Changes afoot at the coalface of labour relations Doing nothing makes Zuma an accessory

SOMETHING really dramatic is taking place at grassroots level in SA’S labour relations that could reshape both the labour environment and politics in SA. The tip of the iceberg is visible at Impala Platinum, which could soon become the first major segment of the mining industry to oust the Congress of South African Trade Unions’ (Cosatu’s) largest affiliate, the National Union of Mineworkers (NUM).

But perhaps the most unrecognised aspect of this new environment is the role played by SA’S labour legislation, which has always been a general problem, but now threatens to become a specific problem for a whole new set of reasons.

How important the developments at Impala will turn out to be remains difficult to answer, but they are dramatic enough to warrant a much closer look than they are getting at the moment. Impala has already lost 120 000oz and about R2,4bn in the strike in March. The new wildcat strike, now over, this week cost it another 6 000oz.

For shareholders, the industry has been a pretty miserable investment, although Impala has not fallen dramatically out of proportion with its megarival Anglo American Platinum, and a lot less than Lonmin and Aquarius. The share price of both the big players are 25% down over a oneyear period, more or less in line with the big diversified miners.

It doesn’t help that labour relations at the mines have been very troubled. Remember, this is the industry that has been earmarked as base of SA’S industrial rebound. The repeated “unprotected” strikes at Impala invite a whole range of questions. Why Impala? Why the platinum industry? Why now?

Broadly speaking, the answers lie in the interplay between the changing character of Cosatu, the essential conception of SA’S labour legislation, and the changing nature of South African society. Impala has been at the vortex of these problems, which have a good chance of spreading.

All of these contesting forces led to an unusual development at Impala this past week: a decision to verify the claim by the NUM’S rival, the Association of Mineworkers and Construction Union (Amcu), that it represents the majority of the roughly 20 000-person workforce. If Amcu’s claim is true, it will be the first major inroad into Cosatu’s dominant position since democracy. In itself, the change will not be dramatic for the NUM, which claims about 300 000 members. But symbolically, it may herald a new phase.

Amcu has been active for a number of years, but only recently has it seen its membership surge in an industry. Why platinum has been so successful is hard to know. Poor leadership from the NUM could be a factor. Traditionally, the NUM president handles the gold and the coal portfolios, and the deputy president handles platinum and the smaller sectors. The current deputy president is Piet Matosa, seen by platinum shop stewards and workers as a Cosatu head office appointee. He was attacked at an Impala mine three years ago, and he unfortunately lost an eye. His position was contested at the NUM congress this weekend, although he managed to face down the challenge.

But another problem has to do with the nature of platinum mining. Unusually, the industry is strongly weighted towards the lower levels of the salary hierarchy. With the end of job reservation and the gradual elevation of NUM members up the skills and pay scale, shop stewards have been selected from this small core of better paid workers. As society has changed, the distance now between this select band of senior employees and base-level employees is pretty marked for the first time.

Amcu is a much less sophisticated union, much more inclined to bypass the Labour Relations Act and go on unauthorised strikes, as we have seen this year. Its representatives come out of the base of the salary structure, and therefore presumably have a better connection with the largest part of the workforce. They have a much more intense focus on workplace matters, and there is some feeling the NUM is distant, focused on political issues, and NUM leaders are out for themselves in the world of politics.

Whatever the reasons, Amcu now needs to be taken seriously. This is where the legislative environment becomes an issue. The Labour Relations Act was passed in 1995, to bring labour legislation in line with the new constitution. Less recognised was its role as a big “thank you” from the ANC to Cosatu.

The legislation didn’t stop at formalising the right to strike as the constitution required, it also weighted the labour relations balance heavily in favour of labour — something recognised only at that point by the diminutive Democratic Party. It did so by introducing mechanisms such as the closed shop and the agency shop, which forces workers to join the majority union and which allows the union to charge all workers membership fees. It’s a little known fact that legislation allows a company to fire an employee who refuses to join a union with which it has a closed shop relationship. The legislation is the major cause of SA’S sclerotic labour market and the big reason it has been steadily declining in world competitiveness surveys.

What is relevant is the extent to which the legislation favours majoritarianism. The concept behind the legislation is that there will be one, big union in every industry, and the strategy was intended to create a situation in which Cosatu particularly would rule the roost.

It was assumed that this would help to create labour peace and that Cosatu would always be the moderate, reasonable, well-led organisation it was in the early 1990s. It was assumed Cosatu could be relied on not to become belligerent, and that labour relations would improve in this majority-favouring environment. However, the opposite has happened; working days lost to strikes are reaching extreme levels, and the huge power bestowed on Cosatu has turned into a political nightmare for the ANC, which Cosatu now leads by the nose.

For aspirant unions outside Cosatu, the result is a Game of Thrones scenario; you have only one way to win, and that is to deliver a knock-out blow. Impala’s current position is telling; it is legally obliged to ignore the representatives of the majority of its workforce and negotiate with the union representing a small slice. The process of de-recognising the NUM and recognising Amcu will take months, if it happens at all.

Another factor is competition between unions, and here the politics will also to be tough.

Many mining operations include smelting and other industrial operations. As a result, there appears to be more competition for support between the Zuma-supporting NUM and the more ambivalent National Union of Metalworkers of SA. How this plays out will be interesting.

Overall, it may the premature to declare a new, difficult phase of labour relations in SA. But the early fault lines are definitely visible.

I’VE written several times about my problems with the Brics concept, so it’s refreshing to see alternative views. One of the most interesting is the book Breakout Nations by Ruchir Sharma. The Bric nations (Brazil, Russia, India and China) idea seems too closely wedded

OUTSIDE this huge debate about youth wage subsidies and freedom to paint private parts, one small thing really irks me. Taking questions in Parliament, which most democratic leaders do fairly regularly but which in SA only seems to happen twice a year, President Jacob Zuma was predictably asked about police crime intelligence boss Richard Mdluli.

Zuma’s reply was that Police Minister Nathi Mthethwa had appointed a task team to investigate aspects of this matter, while the inspectorgeneral of intelligence was also probing aspects within her mandate. “Everything possible was being done to address the matter,” he said.

But the appointments, suspensions, to straight-line extrapolation, often expressed in the year China will overtake the US as the world’s biggest economy. Sharma’s putdown of this idea is telling: “As much as we all love the speculative titillation of futurology, no one can forecast the next century with any credibility and, more importantly, be held accountable for it,” he writes.

Instead, he says, each country should be examined for its own specific characteristics.

He also focuses less on the race in absolute gross domestic product (GDP) and more on GDP per capita. GDP size is a completely spurious measure when it comes to economic wellbeing, because countries with large populations have an obvious cumulative advantage. GDP per capita is the more comparable measure, and more inclusive.

Actually, it turns out the next wave of “breakout nations” may not include any of the Brics, he says. China is slowing, its malls are empty and its labour market competitiveness is eroding. China’s growth is reinstatements, transfers, in government departments were the responsibility of those departments “and not the president”. He takes the same “I wash my hands” approach to a host of other issues, including analyst Moeletsi Mbeki’s criticism at the weekend, citing “procedure”.

But if there is illegality involved, then for pity’s sake, it’s absolutely up to him to get stuck in, and damn quickly too. It should be axiomatic that you can’t steal money from taxpayers by hiring your mates to do nothing. He needs to demonstrate unequivocally this is unacceptable behaviour, because if he doesn’t he is effectively encouraging it and is effectively an accessory. Why does no one seem to understand that? very dependent on the cheap money policies of first world nations. India’s tiny GDP per capita means it should easily outpace the rest of the world, but he says India has many other weaknesses. He hardly has time for Russia and Brazil, which he sees as functions of commodity markets.

The real breakouts will be South Korea, Indonesia, the Czech Republic, Poland and possibly Turkey. And SA? SA, he says, is stuck in a kind of time warp. During apartheid, SA developed one of the most top-heavy forms of capitalism, with much of the economy under state control and the rest in hands of a few dominant cartels. The ANC kept that basic structure, with itself now the dominant ruling party, “backed by its allies in perhaps the most powerful union movement in the developing world. None of these power centres — not the state, not the private companies, not the ANC or its union allies — seems to have much sense of urgency about ramping growth.”

Pretty spot on, I think.