NEDLAC'S FIRST YEAR:
BUILDING SOCIAL PARTNERSHIP

The formation of Nedlac

On 18 February 1995, the National Economic Development and Labour Council (Nedlac) waslaunched, ushering in a new era of inclusive decision-making and consensus-seeking in theeconomic arena.

Nedlac's origins lie in the struggle against apartheid, against unilateral governmentdecision-making, and in the calls from all sectors of society for decisions to be taken ina more inclusive and transparent manner.

It emerges out of a recognition of the importance of seeking consensus on majoreconomic, social and development policies to ensure their success, and out of anawareness, as President Mandela remarked at Nedlac's launch, that "our democraticgains will be shallow and persistently threatened if they do not find expression in foodand shelter, in well-paying jobs, and rising living standards".

The character of Nedlac

Nedlac draws on the experience of its predecessors, the National Economic Forum (NEF)and the National Manpower Commission (NMC), and is also part of an international traditionof institutionalised cooperation between government and economic stakeholders. However, itis unique in some important ways: it is the most representative policy body South Africahas yet had, including not only government, labour and business, but also organisationsrepresenting the community; it is an agreement-making body of equal partners and not anadvisory body; and it requires mandated representatives and serves as an instrument forcontinued "accord- making".

Nedlac's founding document describes its character as "a representative andconsensus-seeking body where the parties to the Council will seek to reach agreementthrough negotiation and discussion based on proper mandates. If agreement cannot bereached, each party shall retain its freedom of action within its own sphere ofresponsibilities." This is a formula that has been successful since 1992 when the NEFwas formed and the NMC was restructured.

The character of Nedlac

The Nedlac Act, passed with unanimous support in Parliament in 1994, says Nedlac shall:

• Strive to promote the goals of economic growth, participation in economic decision-making, and social equity.
• Seek to reach consensus and conclude agreements pertaining to social and economic policy.
• Consider all significant changes to social and economic policy before it is implemented or introduced in Parliament.
• Encourage and promote the formulation of coordinated policy on social and economic matters.

As the Nedlac Act outlines, the institution has a broad scope of activity, covering allrelevant aspects of social and economic policy and decision-making. But from the outset ithas been acknowledged that for the negotiation process in Nedlac to produce significantagreements that contribute meaningfully to the transformation process, it is vital tofocus the institution's work programme. During Nedlac's first year considerable effort hasbeen put into the development of that work programme, specifically the identification ofthe key areas on which the social partners need to be seeking agreement.

The Nedlac structures and operations

The Nedlac structures have by and large proved to be effective vehicles for pursuingthe institution's work programme. In addition to the formal structures, various ad hocsubcommittees are established when necessary. This includes periodic meetings on specificissues at senior-leadership level for purposes of assisting in guiding the overalldevelopment of the institution's work programme and in response to general economicdevelopments.

The Executive Council is Nedlac's most senior decision-making structure. It meets on aquarterly basis to receive and consider reports on the general affairs of Nedlac and onthe work of the chambers. A key task of the Executive Council is to considerrecommendations from the chambers for agreement-making and to reach decisions. TheExecutive Council also deliberates on areas of disagreement or deadlock that might havearisen in the chambers.

The Management Committee meets monthly and its task is to oversee and coordinate thework of Nedlac and, in particular, its chambers.

The Nedlac chambers are in many ways the engine-room of the institution. They meetevery two weeks.

The chairing of all Nedlac structures rotates between constituencies, mostly on aquarterly basis.

Nedlac's constituencies

Ultimately, the four Nedlac constituencies are challenged to make the institution work,and to produce agreements which can be acted on to improve the country's prospects andquality of life. It is the ability of the representatives to obtain realistic mandates, tonegotiate in the best interests of their constituents, and to deliver their constituenciesthat will determine Nedlac's ongoing success.

All constituencies are represented at very senior level, and through the process ofinteraction during Nedlac's first year, a growing consolidation and the capacity toparticipate have been evident. All constituencies have developed mechanisms forcoordinating their inputs into Nedlac. These include constituency workshops and caucuses,and, in the case of the labour and community constituencies, offices have been set up tomanage and coordinate their involvement in Nedlac. The capacity and participation of eachconstituency is most important and will remain an important focus in the year ahead.

The business constituency in Nedlac is represented by Business South Africa (BSA) andthe National African Federated Chamber of Commerce (Nafcoc).

Labour in Nedlac is represented by the Congress of South African Trade Unions (Cosatu),the National Council of Trade Unions (Nactu), and the Federation of South African LabourUnions (Fedsal).

The government delegation in Nedlac includes ministers, deputy ministers,directors-general and senior officials from several ministries and departments, includinglabour, finance, trade and industry, public works and mineral and energy affairs.Government's involvement in Nedlac is coordinated through the Department of Labour.

The community constituency in Nedlac comprises representatives of the women, youth,rural, disabled, and civic sectors. Immediately after the launch of Nedlac, the importanttask of constituting the community constituency was embarked upon. The decision toincorporate a fourth constituency in Nedlac and the actual process (documented below) ofconstituting this constituency were both novel developments in the history and experienceof cooperative institutions such as Nedlac.

When Nedlac was being formed, the principle of inclusivity was acknowledged as animportant cornerstone for ensuring the success of the institution. For this reason it wasdecided that, in addition to business, labour and government, a fourth constituencyrepresenting community interests should be included in Nedlac. However, because no clearorganised and overarching structure existed, it was recognised that a special processwould be needed to constitute this fourth constituency. The Nedlac Act and constitution,therefore, set out criteria for the admission of organisations to this constituency, withappointments to be made by the Minister without Portfolio in consultation with the otherNedlac constituencies.

According to the criteria set out in the Act and constitution, the successfulorganisation would need to:

• Represent a significant community interest on a national basis.
• Have a direct interest in development and reconstruction.
• Be constituted democratically, and have a constitution which provides for democratic decision-making procedures.
• Be able to seek mandates from their own members, and obtain compliance from their members with regard to the resolutions and policies of Nedlac.

Shortly after the launch of Nedlac, applications for membership of the communityconstituency were invited, and over 60 applications were received. A selection committeewith representation from business, labour and government was set up to consider theapplications and make recommendations to the Minister without Portfolio. Therecommendations of this committee, which were developed in an open session, were that, atthis stage, five sectors should be represented in this constituency. Organisations,considered to be representative of these sectors, were subsequently appointed by the thenMinister without Portfolio as follows:

• Civics:
  South African National Civics Organisation.
• Youth:
  National Youth Development Forum.
• Women:
  Women's National Coalition.
• Rural people:
  National Rural Development Forum.
• The disabled:
  South African Federal Council on Disability.

The National Youth Development Forum has since disbanded, and the youth are in theprocess of forming a new body to represent their interests.

The community constituency is represented along with business, labour and government inthe Development Chamber, and also has representatives on the Management Committee andExecutive Council.

The work programme and agreements reached

Nedlac's constituencies themselves decide on the council's agenda. Issues aresubstantially worked through at chamber level and then referred to the Executive Councilfor final decision-making. In the course of the year, a variety of process tools have beendeveloped and used to facilitate agreement-making. Constituencies have also begun adiscussion on how to ensure that the relationship between government policy formulationand Nedlac processes is as effective as possible.

This report outlines a comprehensive programme of issues currently being addressed inNedlac. Many of these are close to finalisation and agreement as Nedlac moves into itssecond year.

During its first year, agreements were reached on the following:

• The labour relations bill.
• Support for government ratification of six International Labour Organisation (ILO) conventions.
• The mine health and safety bill.
• The establishment of the National Investment Promotion Agency (Nipa).
• The creation of a competitiveness fund to enhance technical and marketing support for small, micro and medium-sized enterprises (SMMEs).
• The setting up of an advisory committee to investigate the possible establishment of a national development agency.
• A resolution with respect to Sasol synthetic-fuel protection.

To develop a strategic focus or a framework for social partnership and agreement-makingin Nedlac, a parallel process to the work of the chambers is also in motion. It is aimedat identifying the core overarching issues (and the interlinkages and trade-offs betweenthem) on which the social partners need to be seeking agreement. This process will, amongothers, assist in prioritising the work of the chambers and in ensuring that the approachto policy-making is not piecemeal.

Capacity-building

The success of an institution such as Nedlac depends critically on the capacity of itsconstituencies to meaningfully participate. It is for this reason that significantattention is placed on programmes for capacity-building within constituencies. Activitiesover the past year have included Nedlac support to the emerging business, community andlabour constituencies for administrative infrastructure and for the holding of educationand policy-development workshops. A sectoral-workshop facility, co-managed by Nedlac andthe National Productivity Institute (NPI), was recently initiated to also assist withcapacity-building and policy development at sectoral level in the development of sectoralstrategies.

Funding

Nedlac's activities are funded from the budget of the Department of Labour. For itsfirst period of operation, the Executive Council agreed that Nedlac could account for a15-month period (1 January 1995 - 31 March 1996), and in this period funds received fromgovernment amounted to R7 946 690.

The financial statements for the 15 months ended 31 March 1996 have been audited byNedlac's auditors, Fisher Hoffman and Sithole. The audited statements will be consideredby the Executive Council at its meeting of 28 June 1996. Upon approval, the financialstatements will be incorporated in the Nedlac annual report for submission to the Ministerof Labour and for tabling by the minister in Parliament.

Secretariat

Nedlac's activities are managed and serviced by a secretariat currently numbering 16,and made up of professional and administrative staff.