Bosses have ‘lost touch’ with workers
Years of disengaged management blamed for platinum mining crisis
SOUTH African executives have “lost touch” with their employees, says the director of the International Labour Organisation in South Africa, Vic van Vuuren.
They have distanced themselves from the reality of what is happening in the country’s socioeconomic environment and now, in the case of the platinum sector, it has blown up in their faces, he says.
Nothing symbolises this divorce from local reality more starkly than the vast salary increases, bonuses and share options they continue to reap.
Van Vuuren says Anglo American Platinum’s announcement this week that its top executives would receive millions of rands in shares was “mind-boggling” both in terms of the amounts involved and the context in which the announcement was made.
Amplats employees are facing financial disaster after being on strike for 15 weeks in support of a R12 500 wage demand the company says it cannot afford.
“It underlines how out of touch management is with the South African psyche,” says Van Vuuren. “If you are going to do that [reward executives so handsomely], there has to be a quid pro quo.”
As in the case of the recent R28-million paid to each of Standard Bank’s two CEOs, mining companies argue that this is in line with global standards and necessary to stop their executives from leaving the country.
Van Vuuren says it is “very shallow” to use the global market argument to justify executive remuneration but the developing economy argument when it comes to employee remuneration.
“At management level, we’re playing in a global market, but on the other side, we’re in a developing economy and we can’t afford to do the things the workers are asking of us.”
Van Vuuren, who was a corporate lawyer before joining the International Labour Organisation, blames the unfolding disaster in the platinum sector on years of disengaged management.
“Management have outsourced the human resources function.”
This works in a first world environment like the US, where the issues HR departments have to deal with are relatively minor and socialsecurity networks for employees are very sophisticated.
“We don’t have that here. We have a very different set of dynamics; we have a huge social deficit. The only way to deal with that is for line management to get involved. They need to get their hands dirty — they can’t just outsource it.”
Management is divorced from the socioeconomic challenges facing their employees, such as displacement from their homes, the long distances they have to travel and the slum-like conditions they live in.
“Management could have been more proactive in the realms of social dialogue outside of the collective bargaining arena,” says Van Vuuren.
And that does not apply only to the mining sector. “That is an indictment of management in general in South Africa. They’ve restricted their social dialogue to collective bargaining around wages and service conditions and have not got involved in the dynamics of what has been playing itself out beyond this.
“There has been a first world approach: ‘Government, you take care of all this.’ But the government is not taking care of all this, for whatever reason.
“If they had been more engaged, they could have negated a lot of what is on the table now. It’s a situation that has been building for years and has blown up in their faces.”
Van Vuuren believes that what is happening in the platinum sector will happen in other sectors if the lessons are not learnt.
“If we don’t learn from this, then people who are resting on their laurels and pointing fingers at the platinum industry are going to find that it might just be coming their way soon.”
The argument from business is that it is already shouldering far too much of what should be the responsibility of the government and cannot be expected to do more.
Nothing symbolises this divorce from local reality more than their bonuses and share options
Van Vuuren accepts that it is “not the responsibility of the private sector to fund houses and all of that. That doesn’t make sense. There has got to be a role for the government.”
But, in the mining sector, the levels of engagement with local government about the provision of services such as housing, education and transport must be much greater, he says.
“Companies should even get their hands dirty and help local government officials who don’t have the expertise to increase their service delivery. The better the service delivery, the more pressure it will relieve at the workplace.”
He says none of this negates the probability that the current standoff in the platinum sector is largely about union rivalry between the Association of Mineworkers and Construction Union (Amcu) and the National Union of Mineworkers (NUM).
He attended a forum of international unionists recently, and “they are very concerned that workers in this situation are being used as pawns for other issues”.
They believe the interests of the workers have long since been overtaken by other agendas.
“Once a worker starts suffering harm that goes beyond the norm, it means the strike has been too long. Even if the companies agree to their R12 500 demand tomorrow, what the workers have lost cannot be made up in their working lives.”
Just as shareholders and boards have to “take ownership” of the present situation, he says, “so do union leaders”.
“We don’t find strikes like this anywhere else in the world. They might be economically disruptive, but they’re short, sharp and very effective. And the worker does not suffer irreparable harm.
“What we’ve got here is a point of no return for some of these workers in terms of the damage they’re going to suffer.”
Chamber of Mines chief negotiator Elize Strydom has commented on the poor quality of Amcu negotiators as an exacerbating factor in the strike. Van Vuuren says he would not confine it to Amcu.
“Capacity has been drained from the unions. Many union leaders have left to become politicians or to join management.”
He blames this “brain drain from the unions” for the damaging duration of many strikes. But he also blames company executives for not thinking outside the box.
An answer to the current impasse might have been for executives and chairmen “to go off site with Amcu leaders. Take time out. Go unofficially to sit for a week or a few days somewhere and just talk through what’s happening — the hardships the workers are suffering, the irreparable harm to the industry — and let’s see if we find some sanity in this process.”
He says they also need to appreciate the value of symbolic gestures such as forgoing pay increases or bonuses.
“This principle has been practised by management teams in Europe, but it is something we are not seeing in South Africa. What we get here is the opposite. Maybe our executives have gone the extra mile, but then they need to communicate that and they’re not. We’re not seeing it.”