Mbeki warns South African unions
By Norm Dixon
South Africa's President Thabo Mbeki used his annual "state of the nation" address to the joint sitting of national parliament on February 4 to warn trade unions that the African National Congress government would not "tolerate" efforts to oppose its accelerated drive to implement conservative economic policies.
Business Day, the mouthpiece of South Africa's capitalist class, reminded the president on the morning of his speech of what the ruling class wanted to hear. It noted that, with a 66% parliamentary majority and an even higher popularity rating, Mbeki "can say almost anything but there are forces that require reassurance on matters such as crime, the liberalisation of the labour market, a more investor-friendly environment and South Africa's intentions in the chaotic African continent ... The support levels mean that Mbeki can get tough where he needs to."
Mbeki did not disappoint them. He highlighted the progress the ANC had made in making South Africa "investor-friendly", pointing to the fact that in 1993 "foreign direct investment amounted to 941 million rands as compared to just under R6.5 billion in 1998, with portfolio investment growing from R2.4 billion to R20.4 billion in the same period".
Mbeki quoted with approval statements by Julian Ogilivie Thompson, chairperson of South Africa's most prominent corporation, Anglo American PLC, that "South Africa is one of the most attractive emerging markets" for investors. Mbeki said, "Our government fully shares this confidence, which was also communicated to us by all the business leaders with whom we had the privilege to interact at the World Economic Forum at Davos".
To underscore and deepen the international capitalists' enthusiasm for South Africa's neo-liberal course, Mbeki announced the formation of an International Investment Council to advise the ANC government on policy, as well as to sell the merits of South Africa to investors around the world. The council's members include billionaire financier George Soros; Niall FitzGerald, co-chairperson of British-Dutch Unilever; Minoru Makihara, chairperson of Mitsubishi; Tony O'Reilly, chairperson on Independent Newspapers of Ireland (and the owner of a substantial number of South African newspapers); Ratan N. Tata, chairperson of Tata, India; and Jurgen Schrempp, CEO of Daimler-Chrysler.
Anti-worker provision
Mbeki then announced that the government would introduce "amendments to certain provisions of the Labour Relations Act, the Basic Conditions of Employment Act and the Insolvency Act" because they had resulted in "unintended consequences". He made it clear that the changes would favour business. Big business has criticised provisions relating to notice periods, rates of overtime pay and unfair dismissal procedures as "labour market rigidities" and "disincentives" to hiring more workers.
The president also announced that "the program for the restructuring of state assets is also being speeded up to [improve infrastructure], to increase the levels of investment and further modernise the economy".
While Mbeki was short on specifics on the ANC's next privatisation targets, there are indications that the government will move to sell "big ticket" items, such as the giant power utility Eskom and the country's commuter train system. Until now, opposition from the Congress of South African Trade Unions (COSATU), the South African Communist Party (SACP) and the ranks of the ANC had prevented the sale of such public assets.
The government is moving to sell a substantial portion of Eskom, in a process modelled on its 1997 sale of 30% of the telecommunications utility, Telkom. On January 28, the director-general of the Department of Public Enterprises, Sivi Gounden, announced that the government "wants to encourage maximum private sector participation while at the same time maintaining a level of control in Eskom".
Eskom's power generation capacity has been estimated to be worth more than US$18 billion (about R110 billion) by the US-based Electricity Power Research Institute. Late last year, the government divided Eskom into four corporatised companies. Details of the final privatisation plan for Eskom are to be announced by public enterprises minister (and SACP central committee member) Jeff Radebe in March.
Mbeki seized upon an intra-union dispute within the National Union of South African Metalworkers (NUMSA) to issue a warning to trade unionists. "We must warn very strongly that illegal and unjustified strikes such as the one recently experienced at Volkswagen in Uitenhage cannot be tolerated. Jobs, a better life for our people in the context of a growing economy and our standing in the eyes of the investor community cannot be held hostage by elements pursuing selfish and anti-social purposes", he declared.
The VW dispute erupted after NUMSA sacked 13 shop stewards for "bringing the union into disrepute". The VW workers walked off the job in protest.
Management then issued an ultimatum that all employees return to work or face the sack. Around 1300 workers defied the bosses and were dismissed. It seems that some of the defiant workers are influenced by a small far-left party, the Workers International Vanguard League.
"The government has worked with the management at Volkswagen as well as NUMSA to ensure that the problem created by some irresponsible elements at this plant is resolved", Mbeki boasted in his speech.
Mbeki's speech generated praise from big business. South African Chamber of Business (SACOB) CEO Kevin Wakefield declared that the president has "pressed the right buttons" and that business felt all the concerns SACOB had wanted dealt with were addressed in "typical Mbeki precision", especially "labour and labour market rigidity". Business spokespeople and opposition parties all agreed that the ANC had to turn its tough talk against the unions into action.
Unions campaign
COSATU and the SACP issued surprisingly meek responses to the speech. Both focussed on Mbeki's general statements in favour of poverty alleviation, job creation, economic development and against racism, while diplomatically downplaying the pro-capitalist methods proposed to achieve them.
COSATU president Willy Madisha said: "We only hope that when [the changes to the labour laws] take place, it will be to the benefit of the majority of the people". SACP secretary-general Blade Nzimande, according to a South African Press Association despatch, commended Mbeki for announcing changes to the Insolvency Act to make it harder for companies to sack workers without paying them their outstanding entitlements.
In contrast, the South African Municipal Workers Union (SAMWU) issued a spirited response. While welcoming Mbeki's strong statements against racism, SAMWU pointed out that "workers face other problems in the workplace such as low pay, unfair dismissals and overtime work without pay ... SAMWU will fight tooth and nail any downward review of the [labour acts] ... SAMWU does not agree that these laws have had 'unintended consequences' on job creation, as it is still a struggle to get employers to implement the laws."
SAMWU said it was "alarmed at the implications in the president's comments that restructuring of state assets will be speeded up. The union supports transformation of government to meet the needs of the people.
"This cannot be achieved following the pattern so far, which has been to slash jobs and privatise assets in the drive for a 'lean and mean' state. In this regard, SAMWU will be wholeheartedly supporting ... [the] COSATU public sector union protest against job losses."
The 1.8 million-strong COSATU is in the midst of a "mass action" campaign against job losses arising from the restructuring of state enterprises, company sell-offs and plant closures. The unions want the ANC government to change the labour laws to make it harder to retrench workers and for firms that declare themselves insolvent to avoid paying sacked workers' entitlements. The campaign will culminate in a national general strike in May.
Preceding the general strike, trade unions are holding industry-by-industry protest rallies and pickets, which began with the public sector on February 7 to 12. Workers in the services, food, banking and beverage industries will take action on February 14 to 19; the chemical, transport, paper and printing, domestic service and farming industries on February 21 to 26; and the mining, energy and construction sectors from February 28 to March 4. Mass rallies will be held in each province in March.
SAMWU is also continuing its struggle against the ANC-controlled Johannesburg Greater Municipal Council's privatisation plan, iGoli 2002.
There are strong signs of disillusionment with the ANC at the local government level. According to the January 30 Sunday Independent, the South African National Civic Organisation has floated the possibility of it running its own candidates in this year's local government elections because the poor are not being "sufficiently catered for" by the ANC.
Following a two-day workshop by COSATU's public sector unions, COSATU general-secretary Zwelinzima Vavi admitted on February 3 that the union federation would find it difficult to convince union members to support the ANC in the local elections. He noted that campaigning for the ANC in Johannesburg would amount to ensuring that the iGoli 2002 privatisation program went ahead.