Strike fever hits SA as unions go into battle
Gold, construction, vehicle and textiles sector facing shutdown
SA’s fragile economy faces a tidal wave of industrial action in coming weeks as trade unions flex their muscles in key sectors, with potentially devastating consequences for exports and SA’s image among investors.
About 30,000 workers in the export-intensive vehicle sector have been on strike since Monday, and they are set to be joined by tens of thousands more workers in the gold, construction and, possibly, textile sectors.
The National Union of Mineworkers (NUM) is also planning to march on Eskom tomorrow, to protest at the parastatal’s declaration of a dispute after Eskom had offered a 5.6% pay rise. The NUM, however, has abandoned percentage wage demands and is seeking, among other things, wage levels of R3,200 and R3,500 for lowest-paid workers.
The unions’ high wage demands are being seen partly as a result of internal friction within the Congress of South African Trade Unions (Cosatu), whose general secretary, Zwelinzima Vavi, has been suspended, prompting threats of a breakaway by the National Union of Metalworkers of SA, a Vavi backer.
Cosatu heavyweight the NUM is also fighting a rearguard action to protect its turf against further inroads by militant newcomer the Association of Mineworkers and Construction Union (Amcu).
“The gloves are officially off, the battle lines are drawn and the fight will be taken back to the mining, construction and Eskom oligarchy,” NUM general secretary Frans Baleni said yesterday.
Analysts said the industrial unrest was likely to further taint SA’s image as an investment destination, and have a severe knockon effect on the currency, which is already under pressure at the prospect of the US scaling back its bond-buying programme.
London-based research consultancy Capital Economics’ Africa economist, Shilan Shah, said the rand could weaken further. “Strikes are particularly worrying from a sentiment point of view. The rand has been weak in past few weeks. If there are strikes, investors could get nervous, which leaves the rand under even more pressure,” Mr Shah said.
Reserve Bank governor Gill Marcus has on a number of public platforms expressed concern at the damaging effect of strikes on economic growth and jobs.
Yesterday, the rand clawed back against the dollar in late trad- ing after weakening to its worst level in more than four years. It sank as low as R10.44/$, surpassing the previous low of R10.36/$ of early June. It later recovered to R10.27/$, while the JSE all share index closed 252.07 points, or 0.59%, higher at 43,014.
Gold shares were hit hard, but spot gold recovered to $1,377.24/oz in late trade. Gold has fallen 20% this year, amid a gloomy outlook for resources.
In the gold sector, companies are being squeezed between growing worker militancy over wage claims that have added to costs, and falling bullion prices.
The NUM, which represents two-thirds of gold miners, will get feedback today and at the weekend before deciding on Monday whether to issue a strike notice, said spokesman Lesiba Seshoka.
It would take 48 hours before workers could down tools, the NUM spokesman said.
“It looks very likely there will be strike action in the gold sector because workers have said it is do or die this year for the companies to meet their demands,” he said.
“The reality is the Chamber of Mines wants to convince us that the gold companies have no money but they have no credibility because they have been saying the same thing for so many years.”
A certificate of nonresolution
has been granted by the Commission for Conciliation, Mediation and Arbitration (CCMA) to the NUM and Uasa, allowing them to strike.
The chamber, which represents the seven gold firms, has raised its wage offer to entry-level workers and rock-drill operators to 6% from 5.5%, as well as their living-out allowance, taking their total salary to R9,120 a month. The offer was rejected.
Amcu, the second-largest union in the sector with 17% representation, and Solidarity will both continue talks with the chamber on Monday. Solidarity general secretary Gideon du Plessis said the union would recommend to members that they not go on strike because the companies were close to meeting its demands. The outstanding issue was its demand for a 10% wage hike.
Amcu is demanding that entrylevel wages rise to R12,500 a month, which is a 150% increase.
The NUM has also given notice to construction companies, represented by the South African Federation of Civil Engineering Contractors (Safcec), that workers will strike.
Yesterday, the union said construction firms such as Wilson Bayly Holmes-Ovcon (WBHO), Group Five, Murray & Roberts and Aveng would be affected.
Late yesterday, Safcec said the NUM and the Construction & Allied Workers Union (BCAWU) wanted a 14% increase for this year, while employers have offered 7.5%.
BCAWU general secretary Narius Moloto said perceived gains by workers in mining were putting pressure on the construction industry.
“At the moment, workers expect a lot from us. There is a danger of unions taking a tougher stance than they ordinarily would because they want to hold on to their members.”
Pressure is also building for industrial action in the textiles sector, with 86% of workers having voted to go on strike, the South African Clothing and Textile Workers Union said this week.