Address by Zwelinzima Vavi, General Secretary of COSATU, to the FAWU Eastern Cape Regional Congress, 11 July 2014, Port Elizabeth

Thank you very much for inviting me to address this Workers Parliament of your illustrious FAWU, the union of Ray Alexander Simons, Elizabeth Abrahams, Neil Aggett, Elizabeth Mafikeng, Oscar Mpetha, Chris Dlamini, Jay Naidoo and hundreds of other working class fighters.

We meet at a time of great upheaval in the labour market. 220 000 NUMSA members in the engineering and metals sectors are on strike, in support of fully justifiable demands.

NUMSA's demands are fully in line with the resolutions of COSATU's 2013 Collective Bargaining, Organising and Campaigns Conference and our long-standing campaigns for a living wage and better working conditions.

They include a one-year agreement, a wage increase of 12%-15%, a total ban on the use of labour brokers, a housing allowance of not less than R1 000 per month and no company to be allowed to implement the Employment Tax Incentive Scheme.

Let's hope that the union and employers will soon reach an acceptable settlement and that other unions, including FAWU, will then make similar demands to achieve decent wages and conditions and the end of casualisation and labour broking.

Let's hope also that this and other recent industrial disputes will persuade the government to speed up its promised investigation into the modalities of a national minimum wage. We have warmly welcomed the decision of the German parliament to introduce a national minimum wage there and hope that will encourage our government to do the same.

This could resolve many potential disputes, once lower-paid workers, which include thousands of your members who toil to produce the nation's food, would then have the legal and constitutional right to that minimum wage and would not need to strike as so many have no alternative to do now. 

It will start to narrow the huge and widening gap between rich and poor in South Africa, which, together with the crisis level of unemployment and poverty, lie at the heart of the wave of recent protest actions by workers and communities, and at the same time stimulate economic growth by increasing demand for goods and services.

Inequality

A PricewaterhouseCoopers (PWC) Report on Executive Remuneration released this week revealed that the huge wage gap between the top earners and those at the bottom continues to widen. The total guaranteed pay packages for Chief Executive Officers of large companies increased way above inflation between 1 May 2012 and 30 April 2013.

The median level of what they call the ‘total guaranteed package' of remuneration for CEOs in the top industrial companies in 2013 was R13.659 million. This works out at R1.138 million a month, 470 times the current R2420 minimum monthly wage for farm workers.

You would think that no-one could possible justify such gargantuan level of inequality, but the PWC report includes an article by right-wing ‘economist' Loane Sharpe, who tries to justify this inequality, on the grounds that executive pay has to reflect trends in the global market so that companies can attract and retain staff, and complains that South African CEO earn less than their American counterparts.

Yet there is no suggestion that South African workers' wages should be compared to the USA, where the average hourly wage is $10.28, equivalent to R110, or R19 000 a month! On the contrary Sharp claims that workers' pay is too high and blames this for the high levels of unemployment, arguing that ‘high' wages deter employers from recruiting the unemployed, and that raising wages will make unemployment even worse.

He is implicitly arguing for even lower wages, along with weakening trade unions and collective bargaining and emasculating labour laws, as the only way to increase employment, so that employers can use the ‘reserve army of labour' - the unemployed, who they hope will be so desperate for a job that they will work for next to nothing - to force down wages and maximise short-term profits.

It would leave more and more workers, both employed and unemployed, so poor that they can barely afford the basic necessities of life let alone manufactured goods and services, the demand for which would fall to even lower levels, sparking a recessionary economic cycle.

The PWC report will further strengthen our case for a national minimum wage.

Economic restructuring

There is a more urgent need than ever to speed up the 2nd Phase of the Transition for a radical restructuring of our economy from the one we inherited from the apartheid regime. As Trade and Industry Minister Rob Davies warned in August 2013, South Africa faces the danger of deindustrialisation amid job losses and factory closures in the manufacturing sector, along with rising imports and declining exports of some manufactured products.

The centrepiece of the restructuring must be to rapidly reverse this trend, escape from our overdependence on the export of our mineral wealth and build an economy based on manufacturing industry, including the beneficiation of those minerals.

We need FAWU to work with progressive ministers, like those of Trade and Industry and Economic Development, to press forward with the progressive elements of the New Growth Path (NGP) and the Industrial Policy Action Plan (IPAP).

The Eastern Cape is a predominantly rural province, with a large agricultural sector, which, together with mining, was the foundation on which they built their political constituency, based on white farmers and the mine bosses, both of whom still have a grossly disproportionate amount of power and influence in the economy.

This support was bolstered with racist legislation - the pass laws, influx control - and the migrant labour system and single-sex hostels, all of which were used to brutally enslave and exploit the black working class and consolidate the bosses' power.

The recent long strike in the platinum mines was a direct consequence of our failure to transform the mining sector, in which monopoly companies and still mainly white millionaire bosses get richer and richer while their workers toil to produce the companies' wealth, in dark, hot, dangerous and unhealthy conditions in return for poverty wages.

The 2012-2013 strikes of farm workers proved that workers on the land are also running out of patience with low pay, job insecurity and super-exploitation.

After losing too much time in the first twenty years of democracy, we must now accelerate economic transformation. Both the NGP and IPAP identify agriculture as one of the key areas for creating new jobs and we have backed the President's commitment in his State of the Nation speech to create a million new jobs in agriculture by 2030.

We have already halted job losses in agriculture; Statistics South Africa recorded a 87 000 growth in agricultural jobs between the second quarter of 2011 and the fourth quarter of 2012, at a time when global demand was still low due to the economic meltdown in many parts of the world.

As well as creating employment, the expansion of agriculture must also be geared to providing food security, to make sure that no-one goes to bed hungry and that we reverse the trend which has made us a food-importing country.

As I said recently to your Eastern Cape comrades in DENOSA, "It is absolutely unacceptable that 13 million people go to bed hungry every night in this country, and that a further 14.8 million are at risk of hunger. Malnutrition is actually expanding, resulting in stunted growth, blindness, incomplete mental development, and other health problems. How can this be in a land where there is more than enough food produced and imported to feed the whole nation?"

The transformation of agriculture cannot be separated from resolving the land question. The redistribution of land stolen from the majority population has proceeded at a snail's pace. For that reason we welcome the proposal of the minister of rural development and Land Reform, Gugile Nkwinti, to require commercial farmers to hand over half their farms to farm workers. 

We want to meet the minister to hear how he intends to implement this and how it will work, but fully support the broad objective. We also want to encourage the promotion of more worker and community-controlled co-operatives and employee share option schemes.

Talking of farms, we were all shocked at the story of the dead and dying animals on the farm of NCOP Speaker, Thandi Modise, and it reinforces our insistence that political representatives should not get involved in business. They must choose one or the other, and not try to fight for the poor, while enriching themselves from their businesses.

COSATU's 2012 National Congress grappled with the challenges we face to transform the economy. While encouraged by new directions in government policy, including steps towards a coherent beneficiation strategy, local procurement, IPAP, an infrastructure programme aligned to an industrialisation and development strategy, and the start of a new approach to regional development, Congress resolved that far more urgency is needed and that all this will only succeed if pursued in the context of other macro-economic changes, including:

i. Decisive state intervention in strategic sectors of the economy, including through strategic nationalisation and the use of various macro-economic and other levers at the states disposal

ii. An overhaul of our macro-economic policy

iii. Treasury to be urgently realigned and a new mandate to be given to the Reserve Bank, which must be nationalised

iv. The National Planning Commission to be given a renewed mandate, to realign the National Development Plan(NDP), in line with the proposed radical economic shift. 

v. Aspects of the New Growth Path to be realigned in line with the new macro-economic framework.

vi. All state owned enterprises and state development finance institutions to be given a new mandate.

vii. Urgent steps to be taken to reverse the current investment strike and export of South African capital - including capital controls and measures aimed at prescribed investment, and penalising speculation.

viii. The urgent introduction of comprehensive social security.

Organisational challenges

Congress also resolved however, and this has become even more urgent today, that we shall achieve none of this unless we also transform, unite and strengthen our own structures.

The delegates instructed us to go back to basics, focus effectively on workplace issues, organisation and recruitment and deliver better service to our members, remembering the 2012 Workers Survey, which showed that job security and living wages were workers' priorities. This must now be taken forward with urgency.

A key Congress resolution, which applies particularly to FAWU, is to extend our membership into areas where workers are currently unorganised. That is why we also launched a vulnerable workers campaign to organise and improve the lives of street traders, domestic, security, catering and of course farm workers.

Congress called for a mind-set change, with more focus on the expectations of our members. It also highlighted the need for greater solidarity and unity in action, and more visible and interactive leadership. Other areas we have to address were:

i. Ending social distance between leaders and members, by entrenching deeper forms of accountability and worker control;

ii. Stopping bureaucratisation of our structures, by ensuring that we remain a campaigning mobilising organisation;

iii. Halting divisive and undemocratic conduct in our unions, which attempts to undermine worker unity, or create splinter unions.

iv. Building strong worker-controlled unions, focused on issues of concern to our members, at the workplace, socio-economic and political levels;

We shall go nowhere if we prioritise faction fighting, creating divisions, waging vendettas and insulting one another. This must come to an end right now and instead we must focus on uniting, building and further democratising our organisations.

As I said earlier this week to your Eastern Cape SADTU comrades: "Let usnot waste our time on petty squabbles, and the politics of labelling those who hold different opinions as reactionary or part of the ‘anti-majoritarian offensive'. 

"Our priority must be to build democratic, genuinely independent, worker-controlled trade unions and a strong, united federation. That is what should be preoccupying our minds, rather than the new alien cultures of rumour-mongering, character assassination and cut-throat vendettas which afflict our movement at the moment. We must focus not on supporting or defeating any faction, but how best to strengthen and unite our movement."

I wish you a successful Congress.

Issued by COSATU, July 11 2014

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