THE CONTRIBUTION OF STAKEHOLDER INVOLVEMENT TO ECONOMIC AND SOCIAL DEVELOPMENT SEMINAR - 5April 2000

1.    INTRODUCTION

On 5 April 2000, Nedlac launched its 'Expanding Dialogue' series. This series aims to provide constituency representatives the opportunity to engage in informal discussion amongst themselves and with specialists, who do not ordinarily attend Nedlac meetings, on topics that are of relevance to the pursuit of economic growth and social equity.

The first seminar's topic was "Contribution of Stakeholder Involvement to Economic and Social Development". The speakers were:

• Prof. E. Webster, director of the Sociology of Work Unit, Wits University.
• Mr. S. Morotoba, Executive Officer of the National Skills Authority.
• Mr. M. Clark, Chief Executive Officer of the KwaZulu-Natal Economic Council.
• Mr. P. van Niekerk, Executive Director, Human Resources of the Dorbyl Group.

Approximately 40 representatives of Nedlac's constituencies as well as representatives from other statutory bodies, Provincial Economic Councils and research agencies attended the seminar (please see attached for the details of all who attended the seminar).

2.    THE SPEAKERS

This section only highlights one or two points from each presentation, as many of the broad themes were picked up in the debate.

2.1. E. Webster

In his presentation E. Webster raised two points that caused much debate in the debate section of the seminar. He argued:

(a) That stakeholders, particularly labour, were finding it increasingly difficult to hold together the diverse interests that emerge under globalisation - the winners and the losers - while maintaining internal democracy. The challenge of managing diverse interests within one constituency was likely to be one of the central problems facing constituencies in the coming years.

(b) Stakeholders were prone to blame an institution for the failure of projects or processes in which they were involved, but often the problem lay within their internal structures and commitment to the process. He drew an analogy with a failed marriage in which the respective partners blame the institution of marriage rather than assessing their own weaknesses that lead to the failure of the marriage.

2.2. S. Morotoba

S. Morotoba reflected on the complexities of managing stakeholder relations. He revealed that the structuring of constituencies' participation in various structures was critical in ensuring that debates in stakeholder-based institutions are able to contribute to social development. Unless consensus is obtained on the management issues, the institution's ability to engage substantively with policy debates is constrained.

He further stated that it was the National Skills Authority's experience that stakeholder driven development was increasingly being viewed by the international community as an important tool in ensuring the sustainability of policy initiatives.

2.3. M. Clark

M. Clark raised the point that there is often confusion over the purpose of stakeholder engagement. Stakeholders are not sure whether it is to consult, to negotiate, to participate in policy formulation or simply to prevent unilateral policy formulation. This lack of clarity limits the impact of stakeholder engagement.

He noted that the public image of stakeholders that were unified in addressing policy challenges facing the KZN province was as important contributor to regional peace as they offered an example that disputes could be resolved through dialogue.

2.4 P. van Niekerk

P. van Niekerk argued that stakeholder engagement had been central to Dorbyl's ability to increase earnings and access the export environment. Stakeholder engagement had been responsible for inspiring many creative solutions to productivity problems yielding substantial savings in production processes. He emphasised that such stakeholder processes had to be built on trust and that there had to be demonstrable returns to all stakeholders.

He pointed out that in advancing stakeholder engagement it is not so much the future that constituencies are fearful of, but rather the loss of their current position. Accordingly, it is essential to address that fear in order to establish the trust necessary for strong relationships.

3.    THE DEBATE

The debate after the speakers' inputs revolved around a number of points that are detailed below.

All the participants agreed that stakeholder engagement and social dialogue were important features of the South African economic and social policy formulation and implementation. Participants emphasised that the search for solutions to development and economic challenges being considerably furthered by new ideas that emerge through social dialogue. Others pointed to increased social stability and trust as products of social dialogue that were central to sustained economic growth. Notwithstanding consensus on these benefits there was vigorous debate over a number of the issues raised in the inputs.

Although there was agreement that social dialogue is central, participants noted that there are a range of different forms of engagement that fall under that broad label. Social dialogue is often used to mean everything from a meeting for purposes of information-sharing to negotiation. While no attempt was made to establish a definition of social dialogue, it is clear that it includes a continuum of engagements with stakeholders.

Some participants noted that this is strongly determined by who defines social dialogue in a particular instance. The way in which social dialogue is defined, which in turn depends on the commitment and relative power of the stakeholders, has a significant impact on the scope of the process and its influence over policy development and implementation. All organisations that engaged stakeholders had to manage the degree of breadth (or narrowness) that defined social dialogue.

Where these engagements fit in the policy process was seen as important to understanding the nature of social dialogue in South Africa. Is social dialogue a small part of the policy process or is it the whole of the policy process? Some participants argued that a social dialogue approach constitutes a small part of the overall approach to policy formulation throughout the economy - from a national to a firm level. Accordingly, while it may be possible to conclude that processes involving some form of social dialogue have positive outcomes, they may compose a small minority of all processes in the economy. The question was posed, "If social dialogue is central to only a few processes, is it effectively being undermined as constituencies attempt to influence policy in different ways?"

The commitment and relative power of stakeholders was raised a number of times throughout the discussion. Constituency representatives emphasised the commitment of their organisations to Nedlac and other bodies of social dialogue. Nevertheless it was noted that constituencies struggled with capacity constraints which limited their impact on certain processes.

Participants noted that as social dialogue developed there was a relatively high turnover of individual representatives within constituencies. In the short term this constrained processes as relations of trust between stakeholders needed to be developed and as representatives developed the requisite package of skills to engage. Participants from statutory institutions and provincial economic councils emphasised that this raised challenges that pertained to the management of social dialogue. While seemingly straightforward, the activities of such bodies needed to be carefully managed in order to allow for the optimal participation of constituencies.

4.    CONCLUSION

Participants noted that because of South Africa's history, social dialogue was critical in shaping the country's future. For this reason social dialogue was emerging at a range of sites throughout the country. It was noted that it was key that the different spheres of dialogue be linked, even informally, to provide for an effective sharing of knowledge and experience. The 'expanding dialogue' series was a useful vehicle for building those links. Constituencies and other participants welcomed the opportunity to informally share their viewpoints.

5.    WAY FORWARD

5.1. Nedlac would be convening a second seminar on stakeholder engagement entitled "Globalisation, Corporatism And Changes In The Workplace" with Prof. M. Castells in June 2000. Invitations have been sent to constituency offices.

5.2. Nedlac was undertaking a review of stakeholder engagement in the South African economy. The report on this research would be launched later in the year.