COMMISSION ON GLOBALISATION, UNEMPLOYMENT AND DECENT WORK

Chairperson: Fadila Lagadien, Disabled People of South Africa
Speaker: Cunningham Ngcukana, General Secretary, Nactu
Respondent: Rams Ramashia, Director-General: Department of Labour

1. Welcome and opening

The chairperson opened the commission and welcomed all present.
She indicated the theme of the Commission and introduced the Speaker and the Respondent.

2. Summary of issues raised by Cunningham Ngcukana

2.1. Definition of Globalisation

Globalisation is defined by the Director General of the ILO as: The expansion in the volume of cross border transactions in goods and services and an increase in international capital flows and widespread diffusion of technology.

2.2. Developments that facilitate Globalisation

Globalisation is facilitated by the following developments

• Liberalisation of trade through regional and multi-lateral trade organisations.
• Rapid expansion of foreign direct investment.
• Low barriers to international transfers resulting in massive unproductive, speculative equity funds, as a result of liberalisation of the exchange controls.
• Information and Communication Technology facilitating the speed of such transfers.
• The entry of the former Soviet Bloc into the international trading and investment system.

A common understanding of the meaning of globalisation is required in order for there to be a common response.

2.3. The Employers' response to the phenomenon of Globalisation

1. In a global environment without rules, the response of companies, in an effort to be competitive, has been to out-source aspects that are regarded as non-core to their business.
2. To Increase the use of casual labour in order to reduce the cost of social benefits such as pension and medical insurance.
3. To put pressure on governments to deregulate the labour market by fragmenting centralised bargaining and removing the Minimum Wage Regulations.
4. Investment towards capital intensive and technologically advanced methods of production to reduce the cost of labour.
5. Acceleration of mergers and acquisitions, resulting in massive job losses.

2.4. Response of Governments to this phenomenon

1. Deregulate labour markets.
2. Introduce tax incentives to attract investments that, in many instances, never come.
3. Liberalisation of trade through lower tariffs.
4. Reduction of the budget deficit in the face of "centralac" deficits.
5. Liberalisation of exchange controls for exports thatresult in the exploitation of currencies by speculators.
6. Privatisation and or restructuring of State enterprises.
7. Removal of state subsidies.

2.5. What do these developments mean for workers in the global market?

1. Widespread job insecurity
2. Casualties of employment without benefits.
3. Increase in unemployment as a result of retrenchments.
4. Increase in workplace injuries.
5. Lower wages and longer working hours.
6. Denial of basic worker rights.
7. Reduction of the collective bargaining power of the workers.

2.6. What should the response of countries towards globalisation be?

At the 98th session of the ILO International Labour Conference in June 2001, the Director-General of the ILO addressed this issue in his report entitled" Reducing the decent work deficit, a global challenge".

In his report, the Director-General calls on member states to pursue and foster strategic objectives, which are:

• To promote and realise fundamental principles and rights at work.
• To create greater opportunities for women and men to secure decent employment and income.
• To enhance the coverage of social protection for all.
• Strengthen tripartism and social dialogue.

These objectives reinforce each other and form an integrated agenda that must be pursued at National and International level.

Labour supports these objectives as indicated in its document published in 1996 entitled " Social Equity and Job Creation, the key to a stable future.
The Director-General of the ILO further raised in his report fundamental issues that were raised earlier by Labour in South Africa, in the context of decent work deficit. These issues include:

• Opportunities for decent work in a sustainable environment - this is about recognition, dignity, security, having a voice, and about gender equality and solidarity.
• We need to address the question of decent work deficit that is expressed in the employment gap with large-scale unemployment and under-employment, particularly in our country and other developing countries.
• The "rights" gap is reflected in the widespread denial of the basic rights at work.
• The social protection gap is reflected in the unsafe working conditions and income-insecurity.
• The social dialogue gap is reflected by undermining collective bargaining rights.

The second issue to be addressed is that:

• Policy goals should be directed to address decent work deficit.
• Countries and institutions, including South Africa, have zealously targeted the reduction of the budget deficit and should now focus on reducing the decent work deficit.
• Decent work remains a valid objective of any country or society.

2.7 Challenges to creating employment and decent work in the current global economic environment

Many Governments raise the following challenges:

AFFORDABILITY
Governments complain that they cannot afford the creation of employment and decent work in the current economic environment, however decent work should not be justified purely on the grounds of affordability as there are economic gains arising from decent work;

• It can enhance productivity for companies.
• It can promote equitable and sustainable growth patterns.
• A stable labour market encourages growth of demand and investment and the promotion of gender equality.

UNIVERSALITY

• The rights of workers should apply to all and include farm workers and the domestic workers.
• There should be a baseline for decent work and no ceiling, as decent work is also relevant for the poor.
• Rights, employment-security and social dialogue are not an end in themselves, but are the means to capacitate the poor to lift themselves out of poverty.

COHERENCE

• There must be an integrated approach in addressing the issue of decent work and unemployment.
• There must be no separation of economic and social goals and policies and they must be considered together.
• Macro-economic policies must take into account the social impact on the communities.

FEASIBILITY - Is decent work feasible?

Labour acknowledges that the new patterns of production and investment in the global economy may undermine the effectiveness of national policies but they also present some opportunities.

Globalisation is not a supernatural force but is driven by human beings, and if it undermines decent work, it must be challenged.

GLOBALISATION AND THE SOCIAL POLICY

• If globalisation does not work for the poor, it must be challenged.
• Labour wants a global economy based on rules.
• If South Africa is to make human and social progress, it needs to include labour standards in its trade policies.
• Developing countries are facing a number of problems with the dispute resolution mechanism of the WTO. Human rights can never be subjected to economic policies.

GLOBAL ECONOMY

• We need rules in global investments.
• In 1997/98, millions of workers were thrown out into the streets without social protection, creating xenophobia and racism by speculators.
• There is a need in the securities market, for controls on investors.
• We need to regulate investment through taxation or through agreed upon global rules.

3. Summary of issues raised by Rams Ramashia

3.1. Definition of Globalisation

(i) There is an important relationship between Globalisation, unemployment and decent work. The Director General of the ILO in his Report in June 2001 entitled " Decent work deficit, a global challenge ", argues there are two extreme views of globalisation namely:

• Globaphobia - "Fear of Globalisation", where globalisation is regarded as the source of all that is bad in our world.
• Globaphilia - "Love of Globalisation", where globalisation is regarded as the source of Wealth and Welfare

(ii) These caricatures are unhelpful as globalisation is a reality as stated by our President when he addressed the World Economic Forum in Davos, in June 2001, "…the choice for our countries in the South, is not whether to engage with globalisation or not, but how to engage with it ".

(iii) It is essential for people and governments to engage with the process critically, to reshape and redirect its impact.

(iv) The objective must be to enhance our citizen's incorporation and access to the benefits of globalisation whilst minimising polarisation and social exclusion and mitigating these effects when and where they do occur.

(v) It is indeed a fact that globalisation, by its very nature, marginalises theweak and the poor but, as the President has said, the issue is not to fight globalisation or try to stop it.

(vi)Any attempt to stop globalisation would be tantamount to trying to sweep away the sea wave by wave with the broom and therefore the challenge is to engage with globalisation in such a manner that it does not marginalise the poor.

3.2. What does this mean in relation to unemployment and decent work?

• On the one hand globalisation provides an opportunity to be exploited.
• Participation in the global economy provides many opportunities for growth and development.
• There are opportunities created by the internalisation of production, and new possibilities created by the information technology revolution.
• The question is, as the President has said at the Information Technology World Conference, that we as a country, should harness this to create employment.
• There are some areas that Government is looking at, for instance, the Department of Labour hosted the Deputy Minister of Labour from China, where the two countries were looking at co-operating on a job-creation project, using some of the plants and herbs that grow in the wild in South Africa, as raw-material.
• On the other hand we need to fight to ensure that the social consequences of globalisation are considered, that globalisation does not lead to further job losses or that we do not have a dual International Labour Market - one characterised by good employment practices and the other characterised by sweat shops. That is certainly what we need to avoid, and workers across the ocean and across the world should unite to deal with this phenomenon.
• The initiative by the ILO to link social and trade issues and to engage the WTO, is important in this context. The initiative or campaign by the ILO to promote decent work becomes extremely important as it arises out of the recognition that not all kinds of work are suitable or acceptable work and that one should not simplistically say any job is better than no job at all.
• The ILO has developed a number of criteria to define decent work which include the following:

1. Access to employment, which means wage or self-employment should be available for people seeking it.
2. Fair and equal treatment in employment, which means discrimination, should be forbidden. South Africa has gone a long way through the Employment Insurance Act to ensure that unfair discrimination is outlawed at the workplace.
3. (Decent remuneration at work.
4. Fair conditions at work.
5. Safe working conditions.
6. Protection in case of unemployment.
7. Social protection and employment.
8. Employment and training opportunities.

• Some of the initiatives that South Africa has taken in the last seven (7) years, include a legislative framework to deal with some of the issues raised by the ILO in its decent work agenda to ensure that the rights of workers are protected.
• This list includes participation and motivation, which means that, there are opportunities for workers to participate in decisions that affect them directly, such as the work organisation and that is why the Department of Labour believes that:

1. Workers should be consulted on the issues relating to restructuring or retrenchment and in addition, the Department of Labour has tabled an amendment which provides for " meaningful joint consensus seeking " in order to protect workers from being marginalised and from being victims of restructuring processes as the Government can not leave this to market forces which are themselves imperfect.
2. The last within this criteria is, voice and collective participation, and in this regard there should be a possibility to voice complaints and file grievances as well as to avail support from bodies representing the interest of workers.
3. There is an argument that the provision of all these rights and benefits to workers is incompatible with economic efficiency, however one of the achievements of the ILO over the past two years, has been to put an end to this myth. One of the results of the recent processes between the trade unions and the business captains is that they have come to the same conclusion that good labour practices enhance productivity and competitiveness, and regulations play an important part in determining efficiency and outcomes. Motivation, skills and the organisation of labour are essential assets in the competitive strategies of any enterprise.
4. Decent work is threatened by globalisation on one hand, however we need to harness the opportunities posed by globalisation to advance the cause for decent work.
5. It is not a question of choice between having globalisation or having decent work, but rather, it is about finding some kind of formula and harmonisation between the demands for globalisation on the one hand, and the demand for decent work on the other.
6. The MAP programme is one such important programme which would assist in this regard as it provides an opportunity for us in Africa to enhance and strengthen the right of work on our own terms.

3.3 Unemployment and Decent Work

1. In SA, to some extent, as a result of the challenges posed to us through globalisation, employment depends crucially on education and training. Some workers are not employable because they do not have skills, thereby increasing the demands for jobs in SA in respect of skilled workers.
2. We have a shortage of professional and technical skills in certain sectors and therefore that part of the decent work agenda, "which talks to skill development, talks to employment".

3.4. How do we achieve decent work in SA in the context of globalisation?

• We need to enhance employment creation that gives more people decent work.
• We need to continue to enhance the rights of the workers.
• SA has the most progressive body of legislation in the world and this body of legislation has been enhanced by some of the recent legislation proposed such as :
  • The New Unemployment Insurance Bill which seeks to provide greater protection and a safety net for those who lose employment.
  • The Amendments to the LRA and the Amendment to the BCEA are some of the key initiations to ensure that the Agenda of globalisation and decent work are harmonised.
• It requires an incremental approach to make these rights real for workers, particularly those that are vulnerable, and this remains an ongoing challenge for all of us.
• We need to improve social protection, for without adequate social protection, our society as a whole becomes unstable. This results in, increased criminality and breakdown in families and community structures.
• It also makes it more difficult to ride the proverbial international economic storm.
• We need to remain more vigilant and protect social partnership. This Summit (Nedlac Summit 2001) is evidence of such partnership.
• We need to look carefully at the quality of the type of social partnership we have.
• Including debating the issues that have been raised by Labour earlier on, such as the question of how Governments respond to the issue of globalisation, three critical points are to be raised, viz:

(i) Restructuring of State Assets:

• It is clear that Labour is concerned about the issue of job losses and the issue of access to social services.
• Government believes that such concerns are legitimate and is prepared to dialogue but there are certain types of business which Government does not have to run in the first place, which are being run by the Government as a result of the previous Government having nationalised them. It is therefore the responsibility of the present Government to take away what is not considered to be its core-business and run it differently and if by such restructuring processes foreign direct investment is attracted, that would augur well.

(ii) Liberalisation of Trade:

The President in his state of the nation address qualified liberalisation by saying that it is "managed" liberalisation i.e. it happens according to our own terms.

(iii) Deregulation of the Labour Market:

Everyone in South Africa knows that government has not attempted to deregulate the labour market. However what the Government seeks to do, is to strike a balance between labour market efficiency and decent labour standards.

(iv) In conclusion, the Government wishes to call upon the social partners in the coming year, to unpack what is in the Nedlac Declaration i.e. the quest to ensure that South Africa becomes the destination of first choice by investors, we need to unpack this declaration and determine what each Constituency is willing to sacrifice in order for our country to achieve the following objectives:

• Attract much needed investments.
• Achieve sustainable growth.
• Create more decent jobs for more people.
• Reduce the level of inequalities.
• Eradicate poverty

(v) Needless to say, history would judge us harshly if we fail to rise above ideological allegiances and selfish interests and allow that to blind us from seeing the greater picture.

4. Summary of the themes in the discussion

• To create the greater opportunities for women and men to secure decent employment and income.
• To enhance citizens' incorporation and access to the benefits of globalisation.
• To ensure that the social consequences of globalisation are considered and that globalisation does not lead to further job losses.
• To promote and realise fundamental principles and rights at work.
• To enhance the coverage of social protection for all.
• To strengthen tripartism and social dialogue.
• Attract the much needed investment.
• To unpack what is in the Nedlac Declaration and to ensure that South Africa becomes the destination of first choice by investors.
• To strike a balance between labour market efficiency and decent labour standards.
• To reduce the levels of inequalities.
• To eradicate poverty.