Mining’s abnormal state preventing effective govt intervention

19 Jun 2013 | Mining Weekly | Original Publication:  BDlive

JOHANNESBURG (miningweekly.com) – The abnormal current state of the South African mining sector was preventing effective government intervention, former Opposition Leader and former South African Ambassador to Argentina Tony Leon said on Wednesday.

Leon, who addressed a Front Foot 'State of the Nation' breakfast, said in response to Mining Weekly Online that President Jacob Zuma’s recent intervention in bringing stakeholders together under Deputy President Kgalema Motlanthe and relevant Cabinet Ministers would have been fine in normal circumstances.

“But we know in our reality that the situation in mining is currently completely abnormal. We’ve got wage settlements that are completely out of kilter with what the sector can bear, both in terms of productivity yields and in terms of other benchmarks.

“We’ve bought peace where we have it, and only in certain areas, at a very high cost. We now have proven that our labour relations model in terms of the Labour Relations Act, does not work, because the whole form of centralised collective bargaining doesn’t work,” Leon said.

He added that key relevant Cabinet Ministers needed to be seen to be nonpartisan, and government needed to recognise that the law-and-order mechanism had to change.

He criticised the Farlam Commission of Inquiry into the Marikana killings for taking longer than it should.

“I don’t want to anticipate what’s going to come out of the Farlam Commission of Inquiry into what has happened at Marikana, but it has taken an unbelievably long time, given that we are about to approach the anniversary of Marikana and the commission is now only expected to end in October. That’s far too long.

“But we need to know that the interventions in the future will both be more effective and less deadly than we saw at Marikana," he said.

Leon would ideally like to see greater clarity between the unions and reconsideration of the majoritarian basis on which recognition worked, with more power returned to stakeholders other than unions.

“In other words, that you have the stakeholders who aren't actually in the labour unions also getting more recognition in terms of the wage negotiations,” he said.

He did not believe any of these steps were necessarily going to happen in the run-up to the 2014 general election, owing to the ruling African National Congress (ANC) not wanting to offend trade union federation, the Congress of South African Trade Unions (Cosatu).

The truth was that the National Union of Mineworkers, as one of the senior stakeholders in Cosatu, was instrumental in getting the ANC’s vote mobilised for next year’s election.

“So, a lot of what should happen won’t happen, at least until after the next election,” he added.

All that came on top of investor uncertainty created by the Mineral and Petroleum Resources Development Act (MPRDA) and the various ever-shifting codes promulgated under the MPRDA.

"Clearly, whatever its intentions, the entire paraphernalia of our mining legislation has achieved neither a conducive environment for the industry and all its stakeholders and has pushed us ever further back in the benchmarks of global mining.

"This is one element that is entirely in government's purview to rectify," he added in a note.

State religion does not have all the answers to jobs crisis

OUR state religion appears to be the worship of the state. Heaven knows, to sustain the analogy, there now appear to be no shortage of new and unlikely adherents to this belief. Barack Obama’s administration is now effectively the controlling shareholder of General Motors and Gordon Brown’s government owns 70% of the Royal Bank of Scotland. The deep global recession has created some unlikely converts from unfettered market capitalism to more state directed economic leadership.
But, back home in SA, as I surveyed the jobs massacre contained in the figures for the first quarter released this week, which show that 179000 jobs were lost and that the “distressed labour market” could yet shed another 200000 jobs before year-end, it occurred to me that what we need now is a healthy dose of local agnosticism in order to innovate and create new work. In other words, less ideology and more realism.
Last Friday, Economic Development Minister Ebrahim Patel appeared to make an important concession: he said that government’s policy of promoting “decent work” would not exclude “the creation of temporary, low-paid jobs in the short term”. He made the further concession that the 500000 jobs to be created under the expanded public works programme “would not, in themselves, be proper, permanent, well-paid jobs”, but they could create a bridge into the labour market.
This dose of realism seemed to be in line with the candour of Trevor Manuel , who in his previous incarnation as finance minister said, after presenting his last budget in Parliament, that the problem with “decent work” in a time of crisis was that “all jobs are hard to come by, and the more adjectives you add, the harder they will be”. Or, as the old adage expressed it, the only thing worse than being exploited is not being exploited at all.
Whether these statements represent shafts of light or a false dawn on the gloomy debate around job creation is difficult to assess. This becomes even more apparent when the assault launched by Labour Minister Membathisi Mdladlana on labour brokers and the casualisation of work is taken into account. Last month, he told the congress of the National Union of Mineworkers , “the reality is labour broking is a form of human trafficking. These companies sell the labour of workers to the highest bidder and then pay them the lowest wage ... it allows workers to be traded for profit just as if they were meat and vegetables.”
When I visited the headquarters of the largest private employment agency in SA, Adcorp , this week, I expected after the minister’s pronouncement to find a Dickensian pit of human misery. Instead, the ultramodern office block in Bryanston houses a go-ahead company where I had an interesting discussion with the splendidly named Loane Sharp, who serves as the company’s labour market analyst.
He made the point that the much-maligned labour brokers represent a R23bn industry, which since 2000 has introduced about 3,5- million temporary, part-time and contract employees into the labour force, approximately 2- million of whom are first-time jobseekers, 92% of whom are African, and 85% of whom are aged 18-35. Of even more significance was his analysis that a third of these employees secured traditional permanent jobs within a year and 47% did so within three years.
In other words, far from being reprehensible and “human traffickers”, the brokers are, in fact, SA’s principal entry point into the labour market for unemployed African youth.
Sharp’s analysis runs counter to the Congress of South African Trade Unions’ (Cosatu’s) blunt instrument: they are calling for a ban on labour broking, which could lead to the loss of, perhaps, a million jobs. The labour minister is advocating the quasi or de facto nationalisation of private employment agencies. But the agenda behind this agenda is, simply, that the bulk of these temporary or casual workers are nonunionised. They, therefore, compound Cosatu’s crisis of relevance and its shrinking membership and revenue base.
Another voice, which deserves to be heard is the estimably sensible one provided by Ann Bernstein and the Centre for Development and Enterprise/Business Leadership SA’s “5- million jobs initiative”. They offer a welter of practical initiatives to resolve the exquisite Catch 22 in which the vast pool of young, unskilled jobseekers find themselves. As Bernstein put it: “They can’t get a job because they have no work experience and they can’t get work experience because they can’t get a job”.
The most persuasive statistic the centre provides to bolster this assertion is the fact that more than 70% of 15-30 year olds who want a job have never been able to find one.
To quote the vanquished Thabo Mbeki , the crisis on the job front calls for a “business unusual” approach. And that means that adherents to the old gospel of the state religion need to listen to a few agnostic voices.

*Published 26 June 2009 in Business Day

Jacob Zuma Visits the USA *

Last week a senior South African ANC politician managed to break through the media radar screens in Washington DC. Given the intense attention, and corresponding coverage which the US presidential election and the simultaneous and ongoing financial crisis enjoy, this was no mean feat.

Unfortunately, perhaps for him, his Party and the country, the politician in question was the Chairperson of Parliament’s Finance Committee the accident-prone Nhlanhla Nene. His fifteen seconds of infamy when he fell through the chair in the SABC TV studio ensured him primetime place on at least one cable TV news network – MSNBC (and more than 36 000 hits on YouTube, where viewers gave his performance a 5-star rating.) Jacob Zuma, who was in Washington last week, received far less coverage.

To be fair to the ANC President, his visit was designed to calm the waters – and uncertainties relating to his presumptive State Presidency – rather than to make waves. In this regard he went to considerable lengths before his major Washington audience at the Council on Foreign Relations to indicate that there would be “no change” of broad economic policy and political direction under his leadership.

He claimed, for example, that his allegiance – and indebtedness – to the forces on the ANC left, particularly the SA Communist Party and COSATU, was no greater or more significant than that of his two predecessors, Nelson Mandela and Thabo Mbeki. He also managed, or attempted, to pivot his leadership away from the flagship issues of AIDS and Zimbabwe which has made Mbeki, and through him South Africa, a figure of some notoriety and certain unpopularity in Washington. He dismissed the Mbeki-Manto Tshabalala-Msimang AIDS denialist regime as one characterised by their “personal opinions”, at variance with mainstream ANC policy, now being corrected. On our benighted northern neighbour, Zuma gave a tepid endorsement of “quiet diplomacy” but robustly denounced Robert Mugabe’s refusal to grant Morgan Tsvangirai a passport.

Zuma was, by all accounts, well received by the soon-to-exit Bush administration at the White House. But perhaps his visit there, meeting with Secretary of State Condoleezza Rice and even a quick grip-and-grin session with President George W Bush underlined the ambivalence of his reception. On the one hand, Zuma is, in effect, if not in formal office yet, the most powerful politician in South Africa. We are, beyond argument, the most important country in Africa. Even Bush’s detractors regard his Africa policy – particularly the PEPFAR AIDS-fighting fund and the Millennium Challenge Account as his “finest hour” (to quote no less an adversary than Democratic Vice Presidential nominee Joe Biden). Therefore, Zumas’ clout ensures him access. On the other hand, the notoriety which the unresolved criminal corruption charges have attached to his name ensured that the White House cancelled a photo opportunity of his visit.

Zuma was hardly evasive on his legal challenges. With a degree of mind-numbing detail which probably bewildered, in its labyrinthine complexity, the Washington grandees and old Africa hands listening to his address at the Council on Foreign Relations, Zuma painted himself as the innocent victim of a political conspiracy. And I suppose, if you are to press such a charge, Washington is the ideal place to do it. He described his case as “a very obvious political manipulation” and he had no qualms in fingering Mbeki, and former Director of the National Prosecuting Authority, Bulelani Ngcuka, and ex-Justice Minister Penuel Maduna as the guilty parties.

The complex detail which Zuma provided around his legal travails stood in sharp relief to his vague bromides around South Africa’s economic challenges and the massive downturn in overseas investor confidence towards our country and other developing economies. On the very day that Zuma was suggesting to his American audience that they should “invest more in South Africa”, the New York Times published a list of the currencies of emerging markets countries that have fallen against the US Dollar over the last three months. The South African Rand ranked second from the bottom of the world’s worst performers, beating only the Icelandic Krona (we dropped 31.38% compared to Iceland’s 31.78%). Unhappily, Iceland has declared national bankruptcy. Yet, the run on the Rand and the vertiginous decline in commodity prices – barely preoccupied Zuma. Or at least, his answers evinced little fresh or reassuring thinking on the subject. He simply repeated the mantra that “the ANC has good policies” and announced that even the President of the Party – or the country for that matter – was unable to change them.

I spoke to a key Wall Street investor (or more accurately, one of the few still left standing) who attended a smaller Zuma event at the Harvard Club in New York. He said the ANC President displayed more charm than substance and did not present a persuasive case for investment or, given the latest portfolio reversal out of the JSE, reinvestment. “On the other hand”, he said, “he was neither frightening nor arrogant.”

My impression of Zuma in Washington was similar. I was struck by how he reached out to me, seated in the audience, and described the government and South Africa’s parliamentary opposition, as partners in South Africa’s democracy, in a manner that Thabo Mbeki never countenanced. This strongly suggested, to an audience containing many Africa-sceptics, that our democratic gains are less reversible than the fluctuating fortunes of our currency.

* Written for the Independent Newspapers in South Africa - submitted 29 October 2008.