Steel industry: Govt must increase import tariffs – COSATU

Federation says govt should also engage China to introduce voluntary export restraint

COSATU meeting with Government on Job Losses

24 August 2015

The Congress of South African Trade Unions (COSATU) and other trade unions in the Metal Industry met with Ministers of Trade and Industry and Economic Development on Friday, 21st August 2015 to discuss the ongoing job loss bloodbath in the country.

The meeting was also attended industry employers and was a follow-up to a meeting held between the dti and COSATU Mpumalanga leadership on the same challenge of job losses.

The meeting with the two key government departments was not a replacement of the S77 Notice COSATU filed with NEDLAC earlier this month.

The COSATU S77 Notice doesn’t only focus on the jobs crisis in the steel industry but in all other sectors of the economy.  

COSATU appreciates that at the heart of the problems in the steel industry is the ongoing global economic crisis. As a result of the global economic slow-down, there is lower demand for steel from South Africa.

The problems are exacerbated by cheap steel imports from China in particular.

COSATU is concerned that the slowing down of production in the mining sector because of the low commodity prices will further cause more harm to jobs as mines are a big consumer of steel products in the economy.

COSATU therefore supports calls by the steel industry for government to increase import tariffs to safe the steel industry and the jobs.

We further call on government to engage the Chinese government to introduce voluntary export restraint; a measure that was introduced in the clothing and textiles industry in the early 2000s.  

It is COSATU’s view though that the raising of the import tariff and introduction of voluntary export restraint, while they would ensure a temporary reprieve for the steel industry, they do not constitute strong enough measures aimed at changing the structure of the economy.

For many years, COSATU has called for the abandonment of import parity pricing, particularly in the steel industry.

Steel is a critical input in the infrastructure development programme, both economic and social. COSATU wants a clear commitment from the steel industry that it will abandon import parity pricing and it will not revert to it when the economic conditions have improved.

This should be one of the conditions for government interventions to safe the steel industry.

The second condition should be a clear commitment from the industry that it will place a moratorium on retrenchments to allow social dialogue aimed addressing the challenges facing the industry. The third condition should be a clear commitment to cut obscenely high executive salaries in the industry while workers are forced to live on pittance.

COSATU repeats its call on government to impose a ban on scrap metal in order to provide feedstock for the steel industry and the foundries. We have also called for the imposition of export taxes strategic minerals and inputs.

Government should use this crisis to change the ownership structure of the economy. We have for years been calling for the renationalisation of Arcelor-Mittal, which was Iscor before it was privatised by the apartheid regime.

Lastly, COSATU believes that the initiatives that were put in place at the beginning of the global financial crisis in 2008 are still relevant. Instead of workers being retrenched they should be sent for training through the “training layoffs” scheme which should be funded by the SETAs.

In this regard, strong monitoring mechanism should be put in place to ensure the success of the scheme to avoid low-uptake experienced in the past.

Furthermore, the billions of surplus funds in the Unemployment Insurance Fund should be used to bail out companies in distress.

Again, factors that resulted in a low uptake in this regard should be identified and dealt with accordingly to ensure the optimal success of the intervention.

Statement issued by Cde Bheki Ntshalintshali, COSATU Acting General Secretary, August 24 2015