COSATU Media Monitor, 04 February 2013

[Norman Mampane]

COSATU Media Monitor

Monday, 04 February 2012

 

COSATU has rejected the 16% increase at NERSA Public Hearings. The electricity campaign continues with a night vigil earmarked the night before NERSA announces the outcome.

 

COSATU has served a Section77 Notice at Nedlac on the 11^th December 2012

http://www.cosatu.org.za/show.php?ID=6785

 

COSATU E-toll Campaign goes ahead in  February 2013.

http://www.cosatu.org.za/show.php?ID=6793

 

Stop Commodification of public goods!

 

The articles in the Media Monitor do not represent the views of COSATU. They are selected because we believe they deal with topics of interest to our readers, who will then be informed on how the media is reporting and commenting on these topics. It will enable them, if necessary, to respond to inaccurate, misleading or biased reports or comment.

 

COSATU is on Twitter and also has a Facebook Page!

 

 

To participate and follow the Federation debates hashtag on Twitter #cosatu and/or search for Cosatu Today after logging.

 

 

 

Contents

 

Workers’ Parliament

Ø  Afcon volunteers strike in Port Elizabeth

Ø  'National Health Insurance wants cheap labour'

Ø  NUM loses engine of power in Rustenburg

Ø  'ANC endorses plan to ban teachers' strikes’

Ø  Black artists denied their royalties

Ø  Clothing jobs hang in balance

 

COSATU

Ø  ANC, Cosatu on collision course over youth subsidy

 

South Africa

Ø  ‘Sack Pule’ calls over claim lover netted R6m from indaba

Ø  Shabangu's Anglo grievance was justified

Ø  Serious lack of coal supply for Eskom – Roadmap

Ø  Police keep eye on scene of railways riot

Ø  SA to miss digital conversion date

Ø  Concern over SABC board resignations

Ø  Building cartel being probed - report

Ø  Government, business seek common ground

Ø  ECONOMIC WEEK AHEAD: Factory data set to show a quiet December

Ø  Youth unemployment needs jump-start

Ø  'New SIU boss must be of utmost integrity'

Ø  Bid rigging scandal rocks construction industry

Ø  Bafana must be applauded

 

Alliance

Ø  POLITICAL WEEK AHEAD: Cabinet convenes to thrash out key issues

Ø  SACP mourns Mnguni

Ø  Zuma meets with business leaders

Ø Take a hike, Eskom!-ANC rejects proposal

 

International

Ø  Barclays CFO is set to retire

Ø  China's shortage threatens economy

Ø  Africa Command HQs to stay in Europe

Ø  US employment report points to steady economic growth

Ø  Iran agrees to nuclear talks with top powers

Ø  BP accused of price manipulation

Comment

 

Ø  COSATU E-toll Campaign goes ahead in February 2013

Ø  COSATU Section77 Notice served at Nedlac on the 11th December 2012

Ø  COSATU participated in the NERSA Public Hearings on electricity tariff increase and rejected 16% increase

Ø  No longer a special case to be handled with kid gloves

Ø  LETTER: Lonmin leaders led from the rear

Ø  EDITORIAL: Giving is bigger than the gift

Ø  Venezuela will still deify Chavez

Ø  Eskom: plotting SA’s power future

Ø  Let Farlam Commission decides

Ø  Inside Labour

 

1.          Workers’ Parliament

Afcon volunteers strike in Port Elizabeth

Michael Sherman, Sapa, 03 February 2013

 

·          

A group of about 30 Afcon volunteers went on strike hours before the quarterfinal match between Cape Verde Islands and Ghana in Port Elizabeth.

Police officers looked on as they toyi-toyed and sang, across the road from the Nelson Mandela Bay stadium, where the match was scheduled to start at 5pm.

They claim the Confederation of African Football (Caf) had promised to pay the mostly unemployed young men and women R1 000 after their five-day training.

"They didn't give us the money for the training. We started our training on the 5th of January and ended on the 16th," Themba Tshayingwe said.

Caf officials were not available for comment.

"They [CAF] promised us R1 000 at the training," Tshayingwe continued. "They said for the period of five days we would be paid R200 per day. Now they say they don't want to pay us. They then said they are not responsible for paying us. So who then is responsible?"

Tshayingwe said around 500 volunteers had not received their money, and many of them had used loan sharks to get to the stadium. "Bear in mind we are using our own bus fare here. Some of us went to loan sharks for the bus fare." 

Another volunteer, Wonder Mkokeli, said they would not work until they had been paid. "Up until our issues are resolved we are not going to work today. That's the decision we told these volunteers." Mkokeli said they had asked the mayor to intervene.

"We've written several letters to the mayor asking him to intervene because this issue started a long time ago. "We don't have money, we are unemployed. We want to be here, we want to make this tournament a success, but now they don't keep their promises." – Sapa

_____________

'National Health Insurance wants cheap labour'

Mia Malan, M&G, 01 February 2013

 

·          

Private doctors have accused the health minister and the Health Professions Council of South Africa of a having a "hidden agenda"

By introducing low guideline tariffs, they were trying to force down fees to a level that the government's planned National Health Insurance (NHI) scheme could afford, according to Chris Archer, chief executive of the Private Practitioners' Forum.

"Without the private health sector, the government won't be able to provide universal healthcare for all South Africans. But it can't afford realistic private practice rates. This is clearly why the HPCSA is apparently so determined to press ahead with its plan, despite the widespread resistance to it that has developed across the professions," Archer said.

Doctors said Health Minister Aaron Motsoaledi was putting pressure on the council, which regulates health practitioners, to implement the tariffs before the NHI is rolled out countrywide within the next five years. But Motsoaledi said it was "nonsense" and the council was merely attempting to protect patients from exorbitant rates in "the law of the jungle where there are no guidelines on doctors' fees".

According to Usuf Chikte, from the council's medical and dental board, most of the complaints the HPCSA received from patients related to overcharging. "In some cases, certain practitioners charge more than four to five times the medical aid rates and they feel it is their right to do so in terms of the law," he said.

In August last year, the HPCSA backtracked on its decision to gazette standard tariffs for doctors and dentists after medical associations threatened them with legal action because of a lack of consultation. According to the South African Dental Association (Sada), dentists' tariffs were on average between 30% to 40% lower than the professional fees published by the council seven years ago. In 2006, the HPCSA's professional tariff for a comprehensive oral examination was R705 but, in the 2012 list, an amount of R245.21 was recommended. The same was true for a porcelain crown: R2690 was allocated for it in 2006, but only R1064.87 in 2012.

"At such unrealistic rates, doctors won't be able to afford to practise. They will close down their practices and go elsewhere … The NHI will be a dead dodo, because there will be very few private practitioners left to contract for services, which the state won't be able to provide on its own," Archer said.

By the end of last year, South Africa had only 38652 registered doctors and 5652 dentists for a population of 51-million.

Professional tariff rates
The HPCSA used an inflation-adjusted version of the 2006 national health reference price list, a guide that was used by the medical schemes industry to determine reimbursement rates, which the HPCSA had adopted as an ethical, or maximum, tariff. The 2012 tariffs are in effect the 2006 reference list rates plus 46.66%. But the 2006 reference list tariffs were significantly lower than professional tariff rates, calculated by the South African Medical Association (Sama) and Sada, which the HPCSA published in 2006. Doctors argue this should have been used as the basis from which to work because these tariffs were aligned to inflation or the consumer price index.  

Although the new tariffs won't be binding, doctors argue that patients and medical aids will gravitate towards them. "The concern with a published guideline that is unreasonably low is that it will guide public expectation in respect of what should ethically be charged," said Maretha Smit from Sada. "It is simply unfair to expect from a highly qualified professional to go through the humiliation of patients continuously calling him or her unethical as a result of an unreasonable guideline in the public domain."

After withdrawing the publication of its guideline tariffs last year, the HPCSA opened up the process for public participation until February 21, but doctors and dentists are not convinced that the process of determining new tariffs will be fair.

"We are watching the process with a hawk's eye and are highly suspicious of it. We strongly suspect there is an already written document with tariffs lying on someone's desk that will be accepted, regardless of our input," Smit said. "If that happens, we will go to court to get an interdict against the result of the consultation process, as our Constitution requires proper consultation in such cases."

However, Chikte said: "The HPCSA has no hidden agenda. We have not received a mandate from government to get private tariffs down. We are willing to obtain, waiting to receive and wanting the broadest range of comments from the widest possible cross-section of society to assist us in the determination of guideline tariffs."

According to Motsoaledi, the NHI white paper will be released later this month. "The NHI will be there within the next five years. Doctors who outprice themselves won't be part of the NHI; I don't know what they will be part of. I, as the health minister, need to make sure healthcare is affordable to all South Africans and I can't be expected to be neutral in the matter."

---

A decade of blips on the tariffs radar

2004: The Competition Commission rules that doctors are not allowed to sit around a table to discuss fees as it amounts to price fixing.

2006: The Council for Medical Schemes develops a national health reference price list (NHRPL) and the Health Professions Council of South Africa (HPCSA) adopts it as its ethical, or ceiling, tariff. This was, in essence, a list that medical schemes would use to determine reimbursement tariffs. The country’s medical and dental associations calculate professional rates that the HPCSA publishes. These rates are significantly higher than the NHRPL tariffs.

2008:  The HPCSA scraps its ethical tariff list as the health department decides to publish its own reference price list that will be used instead.

2010: The North Gauteng High Court declares the health department’s price list invalid owing to a lack of consultation with stakeholders about determining prices.

August 2012: The HPCSA announces it will publish new guideline tariffs for doctors and dentists. Doctors consider the rates unreasonable and claim they were not consulted. The council withdraws the tariffs and opens the process for public participation.

January 2013: Health Minister Aaron Motsoaledi says he is in discussions with the Competition Commission to overturn its 2004 ruling and start a collective bargaining process to allow doctors, medical schemes and government to discuss fair prices.

_______

NUM loses engine of power in Rustenburg

Natasha Marrian, Business Day, 04 February 2013

 

·          

THE National Union of Mineworkers (NUM) is set to fight to regain ground in the Rustenburg area as Friday marked the end of its recognition agreement with Impala Platinum (Implats), where the first of the wildcat strikes in the mining sector broke out early last year.

The NUM is bleeding membership in its largest and most influential region, Rustenburg, prompted by a host of factors, including its intense rivalry with splinter union, the Association of Mineworkers and Construction Union (Amcu). Implats has served the union with its final month-long notice — which concluded on Saturday — before terminating the recognition agreement.

A roaring, violent sea change has taken place across Rustenburg, leading to the country’s oldest and largest union being dethroned across the platinum belt.

It is understood that Lonmin and Anglo American Platinum too may soon begin the process Implats embarked on last year, of informing the NUM that it is no longer the majority union.

While February 2 marked the end of the NUM’s recognition agreement at Implats, the union says it will not let go without a fight and approached the labour court on Friday to interdict the move. However, the court has dismissed the application, saying it had not deemed the matter as urgent.

The NUM’s membership at Implats has dropped from 20,000 members — about 75%, to 3,300 members — about 10%, paving the way for the company to negotiate new recognition agreements with other unions, including Amcu.

Implats spokesman Johan Theron says in terms of the company’s recognition agreement with the NUM, it has to maintain a membership of 50% plus one.

The union had been given notice that its membership had fallen last year, a courtesy to allow it to regroup and regain ground. But it failed to do so by the December deadline.

NUM general secretary Frans Baleni, says it plans to regain lost ground by rolling out "education programmes for the youth".

He says the NUM has lost "some" membership at Implats, but it is "difficult to tell" at other mines in the region.

"Other mines are still subject to verification," he says.

Mr Baleni says the NUM will decide whether to appeal the labour court’s ruling or embark on further legal action this week.

In Mr Baleni’s secretariat report to the NUM’s national congress last year, he placed membership figures in Rustenburg at 94,699, with a growth of only 4% year on year.

The NUM’s last membership figures submitted to the Department of Labour stood at 308,628. This is likely to change dramatically after the union conducts its next audit in about April.

Mr Baleni describes the region, which "by virtue of its size, can determine the union’s agenda", as one with a high leadership turnover and an "unpredictable membership".

Implats workers were the first in the region to reject the NUM. It is estimated that its membership at Lonmin has fallen dramatically — with Amcu gaining about 16,000 new members there and about 27,000 new members at AngloPlats, effectively dethroning the NUM as the majority union.

Amcu treasurer Jimmy Gama says the union is now making headway in the gold sector, with membership growth of about 15,000.

A worker from the gold sector, Sithembile Ntulo, who has been a NUM member since 1987, says he has been "trying" to leave the union since September, but has battled to do so, due to his inability to get access to local leaders.

"The NUM continues to take my money, but they don’t do anything for me," he says.

Mr Baleni blames the NUM’s failings on employers — who sidestepped ordinary bargaining processes — and on bitter rivalry for lucrative leadership positions in the union. "We are a victim of our own successes, there is an army of people out there who are aggrieved because they have lost leadership positions and therefore destabilise things," he says.

Despite this, the NUM’s political muscle remains intact as its president, Senzeni Zokwana, was recently elected to the African National Congress’s (ANC’s) top leadership structure, the national executive committee. Ironically, its focus on politics has caused some disenchantment among members who feel the union remains too close to the powers that be — both in the state and in big business — to adequately represent them.

The union will have a lot on its plate this year — aside from stitching together its tarnished reputation and regaining the trust of lost members, it will prepare, one again, to begin work on the ANC’s 2014 election campaign.

While the NUM regroups, Amcu will have to pull out all the stops to maintain its growth. It lacks the experience and organisational muscle of the NUM and will have to dig deep to manage the expectations of new members — who, ultimately, stand to lose if it fails.

______________

'ANC endorses plan to ban teachers' strikes’

Eyewitness News, EWN, 03 February 2013

JOHANNESBURG - The ANC and trade union Cosatu look set to clash heads, as a report has emerged that the ruling party wants to make it illegal for teachers to go on strike.

Today’s Sunday Times has quoted insiders who attended the ANC's national executive committee lekgotla this week - where members reportedly endorsed a proposal to declare education an essential service and ban teachers' strikes.

The Congress of South African Trade Unions has rejected the decision and the South African Democratic Teachers’ Union (Sadtu) is furious at President Jacob Zuma's proposal.

The paper quotes Sadtu General Secretary Mugwena Maluleke as saying the decision to adopt Zuma’s proposal is not the answer to averting labour strikers.

“It is meant to address an irritation that is strikes. But strikes do not affect education, because teachers don’t strike every day.”

Meanwhile, government has reportedly spent about R2.3 billion on surplus teachers whose jobs have been cut - even as there is a shortage of at least 15, 000 teachers at schools across the country.

________________

Black artists denied their royalties

Business Report, 03 February 2013

Rodriguez is but one of many artists who never received their music royalties in South Africa, and they were mainly black.

On October 8 1962, Solomon Linda, the singer and composer of Mbube, which became the pop hit The Lion Sleeps Tonight and featured in the movie The Lion King, died without receiving royalties for his work.

Linda sold his rights of the song to Gallo Record Company for 10 shillings.

By 1949, Mbube had sold over 100 000 copies in South Africa.

In 2000, South African journalist Rian Malan wrote a feature article for the Rolling Stone, describing Linda’s story and estimating the song had earned $15 million (R135m) for its use in the The Lion King.

In 2004, Linda’s descendants, with the backing of the government and Gallo Records, sued the Walt Disney Company for its use in the The Lion King and stage musical without paying royalties to them.

The settlement reached between the parties was that Linda heirs would receive payment for past uses of The Lion Sleeps Tonight and an entitlement to future royalties from its worldwide use.

The Manhattan Brothers was a popular singing group in South Africa in the 1940s and 1950s.

Joe Mogotsi, a member of the group, wrote in his book, Mantindane, that the Manhattan Brothers’ recording career began to spiral soon after it signed with Gallo but knew nothing about copyright.

“Years later, when we found out about our rights, and wanted our dues from the songs we had written and recorded, we were told under South African law blacks were not entitled to royalties.” – Wiseman Khuzwayo

_____________

Clothing jobs hang in balance

Nompumelelo Magwaza, Business Report, 03 February 2013

The fate of 20 000 textile workers depends on the outcome of a wage debate sparked by non-complaint companies’ court action against the Department of Labour in the KwaZulu-Natal High Court last week.

The five Newcastle clothing manufacturers, which are also part of the United Clothing and Textile Association (Ucta), are seeking a review and order setting aside the minster’s decision to extend the wage agreement to clothing manufacturers that are not members of the bargaining council, on a basis that such a decision was unlawful and unconstitutional.

The application has also been brought against the Bargaining Council for the Clothing Manufacturing Industry and the Southern African Clothing and Textile Workers’ Union (Sactwu).

According to papers before the court, owners of these factories argue that the extension of the agreement to non-parties compelled their factories to pay staff minimum wage. They further stated that if the factories complied with the minimum wage provisions, four of the five would close and the fifth would have to fire a third of its staff.

At the centre of the debate was also the wage model based on productivity, which Ucta believed would create more jobs in the clothing and textile manufacturing industry. Chairman Ahmed Paruk said the association believed that workers should be paid according to their productivity. “This model encourages workers to produce more and also (to) beat the deadline. This has worked in China, Pakistan, Mauritius, where most the retailers worldwide get their merchandise from.”

Paruk’s argument was supported by the Centre for Development & Enterprise (CDE) report on how an alliance of organised labour, the state and some firms, was undermining labour-intensive growth. “The struggle of the Newcastle clothing producers to remain in business is symptomatic of the difficulties involved in promoting labour-intensive growth in South Africa,” the CDE said.

The centre believes that the Newcastle case was very important as Chinese-South African entrepreneurs are an asset for the country. “Their factories point the way to how this country could encourage more industries providing employment for low skill workers. South Africa can compete with Asia.”

Allowing low-wage producers in places like Newcastle to continue to exist will not harm jobs in the upper-end of the industry. “Instead it will accommodate the needs of lower-skilled workers, the unemployed and poorer consumers who purchase basic clothing goods rather than the pricier, branded fast fashion products.”

Sactwu previously said workers in these factories earned R250 to R400 a week, far below the legally prescribed minimum of R534 a week. Sactwu said last week that the CDE report was part of a carefully orchestrated campaign to attack compliant firms and undermine the democratic government’s decent work agenda.

“In essence, it masks illegal under-payment of clothing workers with an academic veneer and promotes job losses in companies which obey the law.”

Sactwu’s general secretary, Andre Kriel, said at a broader level this was a political and right-wing economic aim to dismantle the collective bargaining legal framework agreed to by business, labour and the government at Nedlac and as subsequently enshrined in the Labour Relations Act. “The report promotes ever harsher exploitation of the poorest of the poor.”

He said the industry wage agreement did make provision for productivity payments.

According to the CDE, owners felt that there was a failure to understand how difficult it was to compete at the bottom of the clothing market.

“Profit margins are very low, and tight deadlines are stressful for owners and workers. In this highly competitive environment, missed deadlines can turn a small profit into a major loss as penalties are imposed and orders cancelled.”

Some owners live on their factory premises, mobilising their family to work long hours in the factory if a deadline is in danger of being missed.

But Sactwu said: “This will ignite a race to the bottom, the rise of a sweat shop economy in the domestic clothing industry and extreme exploitative conditions for vulnerable workers.”

_____________________________ 

2.    COSATU

ANC, Cosatu on collision course over youth subsidy

 Natasha Marrian, Business Day, 04 February 2013

 

THE African National Congress (ANC) is set to announce a far-reaching decision on the youth wage subsidy on Monday. It is likely to set it on a collision course with its labour ally, the Congress of South African Trade Unions (Cosatu).

The youth wage subsidy, after being announced by President Jacob Zuma in his 2010 state of the nation address, has been on hold ever since, despite Finance Minister Pravin Gordhan setting aside R5bn for it in his 2011 budget.

The stumbling block to its implementation has largely been Cosatu’s argument that subsidising companies to hire young people would jeopardise the jobs of older workers. Negotiations over the subsidy have been before the National Economic Development and Labour Council for two years.

Delegates at the ANC’s policy conference last year had apparently rejected the youth wage subsidy, with Mr Zuma raising the prospect of a job-seekers’ fund in his closing address.

But a senior government source, who attended the ANC’s three-day lekgotla last week, said the subsidy was "back on the table" after it was felt that the unions could not be allowed to hold the party to ransom over the issue. Decent employment emerged through young workers obtaining experience and working their way up.

It was a matter of articulation, but a form of the subsidy would be announced today, the source said. The subsidy was not seen as a panacea to the challenge of youth unemployment and might form part of a raft of measures.

The ANC’s largest province, KwaZulu-Natal, supports the subsidy. Last year Premier Zweli Mkhize said the province was ready to implement the subsidy. Mr Mkhize was elected ANC treasurer in Mangaung in December.

On Thursday, ANC policy chief Jeff Radebe made clear that the issue of a youth wage incentive to encourage firms to hire young, inexperienced workers was back under consideration. He said the ANC would hold a bilateral meeting with Cosatu before or shortly after the state of the nation address.

New dynamics are at play in the relationship between Cosatu and the ANC, with the federation president, Sdumo Dlamini, now serving on the ANC’s national executive committee. The ANC has criticised Cosatu for its "public posture" towards its allies, with this criticism largely directed at its general secretary, Zwelinzima Vavi.

A Cosatu leader on Sunday said they would be meeting the federation’s affiliates this week to discuss managing the new arrangement and the relationship between Cosatu’s top leaders.

ANC secretary-general Gwede Mantashe will brief the media today on whether the proposals put before the lekgotla were endorsed. These decisions will inform an upcoming Cabinet lekgotla and would also feed into Mr Zuma’s state of the nation address on February 14.

Last Tuesday, the ANC met Cosatu’s second-largest affiliate, the National Union of Metalworkers of SA (Numsa). Numsa is leading protests against Eskom’s application to the National Energy Regulator for a 16% electricity tariff hike.

Numsa general secretary Irvin Jim on Sunday confirmed the meeting in which his union presented its case on why the application should not be granted. He said the meeting was cordial and Numsa understood that the ANC had to hold its own discussions on the matter.

The source at the ANC lekgotla said the Eskom price hike issue was debated. The spirit of the discussion was that prices had to be controlled to boost manufacturing and create employment.

Another source on the ANC’s national executive committee confirmed reports that the party had endorsed a call to declare education an essential service. The insider said education emerged as a "facilitating factor" for creating employment opportunities — the main focus of the lekgotla.

____________

3.    South Africa

‘Sack Pule’ calls over claim lover netted R6m from indaba

 Paul Vecchiatto,Business Day, 04 February 2013

 

FALLOUT from Communications Minister Dina Pule’s involvement in last year’s ICT Indaba could affect her political career.

On Sunday, the Sunday Times reported that an investigation by Werksmans Attorneys on behalf of MTN revealed that Ms Pule’s alleged lover, Phosane Mngqibisa, benefited improperly from the conference to the tune of R6m.

Public Protector Thuli Madonsela expected her investigation into Ms Pule’s alleged conflict of interest to be completed by the end of March. Parliament’s ethics committee has also started an investigation.

Opposition spokesmen have called on President Jacob Zuma to fire Ms Pule. They say she no longer is necessary to the Cabinet as she has lost her place on the African National Congress national executive committee in December. They also say her department has made no progress on key issues.

"We still don’t know … Telkom’s future even though Ms Pule was supposed to have made a recommendation to Cabinet in September," Democratic Alliance MP Marian Shinn said. "The allocation of spectrum is still in the air and digital migration is going nowhere." Congress of the People MP Juli Kilian said her party challenged Mr Zuma to prove his commitment to eradicating corruption by removing Ms Pule. She said Ms Pule had failed to appear before the communications committee since the ICT Indaba in June last year.

____________

Shabangu's Anglo grievance was justified

Jan de Lange ,Miningmx 01 February 2013

 

[miningmx.com] – THERE are always two sides to every story. The same goes for the matter between Anglo American Platinum (Amplats) and mines minister, Susan Shabangu, regarding the proposed cutting of 14 000 jobs in mines at Rustenburg - now on hold.

Up until two weeks ago, Shabangu was the mining industry’s protector and hero in the government owing to her opposition to nationalisation. But overnight she has turned into a witch following her tirade against Amplats and thinly veiled threats to cancel mining rights licenses.

This caused Anglo American’s market capitalisation to fall by R40bn and Amplats’ by R14.6bn. There was no sound reason for questioning the validity of Anglo’s mineral rights, and Shabangu’s comments were without doubt extremely irresponsible.

All that she achieved was to confirm the world’s stereotypical classification of our country that we are quickly moving to a typical African banana republic. Especially in London, where Anglo is listed and there has long been pressure on it to reduce its exposure in South Africa.

The other side of the story revolves around a question that nobody has yet been able to answer: why did Shabangu or anyone in the Government, the ANC and even in Cosatu not say a single word between 2008 and 2010 when Amplats declared no less than 25,000 workers redundant and dismissed them?

Yes, Amplats closed three mines during this period – also around Rustenburg. However, the restructuring and cutting was done completely differently than the plans announced two weeks ago by Amplats.

In the first place, there never was any announcement that Amplats was abolishing 25,000 posts. The process started with fairly generous but affordable retirement packages offered throughout the group. The offers that were accepted created space to re-deploy workers after three shafts were closed and jobs in the shafts and the surface support services were scrapped.

The next step – after the relevant shafts were identified – was to discuss the job cuts with the unions, before any decisions were made. At the same time there were in-depth and ongoing talks with Shabangu and with the top management of her department.

In fact, there are sources in this ministry who say that Neville Nicolau, the CEO at the time, even discussed the job cuts two or three times with former President Kgalema Motlanthe and with President Jacob Zuma to make sure that the reasons for them were properly explained.

At her news conference after the latest restructuring, Shabangu said it was a huge problem for the country as a whole when 14,000 workers were going to lose their jobs. In a developing country with a measured unemployment rate of 25% and an estimated actual unemployment rate of around 50%, no one could disagree with her about this.

These figures are among the highest in the world, and a CEO who has 14,000 peoples' jobs declared redundant in our country would have to motivate this properly and at a high level to the government before he announces it publicly.

There are several indications that Amplats did not do so.

Shabangu said there was a meeting last year in September with Cynthia Carroll, Anglo’s CEO and chairman of Amplats. Carroll told Shabangu at the time that restructuring was being considered.

“It wasn’t news to us. The whole year they talked about the challenges facing the platinum sector – and other producers too. At our last meeting we agreed that they would submit a plan to me,” Shabangu said.

Well, on the Thursday (January 10) before the announcement, Amplats made an appointment with Shabangu for the same day that the announcement would be made. However, the announcement was made before the meeting, and it doesn’t look as if Amplats spoke to Shabangu on the day of the announcement.

A public announcement was therefore made about a matter of national interest, but the minister concerned would only be informed after the announcement. That sounds like looking for trouble. And it makes one wonder whether Carroll really had such good relations with the government during her term of office as she is often given credit for.

This naturally allowed Shabangu the opportunity to give a clear message to the two new CEOs at Anglo American and Amplats, Mark Cutifani and Griffith at Amplats respectively, that she is the regulator of the mines in South Africa, that she has much more experience in her job than they have and that they are expected to act accordingly.

Perhaps Cutifani and Griffith need such a message. But South Africa did not need it to be delivered at such high cost.

_____________

Serious lack of coal supply for Eskom – Roadmap

Martin Creamer, Miningweekly, 01 February 2013

 

The current coal supplies to State electricity utility Eskom will decline rapidly after 2015, when existing large-scale mines' suppliers reach the end of their lives and require recapitalisation, says South African Coal Roadmap steering committee chairperson Ian Hall.

“There’s a serious, serious supply shortage in South Africa to supply Eskom,” says Hall, who was addressing the IHS McCloskey coal export conference in Cape Town.

From 2013 to 2019, 120-million tons of new capacity need to come on stream.

“South Africa’s biggest challenge right now remains supply to Eskom over the next six years,” says Hall.

Of the four-billion tons of coal that Eskom will need over the next 40 years, two-billion tons will have to come from new sources.

“So there’s a huge challenge but also potentially a huge opportunity,” he adds.

Three-quarters of South African coal is used domestically.

The roadmap, which attempts to chart the best way forward, will be completed by the end of February after two years of work.

The cost of electricity changes under each of the scenarios that it puts forward.

Its goals of helping to secure coal contracts for Eskom’s new and existing power stations and building 120-million new tons of capacity in the next six years are seen as a very tall order.

While Eskom is under enormous pressure to reduce its costs, coal prices are poised to rise by between 9% and 10% a year.

The reality is that the 120-million tons of new capacity has to come from new capital invested in areas that have poorer coal quality and which are further away from the power stations.

The cost of the 120-million tons is expected to represent a step-change. 

An agreement on coal pricing to create the incentive to build the mines needs to be reached urgently.

The Waterberg, with far more than half of South Africa’s remaining coal resources, has to be accessed in order to meet the commitments.

Policy and legislation needs to be aligned attractively and there has to be clarity on carbon tax and the implications of declaring coal a strategic resource need to be woven into the amendments to the Minerals and Petroleum Resources Development Act.

Coal, Hall says, will remain one of the top two primary energy sources in the world until 2035.

In the last ten years, coal has accounted for 45% of all energy demand growth in the world and in the run-up to 2035, this growth for coal will continue, fuelled by urbanisation in the developing world.

Coal, despite the bad press, will remain the second-biggest primary energy after oil even in 2035, according to the International Energy Agency, and the largest source of electricity generation.

“It will remain the biggest in South Africa despite what happens on all the other fronts,” Hall says.

Last year coal was the biggest commodity producer in South Africa by value and the resources and reserves study of the Council of Geosciences is expected to show that South Africa still has more than 60-billion tons of recoverable coal.

While South Africa is the twenty-fourth largest economy in the world, it is the twelfth largest contributor of greenhouse gases.

Seaborne trade patterns are expected to change between now and 2035 with India becoming the single-biggest seaborne coal importer in the medium term, which South Africa is well positioned to exploit.

Edited by: Creamer Media Reporter

________________

Police keep eye on scene of railways riot

Chris Makhaye, The New Age, 04 February 2013

Police kept a presence yesterday at the volatile KwaMnyandu station in Umlazi south of Durban where two trains were torched by angry commuters last week.

At least four locomotives were set alight, causing damage of up to R40m.

This happened after thieves stole cables nearby, causing delays to trains to and from Umlazi and leaving thousands of commuters stranded.

At Mnyandu station a group of angry commuters torched a train and destroyed station infrastructure.

Calm was only restored when the police arrived and emergency workers were able to douse the flames.

A train driver who was trapped in one of the trains was rescued.

Four men appeared in the Umlazi Magistrate’s Court on Friday in connection with the torching of two trains in the area. The four were arrested after a riot sparked by the disruption of services. Metrorail spokesperson Thandi Mkhize said the torching of trains was unacceptable behaviour and a criminal act.

Mkhize said: “No amount of justification can be deemed an acceptable reason to torch trains.

“We will work closely with law enforcement authorities to bring these criminals to book.

“We urge our commuters to work with us and the law enforcement authorities to identify the perpetrators and let the full might of the law take its course.

“We are deeply concerned at the pattern of these incidents which result in the destruction and vandalism of public assets which suggests escalating criminality in our environment which has no other motive but to paralyse our system to achieve narrow selfish ends.”

Work to repair damaged infrastructure was still under way yesterday.

__________

SA to miss digital conversion date

Sapa, Business Report, 03 February 2013

 

Johannesburg - South Africa will miss the 2015 deadline to convert its analog broadcasting signal to digital, according to Sunday's Rapport newspaper.

 

The delay will mean that analog television will use up bandwidth which is necessary for faster internet.

 

The International Telecommunication Union (ITU) has said that after June 2015 countries will no longer be protected against disruptions of the radio waves that are used for analog television broadcasts.

 

The original plan had been to make the switch from the analog to the digital signal by 2008.

 

A communications department official told Rapport that the government would have to negotiate with the ITU to protect its analog broadcast network after the 2015 deadline.

 

"There is not enough time left. All we can do now is to extend the cut-off date," assistant director for information and communication technology, Themba Phiri, told Rapport.

 

The switch from analog to digital requires that the government distribute between five and seven million decoders to poor households. It was estimated it would cost R4.5bn to subsidise five million decoders.

 

Another problem was that the department had insisted that the decoders be manufactured locally.

 

A further hurdle was that Communications Minister Dina Pule and e.tv were involved in a legal battle to determine who should be in charge of the decoders and the technology used to convert digital television signals.

 

Two weeks ago Pule indicated she would appeal a court ruling that she acted improperly in putting state-owned broadcasting company Sentech in charge of this.

___________

Concern over SABC board resignations

Khulekani Magubane, Business Day, 03 February 2013

 

Public broadcast support group, the SOS Coalition has written an open letter to President Jacob Zuma and the chair of the portfolio committee on communications Sikhumbuzo Kholwane, regarding the coalition's concern over the reported resignation of Patricia Makhesha from the South African Broadcasting Corporation (SABC) board.

Ms Makhesha is the seventh non-executive to make and exit from the board since the board’s appointment in 2010. This has raised concerns within the SOS coalition about corporate governance and ministerial influence over the board of the state broadcaster.

The letter, dated on Friday and written by broadcast researcher Kate Skinner, called for a special hearing on the issues pointed out by outgoing board members to be held by the parliamentary committee on communications.

"Further, it is the duty of Parliament to investigate and make public the reasons for Ms Makhesha's resignation. SOS believes strongly that the Presidency and Parliament cannot simply accept these letters of resignation and move on," the letter read.

Governance challenges have dogged the state broadcaster since it has been unable to maintain its board consistently. The SOS coalition managed to get the letters of resignation of most of the outgoing board members from the Presidency.

"Among others, it is shocking that national cultural treasures such as Barbara Masekela and communications-industry leaders such as Feleng Sekha have found it impossible to stay and fulfil their duties on the SABC board," the letter read.

SOS coalition co-ordinator Sekoetlane Phamodi said the resignations of members from the SABC board were an urgent matter that needed to be addressed by the portfolio committee as soon as possible.

"We believe this must be addressed as soon as they can meet again. This needs to be on top of the agenda. We must have the board that is not compromised in its stability because a compromised board will lead to the state broadcaster being compromised as a whole. We need intervention as a matter of urgency," Mr Phamodi said.

Mr Phamodi said Mr Zuma was directly involved as recommendations were made to him regarding the board. He said while reasons for Ms Makhesha’s resignation were not known, the coalition had reason to believe that she, like others, left because of corporate governance within the state broadcaster.

"We don’t know what her reasons are. It is mostly speculation but we suspect that given the track record of members’ resignations, it is quite possible that her resignation had something to do with corporate governance, but we do not know for sure," he said.

____________

Building cartel being probed - report

Sapa, Business Report, 03 February 2013

 

Johannesburg - A probe shows top construction companies fixed state and other contracts worth billions of rands, City Press reported on Sunday.

 

Affidavits detail a decades-long, formal kickback and price-fixing racket that allegedly involved prominent names in the industry.

 

At least 11 affidavits were made by executives from Stefanutti Stocks to the Hawks serious economic offences investigator and the National Prosecuting Authority, the newspaper reported.

 

The statements were also handed to the Competition Commission for its probe into construction industry tender-rigging, thought to involve contracts worth at least R30bn.

 

According to the affidavits the projects "fixed" included the National Stadium (FNB Stadium) in Soweto, the Coega development project in the Eastern Cape, Green Point soccer stadium in Cape Town, the Nelson Mandela Bridge in Johannesburg, and the Gautrain.

 

In their statements the executives admit they may be guilty of fraud, corruption and racketeering, and offer to co-operate with police in exchange for immunity from prosecution. So far only one person had received this, according to the report.

 

Some of the companies allegedly involved in the bid-rigging were: Wilson Bayly Holmes Ovcon, Stocks & Stocks civil engineering, Murray & Roberts, Group Five, Concor, and Aveng.

_______________

Government, business seek common ground

Ntsakisi Maswanganyi ,Business Day,  04 February 2013

GOVERNMENT and business leaders presented a united front after an almost four-hour meeting at the Sefako Makgatho presidential guest house in Pretoria on Sunday emerging from the talks expressing support for the National Development Plan (NDP) and growing the economy to create jobs.

In recent weeks, the relationship between government and business has been strained. Last month’s announcement by Anglo Platinum that it would embark on a restructuring process that could result in job losses and the controversial First National Bank advertising campaign did not go down well with the government. While the government and business said the discussions were "fruitful" and "characterised by urgency", neither would go into details of what was discussed.

"There is nothing concrete yet. We were meeting for the first time. It was a big group. We flagged issues … to share common ground," Black Business Council president Ndaba Ntsele said.

The meeting, which was a follow-up to discussions held during the recent World Economic Forum in Davos, was attended by President Jacob Zuma, Cabinet ministers and business leaders.

Mr Zuma said the meeting was important to establish common ground in order to achieve the country’s goals of eradicating poverty, and creating jobs.

"If we talk about economic development, infrastructure, economic drivers, it is things that will create employment. We want business to participate. It was important therefore that we have this meeting," Mr Zuma said after the meeting.

There appeared to be a strong emphasis on the NDP despite the lack of detail about the discussions.

The plan aims to eliminate poverty and reduce inequality by 2030, and create 11-million jobs by then through the promotion of employment in labour-absorbing industries and raising exports and competitiveness, among other means.

The private sector would have to grow significantly to contribute to the creation of the jobs targeted in the NDP, Business Unity South Africa president Jabu Mabuza said on Sunday.

"So we are saying (that) business unequivocally endorses the National Development Plan," Mr Mabuza said. "We want to come to government and say these are the challenges that would stop us from contributing to the growth. This is what we as business are going to do about these challenges."

Some analysts believe that the meeting would go a long way in improving confidence levels. Business confidence was weak for most of last year owing to violent strikes, sovereign credit rating downgrades, and policy uncertainty.

"The move by President Zuma to follow up the Davos discussions with the meeting is a step in the right direction to improve confidence," Investment Solutions chief strategist Chris Hart said.

Mr Hart said he was "reasonably optimistic" South Africa would see some restoration of business confidence this year amid an expected moderate recovery in the global economy.

The meetings were set to continue, according to Mr Zuma

"We are meeting in two months’ time to deal with the specific constraints that business will have identified, and we will discuss. It is going to be ongoing. A sense of urgency prevails and we want to ensure that we keep the momentum," he said.

______________

ECONOMIC WEEK AHEAD: Factory data set to show a quiet December

 Ntsakisi Maswanganyi , Business Day, 04 February 2013

 

FIGURES due this week are expected to show that growth in manufacturing remained weak in December, indicating the extent to which slower global demand and strike activity have affected the sector during the year.

Standard Bank economist Thabi Leoka notes that December is usually a weak month as factories close for Christmas.

Manufacturing production figures for December are due on Thursday from Statistics South Africa.

"We expect manufacturing production to have slowed to 2.6% year on year in December from 3.4% in November, but improved on a quarterly basis," Rand Merchant Bank global markets economist in South Afroica Carmen Nel says.

"We expect the 2.6% because there was some moderation in domestic demand in December and concern of a spillover from the mining supply sector."

The slowdown in growth is backed by a leading indicator of activity in the mining sector — the Kagiso purchasing managers index (PMI), which fell to 47.4 in December from 49.5 in November. Anything below 50 suggests a contraction in manufacturing activity.

"Manufacturing will slow because of the structural challenges in the sector such as a rather uncompetitive industrial sector, and very soft offshore demand," ETM Analytics economist Jana le Roux says.

"We think the manufacturing sector is likely to produce benign growth at best this year."

The latest PMI reading for last month improved, but remained below 50, supporting views of a subpar performance by the sector this year. More worrying was the drop in the employment subcomponent of the index, which lost a further 2.4 points to 42.3 last month after falling seven points in December.

Bureau for Economic Research senior economist Hugo Pienaar says this does not bode well for job creation in the sector.

Ms le Roux says: "While we may still see activity in manufacturing, the most recent challenges posed by labour unrest and the consequent expected wage increase demand may leave employers less inclined to expand their labour force."

Employers have warned that granting high wage settlements will mean they will not be able to add jobs or might even be forced to trim their staff complements.

An update on unemployment will be released tomorrow with Statistics South Africa releasing its fourth quarter jobs report.

The quarterly labour force survey is expected to show a moderate deterioration in the unemployment rate — which stood at 25.5% in the third quarter.

"We will probably see a small contraction in the total number of jobs. The labour unrest, rising input costs, the slowing global economy will have contributed to this," Investment Solutions chief strategist Chris Hart says.

Ms Leoka expects employment this year to be negatively affected by companies laying off employees as a result of under-pressure margins.

An update on how businesses are feeling about economic conditions will be revealed when the South African Chamber of Commerce and Industry publishes its business confidence index for last month on Thursday.

The index improved from 91.7 points in November to 93 in December, but was still not at a convincing level to investors, the chamber said at the time.

___________

Youth unemployment needs jump-start

Vuyo Jack, Business Report, 03 February 2013

.

Youth unemployment is one of the global issues that needs resolution sooner than later. The government debt crisis in Europe has escalated the youth unemployment problem within Europe and has impacted other countries that trade with Europe. The statistics cited at the recent World Economic Forum annual meeting show that 50 percent of the world’s people are under the age of 27. Furthermore, there are 1.5 billion people between the ages of 15 and 29 vying for only 300 million jobs.

An International Labour Organisation report released last month shows about 35 percent of unemployed young people in advanced economies have been out of a job for six months or longer. This absence directly affects their long-term career prospects as their skills deteriorate. Others get discouraged and leave the labour market altogether. With 74 million people in the 15 to 24 age group unemployed around the world, translating into a 12.4 percent unemployment rate for this subset. Job prospects for the world’s younger workers are looking increasingly bleak, says the report.

In Europe 14 million young people, more than 15 percent of European youth aged between 15 and 29, are estimated to be in this infamous new category called “NEET”, those neither in employment nor in education or training, those who have not found a job or have even given up looking for a job and lost interest in improving their skills. NEETs have doubled since 2010.

In South Africa we have a youth unemployment rate of 48.2 percent, according to rankings by Indexmundi website, which gives us a third place in rankings of country comparisons. Armenia and Macedonia have the first two places. When you delve deeper into the unemployment statistics you find that the African and Coloured population groups feel the brunt of unemployment – the especially women. This is a ticking time bomb for the stability of the economy.

The action that the government has proposed is the youth wage subsidy to incentivise the private sector to employ more young people. This has been opposed by Cosatu, who worries about the companies firing the older, more experienced workers. Indeed the trickle-down effect of firing older workers will be felt by many people who rely on them. And these concerns cannot be ignored. So the counter-proposal to the wage subsidy is to give an incentive in the form of a job-seekers allowance to young people. This is equally problematic as it is not financially sustainable and does not guarantee jobs. Young people also abuse the grant, wanting to continue receiving the allowance if it is higher than the net wages of a normal job with transport costs factored in.

So an alternative is to look at new productive areas that create jobs at a rapid rate. The Jobs Fund is meant to address this, but funds must already be committed to projects before benefits can be reaped. The matching of funds approach presupposes that the level of development is high but the reality is that the people that run projects and firms that could potentially benefit from the fund are still starting up and struggling to get that initial funding. The reality of the different interventions from the government cannot work in the absence of private sector involvement and a change of mindset from all involved.

The private sector is driven by self-interest and profit motive, so any solution should be tailored to address this. But the private sector needs to realise that profits are not created in a vacuum and if the whole country crumbles due to social unrest, no profits can ever accrue. Similarly, individuals can act by adopting a young unemployed person. We can copy the Adopt-A-School Foundation concept and expand it into a national campaign of Adopt-A-Youth where we can see what support can be given to avoid an impending revolution.

But unemployed young people must think to add value for the assistance they get. There is no such thing as a sustainable free lunch in life. Our crisis is serious. If we don’t act now it might be too late for all of us.

____________

'New SIU boss must be of utmost integrity'

Stephen Grootes, EWN, 04February 2013

JOHANNESBURG - Former National Director of Public Prosecutions Vusi Pikoli said it is vital for the future of the Special Investigating Unit (SIU) that a person of the "utmost integrity" be appointed as its new boss.

Last weekend, Justice Minister Jeff Radebe said President Jacob Zuma would finally appoint a permanent head to the unit, after leaving it with an acting boss for the last 13 months.

Last week, Pikoli said a fit and proper person must be appointed to head the SIU.

“A person to head such an institution should be a person of utmost integrity, a person who will be able to carry out the functions without fear or favour, and who shall do the work as expected."

But he said it did not matter if they belong or belonged to a political party, so long as they would be unbiased.

Pikoli also answered carefully when asked if he thought a person of the utmost integrity would be appointed.

Willem Heath resigned as head of the SIU in December 2011, just a few days after he told the City Press that former president Thabo Mbeki allegedly initiated rape and corruption charges against Zuma.

He further alleged the former president abused his position to avert some investigations into corrupt practices.

Radebe has not said exactly when the appointment will be made.

_______________

Bid rigging scandal rocks construction industry

Eyewitness News, EWN, 03 February 2013

JOHANNESBURG - Engineering and construction companies including Murray & Roberts, Group Five, Concor and Wilson Bayly Holmes Ovcon (WBHO) have been implicated in a bid rigging scandal.

According to a report in the City Press newspaper on Sunday, the companies fixed state contracts and other contracts worth billions of rand.

Some of the 'fixed' projects include the National Stadium in Soweto, Greenpoint Soccer Stadium in Cape Town, the Nelson Mandela Bridge in Johannesburg and the Gautrain.

It was reported that at least 11 affidavits have detailed a record of formal kickbacks to those who were implicated in the scandal.

A price fixing racket has also been submitted to the Hawks and the National Prosecuting Authority.

The Hawk's Paul Ramoloko said, ”We do have an investigation in that direction, however, we are not in a position to say who is being implicated and how long we have been working on the case for.”

(Edited by Katleho Mogase) 

______________

Bafana must be applauded

Lelo Mzaca & Theo Nkonki, EWN, 03 February 2013

JOHANNESBURG - Bafana Bafana coach Gordon Igesund said his players should be applauded for the dedication they showed in the Africa Cup of Nations (Afcon). 

Bafana were eliminated after losing 3-1 to Mali on penalties in the quarterfinals at the Moses Mabhida Stadium in Durban on Saturday night.

It was South Africa's first Afcon quarterfinal since 2002 and Igesund said his team showed commitment.

“I think they’ve come a long long way, in a lot of aspects. Not only on the playing field but they way they conduct themselves.”

Gordon also spoke highly about Bafana’s sportsmanship and the pride that the team had when they put on their jerseys.

Meanwhile the South African Sports Confederation and Olympic Committee (Sascoc) CEO Tubby Reddy agreed with him.

“Hard luck to Bafana Bafana, hopefully we can grow [from this]”

Reddy also said the general response from the public was a very positive one and that the coach’s main focus going forward should be qualification for the 2014 FIFA World Cup.

WORLD CUP RECORD

Bafana have never won the FIFA World Cup and last time they participated in the tournament was in 2010, when South Africa hosted it.

They did not make it past the group stages in that tournament and did not qualify for the 2006 World Cup, held in Germany either.

The Bafana team managed to score six goals in the 2013 Afcon tournament and drew twice, winning once and were beaten once.

(Edited by Katleho Mogase) 

____________________________________________________

4.    Alliance

POLITICAL WEEK AHEAD: Cabinet convenes to thrash out key issues

 Setumo Stone, Business Day, 04 February 2013

 

THE Cabinet lekgotla meets for the first time on Tuesday since the African National Congress (ANC) national conference in Mangaung in December where President Jacob Zuma was overwhelmingly re-elected for a second term as the head of the ruling party.

Discussions at the lekgotla are expected to offer insights into the text of Mr Zuma’s state of the nation address next week Thursday.

Among the major policy decisions coming out of Mangaung, and set to influence the direction of government, is the endorsement of the National Development Plan — a guiding document in South Africa’s quest to reduce poverty, inequality and unemployment.

The Cabinet lekgotla will further discuss some of the criticisms of the government’s performance arising from the national conference.

The outcomes of the ANC national executive committee (NEC) lekgotla, which ended at the weekend, will be announced today at a media briefing at Luthuli House. These are expected to guide the Cabinet on how best to implement the Mangaung policy decisions.

Democratic Alliance (DA) spokesman Mmusi Maimane speaks to the DA Students Organisation about "Africanism" on tuesday at the University of the Witwatersrand.

National Union of Mineworkers president Senzeni Zokwana is back on the witness stand when the Marikana commission starts on Tuesday in Rustenburg. Mr Zokwana is expected to be followed by witnesses who were actually at the Marikana crime scene in August last year when police shot dead 34 striking Lonmin platinum mine workers during an unprotected strike.

The forced resignations of two mayors in North West’s Ngaka Modiri Molema district municipality is expected to top the agenda when the province’s top five ANC officials meet today. The provincial executive committee is pushing for Ngaka Modiri Molema district mayor Audrey Saku to be replaced by ANC councillor Manketsi Tlhape and for Ramotshere Moiloa local municipality mayor Afrika Thale to be replaced by councillor Justine Bhine.

In Parliament on Tuesday, the select committee on co-operative governance and traditional affairs will receive a briefing from the Free State co-operative governance and traditional affairs department on the findings of KPMG’s report on the struggling Nala and Matjhabeng local municipalities.

In September, the Treasury invoked section 216 (2) of the constitution and withheld funds from the Nala municipality. This was because of the municipality’s "persistent breach" of financial management protocols and alleged mismanagement of public funds.

Police Minister Nathi Mthethwa introduces the Dangerous Weapons Bill to the parliamentary committee on police on Tuesday.

On Wednesday the Treasury briefs the public service and administration committee about its progress report on the review of the entire procurement system of the government.

______________

SACP mourns Mnguni

Sapa, IOL, 03 February2013

Johannesburg - The South African Communist Party’s deputy chairperson in Mpumalanga, Solomon Khephi Mnguni, has died, the party said on Sunday.

Spokesperson Bonakele Majuba said Mnguni had been ill before his death on Saturday.

“The party has lost a committed cadre of the Mass Democratic Movement in Mpumalanga who served as a shop steward in Cosatu union and led both in the ANC and SACP,” said Majuba in a statement.

At the time of his death, Mnguni was the MMC for infrastructure development at the Thembisile Hani Municipality. - Sapa

______________

Zuma meets with business leaders

Shain Germaner, EWN, 03 February 2013

PRETORIA - After a day of meeting with top business leaders, President Jacob Zuma has revealed some of government's plans to deal with the socio-economic challenges facing South Africa. 

Zuma met with representatives from big businesses countrywide, which included the presidents of Business Unity South Africa (Busa) and the Black Business Council.

The president told media on Sunday that the meeting provided a platform for business and government to speak about the country’s priorities, ahead of the State of the Nation Address.

“We want business to participate. It was therefore important that we have this meeting, so that business could express their own feelings about what’s happening and what they think they can do.”

Zuma also said the meeting was an opportunity for government and business to gain a better understanding of each another.

Meanwhile Busa president Jabu Mabuza stood alongside the president as it was announced that the South African economy must grow threefold by 2030.

Zuma said this was one way for the state to remedy the nation’s financial problems.

In two months' time, another meeting will be held to identify the factors that hinder South Africa's economic growth.

STATE OF THE NATION ADDRESS 2013

President Jacob Zuma will present the State of the Nation Address to a joint sitting of Parliament at 19h00 on Thursday, 14 February 2012.

In this year’s speech, he is expected to look back on the achievements of 2012 and present the programme of action that government will embark on in 2013.

Zuma will be addressing the joint sitting at night, in a trend that began in 2010, to try and reach more people that would otherwise miss the address.

(Edited by Katleho Mogase) 

__________________

Take a hike, Eskom!-ANC rejects proposal

Moipone Malefane, Sunday World, 03 February 2013

 

The ANC rejected Eskom’s proposal for a 16% tariff hike during an intense discussion at the party’s lekgotla this week.

The meeting which was held in Pretoria over the last two days, agreed that the proposed increase was too high and asked the department of Public Enterprise headed by Minister Malusi Gigaba, to deal with the matter.

Sunday World could not establish whether the ruling party wants the department to scrap the increase or whether it wants it to reconsider the amount of the hike.

The National Energy Regular of South Africa has been holding public hearings on Eskom’s proposed price increase and the hearings have been dominated by arguments highlighting the likely negative economic and social effects of the hike.

The National Union of Metal Workers of SA [Numsa] has also rejected the increase arguing that the poor will not be able to afford to keep with the increases.

The Lekgotla was attended by ANC national executive committee members,senior government officials,ministers,deputy ministers and director-general, as well as the SACP and Cosatu.

Union leaders, including Cosatu Sidumo Dlamini,deputy general secretary Bheki Ntshalintshali and National Education,Health and Allied Workers’ Union [Nehawu] general secretary Fikile Majola also attended.

The decisions taken at the Lekgotla will be discussed at the cabinet Lekgotla this month, before President Jacob Zuma’s state-of-the-nation address in two-weeks time.

The Lekgotla also endorsed the decision that education be declared an essential service,though education unions rejected the idea.

This backs Zuma’s recent remarks that declaring teaching an essential service was the only way to make sure that children’s education is not compromised.

ANC general secretary Gwede Mantashe also expressed his support for Zuma over the issue.

Those who attended the Legotla tell Sunday World that there is a potential conflict with the unions but they insist that education in critical for the country.

They add that the unions will be consulted for their input because the Lekgotla did not decide on the implementation process.

Teacher unions, namely South African Democratic Teachers’ Union [Sadtu] and Nehawu are against the move, saying it will prevent teachers from going on strike.

They have called for the government to fix the challenges facing teachers,including rewarding them sufficiently and providing proper infrastructure and equipment at schools.

Following Zuma’s remarks on the matter last month, Nehawu vowed to fight attempts to declare education an essential service-a move that has been rubbished as half-baked in order to try and solve a myriad problems in the country’s poor education system.

Nehawu says it will ensure Cosatu, to which it is affiliated, tackles the ruling party for this proposed ‘constitutionally unsound’ law.

It says the decision did not even appeal to the apartheid government.

______________________            

5.    International

Barclays CFO is set to retire

Steve Slater and Paul Sandle, Business Report, 04 February 2013

London - Barclays said its finance director Chris Lucas and its top legal expert are to retire, adding to change at the top of the British bank as it struggles to put a series of scandals behind it.

Lucas, aged 52, has been finance director for a tough six years that spanned the global financial crisis, but the past nine months have been particularly difficult.

He is one of four current and former employees being investigated by UK authorities regarding a capital injection by Qatar in 2008.

Group General Counsel Mark Harding will also retire, the bank said in a statement on Sunday.

Both will remain in their roles until their successors have been found and an appropriate handover completed.

The bank said headhunters had been appointed, but it expected the process to take “a considerable time” to complete.

It could take up to a year to fill Lucas's position, people familiar with the matter told Reuters earlier on Sunday. Sky News first reported Lucas would leave.

Sources said Lucas's departure was not linked to the investigations into Qatar. He is also the only one of Barclays' executive directors still in his post after the bank was fined $450-million in June for rigging the Libor global benchmark interest rate.

New Chief Executive Antony Jenkins is attempting to move on from the bank's troubles, which also include the mis-selling of financial products, but that is proving a challenge.

The Financial Times reported on Friday that UK authorities are looking into allegations that Barclays lent Qatar Holding money to invest as part of the rescue fundraising four years ago.

British rules forbid a public company from giving financial assistance in order to acquire its shares.

Jenkins said Lucas and Harding both told him late last year they were considering stepping down. “Their decision to retire was theirs alone,” he said.

Lucas has had health problems and although that has not affected his ability to do his job, it influenced his decision to retire, one of the sources said.

“Now is the appropriate time... to begin my retirement from my role on the board and executive committee, and to pass the mantle on to a successor,” Lucas said in a statement.

Jenkins is due to unveil plans to streamline and revive Barclays on February 12 and he has also promised to improve culture and standards across the bank's 140 000 workforce.

The CEO said on Friday he will not take a bonus for 2012, saying he should “bear an appropriate degree of accountability” for the difficult year the bank endured.

“The execution of our change programme will take place over the next five to 10 years, and both Chris and Mark feel that now is the right time for them, personally and professionally, to pass the baton on in their respective roles to executives who can commit to seeing that programme to completion,” Jenkins said.

Harding, 55, joined as general counsel in 2003, and has responsibility for legal issues throughout the bank, and as such handled Barclays' settlement with British and US authorities last year for its manipulation of Libor rates.

Harding was previously general counsel of UBS's investment bank and a partner at law firm Clifford Chance.

Former Chief Executive Bob Diamond, Chairman Marcus Agius and Chief Operating Officer Jerry del Missier all left last year following the Libor scandal.

Lucas, who joined the Barclays board in April 2007 from PricewaterhouseCoopers, was paid almost four million pounds each year in 2011 and 2010, including long-term awards.

Jenkins and his chairman David Walker, are likely to be grilled on standards at the bank by British lawmakers when they appear before the UK banking inquiry on Tuesday. – Reuters

___________

China's shortage threatens economy

Sapa-AFP, Fin24, 03 February 2013

 

 

Beijing - China's demographic timebomb is ticking much louder with the first fall in its labour pool for decades, analysts say, highlighting the risk that the country grows old before it grows rich.

 

The abundant supply of cheap workers in the world's most populous nation has created unprecedented cost efficiencies that underpinned its blistering economic expansion over the past 35 years, propelling the global economy forward.

 

But now the inexorable consequences of the one-child policy imposed in the late 1970s are beginning to appear, and threaten to impact its future growth.

 

China's working-age population, defined as 15-59, fell 3.45 million last year, official data showed earlier this month -- the first decline since 1963, after tens of millions died in a famine caused by the Great Leap Forward.

 

The immediate effect may be small in a nation of 1.35 billion people, but the cumulative effects will accelerate over the coming decades.

 

The number of people aged between 15 and 64 will drop by around 40 million between 2014 and 2030, said Wang Guangzhou, a researcher with the Chinese Academy of Social Sciences (CASS), a government think-tank --more than Poland's entire population.

 

"The population is aging so fast that we are running short of time to deal with it," said Li Jun, also of CASS, adding the family planning policy had exacerbated the problem.

 

China's proportion of over-65-year-olds is projected to double from seven to 14% over only 26 years -- a key demographic measure that took the United States 69 years to complete.

 

"Undoubtedly it will substantially slow down China's potential growth rate," Yao Wei, an economist with Societe Generale in Hong Kong, told AFP.

 

An ageing population not only means fewer people available to employ and higher labour costs, but investment -- a key driver of China's growth --will be harder to maintain as families spend their savings on health care, she said.

 

Chinese authorities maintain that controlling its population growth has been key to increasing its prosperity.

 

But while China has risen to become the world's second-largest economy, on a per capita basis it still lags far behind the US and other developed countries.

 

Industrial disputes have become more common in recent years, as workers demand higher pay and better working conditions on the back of growing awareness of their rights and the shortage of skilled staff.

 

Multinational companies are looking to other developing economies with lower wages for further expansion, with some already moving production bases out of China to rivals such as Indonesia and Vietnam.

 

In a survey of 514 Japanese manufacturers by the Japan Bank for International Cooperation last year, the number of respondents voting China as the top destination for overseas business fell by more than 10 percentage points on 2011.

 

Economists said China must look to speed up the transformation of its economic model and move up the value chain.

 

"The golden period of the manufacturing industry, particularly those depending on exports, has gone," said Yao.

 

At the same time, she said, the country was woefully underprepared to meet the burden of caring for the elderly.

 

"The fiscal situation is not prepared and the social security network is not complete," she said.

 

By around 2060, every three Chinese workers will have to support two people above 60, compared with a ratio of five to one now, according to Li's projections.

 

It is a crucial challenge for the ruling Communist Party, said Ren Xianfang, a Beijing-based analyst with research firm IHS Global Insight.

 

"Delivering growth and delivering social security to the general public are the key things for the state to (maintain) its legitimacy."

 

Analysts said the medical services are increasingly expensive and hard to access, while the country's flagship public pension plans are crippled by problems including insolvency risks, difficulties in expanding coverage and mismanagement.

 

A rural areas programme was introduced in 2009 to provide people from the countryside with their first ever state-subsided retirement scheme, but its payouts are particularly meagre -- in many areas as low as 55 yuan ($9) a month.

 

The husband of Du Wenlan, a farmer from Chongqing, gets 80 yuan a month from the plan. She only buys new clothes once every three years, she said, and tries to save money by diluting their rice porridge.

"What can 80 yuan do?" she asked.

 

On the streets of Beijing, Su Xu, 30, who works for a cosmetics company, told AFP: "I panic when I think about my retirement."

____________

Africa Command HQs to stay in Europe

Reuters, EWN, 03 February 2013

WASHINGTON - Defence Secretary Leon Panetta has decided against moving the US military's headquarters overseeing Africa from Germany to the United States, concluding the benefits of staying in Europe - closer to African hot spots - are worth the extra cost, officials say.

The Pentagon notified Congress of its decision this week. Some lawmakers had been pushing for Africa Command to move stateside, with South Carolina and Georgia promoted as possible locations.

"The decision was based on the operational needs of the commander," a US defence official told Reuters, referring to General Carter Ham, the outgoing head of Africa Command.

Africa has become much more important for the US military in the last decade. American forces played a prominent role in NATO operations during the uprising in Libya, and is assisting the French mission in Mali.

The decision about the location of AFRICOM, as it is known in the military, was shared with Congress the same week that news emerged of a deal with Niger that could pave the way for a US drone base there.

AFRICOM is the only US regional combatant command that is neither in the United States nor in its area of responsibility.

Central Command, which oversees the Middle East and Afghanistan, is headquartered in Florida. Pacific Command, which monitors Asia, is in Hawaii.

BENEFITS OF OVERLAP

The scope of the Pentagon study informing Panetta's decision focused exclusively on moving AFRICOM to the US.

The Pentagon discarded the idea of locating it in Africa before AFRICOM was established five years ago, partly because of sensitivities among potential host nations.

Logistics and overlapping of resources with the military's European Command also made it logical to locate both in Stuttgart, Germany.

That overlap persists with US Army, Navy, Air Force and Marine assets dedicated to AFRICOM located in places like Vicenza, Italy, and Ramstein, Germany.

Ham had recommended against moving the headquarters back to the United States. There are about 1,500 personnel at the command's base in Stuttgart, Germany, according to AFRICOM's website.

"The Secretary, informed by the judgment of the AFRICOM commander and a study of locations, decided the current location serves the operational needs of AFRICOM better than a (continental US) location," the official said.

Among the benefits of staying put in Europe is the ability to better respond in a crisis, with shorter travel times for commanders to hot spots, one official said.

There are already some 2,000 military personnel assigned to Camp Lemonnier in Djibouti, according to AFRICOM's website.

AFRICOM gained its own rapid-reaction force last year, no longer relying on one hosted by the European command. For example, such a force could be mobilised if US personnel in Mali needed to be evacuated.

_____________

US employment report points to steady economic growth

Lucia Mutikani, Business Day, 01 February 2013

 

WASHINGTON — US job growth grew modestly in January and gains in the prior two months were bigger than initially reported, supporting views the economy’s sluggish recovery was on track despite a surprise contraction in output in the final three months of 2012.

Employers added 157,000 jobs to their payrolls last month, the Labour Department said on Friday. There were 127,000 more jobs created in November and December than previously reported.

The unemployment rate, however, edged up 0.1 percentage point to 7.9%.

The closely watched report also showed an increase in hourly earnings and solid gains in construction and retail employment.

Coming on the heels of data on Wednesday showing a surprise contraction in gross domestic product (GDP) in the fourth quarter, that should ease any worries the economy was at risk of recession, even though the unemployment rate ticked up.

GDP contracted at a 0.1% annual rate in the fourth quarter, largely because of a sharp slowdown in the pace of inventory accumulation and a plunge in defence spending.

A monster storm that hit the East Coast in late October also weighed on output, a drag that should lift this quarter.

Federal Reserve officials said on Wednesday that economic activity had "paused," but they signalled optimism the recovery would regain speed with continued monetary policy support. The Fed left in place a monthly $85bn bond-buying stimulus plan.

Economists polled by Reuters had expected employers to add 160,000 jobs and the unemployment rate to hold steady at 7.8% last month.

The Labour Department also published benchmark revisions to payrolls data going back to 2008. It said the employment level in March 2012 was 422,000 higher on a seasonally adjusted basis than previously reported.

It also introduced new population factors for its survey of households from which the unemployment rate is calculated. This had a negligible effect on the major household survey measures.

Modest job growth

Job growth in 2012 averaged 181,000 a month, but not enough to significantly reduce unemployment. Economists say employment gains in excess of 250,000 a month over a sustained period are needed.

Though the unemployment rate dropped from a peak of 10% in October 2009, that was mostly because some unemployed Americans gave up the search for work because of weak job prospects.

The share of the working age population with a job has been below 60% for almost four years.

All the job gains in January were in the private sector, where hiring was as broad-based as it was in December and declines in public sector employment remained moderate.

Steady job gains could help the economy weather the headwinds of higher taxes and government spending cuts. A payroll tax cut expired on Jan 1 and big automatic spending cuts are set to take hold in March unless Congress acts.

The goods-producing sector showed a third month of solid gains, with manufacturing employment advancing for a fourth straight month. Construction payrolls increased 28,000, adding to December’s healthy 30,000 gain.

Construction jobs are expected to rise further as the housing market recovery gains momentum. Housing is expected to support the economy this year, taking over the baton from manufacturing.

Within the vast private services sector, retail jobs increased by a solid 32,600 jobs after rising 11,200 in December. Retail employment has now risen for seven straight months. Education and health payrolls added 25,000 jobs in January after employment grew by the most in 10 months in December.

Government payrolls dropped by 9,000 last month after falling 6,000 in December. The pace is moderating as local government layoffs, outside education, subside.

Average hourly earnings rose four cents last month. Hourly earnings have been rising steadily. They were up 2.1% in the 12 months through January.

"It may be that we are now getting to a point in the labour market where we are going to see an upward creep in average hourly earnings," said RDQ Economics’ Ryding, chief economist at RDQ Economics in New York.

"That’s going to be good for the consumer and they need help because they are being whacked by the payrolls tax increase," he said before the release of the report.

The length of the workweek for the average worker was steady at 34.4 hours for a third straight month.

Reuters

______________

Iran agrees to nuclear talks with top powers

James Blitz And Quentin Peel, Business Day, 04 February 2013

 

MUNICH — Iran has announced it will hold talks with world powers over its nuclear programme, in the first sign of diplomatic movement since last year to try to settle the international impasse.

In a speech to the Munich Security Conference on Sunday, Ali Akbar Salehi, Iran’s foreign minister, said Tehran had agreed to attend a meeting with the world powers in Astana, the Kazakh capital, on February 25.

The six powers that negotiate with Iran — the US, UK, France, China, Russia and Germany — would make a revised offer on sanctions, with slightly more concessions than in past negotiations, said western diplomats.

However, they noted that Iran and the international community had held three unsuccessful meetings on the issue last year. Diplomats also said Mr Salehi gave little indication in his speech that Iran — which says it is enriching uranium for peaceful energy only — would accept any new deal.

Iran’s move came on a weekend that also saw Joe Biden, the US vice-president, announce that Washington was prepared to hold bilateral talks with Iran to seek a solution to the nuclear standoff.

The US "would be prepared to meet bilaterally with the Iranian leadership", Mr Biden said in Munich, but "there has to be an agenda that they are prepared to speak to. We are not just prepared to do it for the exercise."

The US has made clear for some time that it is prepared to meet Iran bilaterally. Mr Biden’s comment is the highest level at which this offer has been made, but diplomats say Iran has been reluctant to respond.

At meetings with Iran last year, the six powers — known as the E3 plus three — offered to scale back some international sanctions on Tehran in return for moves to halt certain nuclear activities.

They called on Iran to close its second enrichment plant at Fordow, end production of more highly enriched uranium and ship its existing stock of 20% enriched uranium abroad. In return they offered what was effectively a symbolic first step to end sanctions.

In Astana, the E3 plus three would offer to scale back sanctions slightly if Iran took the required action, diplomats said. However, Iran is asking for far more substantial concessions than the six powers are prepared to give, and expectations of success are low.

One western diplomat in Munich said the level of pressure that economic sanctions were exerting on Iran was striking. Energy sanctions meant Iran had lost $46bn of revenue, equivalent to 8% of its annual gross domestic product, the diplomat said.

Analysts say a key test for Tehran may come with this year’s elections, which could see demonstrations against the regime.

"Iran is currently suffering 40% inflation and that means a huge decrease in purchasing power," said an expert based outside the country. "This could bring people out on the street."

Despite the pressure, many believe there will be no breakthrough for some time because Tehran will weather the storm.

"I think these are good statements that both sides are at least open to this, (but) I think there have to be some ideas about how you get them to the table in a credible way," said Vali Nasr, dean of Advanced International Studies at Johns Hopkins University in Baltimore. "One of the worst things is that if they went to the table and then they fail … then we really will be at an impasse."

The year ahead is a critical one for chances of overcoming a stand-off which, if left to fester further, could see Iran approach nuclear weapons capability and provoke military action by Israel that could inflame the Middle East.-The Financial Times ©2013

__________

BP accused of price manipulation

Bloomberg, 01 February 2013

The former head of natural gas liquids trading at BP’s BP Energy in Texas accused the company in a lawsuit of wrongfully firing him in order to manipulate the market and gouge Americans with inflated prices.

Drew Sickinger, in a complaint filed January 30 in state court in Houston, said his removal leaves London-based BP positioned to engage in price manipulation by establishing a dominant and controlling position in the market.

Details of the alleged plan aren’t revealed in the complaint.

Sickinger, who was fired in January, was warned by a supervisor before taking a medical leave in 2012 that “BP’s positions in the market and strategy although unlawful are proprietary and not to be disclosed,” according to the complaint, whose filing was reported earlier by Reuters.

“BP used all means available to it to rid itself of Sickinger and his knowledge of the positions that BP had taken in the market,” according to the complaint.

Sickinger is seeking unspecified damages for breach of contract, fraud and quantum meruit, a Latin phrase describing a doctrine of a promise to pay in the absence of a specific contract.

BP agreed to pay $303 million in October 2007 to settle US Commodity Futures Trading Commission allegations relating to claims of market manipulation.

In January 2009 a BP unit, Houston-based BP America, agreed to pay $52 million to propane buyers who accused it of trying to monopolise the supply of gas flowing through a Texas pipeline in 2003 and actually doing so in 2004.

Personnel Issues

BP doesn’t generally discuss personnel issues or employment circumstances publicly, Scott Dean, a company spokesman, said in an e-mailed statement.

“Previous court settlements are a matter of record, but any additional public allegations of market misbehaviour arising from this specific legal proceeding are untrue and without merit,” Dean said.

“BP is not engaging, and will not engage, in any price or market manipulation. Our ongoing trading strategies are lawful and compliant.” - Bloomberg

_________________________________________________         

6.    Comment

COSATU E-toll Campaign goes ahead in February 2013

 

For more information, contact COSATU Offices

                                

Come one…..Come All!

 

Stop Commodification of public goods!

____________

COSATU Section77 Notice served at Nedlac on the 11th December 2012

_____________

COSATU participated in the NERSA Public Hearings on electricity tariff increase and rejected the 16% increase.

_____________

No longer a special case to be handled with kid gloves

Ben Turok,Business Day, 04  February  2013

 

IT WAS reasonable to assume, especially after Marikana, that mining companies, the government and labour were consulting about the future of the industry. Yet it seems that it didn’t happen. Instead, we have a row over the procedures to be followed by the industry and the government, rather than explanations of the effects on the national economy of proposed drastic cutbacks.

The point is that even though the contribution of mining to gross domestic product (GDP) and tax revenue has been falling steadily for some years, it is still a major indirect contributor to the economy. What happens in mining is therefore very much a matter of national interest. Yet the mining industry has always behaved like an enclave in the broader economy requiring special treatment. This was justified to some extent because of the huge investment and special skills needed, but its exclusive character has been overdrawn.

In the main, minerals have been extracted from deep levels, subjected to some basic processing and then exported as ores without a great deal of beneficiation or fabrication. For instance, we do not have substantial gold or diamond manufactured-products capabilities, despite having vast natural resources. This anomaly has never been explained.

The result of this restricted role of mining is a large gap between mining and manufacturing to the detriment of both sectors and to the economy. The value chain and linkages so necessary for efficient and competitive production of finished goods has been seriously undermined.

This separation is supported by the Chamber of Mines, which argues that mining is driven by inherited comparative advantages, such as mineral deposits or natural beauty, while manufacturing depends on competitive advantages. The chamber emphasises that a mineral resource endowment does not necessarily translate into manufacturing beneficiation. Further, the mining industry should not be required to subsidise manufacturing beneficiation or provide minerals below internationally determined prices. In practice, this means South Africa’s manufacturers have to pay import-parity prices to the mining companies — the same price paid by overseas manufacturers — which ensures that our manufacturers are not competitive. When this difficulty is added to the problem posed by cheap manufactured goods from China and India, South Africa’s manufacturing operates on a very uneven playing field. Its only hope is to find niche markets, where its specialised products may find space.

The isolation of mining from the total industrial value chain also has consequences for labour policy. Anglo American Platinum is mooting displacing 14,000 miners into other activities. But what broad training have they been given to enable them to switch to other jobs, especially in manufacturing? They have been confined to mines, so what skills could a rock driller bring to a production line?

A report by Citibank in 2010 asserted that South Africa has the largest mineral resources in the world, excluding oil, with an estimated value of $2.5-trillion. These are dominated by the platinum group of metals (88% of global reserves), manganese (80%), chrome (72%), vanadium (32%) and gold (30%). But partly due to declining ore grades in some sectors and ever-deeper mines, the value-add of mining was only 0.5% a year between 2001 and 2008. Further, there is little beneficiation, and trade with most parts of the world is characterised by the export of raw materials and the import of manufactured goods.

The contribution to government revenue has been in decline for a long time. Income tax payments from gold mines contributed 4.96% of GDP in 1980-81, but this fell to 0.16% in 1992-93. The contribution of other mines for the same years was 0.38% and 0.20% respectively. Presently, the most important aspect of the industry is the extent of its multipliers into the rest of the economy. These are substantial, but the mining industry could contribute even more to the development of other enterprises. We need to take a hard look at the potential for downstream processes if SA is to benefit from these mineral resources.

In June 2011, the Department of Mineral Resources developed a beneficiation strategy for the minerals sector, noting that "the composition of South Africa’s trade with most parts of the world is characterised by the export of raw materials and the import of manufactured goods". The document called for a "paradigm shift in mineral development" and sought to "advance development through the optimisation of linkages in the mineral value chain, facilitating economic diversification, job creation and industrialisation" and argued that it is possible to industrialise by leveraging natural resources, with the government driving beneficiation. However, the bulk of producers are in long-term contracts with their international clients. This is the pattern across Africa and is leading to calls for "resource nationalism" to ensure greater benefits from natural resources.

In December last year, the Cabinet approved a draft amendment to the Mineral and Petroleum Resources Development Act, which gave effect to its constitutional obligation (in section 24) to ensure that "the nation’s minerals are developed in an orderly manner" (and) provides for "the implementation of the approved beneficiation strategy through which minerals can be processed locally for a higher value".

The case for an increased role for manufacturing in the beneficiation of minerals is therefore compelling. This role would seem to be primarily suited to South African-based firms in the mining value chain. Such firms are more sensitive to national interests and more likely to co-operate in terms of producing for the domestic market, keeping economic rents under control, complying with tax rules, employing local rather than foreign managers and technical staff, and taking account of the social effects of their activities.

A wall seems to have developed between mining and manufacturing which stands in the way of creating an integrated economic base for the country. Yet co-operation could include such elements as agreed pricing, limited and selective protectionist measures by the government, co-operation in skills development, positive procurement in favour of domestic industry, and tax policies to encourage localisation.

The government is responsible for infrastructure, such as energy supply, roads, water, rail, ports, etc. These facilities should not only be for foreign firms that export raw ores, but also for the support of domestic firms in the value chain. This has been neglected in South Africa.

The licensing of mining to foreign firms may be a problem. As minerals in South Africa are formally public property, under the control of the government, conditions should be prescribed, such as providing a portion of mineral assets for beneficiation by historically disadvantaged firms and their communities, and local procurement.

The main message seems to be that we need to break away from the notion that mining is an enclave industry that must be treated with kid gloves. On the contrary, mining exploits a country’s endowment, which is ephemeral, and whose potential multiplier effect must be realised while it is thriving, not when it is in decline. This is best realised by rigorous analysis of the interface between mining and industrialisation.

• Turok, an African National Congress MP, has published extensively on mining in New Agenda and is a consultant to the United Nations Economic Commission for Africa.

______________

LETTER: Lonmin leaders led from the rear

Business Day, 04 February 2013

 

REPUTATIONS matter — just ask Lonmin. Just as the events of last August first dented, then properly damaged stakeholder confidence in Lonmin, so did commitments made at last Wednesday’s annual general meeting immediately help to restore a measure of confidence in the firm — its shares jumped 12% on the JSE.

That the mining company had been battered by a tough platinum market — lower prices, rising extraction costs, stagnant productivity — is beyond dispute.

But what really caused the harm last winter, as the wildcat strike escalated, was the dearth of leadership on the Marikana issue.

Leaving aside the trade unions and police for now, Lonmin’s role in contributing, no, hastening its reputational harm was the way in which it handled the crises internally, and in the eyes of the public and the markets.

CEO Ian Farmer was ill and absent at the time and instead of the chairman, Roger Phillimore, stepping into the breach and taking charge, he and the board decided to let chief financial officer Simon Scott handle the brewing storm.

At the time, Mr Scott had only been with the firm a mere two years.

What this dereliction of duty signalled to the outside world was that this situation was not of strategic consequence and could be safely handled by a more junior local executive. It was a fatal error, as it turned out.

Mr Scott’s first televised appearance in the eye of the storm was of a man scared witless, sleep-deprived, uncertain, not sure of his mandate, and consequently indecisive.

Why no one thought to insist on his boss’s boss being in South Africa to face the music is a decision I’m sure they regret.

Could it be that Lonmin really did not understand what stakeholder management was all about, and that the aggregated views that these groups of interested parties hold constitute the firm’s reputation?

If sceptics doubt this line of thought, consider again the electric response from another stakeholder group — investors — to Wednesday’s utterances by Mr Phillimore. It’s hardly that he’s actually done anything yet. Yet observers have placed such import on it all. First, the words came from him — the chairman and not an underling.

What a relief that those in the upper reaches actually know the gravity of the situation.

And second, much of Mr Phillimore’s comments dealt with stakeholders other than himself and his cohort — why they (workers, their families, the local communities) matter and what the company will endeavour to do to improve their lot.

Lonmin is a harsh example of how bad managerial and other decisions, once the escalation starts, become infinitely more harmful to the firm when leadership absents itself.

Mr Phillimore’s comments were welcome, but he has so, so much more to account for.-Martin Neethling, Constantia

_______________

EDITORIAL: Giving is bigger than the gift

Business Day, 04february 2013

 

BY GIVING away half of his fortune, mining billionaire Patrice Motsepe has done South Africa an enormous service, and not just in an immediate, physical sense, although that is by no means insubstantial in itself.

His act of generosity demonstrates that the rich do not have to be seen as heedless ogres living the high life, cut off from society, which radical politicians and the trade unions tend to make them out to be. Most wealthy people care deeply about the state of the country and the direction in which it is moving.

And what a great moment to make such an enormous gift. The development of all great societies is punctuated by acts of generosity, both big and small, by people rich and poor. Such generosity is not necessarily measured in monetary terms; it can take the form of a generosity of spirit — take Nelson Mandela’s preparedness to forgive, if not forget, those who took away 27 years of his life, for example.

However, after a year of increasingly frequent and violent service delivery protests, bitter political infighting in the ruling party and angry labour disputes, it is a reminder that the important thing is not how rich you are, but who you are as an individual.

In showing that he is more than just a designer suit and wad of cash, Mr Motsepe has implicitly thrown down the gauntlet to other rich South Africans, particularly black economic empowerment moguls — who were, after all, handed their riches thanks to a special dispensation — to demonstrate their commitment to not only the wellbeing of the poor but also to the long-term development of society.

Wealthy blacks are not alone in bearing this responsibility. The beneficiaries of past "special dispensations", from colonialism to apartheid, have even more of a moral obligation to give back to society. And they have: there is no tradition of ostentatious philanthropy in South Africa, but you don’t have to scratch the surface too deeply to reveal the benign influence wealthy families such as the Oppenheimers and Ruperts have had on society.

One note of caution is in order, however. This commitment cannot always be measured in terms of how much money you give away. Great gifts are always laudable and make for good headlines. But, in some ways, the greatest gift the rich can make is to keep capital engaged in the real economy. The real function of capitalists is to invigorate the commercial process. In doing so, as Adam Smith recognised, by acting ostensibly in their own best interests they inadvertently create the context for ever-greater riches for society as a whole.

There is another aspect of Mr Motsepe’s philanthropy that is worth pondering: is inequality, by definition, bad for the economy? Liberal and left-wing politicians celebrate the gift on the basis that it will help to level income through the society. An innate sense of fairness, justice and morality would support this view.

Yet it is possible to argue from the opposite direction: that spectacular gifts from the rich, like those made by Microsoft founder Bill Gates and celebrity investor Warren Buffett, underline the utility of entrepreneurship, as their gifts to society are rooted in their ability to generate the wealth in the first place. No private person in the Soviet Union ever gave anyone anything of great value; there was nothing to give.

As morally compelling as the notion of a classless society might be, the idea that inequality is necessarily bad for the economy and society is at least questionable. Recently, the two leading left-wing economists of our day, Joseph Stiglitz and Paul Krugman, could not agree on this issue. Prof Stiglitz argues, among other things, that inequality is "squelching" the US economic recovery because the middle class is too weak to support the consumer spending that has historically driven economic growth. In other words, because richer people save more and spend less than poorer people, consumption tends to decline as inequality increases. Prof Krugman counters that, although it i s true that at any given point the rich have far higher savings rates than the poor, it turns out this is a statistical illusion. Consumer spending tends to reflect expected income for an extended period. "Economics is not a morality play," he says.

Yet, in some ways it is. The notion of inequality can be as destabilising as the reality of it. There is an inverse link between income inequality and social cohesion. One easy measure is the murder rate: the correlation between the murder rate and inequality is very high, although other factors are undoubtedly at play too. It seems logical that the more equal a society, the more people are likely to trust each other.

Yet it also seems logical that too flat an income-distribution curve can depress the incentive to grow, and there is some empirical research that suggests growth tends to be shorter and weaker in societies that do not reward innovation sufficiently. It seems a degree of inequality in society is necessary as an incentive to drive entrepreneurship, risk-taking and innovation. But the empirical research is complicated and contradictory.

One thing we do know is that forced redistribution depresses economic growth drastically. That is why voluntary redistribution is so important. Reducing inequality in South Africa needs to happen, but it needs to happen progressively and voluntarily. Mr Motsepe’s gift fits very comfortably into that requirement and that is why he should be lauded for it beyond the gift itself.

______________

Venezuela will still deify Chavez

Business Report, 03 February 2013

In the nature and the suffering of what may be his impending death, Hugo Chavez will probably achieve the immortality in human memory that he has always sought, the certainty of a veneration reserved for saints, martyrs and redeemers.

The images appearing in the streets of Venezuela leave no doubt about it. They don’t compare Chavez to Simon Bolivar – the inspiration of the nation’s “comandante” – but to Jesus Christ. And there are explicit slogans displayed that go further and deeper into Venezuelan reality: “The people are Chavez” and “We are all Chavez” – like some modern miracle of transubstantiation.

It is possible that the ruling government of Cuba (where the Venezuelan is in hospital) may try to preserve the authority of a moribund Chavez, like the famous Spanish Cid Campeador, whose body – strapped to his horse – led troops in a victorious battle. But it is much more likely that, after a protracted and agonising struggle with cancer, Chavez’s death will be announced.

And a broad portion of the Venezuelan people will be plunged into mourning. Something similar happened in the case of Eva Peron, the heroine of the Argentine poor, when she died suddenly of cancer at 33. She was instantly sanctified and continues to be so.

There are various scenarios for the future of Venezuela, and none of them is certain. It is most likely that the mourning for Chavez will last for months and will be followed by a new national election, which will be won by a “Chavista” candidate, a supporter of Chavez.

The decisive emotions will be grief coupled with the gratitude that many Venezuelans, especially the poor, feel for Chavez and his social policies. And the electoral, financial judicial and partly legislative organs of the state will continue to be controlled by the Chavista movement. The favoured candidate would be Nicolas Maduro, already anointed by Chavez.

In the period of mourning, Venezuela will live with the fiction of “Chavismo without Chavez”. His portrait in his days of glory, his empty presidential chair, his televised image will be retransmitted and, for a time, will continue to accompany the new president.

But for all religions, sacred and secular, and for the very nature of humanity, mourning always comes to an end. And all Venezuelans – Chavistas and non-Chavistas – will awaken to a severe economic predicament that can’t be ignored. It happened in the Soviet Union in 1989. It will definitely happen in Cuba. It will happen in Venezuela.

The evidence is in the public domain, and it is alarming. The Venezuelan economy shows a deficit of $70 billion (R629bn), 22 percent of gross domestic product. The official monetary exchange rate is 4.3 bolivars (R8.98) to the dollar, but on the black market it is 18 bolivars.

For years, the inflation rate has been the highest in the region. Domestic shortages have become almost a tradition in Venezuela, due to the dismantling of industry, agriculture, animal husbandry (practically all productive activities except petroleum extraction), the exodus of many middle-class professionals and the lack of private investment, internal or external.

Only in 2012 was there an improvement in the continual shortages of many goods and services, but at an extremely high cost, when the Chavez government purchased all sorts of products to grease the votes of its partisans. Venezuela is now suffering an acute shortage of available cash. How can an economy be in such a grave condition when Venezuela has registered more than $800bn in oil sales?

Much of the explanation lies in the handling of all this oil. In 1998, Venezuela was producing 3.3 million barrels of oil a day. The country was exporting 2.7 million barrels a day and reaping the profits. Production has now fallen to 2.4 million, and only 900 000 barrels – exported daily to the US (the hated “empire”) – is now directly paid for.

With the rest: About 800 000 barrels are consumed internally (so cheaply as to be almost free, and stimulating a lucrative black-market trade in illegal exports); 300 000 go directly to China, as payment for products and the repayment of loans; 100 000 barrels are allocated for the importation of petrol; and 300 000 to various Caribbean countries that pay (when they do pay) at huge discounts and very protracted terms of payment.

Or they pay – like Cuba, which receives 100 000 barrels daily – with a supply of medical, educational and police personnel. (Cuba benefits so amply from Venezuelan oil that it actually exports some of its received supplies.) Venezuelan oil profits have shrunk by a third since the Chavez government came to power.

Amid the mourning for Chavez, or immediately afterward, a Chavista president will have to confront this reality and explain it to the Venezuelan people. But this president won’t be Chavez himself, the hypnotic Chavez, Chavez the magician, Chavez the leader who used to explain everything, justify and muffle everything.

It is likely that the reaction will be the typical one within Latin American political culture. The people will react with indignation. They will blame the Chavista government for not being at the level of their former leader and representative. They will say that Chavez wouldn’t have permitted this, Chavez would have prevented it. It will be the end of “Chavismo without Chavez”. And a great opportunity for the opposition.

In the last election, the Venezuelan opposition, after long years of errors and inconsistencies, united among themselves and chose an intelligent and courageous leader in Henrique Capriles. He lost to Chavez but did very well, winning almost 7 million votes.

During Chavez’s physical decline and suffering, the opposition has continued to be critical of the government yet has also showed a noteworthy prudence. And it has done well to do so. Any overflow of vindictive or triumphant passions would be taken as a provocation and lead directly to violence.

If the opposition, after so much time, preserves its cohesion and energy, it could show further gains in the next national elections and recoup its losses, especially once the period of mourning has ended. And this awakening could well be supported by a force of protest that has now somewhat waned but remains latent, that of the Venezuelan students who played a crucial role in defeating a 2007 referendum that would have openly converted Venezuela to the Cuban model of government.

At stake is not only the economic recuperation of a country that has an ocean of largely wasted oil, but the normalisation of democracy, which has been sequestered for almost 14 years by Chavez’s policies of political “redemption”. At stake is the fundamental possibility of contentious groups living together in a society that has been torn apart by discord, intolerance and a propaganda of hatred, by a devotion to an absolute binomial: friend versus enemy.

Few Latin-American governments have shown such devotion to this distinction. Once the mourning for Chavez has ended, it would be best if this distinction were to vanish from the political scene. Only then can Venezuelans arrive at reconciliation.

 

Enrique Krauze is a historian and author of Mexico: A Biography of Power and of Redeemers: Ideas and Power in Latin America. The opinions expressed are his own. This article was translated from the Spanish by Hank Heifetz.

______________

Eskom: plotting SA’s power future

Bloomberg, Business Report, 03 February 2013

Illusionists know how to divert attention so that they can confuse the audience and practice their magic. Filmmakers are expert at planting “MacGuffins” in plots to distract attention from central developments toward unimportant attention grabbers. (Alfred Hitchcock coined the term and was the master of employing them in his mysteries). It is our view that Eskom is using this device in its third multi-year price determination (MYPD3) application and argument for five years of 16 percent annual price hikes.

Eskom keeps putting the strength of its balance sheet as the primary purpose of its pricing application. It is front-loading its tariffs, which hurts the country but benefits Eskom’s balance sheet. Eskom’s unrelenting focus on its credit rating is a MacGuffin. The lead player, the citizens and economy, would die in this film.

If Eskom gets its way, the wholesale price of electricity will have increased over a 10-year period from an average of 19.9c per kilowatt-hour (kWh) to 128c/kWh, which is an increase of 543 percent, or 259 percent in real terms. This equates to a compound rate of growth of 20 percent per annum for 10 years, or an astounding 14 percent per annum in real terms. No economy can be expected to cope with a shock this large to the price of such a basic service as electricity supply. Aggravating the issue further is that the municipalities have a monopoly to distribute electricity at much higher prices.

We have argued previously in the press (Business Report, November 26, 2012) and at the National Energy Regulator of South Africa (Nersa) hearing in Cape Town on January 16 that Eskom’s pricing request is excessive. It is not based on sound economic principles and would damage the economy as so many other participants in the public hearings have confirmed.

The higher the price Eskom can charge, the more cash it will generate from operations and the less debt it will have to issue to fund its growth. But this is to confuse the financial and economic decision-making process, and translates into grossly overcharging current consumers. Financial structure should be a consequence of a sound business strategy, not its primary objective. Eskom likes to confuse and conflate the investment and the financing decision, which need to be clearly separated.

Paradoxically, if Eskom gets its way with higher prices and less debt, the economy is likely to grow more slowly and this will damage rather than improve South Africa’s standing with the credit rating agencies, thus raising the cost of funding the country and Eskom’s debt.

Chamber of Mines president Mark Cutifani highlighted this absurdity on Thursday when he said: “Eskom is primarily focused on achieving a stand-alone investment grade rating at the expense of the competitiveness of South Africa’s electricity intensive tradable sectors. If power costs continue to rise, we would be in an ironic situation where all the major companies operating in South Africa are not investment grade and Eskom is.”

Eskom thinks otherwise – it likes to believe that less debt will mean a higher credit rating. It should seriously think again. The threat to South Africa’s credit rating is not its current debt ratios but its economic prospects. Slower growth means less tax revenue, more government spending, larger fiscal deficits and more debt.

The strategy for electricity generation needs to be clarified and agreed at the highest levels of the government. An energy czar is needed to help make the essential trade-offs for the economy over the short and long run. Such policies would recognise that the large expansion of generating capacity under way is imperative for the economy. Also to be recognised is that years of under pricing electricity and the failure to plan for a gradual adjustment of prices and capacity has left the country with no alternative but to undertake a rapid and large expansion of generating capacity.

The failures to plan well for electricity in the past continue to haunt the economy. We need to get over these failures and make sensible decisions about the future. The issue cannot be left for Eskom and Nersa to resolve – it is far too important.

In March 2008, the total book assets of Eskom amounted to R168 billion. By 2018, in another five years if current plans materialise, these assets will climb to R743bn, which is a formidable increase of R575bn (our forecast based on Eskom’s projected capital expenditure and growth). Furthermore, there is no practical alternative but to rely on Eskom to manage this growth over the next five years.

Today’s burning issue is rather how much of the five-year growth in electricity generating assets should be financed with tariffs and with debt. Well within the five-year window, the energy czar will have to decide on the growth in capacity after 2018 and how it should be financed.

Here are key questions and proposals for formulating a clear energy strategy:

n What growth rate is the country pursuing and how does this translate into capacity requirements for Eskom? The government, which is Eskom’s sole shareholder, must provide clear guidance. Eskom’s task is to supply all the electricity that is demanded at a price that makes economic sense. The role of Eskom and other generators and distributors beyond the next five years will have to be decided as a matter of urgency, but not as urgently as setting the right price for electricity beyond March.

n What economic return on capital is sensible to meet the country’s needs? If it is too high, industry and employment suffer. If it is too low, subsidisation is required and uneconomic activities promoted. We showed through a benchmarking exercise that a real return on capital of 3 percent to 4 percent is sensible and competitive, that is “cost reflective”, in Eskom’s terminology for regulated utilities around the globe. Historically, Eskom’s real return on capital was too low, which led to the capacity crisis and extraordinary price increases over the past few years. Eskom has argued that a pre-tax 8 percent real return on capital and real cost of capital are appropriate. We showed by comparison with the returns realised by public utilities in other economies and by reference to the lower expected returns on capital invested in much riskier economic activities that this is excessive and uncompetitive. The government needs to set a target for the real return on capital and let Nersa monitor that return and its key financial and operating drivers. The sensible target should be a 3.5 percent real return on capital, which should also be applicable to new capital investments. Cash flow return on investment is a globally accepted measure of real return on capital, and a metric we like.

n What is the most economic way of delivering power? This is more technical and involves the usual project economics. Burning coal has high external costs such as environmental pollution and road damage. Game changers include power stations that burn natural and shale gas, which can be built quickly at lower cost and operate more efficiently. The energy and manufacturing renaissance in the US must serve as a template and exemplar for the government and Eskom. The die has been cast for the present expansion, but a decision needs to be made on the energy sources for the next phase of electricity capacity building beyond 2018.

n What financing and capital structure is required to fulfil this strategy? Operating cash flow is stable for power companies, which lessens risk and allows them to operate with high levels of debt and leverage. The cost of debt can be managed by the government guaranteeing Eskom’s debt (as the Treasury has agreed to do) or by the country raising debt on Eskom’s behalf and investing the proceeds of such debt issues as equity in Eskom.

The choice for the economy is simple: it is either more debt, or much higher charges that cause damage. In Eskom’s MYPD3 five-year proposal, debt would grow to R338bn (relative to book assets of R743bn and the government’s guarantee of R350bn). We estimate that if price increases were limited to 10 percent per annum and cash costs were reduced by 5 percent, Eskom would have a competitive real return on capital and debt peak of R450bn.

Surely this is an unavoidable demand on the borrowing capacity of the country or its wholly owned subsidiary Eskom. The government can’t abdicate this responsibility if it is to fulfil its obligation to the wider economy. And the rating agencies should be made to appreciate that to raise debt to fund essential infrastructure that improves the growth potential of the economy, rather than to undermine it, makes economic sense and justifies a better, rather than worse, credit rating.

Another issue to consider when setting the target real return on capital invested by Eskom is whether to allow non-productive construction-in-progress as part of the return on capital and tariff calculation. We believe it should be excluded from the calculation. Granting Eskom the right to charge tariffs on construction-in-progress encourages it to build expensive capacity and to keep building. If Eskom is able to charge these tariffs, it has no incentive to control expansion costs nor to deliver new capacity on time. These are headline issues that dog the current expansion.

We are also concerned about the opaque practice of having Eskom subsidise poor consumers and renewable independent power producers (IPPs). If the government wants to achieve these noble aims, it should do so in a separate, transparent vehicle that taxpayers can monitor. If a separate subsidised vehicle were set up for the support of renewable IPPs, we believe Eskom’s price increase could be sensibly lowered to 7 percent or 8 percent for the core service they provide. Somebody will pay for these subsidies; our aim is to make them as transparent as possible to taxpayers.

The government needs to set a clear strategy with a realistic economic return on capital for Eskom. Eskom’s pricing proposal is excessive and would damage the economy irreversibly; all in the name of chasing a stand-alone investment grade credit rating. We don’t know whether the government or Eskom management has set this objective, but it is misplaced. Eskom with the government’s blessing can and should take on more debt to fund its expansion and charge a price that generates a real return on capital of 3 percent to 4 percent excluding construction-in-progress.

If this strategy were clearly communicated, the risk of regulatory uncertainty would be reduced and South Africa could attract the world’s leading power companies and foreign direct investment. Policy alignment would reduce regulatory uncertainty. In this way growth, competitiveness and credit rating would be enhanced. This objective is the real star.

 

Brian Kantor is the chief strategist and economist at Investec Wealth & Investment. David Holland is an independent consultant and senior advisor to Credit Suisse. The opinions are those of the authors and do not reflect the views of Investec or Credit Suisse.

__________

Let Farlam Commission decides

Gia Nicolaides, EWN, 31 February 2013

There's no doubt that things went terribly wrong in Marikana, but that is exactly why the Farlam Commission of Inquiry has been appointed.

The latest footage to make headlines from the day of the shooting, when 34 miners were killed, supposedly tells a very different story to the one of self-defence that police are telling.

British News station Channel 4 suggests that this footage, taken by police officers on their cell phones, was recently discovered. This is not true. It was shown at the Inquiry on the 21st of November last year and broadcast on South African news channels. Admittedly there may have been parts that were not shown at the Inquiry, but when I saw British Journalist Inigo Gilmore's latest video report I immediately recognised it.

The issue I have, one that has also been raised by the Commission, is that certain conclusions have been drawn from the footage and reported on as fact. One thing that I am certain about is that the conversation between the officers on the video is barely audible. Special audio programs and translators may have been able to decipher what was said, but I don't think any of this has been put into context.

There's a very high possibility that one of the officers did in fact say, “That mother****er, I shot him at least 10 times!” However, to draw such conclusions while the commission is still hearing testimony and collecting evidence is premature. Broadcasting this footage in the U.K. has probably damaged the police's case.

I remain unbiased about the situation, even though I witnessed the shooting and have been covering the Inquiry from the start. I do, however, believe it is up to the Commission at this point to draw conclusions and come up with recommendations. Retired Judge Ian Farlam echoed these sentiments after hearing about the footage broadcast in Britain.

The footage, which was shown on South African television, was reported on extensively and I know that journalists covering this story haven't taken lightly to Greg Marinovich's article, where he states Inigo Gilmore "came to certain conclusions, including one that South African journos are more than a little slack."

If there was in fact a deliberate "mass murder" on the small koppie where the majority of miners were killed, surely the Inquiry will be able to reveal this? I'm not saying that these reports are untrue, but before anyone comes to a conclusion and leaves the police with blood on their hands, the Inquiry should finish what it has been tasked with doing.

Gia Nicolaides is an Eyewitness News Reporter. She covered the unrest in Marikana last year. 

___________________

Inside Labour

Terry Bell, 03 February 2013

 

Yesterday, exactly 40 years ago, the modern trade union movement arrived on the South African scene.  Its birth was heralded by a wave of strikes in Durban that had gestated over 22 days from the time 2 000 workers at Coronation Brick and Tile downed tools.

 

These strikes, that culminated in nearly 5 000 workers at three major plants declaring a dispute on January 31, 1973 were not only to demand better pay and shopfloor conditions;  they also had a broad, anti-apartheid, political dimension.  And, like the worker committees that emerged during the recent turmoil on the platinum belt, they had no fixed leadership or bureaucracy.

 

However, the success of such unity in action meant that this organisational infant soon found its feet, and, as it developed clear identities, it began to articulate many of the demands that today are echoed in areas as diverse as Marikana, Zamdela and the Boland.  These demands can be summed up in one word: democracy.  

 

But the democracy the workers demanded and began to practice then went well beyond the veneer of electoral politics, behind which often gross exploitation can continue.  They wanted equality of choice, not just the legalistic notion of rich and poor being equal.

 

Such ideas emerged piecemeal and unevenly, but constituted a major current by 1986 when the newer unions came together as the non-racial Cosatu and the Black Consciousness orientated National Council of Trade Unions (Nactu).  The federations differed mainly in terms of how to organise in an apartheid state, but shared broadly similar ideas.

 

Today, four decades on, the South African trade union movement, comprising four federations and several hundred independent unions, is shorn of racial divisiveness and can celebrate substantial legal gains.  But it faces perhaps the most critical period in its history.

 

Numerically and organisationally, although not necessarily financially, organised labour is probably weaker now than even a decade ago.  This at a time when the pressure on jobs, wages and conditions is increasingly acute and when many disgruntled trade unionists are mouthing the very demands raised 30 and 40 years ago.

 

There is now widespread agreement within the South African labour movement that it is in trouble.  Although Nactu has been given a membership boost from the mining sector, it has come at a cost to Cosatu — and both federations are weaker today than they were a decade ago.  The unanimous commitment to unity in a single federation also remains elusive.

 

The boost to Nactu has come via the affiialition of the Association of Mineworkers and Construction Union (Amcu).  But Amcu’s membership surge has come almost exclusively at the expense of the Cosatu-affiliated National Union of Mineworkers (NUM).

 

The turmoil in the mining industry has also seen possibly thousands of trade unionists turning their backs on all unions.  In some cases, disgruntled NUM members have also joined, or are trying to join, the National Union of Metalworkers (Numsa), opening up long simmering rivalry between two Cosatu unions.

 

It is certainly true, as some disillusioned former unionists complain, that big unions are today big business, with their management structures divorced socially and economically from the memberships.  This makes for union bosses rather than leaders.

 

One consequence has been the emergence of worker committees in a number of recent disputes.  These are committees elected by workers who are opposing not just the bosses and the state, but organised labour as well.  This is a manifestation of the “bottom-up concept” that is a fundamental — and all-too often ignored — principle of trade unionism.   

 

Thirty years ago, that principle was quite firmly in place.  A Cosatu document from 1986 spells out the then newly formed federation’s view:  “The workers’ movement must be built on workers’ control.....control over shop stewards, workers’ committees, officials and executives.” 

 

This form of direct democracy was seen by the new unions as providing the template for the labour movement as a whole.  And the labour movement, in its turn, it was argued, would provide the example to be followed by society at large.

 

As a result, those early unionists also extended the principle to the communities in which they lived.   Angered at being used, abused, patronised and discarded at will, they demanded the right to have community opinions taken fully into account.

 

Here there are distinct echoes of Marikana and Zamdela in that the demand was that ordinary working people should have a direct say in how their lives were being run.  Significantly, in 1986, the then three-year-old NUM also drew up a Bill of Rights that demanded that miners should “have the right to have a say in the running of the mines — and all future plans”.

 

Six years later, the Cosatu-affiliated National Union of Metalworkers proposed that once the ANC became the government  and, therefore, a major employer, Cosatu should leave the anti-apartheid alliance since workers should “not be in bed with bosses”.  

 

Such calls are again being heard amid a growing mood of grassroots radicalism.  It has meant that both unions and mine owners, let alone other employers, are having to consider new approaches.  For the unions, this may mean a return to founding principles.  For the employers it means trying to stem any such tide of radicalism that could undermine the present system.

 

Perhaps indicative of the growing new mood is the cynicism expressed about the philanthropic announcement this week by mining tycoon Patrice Motsepe.  He said he would annually donate half his family’s assets to be distributed to the poor by religious and traditional leaders.

 

One of the more diplomatic responses came from NUM spokesperson, Lesiba Seshoka:  “This is a good idea, but we should remember that it was marginalised and poor miners who created his wealth;  the biggest proportion of this [Motsepe’s philanthropy] should go to them.”

 

Another unionist noted:  “He could have provided better wages and conditions in all the years that the miners made him billions.  Instead he spent millions on footballers.” (Motsepe owns the Mamelodi Sundowns team).

______________

Norman Mampane (Communications Officer)

Congress of South African Trade Unions

110 Jorissen Cnr Simmonds Street

Braamfontein

2017

 

P.O.Box 1019

Johannesburg

2000

South Africa

 

Tel: +27 11 339-4911 or Direct 010 219-1342

Mobile: +27 72 416 3790

E-Mail: mam...@cosatu.org.za