment. Where unemployment does occur, a guaranteed living income must be in place. However, the principal objective must be full employment;


· Every job must pay a basic living wage. There should no longer be households classified as "working poor";


· Appropriate social support provisions should be in place to support the performance of household and caring labour;


· Discrimination and structural barriers in the labour market must be eliminated;


· Standards of living and quality of work must improve over time. Jobs must not simply be created, but also enhanced;


· Employment creation must support the provision of public services and basic needs;


· Wage differentials between different employees, particularly management and production workers, must be limited and efforts to narrow the wage gap put in place;


· Macro-economic policies must encourage employment growth by, among others, facilitating the implementation of the appropriate industrial, investment, labour market, and public sector policies. This may entail the need to maintain and expand demand for domestically produced goods and services; meet increased demand through an expansion of production, which in turn would generate new jobs; stimulate demand by lowering interest rates, pursuing redistributive fiscal policies and developing effective strategies to boost exports; create an environment conducive to boosting the productive capacity in the economy, increase investment to ensure that increased demand can be met through domestic production, and not through greater levels of imported goods; ensure that the parameters of fiscal policy are consistent with employment creation and retention strategies; and avoid imposing rigid and rapid deficit reduction targets which limit public expenditure and infrastructure development.


2.49 In relation to industrial policy, policies should include the following:


· Industries which can serve as an engine for job creation in South Africa must be identified. Such an analysis must extend beyond identifying labour intensive industries. In addition, the down-stream and up-stream linkages (e.g. between companies that supply components to the sector or distribute the product manufactured) must be identified and actively promoted.


· We need to develop the capacity to produce intermediate goods (inputs used in the production of final goods) and capital goods (e.g. machinery), and reduce imported goods and services.


· Supply-side measures, which are currently in place (e.g. those linked to export promotion or technological innovation), should be evaluated and implemented taking into account their employment-generating effects. Punitive supply-side measures can also be introduced, for example tax disincentives to job shedding.


· We should use the impact on employment creation and the ability to maintain labour intensity and good labour standards, along with other criteria, to award public sector contracts. Procurement policy can also be used to guarantee no job losses in a particular company during the period of its government contract.


· Employment subsidies, which lower the cost of hiring labour while maintaining real wages and benefits, can be used as a tool for promoting labour intensive development. However, such subsidies would need to be strategically and selectively used to prevent windfall profits accruing to employers.


· Development financial institutions (DFIs) such as the IDC and the DBSA must play a much more significant role in job creation, and be incorporated into job creation strategies. Their investments need to be in labour-intensive production processes with high employment multipliers.


2.50 As a country we cannot afford to discount the role of the public service in developing an employment strategy. At the same time, the public service in South Africa needs to be fundamentally restructured. Creating the conditions for a sustainable public service will pave the way for public sector job creation and retention. In this regard we have proposed that:


· Lower interest rates, restructuring the taxation system and reducing the burden of the apartheid debt are all policy measures, which can dramatically increase the sustainability of the public service.


· The structure of the South African public service must be changed to improve the quality of public employment. Employment equity policies within the public service should serve as a model for the rest of the economy. Training and building a stronger skills base should be ongoing for public service employees. Hierarchies within the public service should be collapsed and the wage gap should continue to be narrowed substantially. Equal access to employment opportunities must be ensured and the degree of employment security increased. A solid system of management accountability must be put into place to assure an efficient delivery of services.


· Resources need to be redeployed to decrease the number of those employed in unproductive functions, and increase the number of those involved in service delivery.


· The evolution, development, and extension of the public service requires the creation of effective planning instruments and budget processes. The need for a multi-year planning tool to ensure the effective development of the public service must be recognised, and an alternative medium-term budget framework developed in which employment creation is directly incorporated.


· The roots of the financial crisis in local government must be investigated and addressed to prevent further erosion of the situation.


2.51 Clearly, the government must play a critical role in restructuring state assets. Whether interventions require state ownership should be determined for each enterprise within an integrated framework. Restructuring of state assets can be directly linked to job retention, job creation and job enhancement objectives. Elements of a restructuring programme which promote these goals include:

· In restructuring state enterprises and parastatals, ensuring employment equity and affirmative action within the organisations can be used to improve access to jobs.


· Retrenchments should not be used as a tool for improving productivity and performance of state enterprises. Instead, capital resources must be mobilised within a medium-term time frame in order to re-tool South Africa’s public corporations. Training of employees should occur to ensure that the skills base of these institutions is also restructured.


· All restructuring processes should be required to produce a medium-term (4-6 years) assessment by an independent agency of the impact of the proposed restructuring on job retention and creation. The proposal must then be modified accordingly. This should include private sector suppliers and other PPP’s.


· As part of the restructuring process, an explicit policy statement of how the restructuring proposal will contribute to job creation or ensure job retention must be developed. A social plan must be provided where retention is regarded as impossible.


2.52 The current situation in South Africa and the shifts in economic thinking which are presently taking place point to an opportunity for restructuring and implementing a much more progressive and developmental economic agenda. A missed opportunity at this time could have dire consequences for the socio-economic well being of South Africans in future years. The CC has to develop a program of action to turn this opportunity into reality. We must emerge with a campaign program to defend jobs. We must protect the right and possibility of the state to provide basic services, particularly to the poor and disadvantaged. We need to mobilise both employed and unemployed for a job creation program. We should join hands with workers in the banking industry, Iscor, retail, mining and public sector whose jobs are under immediate threat.



3 Alliance Processes


3.1 At the last National Congress, we tabled a report on the conclusions of the Alliance Summit held on 31 August and 1 September 1997. The summit was aimed at resolving certain differences over macro-economic issues, rebuilding the Alliance and developing a fighting programme of the Alliance as part of ensuring the success of the transformation agenda and a positive outcome in the elections of 1999.


3.2 Taking into account the conclusions of that Summit, Congress during discussions on the Alliance and on the declaration on GEAR, resolved that:


· COSATU must take forward the recent decisions of the Alliance Summit which agreed that there should a broad agenda for transformation which must deal amongst others with:


· The form and content of a joint Alliance transformation programme;


· The Alliance approach to policy formulation;


· The relationship between the Alliance and government;


· Our vision for transforming the public sector.


This will provide the basis for engagement to continuously shift the power balance in favour of the democratic movement and to prepare properly to marshal the democratic forces’ victory in the 1999 general elections.


3.3 We could not take the issues forward last year due to preparations for the ANC National Conference. The ANC however did table as part of its documentation to the Conference the summary of the summit decisions and recommendations. A number of social and economic resolutions were taken which, if implemented, would take the Alliance transformation programme forward. Contrary to media reports, the Conference did not adopt GEAR, as it was never placed before conference for adoption or rejection. Furthermore, the conference reinforced the Alliance Summit position that macro-economic policy should be reviewed from time to time taking into account the needs of the country and to reflect RDP goals. This view was taken further by the NEC Lekgotla, which placed on the agenda the need to eliminate the social deficit as a matter of priority.


3.4 Since the beginning of this year, the Alliance Secretariat and the National Office Bearers have met to develop an approach to taking all outstanding issues forward and to prepare for the Alliance Summit. A number of task teams have been set up to look at the following issues which will form the bulk of the agenda for the summit:


· Employment creation strategy and developing a joint approach to the Jobs Summit;


· Labour Market;


· Social needs, social wages, social security;


· Fiscal and monetary policy;


· Industrial policy;


· Globalisation;


· Building organisation and election campaign;


· Public sector transformation;


3.5 The summit was scheduled to take place on 17 - 18 June 1998 was postponed by the Alliance National Office Bearers at a meeting that took place on 15 June 1998. Contrary to the speculation in the media, the summit was not postponed because of differences over policy issues. The main reason was that while substantial work had been done in most of the task team, it was felt that it would be helpful to the process if the teams were given more time to do their work effectively. At the same time this approach would give the ANC, an opportunity to look at all the issues in its NEC of 19 – 21 June, COSATU and the SACP would do the same in their CC and Congress respectively. As the leadership of COSATU we felt that while it would have been preferable to present to you the outcome of the summit, it is far better to engage not only based on the positions developed by the CEC, but by the CC as well which has a wider representation of the leadership from the shopfloor. Indeed if the truth be told, it was the COSATU leadership that made the proposal for the postponement. It will therefore be unfair to blame the postponement on the ANC, or on the fact that no agreement could be reached.


3.6 It is important to also report that the Alliance meetings have taken place on a regular basis since the Mafikeng conference. We have through the Alliance tackled issues which otherwise could have led to more differences of opinion in the Alliance. The case in point is the issue of non payment of municipality workers in the Northern Cape, whose salaries were paid after we raised this matter in the Alliance. The same can be said of the education crises. SADTU will confirm that the agreement was reached in the main because of the intervention by the Alliance Secretariat. Even on the issue of ESKOM where we have already declared a dispute, it has since been agreed to hold a meeting to resolve this issue on Friday 26 June 1998. This is not to say that there will be no areas of disagreement, but to point out the commitment of the leadership to as much as is possible work as one.



4 1999 General Elections


4.1 In less than 12 months South Africans will be going to the polls for the second democratic elections. The role COSATU will play in the elections will have a major impact on the outcome of the elections. Obviously, that role should be guided by the 6th National Congress resolutions.


4.2 In a resolution on the Tripartite Alliance the Congress resolved that: "Despite the shifts on the part of the ANC in government and despite other obvious weaknesses of the Alliance, such as the lack of a common programme, lack of accountability and co-ordination, the ANC-COSATU-SACP alliance remains the only vehicle capable of bringing about fundamental transformation for the country…More than ever before, COSATU should maintain and strengthen the Alliance with the ANC and the SACP…An election platform must be developed at Alliance level for the 1999 elections to amongst others cover the following areas:


· Providing financial resources;


· Agreement on the candidates list process;


· The key policies for the election manifesto;


· Electioneering support for the ANC at the workplace and in communities;


· Implementation and review structures in regard to policies of governance;


· COSATU should convene a Central Committee in 1998 to finalise and endorse a proposal for the platform."


4.3 The above therefore suggests that the 6th National Congress has already resolved that COSATU should support the ANC in the general elections. What is expected of the CC is to finalise the issue of provision of financial and human resources for a successful campaign, a candidates list process and the development of a set of essential policies for the election. As far as the issue of review of structures of governance and implementation of policies is concerned, the Alliance task team on the transformation of the public sector has already started some work on this.


4.4 A few weeks ago, the Markinor research group released a poll on the views of voters regarding their preference for political parties. Various parties and self-styled political commentators have subjected this poll to various interpretations. Their views range from those that allege that the ANC's majority will be reduced from 62% to 54% in the National Assembly. According to this view, the National Party will retain its majority in the Western Cape with the support of the other opposition parties or surrender it to the Democratic Party. Furthermore, the Northern Cape will go to the National Party and the Democratic Party respectively or jointly with the Freedom Front. Gauteng will be a hung parliament, while the ANC’s majority in the Eastern Cape, North West, Mpumalanga and the Northern Province will be reduced.


4.5 While these are all exaggerations, they are not beyond the realm of possibility. Of the 14% who are either undecided or will not vote, they are mainly from within the ranks of the movement. While there may be valuable and sometimes even understandable reasons for disillusionment with the ANC government, it will be suicidal to gamble with our future and return the National Party to power in a number of provinces. They are likely to reverse most if not all of the gains that we have made over the past four years. The same applies to the DP, IFP and UDM. These are no friends of the working class. There is no doubt that if any one of them or all were to win political power, they will move the country back to where it was before the 1994 elections. To those who believe that Holomisa and Meyer are their saviours we have to remind them that both had a chance to improve the lot of our people during apartheid years. The fact that there is no infrastructure in the Transkei can be traced to their inefficiencies and lack of political will to transform the lives of the majority.


4.6 The democratic movement, and COSATU in particular, has a responsibility to mobilise the majority of South Africans to go to the polls and vote for the ANC. At the same time we need to look at how we can address some of the legitimate issues that give rise to apathy and disillusionment, particularly amongst our activists who are supposed to explain to the masses the gains and limitations of the past period while at the same time they feel that the movement has either abandoned the strategic objectives of the National Democratic Revolution or left them out of policy formulation.


4.7 We believe that all is not yet lost The majority in South Africa, including activists, will give their backing to the movement if the movement in general, and the Alliance in particular, reasserts the following as part of our election platform and political vision in the immediate future:


· Continued movement from apartheid tyranny to a non racial, non sexist, democratic and accountable constitutional state which entrenches the fundamental political, social and economic rights of all citizens, with special emphasis on the working class in general and workers in particular. This requires our ability to continue to implement policies that tilt the balance of forces in our favour.


· Creation of an unfragmented state which enables national government to effectively implement measures to overcome the apartheid legacy of division, economic deprivation, poverty and inequality, and to set national norms and standards in all strategic areas of transformation. Instead of the current situation, where a province can be seen as an institution on its own, political co-ordination will be necessary.


· Consolidation of the Alliance and its constituent members as the key social force to drive the process of social and political transformation;


· Implementation of the RDP’s five key areas: democratisation of the state and society; extension of basic needs; developing a new growth path based on improvement of living standards and respect for workers rights; human resource development; and the redirection of resources and investment.


4.8 Rather than adopt a new election platform, we should recommit the movement to these essential objectives of the RDP - with whatever possible adjustment taking into account our experience of the past four years. It is an open secret that the RDP remains the most popular policy statement ever developed by the Alliance since the days of the Freedom Charter. Its popularity is immeasurable and can not be questioned. In the run up to the elections, the ANC will be expected to account on what we have done to implement the RDP. In the minds of many South Africans, the RDP is dead. In its place, there is GEAR. This situation needs to be addressed by reasserting the RDP not only as part of an election strategy but as what should inform government policy. At the same time it is not correct to say that the RDP objectives have been abandoned in all respect. While it may be true on certain aspect of macro-economic policies, the same can not be said of areas such as health, welfare, aspect of the labour market, infrastructure, land, water, etc.


4.9 In our view, the most unfortunate strategic mistake the Alliance made was not to plan together on how to deal with the challenges, constraints and possibilities at a political and socio-economic level. Such planning includes strategies to implement the RDP, strengthening the government and the Alliance in order to shift the balance of power continuously in favour of blacks in general and the working class in particular, as well as keeping the masses on board as we implement our transformation programme. This would necessitate that where strategic shifts need to take place, such a decision will be taken by the Alliance and explained by the Alliance as a whole to the public.


4.10 As a result, whether or not we have progressive policies and legislation (such as in education, health, land and water) or ones which run counter to the RDP (such as in transport, housing, macro-economic policy) depends largely on the Ministry concerned.


4.11 As an Alliance, we need to develop a strategic approach on how to practically implement the RDP in the concrete conditions of transition. This can only be done with the active participation of all South Africans. Those who are in government at all levels need to understand and accept that they are there to represent the agenda of the ANC-led Alliance and its motive forces. The notion that the Alliance is incapable of addressing the concerns of society as a whole is wrong since we have always placed the interest of the country at the centre of liberation.


4.12 This is not to deny that there are legitimate constraints and limitations faced by government, but to say that the Alliance is capable of seizing the moment, even under extreme difficulties. We should combine state power with mass power. There may be instances where blockages can be unblocked through state power. In other instances, mass action may be the key that unlocks such blockages. We should therefore use both at appropriate moments. After all there is no contradiction between mass struggle and parliamentary processes. Both remain sites of struggle. We must refuse to be converts of the neo-liberal agenda, which seeks to run down services and then hand them over to the private sector due to lack of capacity and resources in government and its institutions.


4.13 We should explain to our people that, despite these constraints, we have made strides in ensuring that legislation passed by parliament reflects the aspirations of the working people and our members. This includes such important matters as the Pensions Bill, retirement funds, taxation, budgets, tax holidays, interest rates, tariffs, Small Business Bill, housing, telecommunications, Termination of Pregnancy Bill, social welfare, public works, Health Bills, procurement policy, local government, etc.


4.14 As outlined above, the process of drafting a new constitution was successfully completed, with significant advances in some areas of socio-economic rights, worker rights, and deepening of democracy. These gains can be reversed by the forces opposed to change. Already powerful interests groups supported by the opposition are challenging comrade Nkosazana Zuma’s attempt to provide affordable medicines. We need to mobilise our forces to mount a powerful protest on the day that these court cases take place. We should put pressure on the Pharmaceutical industries to drop the case or face continued protest from the people on the ground. Those of our members who belong to these parties also need to show their parties the folly of their action. Obviously the correct course would be to ditch such parties in favour of the only party committed to real transformation – the ANC.


4.15 What can be denied is also the fact that, most communities in rural areas now have access to water and electricity. Some communities have had their land returned to them. Most South Africans now have access to better health care, particularly pregnant women, children under 6 years of age and the unemployed. Important policy and legislative breakthroughs were made, and implemented, in certain areas, particularly health, labour, water, land, education and training. There are institutional mechanisms for workers and society to influence policy formulation and legislation. These are gains worthy of defence by us. The same should apply to pending legislation on Employment Equity and Skills Development. The opposition and big business do not want them. At the same time as we defend them, we should be aware that the NP, DP and IFP will use these same bills to win support of coloured and white workers.


List Process


4.16 When COSATU decided to release some of our leaders onto the ANC election list for national and provincial legislatures, we had two main objectives. Firstly, to reinforce the ANC’s election campaign and entry into governance by releasing comrades who could help to implement the programme which we jointly forged with the ANC. Secondly, to ensure that comrades with a direct knowledge and understanding of the concerns of the trade union movement took that commitment into government and ensured that they brought a particular perspective into all government processes. However, it was always understood that once the comrades were released onto the ANC election list, they would no longer be accountable to COSATU and would fall under the discipline of the ANC.


4.17 As was explained at the 6th National Congress, because of the latter point, it is difficult to accurately assess the performance of comrades released for this purpose, problems they have faced etc, because there has not been a structured relationship of direct organisational accountability and support. As far as the strategy was to strengthen the ANC and to ensure an election victory, this appears at face value to have paid off. It is however doubtful as to whether we "got value for our money" from some of these comrades. Obviously their effectiveness or otherwise cannot be divorced from the issue of the functioning of the Alliance as well as the performance of the ANC in government.


4.18 However, it is important to recognise that "former COSATU" MP’s are not homogeneous, and that COSATU’s support base in the legislatures extends beyond them. While some of them have been active in maintaining dynamic contact with the Federation, and supporting pro-worker positions, others have been hopeless to say the least. Their positions are so extremely right-wing that we sometimes wonder whether indeed at one point they were part of us. At the same time, many ANC MP’s and MPL’s who were never part of COSATU have actively supported our positions. We must therefore avoid adopting a narrow approach in addressing this question.


4.19 We should agree as COSATU on how we will participate in these elections, particularly with regards to the issue of those who may be nominated to take part in the elections. In deciding on an approach for the participation of worker leaders in the 1999 elections, a number of factors should be taken into account:


· Whether the negative effect releasing comrades has on the organisation outweighs the benefit of them working in the legislatures and in government;


· Whether refusing to sanction it would serve any purpose since some of the leadership at affiliate and federation level may be nominated in their capacity as active ANC members.


4.20 Taking the above into account, we do not believe that we should have a COSATU list process similar to that in 1994. We should rather encourage our members and leadership to play an active role in the ANC and be elected based on their role in the movement rather than merely in COSATU. We should also ensure that the principle of the right to recall should be agreed upon for all of those who go to parliament. The ANC is also proposing a similar approach. This does not rule out the participation of the Alliance in the list process. Indeed, there will be List Conferences similar to those of 1994 at Provincial and National level, with a percentage of delegates coming from the Alliance, the Youth League and the Women’s League. It is through this process that we can ensure that there are enough women, workers and current MP’s on the basis of deployment and service rendered etc. In line with the 6th National Congress, we should ensure that other people are deployed into the civil service rather than send everyone to parliament.


4.21 The nomination process for 1999 is going to be more complicated than that of 1994. It may even lead to more tensions from within the ranks of the movement. This will occur in part because, unlike in 1994, there are sitting MP’s who have a desire to continue as parliamentarians. Some will succeed because of their good work as parliamentarians, while others may try to manipulate the process. Those who are in the Provincial legislatures may feel that they have outgrown provincial politics and require national portfolios. The same may apply to those who are outside of the legislatures who may think that their time has come. All of these will require careful management by the Alliance.




4.22 In 1994, the bulk of our election campaign money came from the ANC and donors. Most affiliates had also fundraised internationally. It is our view that we are not likely to receive much from international donors some of whom believe that we are now a normal democracy. In line with the LRA, we propose that we call on all our members to contribute to an election fund by means of a levy. In most countries, workers invest in a party of their choice through funding. South African workers cannot be an exception.


4.23 The LRA provides only for affiliates and not the Federation. At the same time, section 13 of the COSATU constitution authorises the federation to raise funds by means of inter alia, levies, and in any other manner within the framework of the constitution in accordance with the aims and objectives of the Federation. Accordingly, it is competent for COSATU to require affiliates to facilitate the raising of levies from their members.


4.24 The deduction of the envisaged levies raises the question of whether or not this can be imposed on the members of the affiliates. The answer to this question is as follows:


· Where the constitution authorises the imposition of levies without the consent of the members concerned, the affiliate has the authority to require its members to authorise their employers to make the deduction; alternatively


· Where the constitution does not grant the affiliate power to impose levies, then the affiliates’ members can only be required voluntarily to authorise their employers to deduct the levies.


4.25 The CC needs to pass a resolution obliging the affiliates to raise the levies from their members in the manner set out above. The affiliates would then be required to implement the resolution in terms of their constitutions. It should be noted that the issue of funding cannot be dealt with as a technical matter. It requires a political commitment to fund the ANC. We are aware that not all members of COSATU are members of the ANC. Indeed there are members of the IFP, PAC, AZAPO, NP and possibly the UDM in COSATU – albeit being in the minority. We however believe that it is in the interests of all workers to vote for the ANC if we want the transformation process to succeed.




4.26 We further propose that we should not set up a separate elections department as happened in 1994, where we had a structure existing parallel to other departments. We should rather establish an elections unit headed by one of the existing COSATU National Office Bearers. Affiliates should be requested to release personnel including administrators (on pay) at national and provincial level, to help co-ordinate the campaign which in many respects will be even more challenging than that of 1994.


4.27 We should discuss with the ANC on how to utilise some of those comrades who are currently in national and provincial legislatures. At the same time, since we are likely to focus on KwaZulu Natal, Western Cape, Gauteng and the Northern Cape, we need to identify affiliates which are key in all of these areas to begin with the process of mobilisation.


4.28 Furthermore, we should call upon SACTWU, SAMWU, NEHAWU, NUMSA, FAWU and SADTU to release leadership and shopstewards for campaigning in the Western Cape. This does not mean that the rest of the unions should play no role. It is merely a reflection of their organised strength in the region with specific reference to the so-called coloured workers whose support is necessary if we are to win the Province.


4.29 For KwaZulu-Natal, we should call on the following unions to be at the forefront of the campaign: SACTWU, NEHAWU, SAMWU, NUMSA, SADTU, SACCAWU and POPCRU.


4.30 NUM, SAMWU, SAMWU, POPCRU and SADTWU should play a similar role in the Northern Cape.


4.31 Taking into account the role that the UDM is likely to play in Umtata, we should ask of SAMWU, SADTU, NEHAWU and SAPSA to play a similar role.


4.32 The Alliance needs to develop a clear programme based on a number of phases for the campaign. Phase one should be one where we go back to our people to explain what we have done over the past four years, the problems that we faced, the gains of the transition and how important it is for all of us not to be complacent in voting for the ANC. That whatever our misgivings about certain things, it would be suicidal to absent one from the elections since its outcome and its impact on the transformation process depends on all of us pulling in one direction. This will require that a document be prepared which all activists could use. The local councillors, MPL’s and MP’s also need to be available to truly account to our people. We should however ensure that this process is not hijacked for individualistic purposes by those who plan to go to parliament as a way of campaigning or discrediting other comrades. This should be a collective effort for our movement. During this phase we should also listen very carefully to what people on the ground have to say in order to address their concerns. This phase should already be underway, particularly since the national parliament is in recess.


4.33 The second phase should include us ensuring that all those who are eligible to vote have Identity Documents and that those who are still waiting for them should have received them by the time we have to vote.


4.34 The next phase should involve the registration of all those who are eligible to vote. In line with our earlier methods of organising, we need to know through door-to-door and street campaigns who has not registered and why. We have a responsibility to ensure that we achieve a decisive majority based on a high turn out. A low turn out in the elections will hurt the ANC more than any other party fighting the elections.


4.35 All these phases can run concurrently. While it is necessary depending on the situation to have rallies, we should focus more on door-to-door and street campaigning. Those of us who are working should focus on industrial areas. We should be aware of the fact that there is going to be a huge concentration by the opposition on our record of accomplishment in government. While we should not try to cover up any obvious failures, we should never go on the defensive. It is far better to be open with our people than pretend that all was well all round.



5. Conclusion


5.1 The issues contained in this report and in the resolutions are important for the Federation. We should emerge from the CC with clear policies on the economy, on jobs and on the transformation. At the same time, we should not be ambiguous about our support for the ANC in the next elections. We have a historic responsibility to ensure that democracy is not aborted in our country. It will not succeed without a strong ANC inside and outside government. It is clear from the above that, while there have been areas of disagreement and set-backs, there have also been major gains since 1994. We cannot squander these gains by boycotting the elections. There may be no second chance. Workers in Britain found themselves settled with the Conservative Party for close to 18 years. Workers in Nicaragua now have the Sandinistas out of power. We cannot therefore decide one day to support the ANC and another day to stay away from the elections and think that we will retain the ANC in power. The fact that we decide to give our full backing does not mean that we should not go on resolving any issues around which there may be difference of opinion. It does mean though that our support should not be conditional on all the issues of differences having been resolved. Even in 1994, there were areas, which COSATU preferred a particular approach, which was not necessarily how the whole Alliance wanted to pursue it. The same is true on certain issues by other Alliance partners. This is not an Alliance of convenience, but a strategic alliance to bring about political and economic transformation.


5.2 The policies that emerge from the CC should be popularised and implemented. This will include the need for a programme of action to ensure that nothing stands in the way of implementation. We will not fail, we dare not fail! We urge all of you to ensure that we emerge out of the CC more united than ever before, as COSATU and as the Alliance.



Viva ANC


Phambili no mzabalazo wa basebenzi

Phambili ne Alliance

Phambili no ku vhotela i ANC

Phambili ne socialism

Phansi i GEAR

Phambili ne RDP

Matimba i ya hina