RETAILERS AND FINANCIERSSIGN GROUNDBREAKING "BUY LOCAL" AGREEMENT

Weeks of intense negotiation between Sactwu, the Southern African Clothing and Textile Workers Union, and major retailers and asset managers culminated on 5 December with the signing of anhistoric declaration in favour of "buying local".

The process was initiated by Sactwu, when it tabled a Section 77 notice of possible protest action to Nedlac in August 2003. The notice was directed at retailers and their banks and asset managers, and argued that the sourcing decisions of retailers were resulting in job losses in the clothing, textile and leather industry, amongst other issues. In terms of the suppliers of capital, Sactwu argued that banks and asset managers benefit from the sourcing practices of retailers, and can have leverage over their corporate behaviour.

Two declarations were signed - one with retailers and another with the finance sector. These declarations were the result of several meetings between the parties, facilitated by Nedlac. The retailers who initially signed the declaration were Pick 'n Pay; Shoprite Checkers; Woolworths; Foschini; Pepkor and Edcon. Later Truworths, the LA Group, Queenspark and Cape Union Mart also signed the agreement.

Retailers' declaration:

The declaration commits the signatories to use their efforts, particularly their buying decisions, to promote higher levels of procurement from South African manufacturers, in an effort to create employment or save jobs in South Africa.

The declaration covers a period of six months, during which time the parties will continue to engage with each other with the purpose of developing a broader agreement on local procurement of apparel and in the home textile and footwear industries. The parties will try to ensure the involvement of South African manufacturers in order to consider ways of strengthening and enhancing South African manufacturing. Nedlac will convene the meetings, which will take place at least once per month. The first meeting took place in January.

In terms of the declaration, each retailer who is currently sourcing up to 75% of its apparel products from South African manufacturers will meet with Sactwu in bilateral discussions to discuss its levels of South African procurement and ways of increasing its South African procurement.

"With these agreements, clothing retail holding companies with a total retail clothing, textiles and footwear turnover of more than R25 billion made a solemn pledge with the nation to help reverse the massive job losses in the clothing sector", said Ebrahim Patel, General Secretary of Sactwu.

"The retail holding companies have more than 30 store retail or franchise names, including some of the country's best known retail chains", he said. These include:

Finance sector declaration

Finance sector representatives who signed the agreement were:

Old Mutual Asset Management (AM); Metropolitan AM; Futuregrowth AM; IndependentBlack Fund Managers Association; Oasis AM; Tri-Linear AM; Rockland Investments; Cerebral Investments; Merit AM; Sanlam. Alexander Forbes and NBC Holdings later joined the signatories. The financial sector agreed to encourage the Clothing Retail sector, particularly in the application of their buying decisions, to promote higher levels of local procurement in an endeavour to create employmentor save jobs in South Africa.

Protest Action against non-signatories

Sactwu subsequently tabled a Section 77(1)(d) notice indicating that they will launch protest action on 28 February against those retailers and financial sector companies that did not sign the agreement. They have indicated that the action will take the form of rallies, protests, demonstrations, days of prayer, pamphlet distribution and the cutting off of suppliers of capital and goods to specific businesses. These businesses may include Mr Price, Stuttafords, Massmart, The Platinum Group, Diesel and others, as well as major banks and finance sector companies.

The purpose of the protest action is to persuade those businesses who have not yet signed the Declaration to do so. Sactwu argues that the effect of some retailers not signing is that they are able to obtain competitive advantage in the marketplace against signatories, through continuing with unethical sourcing policies. The protest action could last up to two years.