Joint statement by labour and business on outcomes of the meeting with government
24 August 2015
Last week Friday, 21 August 2015, a watershed meeting took place between labour; business and government behind closed doors in Pretoria. Organised by Numsa, this meeting was a shared initiative of labour, business and the steel industry associations, an attempt to put the brakes on the looming job loss bloodbath in the primary steel and related industries.
The labour delegation was led by Numsa General Secretary Irvin Jim and included the leadership of Solidarity, Uasa- the Union and Mewusa. The business delegation was led by the CEO of ArcelorMittal (AMSA), Paul O’Flaherty and included the CEOs of Evraz Highveld Steel, Cape Gate, The Scaw Metals Group and Macsteel Coil Processing. Seifsa’s President, Ufikile Khumalo, led the industry associations, while government’s delegation was led by Minister’s Rob Davies and Ebrahim Patel and included senior government officials from Public Enterprises; Trade and Industry; Transport and National Treasury. Transnet leadership was also in attendance.
The meeting was necessitated by a clear agenda of seeking government’s firm commitment to reassess their policies which are contributing to sweeping away jobs in the steel industry.
The meeting was significant in relation to the fact that we had approached government with one voice, irrespective of our differences. Together, labour, business and the steel industry associations concluded a joint 10-page submission to government in which we sketched out our collective call for government to urgently address the current crisis in the steel industry, failing which we will be faced with a disastrous and devastating impact on our economy. The effects of which will be acutely felt by workers employed within the industry, the families they support and the many communities who rely on the industry for their livelihoods.
Our submission provided carefully researched information on the significant role played by the steel industry in the South African economy in particular the industry’s’ contribution in sustaining other industries of which the top 5 (automotive, mining, construction, energy, and infrastructure) contributes 15% to our country’s GDP annually. We explained how the top 5 industries employ more than 8 million workers, contributing some R600 billion to our economy annually.
We pointed out that steelmaking accounts for approximately 190, 000 jobs directly and a further 100, 000 jobs through suppliers. We demonstrated that the steel industry is a core employer in Vanderbijlpark, Saldanha, Newcastle, Germiston, eMalahleni and Nkandla districts, with 75% of households in Vanderbijlpark and Newcastle and 25% of those in Saldanha being dependent on the local steel industry for their livelihood. Among these and many more facts on the centrality of steel to our economy, we emphasised that all of these were at stake in the next 6 months to a year if not urgently addressed.
While as labour and business we have our own issues and demands, we managed to agree on 10 core collective demands in our submission to government. In brief these were:
1. Immediate trade remedies for steel
2. Designation of steel for local government infrastructure spend
3. Urgent rollout of government’s infrastructure programmes
4. Transparency of current State Owned Enterprises (SoEs) capital programmes
5. Fair pricing for steel versus Import Price Parity (IPP)
6. Monitoring of imports
7. Urgent advancement of government’s beneficiation strategy
8. Banning of steel scrap exports
9. Delaying the implementation of Carbon Tax
10. Establishing a steel crisis committee
The meeting with government afforded us the opportunity to share our submission on the key challenges facing this ailing sector, as well as our intervention proposals to save the industry from total collapse.
Government, through the Departments of Trade and Industry (DTI) and Economic Development (EDD) provided us with the work and initiatives underway on their end.
As government, business and labour we agreed that an urgent solution to the current crisis in the steel industry was required and further agreed that any solutions found should not negatively affect jobs in the downstream manufacturing industries.
While government recognised the challenges confronting the industry and indicated a clear willingness to support initiatives aimed at saving the industry, it pointed to the need to be mindful of ensuring that any interventions are not in breach of necessary regulations. At the same time government expressed its recognition of the slow speed in processing remedies. To address this government committed to setting up a joint DTI and EDD committee to explore the expedition of legal, regulatory agreements required to protect the industry from job losses.
The representatives from government present also indicated that they could not speak to the demands impacting on government Ministries not represented at the meeting.
In express relation to our demands and through our engagements with government, we have delivered the following partial victories;
A. On trade remedies:
Government indicated that they are happy to proceed with our demands, specifically:
The first application for tariffs at 10% of the WTO bound rate will be signed off next week with conditions which are not yet finalised, but which will include a demand for industry not to raise the price of steel to unaffordable levels.
The rest of tariff applications will be pushed through ITAC without prejudicing the process.
AMSA will submit their first of 5 anti-dumping applications by the end of August 2015 and the rest as soon as possible thereafter.
AMSA will investigate with DTI and EDD what other avenues are available to fast track anti-dumping measures, e.g. “provisional” anti-dumping, safeguard duties etc.
Further, government committed to looking at any other avenues to ensure protection of the industry.
B. On designation of steel, localisation and government infrastructure programmes:
Government indicated its commitment to support for the local steel industry through designation and localisation in this regard:
A group will be set up through the Department of Public Enterprises to look at how localisation could be created with SoEs. Transnet committed to meet on their 1,000km p.a. rail upgrades.
C. On the banning of export of scrap metal:
Cape Gate and Scaw Metals will provide EDD with evidence as to where ITAC is not following the agreed directive and is allowing export permits as part of working towards the ban on the export of scrap metals.
D. On the training lay-off scheme:
Government indicated that it would support processes more expeditiously if industry committed to alternatives, particularly training lay off schemes, rather than proceeding with retrenchments. In this regard:
Government will facilitate the process of establishing a government, labour and business task team on the training lay off scheme, particularly to address the bureaucratic processes around the available scheme and to see how this could be used effectively for avoiding the imminent retrenchments.
E. On section 189 / retrenchments:
Business and labour would continue to work for solutions regarding the S189s already issued and the impending ones. Processes being followed by individual companies to find solutions will continue.
F. Steel crisis committee
While we would not set up a separate steel crisis committee the team that met on the 21 August will meet again in 3 to 4 weeks’ time to assess progress on agreements reached and plan further.
These partial gains we have secured will be shared with our individual constituencies, as we continue to navigate solutions to avert the imminent job loss bloodbath.
While working together, as labour, we will continue planning our campaign actions focusing on issues that we feel employers must do to avert retrenchments at all costs. We remain firm that no worker deserves to be retrenched, amidst the triple crisis of poverty, unemployment and inequality, ravaging working class and poor households in South Africa today.
We will continue to engage with employers in various levels to stop job losses in this sector. Where we feel that retrenchments are unjustifiable we will be forced to remain true to our trade union fighting approach of “what has not been won in the boardroom, shall be won on the streets”, through embarking on actions and demonstrations to exert much needed pressure from below.
Lastly, as labour, we want to thank the CEOs and SEIFSA, for embarking on this noble journey with us to save this strategic sector of our economy from collapse. This journey has called on all of us to take collective action to avoid jobs being shed. We hope business will go back and rethink their decisions in the interest of our members and society at large.
We too thank government for their commitments in this regard and hope that they act as expeditiously as committed to in our meeting on Friday.
Statement issued by Irvin Jim, Numsa General Secretary