WHAT is the use of the latest social pact engineered by Economic Development Minister Ebrahim Patel? With the economy under siege by strikers and worries growing internationally that the government does not have the means and ability to address the country’s socioeconomic problems, getting business, labour and government together was arguably a necessary process. But what can the extensive set of agreements in the pact be expected to achieve? Can it address the immediate crisis in the mining industry? Can it solve the long-term problems that have the rating agencies so rattled?
On helping to solve the immediate crisis, there are some glaring shortcomings. First, workers and not the union federations (or civic organisations) are striking. The hallmark of the strikes has been an explicit rejection of the National Union of Mineworkers (NUM). As a channel for dialogue with strikers, the NUM channel is broken. The Congress of South African Trade Unions (Cosatu), which has tried to step in, has had limited success where its affiliate has failed.
In the past, a leadership pact with Cosatu has served the African National Congress (ANC) and the government well, securing electoral members support for the past 20 years; brokering agreement on the regulatory framework for industrial relations; and mitigating conflict over economic policy.
In the present situation, where it is the wider population in revolt against the social partners themselves, a pact with institutions at leadership level will not solve the crisis.
But it is not totally without value. Ensuring that Cosatu does not board the wildcat strike bandwagon by holding it to the pact, is important to try to prevent unrest from spreading further. There are Cosatu critics of the NUM’s approach, which for the most part has been to tell workers to go back to work. The easiest way for Cosatu and its affiliates to ensure they remain relevant would be to side with the strikers and propel further action against low wages in other sectors.
At its congress last month, it was decided that all Cosatu affiliates would re-examine their collective agreements with an eye to seeing if there was any way wage talks could be reopened. The pact closes off that avenue: there will be no further unprocedural reopening of wage agreements in terms of the pact. But the more important point is that, to stem the labour unrest, a broader appeal to a far wider audience is needed.
Cosatu president Sdumo Dlamini had the right idea when he said on the eve of the talks: "A call must be made to all South Africans to say: ‘Yes we have problems, but let us not destroy the jobs we have.’" Leaders needed to stand up and show themselves, he said, as workers were going to realise too late that they had been lied to by the likes of Julius Malema. But in the statement following the meeting, President Jacob Zuma said only the following: "Processes to address the grievances of workers have now been put in place and we wish these processes to be concluded speedily. We call on workers who are engaged in unprotected strikes to return to work as soon as possible and for production in the mining industry to be normalised."
Barring one appearance at Marikana, neither Zuma nor the ANC have made a direct appeal to workers in terms they can understand. The communication of what should have been the core message emerging out of the summit hardly resonated.
A critical part of addressing the immediate crisis would be better policing. Had there been sufficient policing and a strategy to deal with intimidation, it is possible the strikes would not have gone on for as long. As it is, the threat of death to strike breakers is too serious for anyone to return to work.
While the pact promises a beefed-up approach to intelligence and security, details of "new measures" are hard to come by (despite persistent inquiries), making it impossible to say if this part of the plan can be expected to make much difference.
In dealing with the long-term developmental problems, the pact draws together several government initiatives, most of which are in the New Growth Path document, and promises to accelerate them. So, for instance, a selection of infrastructure projects, spread out over the provinces, has been earmarked for acceleration. It also makes mention again of the targets for expansion of the government’s two public works programmes as well as a series of measures aimed at increasing youth employment.
Added to all these existing plans are some additions that are specific to mining towns. The pact promises that a "crack team" will be sent to municipalities in mining areas, which are under stress due to poor planning for the huge influx of people into their areas. A task team will also be established by the Presidency to bring together local government authorities, business, labour and communities to help unblock delivery as well as leverage the resources of mining companies into development.
A concerted focus on the development of mining towns, involving a hands-on approach from mining companies, is undoubtedly a good idea and hopefully will go some way to ameliorating government failure at the local level. The absence of basic services — refuse collection, sanitation, electric lighting and roads — in the informal settlements around mining towns is largely responsible for the squalor that miners have found themselves living in.
Patel also took the opportunity to extract some long-sought commitments out of the social partners once he had them around the table. For instance, he got business to agree to a 12-month salary freeze and labour to agree to "an industrial relations system for infrastructure projects that will avoid industrial disputes, protect workers and help speed up the delivery of projects". But, in both cases, although the agreement was secured, compliance is far from certain.
While these are the components of the agreement, Patel is not likely to be under the illusion that its elements are sufficient to bring a shift in South Africa’s pace of growth or its trajectory. The New Growth Path document, published two years ago, aspires to an agreement of moderate wage increases all the way across the economy. The idea was that by reducing the inflationary effect of wage increases, interest rates could be lower and the stimulus to the economy greater.
That idea has now suffered a setback, with a great deal of sympathy having been generated in the ANC that wages — even of the best paid among workers — are too low.
In one of his only off-the-cuff remarks on the labour unrest, Zuma said he thought starting wages in the mining industry were too low. Yet these wages are more than double those in the very low-paying service sectors of the economy.
The fact is that, on all the various occasions of social compacting, the government has extracted very little from labour other than its electoral support. Lowering entry-level wages and linking wages to productivity — two of the biggest challenges in the economy — have never so much as been put on the agenda.
Besides its inability to extract any real concessions from labour, the government now has a more pressing problem to deal with. It was the broader social contract between the government and the people that gave way at Marikana and in the wildcat strikes that followed. That is something that cannot be fixed through a leadership pact and which requires a more direct strategy of political engagement.
• Paton is writer at large.
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