Message from the executive director

Nedlac has been in existence for almost two-and-a-half years.

A year of intense activity has just ended, during which Nedlac has laid a solidfoundation for the establishment of a comprehensive system of social dialogue andconsensus-seeking. Building from the starting point of the negotiating processes whichbegan in 1990, and particularly the National Economic Forum and National ManpowerCommission, a unique South African model of social dialogue has evolved. In addition toits core agreement-making role, Nedlac's activities are broadening and it also serves as amechanism for information exchange, informal problem-solving, research, joint campaigns,pilot projects, constituency organisation and capacity-building, dispute resolution andother functions.

During the second year of Nedlac's existence, the number of formal agreements andreports completed has trebled compared to its first 15 months. This indicates asignificantly higher level of activity. However, the value of the Nedlac process clearlycannot be measured simply by the number of agreements reached. The process underway alsoinfluences and strengthens policy-making and implementation in a variety of subtle ways.

Importantly, as an instrument for the participation of all significant sections oforganised business, the organised community and organised labour, Nedlac serves tostrengthen democratic governance and transparency of decision-making. At the same time, itlimits the scope for self-serving lobbying by narrow interests which dominated anddistorted the way policy was made and implemented in the apartheid era. As a result, newpolicies and changes made are more considered and more durable in the long-term.

However, this is a complicated and inevitably time-consuming exercise. Underpinning theNedlac concept is the firm conviction that time and energy spent in achieving greaterconsensus will be more than recouped in the relative ease of implementation which follows.Combining so many interests and issues makes for a greater level of complexity that isdifficult to manage, and in which full consensus is less likely. That we have largelysucceeded thus far is due to the fact that there are very skilled and experiencednegotiators within all constituencies who are participating in the Nedlac process.

Over the past year, "delivery" has improved across the board in the countryas a whole. As the Nedlac social and economic review shows, the country's social andeconomic fundamentals have become stronger. However, much more still needs to be done, andthis remains an urgent priority. Nedlac's contribution to this improved scenario remainssignificant.

One of the main achievements of Nedlac's first year was the agreement on the LabourRelations Act. During the year under review, the Labour Market Chamber took the processforward to implement the Act. This included "nuts and bolts" work related to theestablishment of the Commission for Conciliation, Mediation and Arbitration, an essentialservices committee, the appointment of Labour Court judges, and the completion of a numberof schedules and regulations. In addition, Nedlac facilitated a substantial programme ofeducation on the new Labour Relations Act for the benefit of workers and small businesses.

The Labour Market Chamber also produced agreements on other important pieces of labourlegislation, including an amendment to the Insolvency Act and to the Compensation forOccupational Injuries and Diseases Act.

For the coming year, skills development has been given top priority. Considerableeffort has already been invested in negotiations on the basic conditions of employmentbill.

In the arena of trade, the Trade and Industry Chamber has been closely involved in workrelated to the trade negotiations with the European Union and has begun to pay significantattention to matters relating to the southern African region and the Indian Ocean Rim. Aframework agreement was concluded on the social clause which commits government, businessand labour to a combined programme to promote the universal adoption and observance of thecore International Labour Organisation standards. As a consequence, labour and businessrepresentatives were included in the government delegation to the World Trade Organisationand other multilateral forums.

In the arena of industrial policy, work completed has related to the development of atax-incentive scheme and other supply-side measures, agreement on the national smallbusiness bill and substantial research work on selected industrial clusters.

Most exciting, perhaps, was the first phase of the Workplace Challenge, which is aninitiative aimed at increasing the competitiveness, productivity and employment potentialof South African firms by harnessing the joint efforts of business, government and labour.The workshops, held in eight provinces, were aimed at sensitising a broad range ofparticipants and were generally very successful. Phase two, which is currently inpreparation, will be more focused on initiatives in selected sectors, clusters or valuechains. Measures are being considered by the chamber to increase the coordination betweenthe cluster research, the Workplace Challenge and other industrial policy initiativescurrently taking place.

The fruits of the previous year's agreements were seen this year with the establishmentof Investment South Africa, the export finance guarantee scheme, Ntsika InvestmentPromotion Agency and the National Small Business Council.

Nedlac's potential to contribute to a programme of building action-orientatedpartnerships was indicated by the conference against crime and violence organised jointlywith the Secretariat for Safety and Security, and the subsequent work on this issueundertaken by the Development Chamber. The high level of crime and violence in SouthAfrica impacts negatively on both the quality of life of all ordinary citizens, as well ason the overall economic performance of the country. For the first time, the religiouscommunity and sports organisations were drawn into Nedlac activities. The declarationadopted by the conference lays the basis for local action by each participatingorganisation. Already the impact is being felt through constituency activities: Sanco'soperation Mpimpa and Cosatu's anti-crime marches are to be commended for adding a newelement to the struggle against crime and violence.

The Development Chamber, which began its activities later than the other Nedlacchambers, also completed its first agreements in February this year. This includesagreement on the proposal to establish a national development agency to supportnon-governmental organisations. Agreement was also reached on a set of guidelines for theestablishment of local development structures, which will facilitate more effectiveconsultation between government and civil society at the local level, while a frameworkagreement was concluded on proposals to enhance community-based public works programmes.

Discussions on macroeconomic matters are generally more complicated than other policyareas. However, during the last year a report on the Budget containing certain taxproposals was completed and submitted to the Minister of Finance. For the coming year, thePublic Finance and Monetary Policy Chamber recently formulated a plan for conductingdiscussions on the Budget process and the medium-term expenditure framework, as well as aholistic approach to tax. Research to assist policy development is also being conductedinto the levels of saving in South Africa and to promote investment, especially in thearena of infrastructure. These latest projects indicate the way in which research isbecoming a useful tool in the Nedlac process.

More than R5 million has been leveraged for capacity-building since Nedlac'sestablishment. This has been done through joint programmes with other institutions orfunding from donors, which complemented Nedlac's own capacity-building fund. Theseresources have been directed to constituency capacity-building aimed at labour, smallbusiness and the community. The funds support a small number of constituency staff andsome infrastructure costs, but have mainly gone into workshops. Roughly R3 million hasbeen invested in education for trade unionists and Nafcoc and Fabcos members on the LabourRelations Act, with approximately 10 000 individuals benefiting from the workshops,manuals and videos produced. Capacity-building will remain a top priority in the comingyear.

Through section 77 of the Labour Relations Act, Nedlac is also challenged to play arole in dealing with socio-economic protest action. The Act sets out a procedure throughwhich workers obtain protection in the event of socio-economic protest action. This is anew function and one which we are having to learn quickly how to manage. The law has notbeen clear, leading to some unfortunate legal disputes. Clarifying these procedures is ahigh priority.

At the 1996 Nedlac Summit, attention was given to the Nedlac processes, as a result ofwhich we have made considerable adjustments to ensure that Nedlac is able to reachagreements, resolve disputes and share information as effectively as possible. In anevolving institution like Nedlac, adjustment and refinement of the process must be anongoing activity to ensure that Nedlac remains dynamic and operates as effectively aspossible.

The improvements made include strengthening the role of the Management Committee incoordinating and expediting the work in the chambers; biannual senior-level policysessions for each chamber, which allow for more discussion on the strategic direction forpolicy; a strategic focus session in each Executive Council meeting; and a morecoordinated approach to dealing with proposals from government for legislative amendments.

Our relationship with Parliament has become more structured, and meetings betweenchamber delegations and specific parliamentary committees have taken place and will becontinued. Work to develop a protocol for relating to Parliament will involveconsultations with the chairpersons of specific parliamentary committees later this year.

Internationally, Nedlac has established contact with many other social and economiccouncils and similar organisations, and has hosted a number of international visitors. Ofgreat significance is the interest in the Nedlac experience shown by countries in thesouthern African region. We anticipate that this contact will continue to grow in thecoming year.

In conclusion, Nedlac must continue to play a vital role in South Africa's transitionby forging an ever greater consensus on the crucial balance between considerations ofequity and efficiency. We look forward to a year of consolidation and enhanced delivery.

I would like to thank the staff of the Nedlac secretariat for their total commitmentand dedication, and all the constituency delegates, especially the Nedlacchairpersons-Minister of Labour, Tito Mboweni; Cosatu secretary-general Sam Shilowa;Business South Africa president Hans Smith; and community representative Thandi Sigodi-andthe overall convenors-Tebogo Loate of community, Ebrahim Patel of labour, Sipho Pityana ofgovernment and Raymond Parsons of business. And a special word of thanks to government'sLes Kettledas, who was an overall convenor until the end of 1996.

On behalf of Nedlac, I also thank those who have played a role in the organisation andhave now moved on to other responsibilities and work. In particular, I would like tothank:

• Pieter Haasbroek, former business convenor in the Development Chamber.
• Gerrie Breyl, former government convenor in the Trade and Industry Chamber.
• Debra Marsden, Nedlac programmes director from February 1995 until March 1997.
• Joshua Wolmarans, coordinator of the Public Finance and Monetary Policy Chamber from February 1996 until April 1997.

On behalf of Nedlac, I once again extend sincere condolences on the deaths of:

• Clive Menell of Anglovaal, who provided support and assistance at crucial times.
• Khotso Tsotetsi of Cosatu, who played an active role in the first phase of the Workplace Challenge and who died in a car accident.
• Ronnie Bethlehem, who represented business in the Public Finance and Monetary Policy Chamber and other committees and who was tragically murdered.

Jayendra Naidoo

May 1997