Financial sector is bleeding the working class and poor - SACP CC

Central Committee also rejects claims it has been a disruptive force fanning factionalism in COSATU

SACP Central Committee Media Statement

The SACP Central Committee met in Johannesburg over the weekend 31st March - 2 June, 2013. The secretariat political report focused on the challenges confronting the trade union movement and the National Development Plan. There were also presentations and discussion on agrarian transformation and rural development; a presentation from the inter-departmental team on the development of an integrated urban development framework; resolutions on taking forward the financial sector campaign; and a presentation made by the leadership of the ANC elections team on the broad strategic campaigning approach to the 2014 elections.

Hands off COSATU

The persisting global capitalist crisis, slowing growth, slackening demand for our commodity exports and falling profits have inevitably produced an intensified offensive against organised labour in our country. The internal challenges within COSATU need to be set against these external factors.

The capitalist offensive has been particularly focused on the mining sector and on the National Union of Mineworkers - the largest affiliate of COSATU. In the platinum sector specifically, the mining houses brazenly undermined collective bargaining agreements and opened the way to vigilante unionism.

The demagogic and coercive mobilisation by these vigilante forces has, in turn, exposed tens of thousands of workers to mass retrenchments - exactly the downsizing pretext the bosses have been seeking to provoke. The vigilante killing of mineworkers, including many NUM members and shopstewards continues. Senior members of the CC were not able to attend the final day of the CC because, as NUM leaders, they were burying another NUM shop-steward, another martyr.

We urge government to be more proactive in dealing with this situation. It has to consistently defend the collective bargaining system and the legislation that underpins it. The daily security of communities in the informal settlements around the mines, and the failure to provide effective housing has also been a seed-bed for vigilante networks.

It is against this background that the SACP calls for unity and the closing of ranks within COSATU itself. The flouting of one of the core founding principles of the federation, namely one industry one union; the poaching of members; the cultivation of personality cults; the undermining of collective leadership and of working class democracy, are all practices that play into the hands of the class offensive against the working class. These practices must be unambiguously condemned and eliminated.

The SACP noted with concern reports this past week that COSATU's investment arm Kopano Ke Matla has been stripped by the Financial Services Board of its licence to manage pension funds for workers. We call on COSATU and its affiliates to reclaim transparent worker control over the billions of rands of worker retirement funds and over the various union investment arms - many of which have been outsourced to big capital and effectively privatised.

The SACP reaffirms its commitment to non-interference in the internal affairs of the federation. COSATU leaders who happen to be members of the SACP do not conduct themselves within COSATU on the basis of an SACP mandate, nor are the details of internal COSATU matters discussed within Party forums.

We reaffirm all of this in the context of a sustained campaign to portray the Party as a disruptive force fanning factionalism within COSATU - it is a campaign led by those who are themselves precisely involved in daily and brazen factional support for one or another personality or grouping within the federation. The SACP says: Hands off COSATU! The SACP says respect the collective leadership of the federation and its affiliates.

The SACP reaffirms the critical importance of trade union independence, we need a militant, and robust trade union movement - not a conveyor belt for Alliance partners, or for the ANC-led government.

Militant union independence, however, should not be confused with a liberal notion of sustained anti-governmental opposition. Our objective as socialist formations must be to collectively build and assert working class power in all sites of power, and not limit our strategic objectives to simply being watch-dogs, "civil society" voices supposedly "speaking truth to power".

The National Development Plan

The CC engaged with the SACP discussion document "Let's not monumentalise the NDP". The CC expressed its full support for the general analysis and specific proposals advanced in the document. We must not allow the NDP to become a political football that divides the Alliance and unites opposition forces who selectively quote from the 484-page plan. The NDP is an uneven document and the CC welcomed the recent admission from planning commissioners that it is not written in stone, and that it is "not perfect", nor even, according to commissioner Bobby Godsell, a plan.

A key challenge with the document is that it veers between being a very generalised and unobjectionable "vision", to specific long-range targets (some of which appear to be unrealistic, others are exceedingly unambitious), to an actual plan - with some chapters going into great and untested detail. There have also been claims that it is fit-for-implementation, an off-the-shelf plan of action in its entirety and at the same time a platform for a grand society-wide social accord.

Chapter 3 on the economy and employment is particularly weak, calling (correctly) for a major upscaling of savings and investment in our economy (from 16% of GDP to over 30% by 2030) - but without critically examining the post-1994 capital liberalisation and macro-economic measures that underpinned the precipitous drop of fixed investment from pre-1994 levels that had often reached 30% and more. It is a macro-economic policy package that has also exposed us to wild, speculatively driven fluctuations in the value of the Rand - as we have once more been reminded this past week. This failure to evaluate macro-economic policies and the powerful (and unpatriotic) financial capital interests that underpin them represents a grave flaw within the heart of the plan. Other parts of the NDP including chapters on transforming human settlements, building a capable developmental state, dealing with corruption, support for the NHI, amongst other things, provide useful proposals and perspectives that need to be defended and consolidated. These important positive areas also serve as a useful antidote to the hypocritical claims of the DA that its policies and those of the NDP in its entirety are identical.

The CC agreed that the next step needs to be the institutionalisation of an organic state planning commission and the alignment of the vast array of plans and planning responsibilities already within the state. At the same time, there is no reason why some version of the current national planning commission could not be retained as an ADVISORY body.

The SACP believes that it would be misguided to seek to build Alliance unity on the NDP in its current form. Instead, we should rather seek to build unity in action around the ANC's key resolution on the need for a more radical second phase of the transition. Greater content needs to be provided to what is actually meant by such a phase, and any useful proposals within the NDP can, certainly, form part of such a strategic platform.

The financial sector is bleeding the working class, the poor, the middle strata

We are often treated to boasting about the "first world" prowess of our financial sector, but it is not a financial sector that effectively and fairly services a large proportion of South Africans. In terms of basic customer service it is characterised by seriously problematic conflicts of interest, over-charging, and poor regulatory controls, including seeming indifference from the Financial Services Board in regard to financial services that most impact on workers and the poor. The practice of external consultants and financial advisors being provided offices within banks has become widespread. The impression created is that they are employees of the bank, but when difficulties arise the banks disown any responsibility.

The public sector financial institutions are also not innocent. The state pension fund (GEPF) is particularly opaque in regard to how benefits are structured. Recent legislation states that in the case of a divorce in which there has been community of property the spouse of the public sector employee is entitled to 50% of the pension (which is fair enough) - but, bizarrely, the pension holder then also has a 50% liability to the fund, this effectively wipes out the entire pension savings. The attention of the SACP has been drawn to several cases of this kind, causing great distress to the individuals affected.

There is widespread abuse of garnishee orders, including within the public sector. A garnishee order requires a written court order. In many cases, possibly in a majority of cases, no such court order has been issued. Before a garnishee order is issued there is also a legal requirement that the affordability of the order for the affected party should be investigated. This requirement appears to be ignored in many cases.

There are many other areas in which working class and poor people are preyed upon. Funeral services, for instance, are ripping off the poor. Undertakers are now issuing funeral policy cover but without effective financial regulation. Unbeknown to many policy-holders, the fine-print often states that if the services of that particular undertaker are not used in the actual funeral there will be penalties. The penalties are typically four years of premiums. This is another area where the FSB needs to be more active - basically undertakers sho

uld be undertakers and insurers should be insurers. The blurring of roles and responsibilities and general financialisation of all aspects of the economy are precisely what underpins the global financial crisis. Across the financial services sector in SA we are finding increasing conflicts of role and interest of this kind to the detriment of workers, the poor and the middle strata in our country.

In the coming weeks the SACP will be mobilising around these and many other abuses by the financial sector including evictions and the ballooning of loan-shark behaviour by micro- and macro-lenders alike. Popular mobilisation around these grass-roots hardships will be used to highlight the wider challenges we face in regard to the financial sector.

These include the slowness of government to implement a long-standing resolution to provide the Postbank with a banking licence; the failure of the Land Bank to adopt a developmental agenda; the need to impose community reinvestment obligations on financial institutions; and the imperative of addressing the wider issue of the continued expatriation of huge amounts of capital through dividend flows, liberalised exchange controls, transfer pricing, and tax evasion.

Rural development and land reform

Cde Lechesa Tsenoli, CC member and deputy minister in the Department of Rural Development and Land Reform, led a discussion on rural development. In the centenary commemoration year of the notorious 1913 Land Act that "legalised" the colonial dispossession of the majority, the CC agreed that a thorough review of post-1994 land reform, agricultural liberalisation and rural development policies is imperative.

The focus on land reform and rural development has to be concerned not simply or even mainly on ticking boxes on formal racial ownership targets - but critically on productive capacity, decent work and worker rights, and sustainable livelihoods. Not only have land reform targets been badly missed, but even more seriously a high proportion of them have ended in productive failure.

Likewise, land reform and rural development cannot be coherently addressed without a critical reflection on the negative impact of post-1994 agricultural liberalisation policies that have seen the collapse of many white-owned family farms, the collapse of many rural towns and rural economies, and the increasing incorporation and subordination of food production in South Africa to global monopoly agro-business and retail. Research and development in agriculture has been cut, the level of support to farms has declined massively and in 2010 it was at 3% in terms of the Producer Support Estimate, compared to the OECD average of 20%.

Most middle-income developing economies have adopted policies that have increased support for agriculture over the last decade. Likewise there has been no growth in the total area equipped for irrigation. Reserve Bank estimates indicate an overall decline in gross fixed capital formation in agriculture, forestry and fishing, with real annual investment in 2010 below the 1984 level. No wonder large stretches of productive land have been converted to game farms and golf-courses owned by absentee business consortia, many of them foreign. No wonder SA has become a net food importer, and no wonder that we are vulnerable to steeply climbing food prices.

While racial inequities, land hunger and racialised rural under-development have to be addressed as an absolutely major strategic priority, they cannot be addressed in a separate "native affairs" silo. As long as local rural economies are hollowed out by globalised agro-business and retail value chains, valiant efforts at establishing rural farming cooperatives and small farming activities will have their backs to the wall. As long as there is serious under-investment in agricultural services, research and development and infrastructure, rural development will remain stalled.

Integrated urban development

The CC expressed its thanks to the colleagues who briefed us on the work of the inter-departmental  task team developing an integrated urban development framework. A strategic approach to rapid third world urbanisation, one of the major challenges of the 21st century, has tended to fall between the cracks in SA. The latest statistics for SA underline that 63% of our people are now living in towns and cities. By default, urbanisation policy has been driven in SA by a reactive low-cost housing approach on the one hand, and by market forces on the other. Our low-cost housing programme has seen 3million housing subsidies provided and 1,8 m RDP houses built. While these are impressive figures by any international comparison, the net impact has been an unintended entrenchment of the apartheid distortion patterns of the past - with the working class and poor housed on the distant peripheries of our towns and cities.

The task team's approach correctly understands that an urbanisation policy and a rural development policy need to be mutually reinforcing. The work of the task team is an important paradigm shift that approaches urbanisation from a multi-dimensional perspective. It is also an instructive example of how where particular chapters of the National Development Plan (in this case chapter 8) are prepared to do a critical self-evaluation of of our post-1994 policies, lessons can be learned, integrative policies can be developed, and it becomes possible for government to take forward the planning and therefore implementation process.

50th Anniversary of the OAU/AU

The CC noted the 50th anniversary of the OAU/AU. The important contribution of the OAU to the struggle against apartheid was acknowledged. Important but uneven progress over the past decades in democratisation and development in our continent is also acknowledged. However, our continent - the second fastest growing region in the world - faces many challenges, including the character of this growth itself. This past week the African Development Bank released statistics exposing the fact that Africa remains a net exporter of capital, and that the surge of growth in many parts of the continent is not unlocking development for the majority. The SACP also welcomes in principle the formation of an African Rapid Response peace-keeping capacity. Appropriately developed, resourced and deployed, such a capacity should marginalise the role of imperialist military deployments in our continent under the pretext of peace-keeping.

The ANC-alliance 2014 election campaign

The CC pledged its full support to the ANC-led election campaign. The SACP will, as in the past, actively contribute to the content of the campaign itself, underlining the importance of connecting campaigns around the social and economic struggles of the working and poor with the election campaign itself. The SACP will also contribute actively to the development of the election manifesto, and to ensuring maximum Alliance unity as the mainstay for an overwhelming ANC election victory.

Initiation deaths

The CC expressed deep concern at the recent deaths of 23 young initiates in Mpumalanga. We call on government - both national and provincial - to take active steps to punish those responsible for these deaths, and to ensure that deaths of this kind never again occur.

Statement issued by the SACP Central Committee, June 6 2013


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