Address to the 1999 Nedlac Summit on behalf of Cosatu,Fedusa and Nactu, by Zwelinzima Vavi

2 October 1999

Deputy President Jacob Zuma,leaders of Cosatu, Nactu and Fedusa, distinguished guests and delegates,leaders of the constituencies of government, community and business, comrades and friends

Sixteen months ago we met at theannual Nedlac Summit to review progress, and plan for the period ahead. As we meet heretoday, we should evaluate how well we have done, what the gaps and unfilled challengesare.

The period under review saw majordevelopments for our society, including the following:

• the Presidential Job Summit took on the task of crafting together an agreement on creating employment, surely the most pressing of our many challenges

• the long struggle against discrimination reached new heights with the passing and implementation of the Employment Equity Act, a piece of legislation to wipe out discrimination in the workplace

• the massive skills backlog was prioritised with the passing of the National Skills Act as a start to setting up the institutional and financial basis to a new revolution of training and workplace education.

These three key achievementsprovide key foundations to creating a better life for all.

They represented a completion ofthe main architecture of the labour market transformation which a populace hungry forfreedom, voted for in 1994. But this new social policy framework was not universallyappreciated. Many detractors, unable to openly call for a return to the days of apartheidslavery, angry at the rights given to workers, hankering back to the days when our labourmarket was super-exploitative and super-flexible, attacked this important change with thepast. They called for a programme to 'fight-back' against worker rights, 'fight-back'against affirmative action and "fight back' against the social gains of democracy.They called for greater labour market flexibility.

Fittingly, the changes to thelabour laws had all been concluded before the second democratic elections took place inJune this year. The population was given a chance to evaluate the programme, anddecisively endorsed them, in greater numbers even than that achieved in 1994 when theprogramme was first put to the voters.

The relevance ofthis to Nedlac is clear: the work we have done together, the agreements we painstakinglyagreed after many hours of negotiations, the consensus we forged we forged betweenbusiness and labour, and with community and government, was resoundingly approved by theSouth African people.

The 1999 electionwas therefore a victory not only for the main political party - although it certainly wasfor them! - but a victory for the fruits of social dialogue and the outcomes of the Nedlacprocesses.

The Job Summitreached important agreements: the Declaration commits the parties to continue the dialogueon macro-economic policy. Significantly, this means that macroeconomic policy is not'non-negotiable' or cast in stone.

The other key areas agreed are:

• to hold sector summits in industries exposed to high job losses, with some public funding for restructuring processes. The agreement includes a commitment of "resources to allow organised labour to participate fully through research and education/seminar capacity."

• A "Buy South Africa" campaign to promote demand for local products and services, with a local label for qualifying goods. This label, or SA mark of excellence, will promote local content, fair labour standards, quality and sustainable environmental practices.

• A strengthening of Customs and Excise, with an allocation of R734 million for the programme over a five-year period

• A Small Business promotion scheme tied to compliance with tax obligations and labour laws by the small business sector

• A Tariff Review that will include government interaction with affected sectors. After tough negotiations, the wording agreed included the following: "It is agreed that it is now a matter of priority that we address the issue of job loss and job creation in industries affected by tariff reform. Accordingly, specific attention will be paid to those industries that have experienced significant job losses over the last 36 months. The government will interact with the parties in these industries to see which carefully assessed tariff adjustments and supply-side support measures could stem net job losses and place the industries on a sustainable growth path. The government will continue to provide a degree of additional protection if circumstances warrant it. In addition the procedures to deal with anti-dumping and countervailing actions will be expedited where these are justified."

• A national Presidential Lead Project on Housing, to provide affordable mass housing, including rental stock of 75% of the housing. The aim is between 50 000 and 150 000 units through this programme.

• A Social Plan agreement, setting out the criteria and procedure for industries to use in order to qualify for public assistance, with the setting up of future forums, a social plan technical support facility, services by the Department of Labour, regenerating local economies and setting up social plan Funds. The management of the social plan will be done from within the NPI.

• An investigation into social security, including the labour proposal for a basic income grant for all unemployed and poor people

The developmentof  learnership programmes to draw young unemployed people into a work environment

• Youth brigades to focus on community service, and education and training

• Special Employment programmes for those normally discriminated against, including women, and people with disabilities, and in areas such as water supply, housing, municipal infrastructure and an HIV/Aids brigade to do public education work

• Promoting labour-based construction methods

• Infrastructure development at provincial level, including the use of development corridors

• The use of new ways of raising funds for job creation, including the labour proposal for one day output through the Labour Trust, the government proposal of the Urnsobornvu Fund, and the Business Trust

This package ofagreements has been implemented in a rather slow pace. Shortly after the Summit, we hadthe end of the year holiday break, and in the new year, attention was focused on theelection campaign, and its immediate aftermath. This has resulted in very little serioustime going into the management and implementation of agreements.

The year aheadmust go therefore to implementing the package of proposals we put together with so mucheffort.

We achieved too otherareas of progress.

The EmploymentEquity Act prohibits discrimination on a range of grounds, including race, gender, sex,pregnancy, marital status, family responsibility, ethnic or social origin, colour, sexualorientation, age, disability, religion, RIV status, conscience, belief, political opinion,culture, language and birth. It requires companies to decrease unacceptably high wagedifferentials between top and bottom. The Act has been called the fitting antidote to thedisease of discrimination, and since so much of the roots of discrimination in our societystarted at the workplace, the major action against it has now commenced on the shopfloor.

The NationalSkills Act and associated legislation have set up the institutional arrangements for amassive expansion of training, through the SETAs, and the financing of training throughthe payroll levy of initially 0,5% and thereafter 1%. These are important ways in whichour society moves beyond the legacies and constraints of the past.

In southernAfrica, we participated in tripartite meetings of SADC and developed charters dealing withworkers rights, productivity, HIV-Aids and the safe use of chemicals in the SADC region.This starts to give expression to the idea that SADC is not a 'free trade agreement' but adevelopment community with an economic pillar (trade and investment) and a social pillar(labour and social policy).

The Conventionsof the ILO are developed annually by the tripartite International Labour Conference thatmeets in Geneva in June. Once a country ratifies a Convention, it is required to bring itslaws into compliance with the ILO Convention.

In March thisyear, parliament approved Convention 100 on equal remuneration for men and women for workof equal value and Convention 138 on the minimum age of employment. South Africa has nowratified all the core ILO Conventions.

Nedlac has recommended thatParliament ratify the following Conventions:

• Convention 144 on tripartite consultation

• Convention 176 on safety and health in mines

• Convention 155 on occupational health and safety

• Convention 174 on the prevention of major industrial accidents

In all, Nedlac has now agreed torecommend the ratification of thirteen Conventions.

But much still needs to be donein our society.

The crisis ofjoblessness continues, and indeed has intensified. According to official statistics,between 1996 - 1999 there was a net loss of over 365 000 jobs in the nonagriculturalsectors of the economy.

Jabu Xulu is onshort-time, caused among others by the sluggish economic activity due to historic highreal interest rates. Cynthia Gumede has been retrenched from her factory in the clothingindustry when it closed due to the combination of tariffs which continue to be reducedfaster than required under the terms of the WTO agreement, and the flood of illegal goodscoming into the country. She took part in the nationwide protests by her union on 8September this year. And Jabu Xulu wants his union, and Nedlac, to bring a sense of theimmensity of the crisis to the attention of government and business.

His organiserpoints out to Jabu Xulu that we have not had real progress in the Public Finance andMonetary Policy Chamber. Nedlac must address this if the project of social dialogue is tobe of lasting value to Jabu Xulu and millions of workers and the unemployed.

And thoseunemployed sisters, fathers and brothers of our members are particularly keen to seeprogress in the discussions aimed at revamping and expanding our social security system.Organised labour will approach these discussions with the commitment and diligence theydeserve, and we look forward to rapid progress on this vital area.

We look forward to a moreconstructive relationship with the SA Reserve Bank, as we all grapple with the challengeof monetary policy. We have felt the pain of a policy which, in its zeal to cureinflation, is squeezing all life out of the South African economy, making loans for thesmall business sector punitively high, increasing the cost of servicing the public debt,putting the price of housing beyond the reach of many people, reducing consumer demand toalarming proportions and causing factory closures and retrenchments of workers. Theapparent willingness of the SA Reserve Bank to maturely interact with key stakeholders istherefore to be welcomed.

We believe that the involvementof organised labour in trade negotiations, such as the EU deal and the SADC trade protocolhas been either non-existent or inadequate. It is not sufficient to say that these are theresponsibilities of government. When jobs are lost, it is our members who are the victims.It is they who stand in the unemployment queues. We propose therefore that we be involvedactively in the formulation of trade policy in the so-called Millenial Round ofnegotiations in the WTO, and in building a strong social pillar in SADC through thepolicies we pursue.

SADC presents us with anopportunity to set out truly regional developmental policies, instead of building theregion around a narrow trade and capital market liberalisation programme. SADC is not a'free trade agreement' but a development community. This means we should simultaneouslytackle issues of trade, investment, labour rights in the whole region, social policies andthe upward convergence of living standards in the region and the promotion of democracy inall SADC countries. One element of this developmental approach is to ensure the region asa whole grows its employment and output, and not that we shed jobs in one country toincrease it in another, for this is a recipe for pitting the people of each countryagainst the other.

This means we should build strongand effective processes and institutions of social dialogue for SADC, meeting on a regularbasis. In this way we should regionalise the Nedlac experience, instead of marginalisingNedlac through the regional experience. In particular, if capital has the mobility to goanywhere in the region without restrictions, should trade unions not have similar rights?

The jobless crisis compels us tostop reducing tariffs faster than required by the 1994 Uruguay Round - let us use thespace to ensure we restructure our industries as many successful countries have indeeddone, instead of squandering it in premature market openings. It is time we took some firmaction in this area, and it is a critical challenge for Nedlac in the period ahead.

There are weaknesses too in thelegislation that results in too ready a resort to retrenchments. We call for a change tosection 189 of the Labour Relations Act to ensure that the issue of retrenchments be amatter of mutual interest, and hence subject to proper negotiations. The Insolvency Actrequires a major overhaul, so that it does not function simply and only as a protectionfor creditors (and I should say as a means of enriching the liquidators at the expense ofeveryone else as we saw with a major liquidation most recently), but as an Act which willgive a company greater opportunity in particular circumstances to trade itself back intosolvency, even if necessary during the period of judicial management.

The decision by key South Africancorporations to place their primary listings on the London Stock Exchange came as a shockand real disappointment to the new democracy. Wealth that was created and multiplied inour country can play a real role in rebuilding the society. A primary listing in London,or New York, or Tokyo will simply consolidate the concentration in capital markets, andmarginalise Johannesburg as a key centre of capital mobilisation. We must take theseissues up honestly and urgently.

In short, chairman anddistinguished delegates, we have much work to do in the period ahead, and Nedlac facessome difficult challenges. It is fitting therefore that we welcome the new ExecutiveDirector of Nedlac, Philip Dexter, who looks energetic enough to help manage the tough,huge, but also very important workload of this institution.