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Shopsteward Volume 27 No. 3

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Media Centre  |  COSATU Speeches

Address by Zwelinzima Vavi, General Secretary and Co-Chairperson of the Millennium Labour Council at the Launch of the Millennium Labour Council

7 July 2000

The Dawn of a New Era

Master of Ceremonies, Comrade Phillip Dexter, Executive Director of NEDLAC
President Thabo Mbeki
Labour and Business Leaders
Distinguished Guests
Ladies and Gentlemen

I extend my heartfelt greetings to all of you on behalf of the membership and leadership of the South African trade union movement. Today marks the birth of a new era in humanity search for solutions to seemingly intractable problems.

Indeed, the Millennium Labour Council is not about pontification but about finding concrete solutions to seemingly intractable problems. The Launch of the Council is a tribute to the human spirit to find lasting answers to complex and difficult questions. It is signals a break with the past of adversarialism and heralds a new era in bilateral relations between business and labour. As the Chinese proverb says "the journey of a thousand miles begins with one step."

The wealth of experience accumulated in our daily engagement at factory level and our interaction in many forums is our only beacon. Others have traveled this path before us we must learn on their experiences in order to consolidate our initiative.

The launch of the Council is historic event in many ways:

  • It brings together the key role players, in a structured manner to discussing pressing problems confronting us in our workplaces, communities and our country as a whole.
  • It advances social dialogue at a time when there is widespread recognition globally of the value of social dialogue and the need to find a better combination between the imperatives of growth and those of social equity.
  • It creates hope for a country that the crisis of joblessness, and the attendant problems of poverty, ignorance and disease will be tackled as the national priority.
  • It creates a platform from which we can tackle the deep and difficult challenges facing a society which is simultaneously building a democracy, and building a modern economy. Democracy and an equitable economic system are mutually reinforcing and we cannot afford to separate them.

As we tread on this virgin territory we must build on the foundations laid in the darkest hour in the history of our country. An excellent example is the way in which we all turned crisis into opportunity during 1991, when the old government introduced a new basis to taxation which led to widespread protests and struggles. Out of these were born the National Economic Forum - the forerunner to NEDLAC which brought business and labour to the table to discuss economic restructuring.

The engagement had many effects. It led to a reduction in the price of petrol. It created a fund for job creation through public works programmes. It helped forge a consensus on how South Africa should address negotiations on trade policy in the GATT, the predecessor of the WTO. Most importantly, this social dialogue hastened the development towards a democracy, through, inter alia, negotiations on peace and democracy which were conducted between business and labour in 1993.

This wealth of dialogue is not confined to a small layer of leaders. On a daily basis our shop stewards and officials are engaged in dialogue with managers in thousand of workplaces to find solutions to important economic and workplace issues.

Our challenge now is to turn the strengths of engagement, negotiation, social dialogue, to the task of creating and sustaining jobs in the economy. As we do this, we will need to confront the complexity of the South African challenge:

  • creating more and better jobs;
  • growing the economy
  • and improving the social conditions of our people.

We do this under conditions not of our choosing. Mammoth challenges lie ahead that we must tackle. Unemployment is exceptionally high. About 40% of the potential workforce is unemployed or underemployed, representing a vast waste of human capital, and a source of many social problems for our people. Economic growth has been too slow to absorb large numbers of new entrants to the labour market. Levels of investment have been too low to drive economic growth to the desired rates.

Poverty is widespread. Almost half the population live in conditions of poverty. Income and social inequalities are extreme.

Levels of crime are turning the lives of ordinary people into terror and fear, act as a disincentive for tourism and investment, and take a huge human toll in deaths and wasted lives.

Aggregate levels of skills in the economy are low, and the skills profile is skewed by the education and political policies of the past.

There are serious gaps and weaknesses in our social infrastructure, in health and education. We face a crisis of truly huge proportions with the spread of HIV / AIDS.

We need a national consensus to address these problems including on macroeconomic policy.

There are however some real strengths which we can build on.

In addition to our national culture of finding solutions to intractable problems, South Africa has a relatively advanced physical infrastructure and financial infrastructure. We have a relatively advanced telecommunications system. Power generation and banking services are of high quality. Indeed, in the recent 2006 World Cup bid, we outclassed developed countries in the strength of our infrastructure.

Our research and development capacity is not insignificant, with established universities and research councils, and a history of product innovation in some areas.

Our country's constitution and Bill of Rights provide the basis for the rule of law, contract certainty, a modern industrial relations system, an independent judiciary and a free press.

We have a population which has shown a capacity to make huge sacrifices and commitments to achieve collectively agreed objectives, even in the face of overwhelming odds.

So with these real and difficult problems, and with some important strengths in the society and the economy, we need to get working.

That is the job we set ourselves, when, in 1998, we decided to embark on a journey with business leaders, a journey which took us to Ireland and Holland, but a journey which also took us to the challenges of South African society.

Holland and Ireland were interesting societies: they used the tools of social dialogue and negotiations to produce a common analyses of the problems facing their countries, and of the instruments, policies and trade-offs required to increase employment, grow their economies, and improve the lives of their people. They recognised the importance of the market, but did not simply abandon the process of restructuring and social equity to the market.

In a series of bold agreements over a number of years, they laid the basis for a new, shared prosperity, substantially improved employment and economic growth, and increased the real incomes, and standard of living of workers.

When we studied these two countries, we recognised that our objective was not to emulate their experience, but instead to study it, and assess its relevance to our very different situation.

Since then, we have been engaged in informal discussions with those business leaders who undertook the trip with us. These discussions have started to address the South African reality. Out of these discussions, we have developed sufficient confidence to agree to formalise the informal relationship, and establish an institutional basis to it.

Subsequently, a record of understanding between labour and business to establish a forum for bilateral discussions was agreed. The Millennium Labour Council will face many challenges.

In its founding documents, it commits itself to address, and I quote:

  1. The current unemployment, job losses and lack of job creation constitutes a deepening crisis in South Africa requiring urgent action.

  2. Current levels of poverty and inequality are unacceptable and require new initiatives to promote improved quality of life and decent work for all.

The challenge of employment creation is also a challenge of investment. It is a challenge which the MLC will need to address.

Levels of investment remain far below the 25 per cent of the GDP needed for sustained development. Private investment actually fell 7 per cent between 1997 and 1999. If South Africans do not invest, the expectation of foreign direct investment is rather misplaced. The MLC will need to focus on this challenge and on the need to forge a new consensus on economic policy.

Workers have one economy. We cannot afford to move to other prosperous societies if things do not work out in our country. We have to make our economy work or we will perish.

We have decided to participate in this structured bilateral with business, because we believe that there is value in pursuing solutions in every front in order to conquer challenges I have outlined. To address this crisis of joblessness and poverty requires bold leadership and concerted efforts by all parties.

The 1998 Presidential Job Summit was a modest - but important step in addressing the crisis at hand.

The launch of the Millennium Labour Council must be seen as another opportunity to find solutions to the challenges confronting South Africa. It is against this background that COSATU's Central Executive Committee in May decided to give its blessing to this initiative.

In our view, there are some key preconditions for success in this joint venture.

First, we must build a mutually beneficial partnership based on trust. It is clear that there will be trade-offs that will have to be made. In our view, such trade offs should not result in one-sided sacrifice by workers. In this vein, we must avoid a chicken and pig partnership. The chicken makes a partial contribution while the pig sacrifices its life in order to create bacon and eggs.

Secondly, the Millennium Labour Council should not be conceived as replacing NEDLAC. NEDLAC remains the only structure based on negotiations where deals are made and announced between its constituent organisations. The Millennium Labour Council should be seen as bringing together senior business and labour leaders to find common ground on matters of mutual interest in particular the areas where a settlement is necessary between the two parties in order to move the country forward. When common understanding has been reached this must be placed before NEDLAC for discussion and finalisation. In this way the Millennium Labour Council will serve to strengthen NEDLAC and social dialogue instead of undermining and weakening it.

Thirdly the Millennium Labour Council is the forum for dialogue and should not be allowed to degenerate into a debating society. Concrete agreements capable of tackling our socio-economic problems must emerge from these discussions and from the negotiations in NEDLAC.

The Millennium Labour Council will not remove the separate existence and interests that labour and capital have. It will not suddenly remove all industrial conflict and create an idealistic world of agreement on every matter. That is not its task, and that task in any event is not achievable in a market economy. What the Millennium Labour Council can do, and must do, is forge a consensus on some important and concrete steps to address our national crisis.

It is well placed to do so: it brings together senior leaders from the two sides of the wealth-creating machinery, its participants are united in a common sense of urgency about the crisis, and it builds on a deep and successful tradition of social dialogue and negotiation.

After all labour and business engage in daily dialogue in hundreds of work places throughout the country. It only through this engagement that we can hope to minimise conflicts not only at the workplace but at the national level as well. Our ultimate goal should be a comprehensive package of measures that, taken together, ensure job creation and job security, eliminate poverty and inequalities and create conditions for sustainable economic growth that will make our country a key player in the global economy.

Let me return to what I said about dawn and darkness: today is the dawn of a new period of engagement, and labour is ready for this engagement.

Long live the Millennium Labour Council!

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