Put union cap­ture on the radar

CityPress - - Business - Terry Bell busi­ness@city­press.co.za

AJan­uary 2015 amend­ment to the Labour Re­la­tions Act (LRA) was all that saved Cosatu from be­ing cat­a­pulted into a po­ten­tially ma­jor fi­nan­cial scandal. The amend­ment saved the fed­er­a­tion’s Chem­i­cal, En­ergy, Pa­per, Print­ing, Wood and Al­lied Work­ers’ Union (Cep­p­wawu) from al­most cer­tainly be­ing dereg­is­tered amid al­le­ga­tions of mas­sive fi­nan­cial im­pro­pri­ety.

This would have re­bounded on Cosatu at a time when the ANC-aligned fed­er­a­tion was deal­ing with a nine-union re­bel­lion, led by the Na­tional Union of Me­tal­work­ers of SA (Numsa).

Key to this was the de­ci­sion by Numsa — in ac­cor­dance with the Cosatu con­sti­tu­tion — to cease af­fil­i­a­tion to the ANC.

Cep­p­wawu, by then al­ready deeply mired in con­tro­versy, largely be­cause of the busi­ness deal­ings of its gen­eral sec­re­tary, Si­mon Mo­fo­keng, was one of the main­stays of Cosatu’s pro-al­liance fac­tion.

The union, al­though ap­par­ently bankrupt, also co-spon­sored the World Fed­er­a­tion of Trade Unions’ congress in Dur­ban last year.

But since 2010, Cep­p­wawu, riven by fac­tions, failed to pro­vide au­dited ac­counts and there was no ap­par­ent men­tion in the union’s books of the es­ti­mated R4 bil­lion in as­sets held by the union’s in­vest­ment com­pany.

Be­cause of this fail­ure to com­ply with the rules of ac­count­abil­ity, the reg­is­trar of labour re­la­tions was faced with hav­ing to dereg­is­ter Cep­p­wawu.

How­ever, to do so, it would, as one se­nior labour depart­ment of­fi­cial noted, “leave the cheque­book in the hands of the gen­eral sec­re­tary and his sup­port­ers”.

Dereg­is­tra­tion would also, as labour reg­is­trar Johan Crouse ad­mits, have had a pos­si­bly dev­as­tat­ing ef­fect on the mem­bers of the union.

It was for this rea­son that Crouse had, in the past, ex­er­cised the dis­cre­tion al­lowed him by the act, not to move to dereg­is­ter any union as soon as it de­faulted.

I ad­mit I was one of those who crit­i­cised him for this, feel­ing he was giv­ing too much lee­way to union bosses. I was wrong. Sev­eral unions have been dereg­is­tered, but only when they had clearly failed, not when they had mil­lions or per­haps bil­lions of rands in as­sets that needed to be ac­counted for.

Such as­sets, of­ten un­der the con­trol of union lead­ers or their ap­pointees, rightly be­long to the mem­bers.

Dereg­is­tra­tion in such cir­cum­stances could leave the mem­bers with noth­ing and no way of know­ing what was hap­pen­ing to their in­vest­ment com­pany as­sets.

Jan­uary 2015 changed all that: the prob­lems of dereg­is­tra­tion could be avoided.

Crouse used the new LRA pro­vi­sion, ap­ply­ing to the labour court to have Cep­p­wawu placed un­der ad­min­is­tra­tion.

It was prefer­able to dereg­is­tra­tion, but would still not have re­flected well on the union or Cosatu.

At this stage, Labour Min­is­ter Mil­dred Oliphant stepped in to or­der that the ap­pli­ca­tion be with­drawn. It wasn’t and Crouse, ac­cused of in­sub­or­di­na­tion, was re­placed by his deputy, Mal­ixole Ntleki, who with­drew the ap­pli­ca­tion.

A se­ries of court cases fol­lowed in which the de­ci­sion by Oliphant was found to be “ir­ra­tional, in­valid and pro­ce­du­rally un­fair”.

Crouse is now back as reg­is­trar and it seems that the ap­pli­ca­tion to place Cep­p­wawu and its fi­nances un­der cu­ra­tor­ship is again un­der way.

Time per­haps for work­ers to think as much about the state of unions and union cap­ture as about the state of the na­tion and state cap­ture.

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