Address by COSATU General Secretary, Zwelinzima Vavi, at Gallagher Estate

Address by COSATU General Secretary, Zwelinzima Vavi, at

Gallagher Estate ICT Sector Summit

03 June, 2002

Honourable Minister, distinguished delegates and guests. Labour is proud to participate in the ICT sector summit and present an agreement reached after weeks of intense engagement at NEDLAC. This event and indeed the sector summit process is very significant in a number of respects:

It deepens democracy and social dialogue in our society;

It gives effect to agreements reached at the Presidential Job Summit;

It recognises the importance of retaining and creating quality jobs and decent work; and

It helps develop an appropriate industrial strategy that promotes development, creates quality jobs and decent work, promotes alternate forms of capital, and meets basic needs.

Labour's approach to the ICT sector rests on several pillars:

accessibility and affordability of communications and IT services to working people and the poor;

advancing the direct interests of our members employed in the sector;

the need to avoid the potential negative consequences that can be caused by the expansion of ICT;

the importance of this sector for South Africa's economic and social growth and development.

ICT and postal services are more than just lines, phones, computers and post offices. It plays a crucial role in our society, regionally and internationally. It can integrate economic activities, enhance labour markets and promote social cohesion. While it can contribute to social and economic development, it can also marginalise people, replace jobs and disempower people. The challenge that the sector faces is to ensure that it promotes empowerment and not powerlessness, promotes connectivity and not dis-connectivity, promotes jobs and not joblessness.

Much work needs to be done to address inequalities and promote growth and development in this sector. For example, The 1999 October Household Survey data indicate that just 7.3% of African Households in non-urban areas have a phone (including cell phones) compared with 85.6% of white households, while in urban areas 31.8% of African households have a phone compared with 87.6% of white households. The Sector Summit agreement and process point to one way in which we can take these challenges forward.

The agreement commits parties to, amongst other things:

Pursue and achieve universal service that is affordable;

Retain and create employment and promote decent work;

Implement the goals of the RDP;

Define a growth trajectory for the sector that will maximise employment creation, investment and growth, and raise living standards on a broader scale;

Promote education, training and skills development;

Promote rural development.

The challenge will be to ensure that all parties engage in the post summit process with a keen enthusiasm and energy to ensure that the vision set out and challenges to be met will indeed be achieved. A key priority must be to ensure that that jobs are retained and that employment in the sector grows. We need to ensure that we use the commitments and mechanisms set out in the agreement to achieve this priority. For example, we must promote investment in labour absorbing activities, we must set up the mechanisms agreed to in the social plan that promote research to increase employment and retain workers in the labour market. Employers must realise that it is in their interests to retain and utilise all levels of skills in the industry and expand the sector to absorb new entrants. All too often, we hear from employers that there are not enough skills in the labour force. We expect employers to abide by the agreement and ensure that they adhere to skills legislation as well as train workers at all levels. According to one of the SETAs in the sector - the ISETT - only 8% of funds available for reimbursement of levies are being claimed by companies. This is shockingly low for a sector that is supposed to be built on a high skills base.

While labour is enthusiastic about the sector summit process we are compelled to point to government policy that we believe will undermine the goals that we have jointly set. While we are at this summit, parastatals, in which government is a majority shareholder, are commercialised and being privatised. The sector is also undergoing liberalisation - specifically with the introduction of the second national operator.

We raised our opposition to privatisation and liberalisation at NEDLAC, and we will raise our opposition and concerns again here because we strongly believe that they pose a direct threat to universal service, job retention and creation, and the potential of the ICT sector to contribute to social and economic development. Our experience already supports our views on this, for example:

Telkom is shedding thousands upon thousands of jobs;

Last Monday workers at Telkom embarked on a national strike protesting inhumane working conditions they were being subjected to in the parastatal's pursuit of profit;

According to Telkom's own report in terms of its licence obligations,in the year to 31 March 2000 it achieved a roll out of 621 219 new lines but it disconnected 223 386 lines over the same period;

Broadcasting is unevenly spread; and

There is a large technology gap - while some schools have large computer laboratories, other schools don't even have computers or in some cases even electricity and phone lines.

Labour believes that the state is best placed to provide basic services such as telecommunications. This belief is informed by a number of economic arguments including:

Telecommunications infrastructure is part of the environment that makes economic activity possible - it is an important determinant of the cost structures of firms and of their spatial location. The benefits from infrastructure for the economy as a whole are therefore much greater than what can be earned by charging for services. Because there are broader economic effects beyond transaction between a service provider and the customer of services, free market transactions will not be economically efficient. Government intervention is required to ensure economically efficient outcomes.

The private sector will always under-invest in infrastructure because they do not take into account the wider economic effects and because they are risk averse. This means less infrastructure and less jobs in operating that infrastructure.

Telecommunications also improves the provision of other essential services such as education and health. However, the private sector will not take into account these wider benefits.

In a country such as ours with massive infrastructural and service backlogs and extreme inequalities, competition in a basic needs sector such as telecommunications is inappropriate. It is likely to result in 'cherry-picking' of profitable market segments and to the neglect of the majority.

Given the enormous challenges we face, we must continue to work together to ensure job retention and creation, and economic and social development. We need to tackle the thorny issues on which we may disagree so that we can emerge with joint programmes that move our country forward. We need to continuously review policies and the work that is being done to ensure that we advance and indeed build a better life for all.