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Shopsteward Volume 27: Special Bulletin

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Central Exec  |  COSATU Speeches

Speech delivered by COSATU President Willie Madisha at the opening of the Central Committee

14 April 2003

It is a great pleasure for me to welcome all of you national and regional office bearers, shopstewards from all our affiliates and from all over the country, organisers and educators, guests and friends to this Second Central Committee of COSATU. We have much to do here. Indeed, we are at a turning point in our history, and our decisions at this meeting and at our Eighth Congress in a few months will do much to determine our success. It is significant that this meeting takes place almost exactly ten years after the assassination of Comrade Chris Hani. To honour him, together with the Communist Party, we are launching the Chris Hani Institute tomorrow. The Institute marks an important step forward in ensuring a comprehensive political education programme for our leadership, activists and new cadres. We should dedicate all our work here to Comrade Chris and the goals for which he fought.

It is also thirty years since the modern labour movement was reborn in the crucible of the Durban strikes. Those strikes revitalised the labour movement, giving birth to the militant, transformative, non-racial unionism that culminated in the formation of COSATU. In this input, I will briefly review the background to the Central Committee, explaining our focus on organisational development. The organisational review process also has to be located in the challenges we face in economic and political terms. Finally, I will begin to sketch a way forward. Comrades, COSATU faces continually changing challenges, with constant shifts in the demands from our members and our environment.

For this reason, we must always review the demands on our organisation and develop to meet them. This is a hard process, but a necessary one for us to survive. This fact was recognised by the Seventh Congress, which called for a process of organisational review and development, building on the September Commission Report. To drive the process, Congress established the Organisational Review Commission. The Organisational Review Commission last year submitted an extensive report to the First Central Committee. The Commission pointed to a range of problems that needed action. It argued that our movement must act decisively to address some key challenges =96 arising above all from the job-loss bloodbath of the past ten years combined with the new demands on unions as the legal and political environment changes.

The difficulties that the Organisational Review Commission foretold last year have now begun to take shape. In particular, COSATU lost over a hundred thousand members overall since the last Congress three years ago. On the one hand, key industries face downsizing; on the other, the public service, the source of much of COSATU=92s growth in the late 1990s, has now reached almost 100% union membership. In part as a result of this situation, two large unions =96 NEHAWU and SACCAWU =96 are many months in arrears on their affiliation fees. That flies in the face of one of our founding principles, which is paid-up membership. As COSATU, we are still managing our work, but only with great difficulty.

This problem needs strong intervention, and we expect the Central Committee to give some guidance. Already, the CEC adopted strict measures to ensure that more of our resources are spent on programmes for affiliates. The National Office Bearers of COSATU are now analysing and developing medium to long-term strategies to deal with the shortfall on fees. We expect to present concrete proposals to the CEC scheduled for the end of May. CEC directed affiliates to sign debit orders with a view to improving COSATU=92s financial institution. I am pleased to inform you that 16 of the 19 COSATU affiliates, including NEHAWU, have to date signed debit order to pay their affiliation fees.

Only three of our unions have not signed. The move to debit orders has immediately changed our fortunes and we are coming to this CC with better hopes for the future. But we have to see that the failure to pay affiliation fees reflects deeper challenges that affect all our unions arising out of job losses and the changed legal, political and social environment. Faced with these challenges, this central committee must find ways to drive forward the organisational review in order to serve our members better in the long run. Comrades, What are the main challenges we now face?

The Central Committee must understand the implications for our organisations of changes in our economic and political environment. The key issue for us remains soaring joblessness. We need to understand the reasons for this situation, which reflects both economic trends and government policies. COSATU has long recognised that the most urgent challenge for the union movement is now rising job losses, combined with informalisation and casualisation. These trends place a three-fold burden on unions: we lose members; we face new organisational and financial stresses; and we have to deal with the very hard issues that arise from workplace restructuring. At the same time, we must express the demands of the working class as a whole for the basic right to decent work

The figures on unemployment are very painful. Since 1995, when government began to collect the data, unemployment has soared from 15% to over 30% as of September 2002. No other country has experienced such growth in unemployment unless there was an economic catastrophe underway. Moreover, these figures only reflect the narrow definition of unemployment, which excludes workers too discouraged to seek work actively. If those discouraged workers are included, unemployment is now at over 40% and close to eight million.

Joblessness is particularly tough on young people. Because it basically results from the failure to create jobs, they are most likely to be unemployed. Almost three quarters of the unemployed today are aged under 30, and almost half of all African youth are unemployed. As unions, we experience the loss of jobs through retrenchment and casualisation. But there is a less obvious effect. Rising unemployment makes it easier for employers to replace workers at a lower wage. All too often, we see this as when permanent workers are replaced with outsourced or casual labour. Unless we do something about unemployment, all workers will find it harder and harder to maintain the gains we won so painfully over the past thirty years.

Indeed, already average incomes from work have begun to decline. True, our own members have mostly been able to safeguard their wages and benefits. But more and more workers are trapped in the informal and survival sector with no unions to protect them. As a result, their incomes have fallen. Thus, in 1995, 35% of workers earned under R1000 a month. By 2002, almost 40% of the employed earned under R1000 - and that R1000 was worth a lot less than in 1995. Not surprisingly, these trends have led to a fall in the share of labour in the national income. Labour now gets only 51% of the national income, compared to 57% in 1991. The worsening position of the working class in economic terms reflects deep-seated structural problems in the economy.

We have discussed these in our position papers and booklets on industrial strategy and for the Growth and Development Summit. We see two key structural problems. First, apartheid left us with a divided and dualist economy. Most of our people were deprived of land, access to capital, even basic services and education. The explicit purpose of the colonial and then the apartheid state was to ensure that most people had no choice but to sell their labour at any price, in order to survive. On that basis, the apartheid state and business built up a strong modern industrial and agricultural sector. But our people were welcome only as cheap labour. Today, this legacy of apartheid still underpins huge inequalities and soaring unemployment.

Most of our people are simply excluded from the modern economy. They do not have the resources or institutional support they need to earn a living. If you cannot get a job in the formal sector, or you lose your job, there is virtually no way to maintain yourself and your family. The situation has been made worse by a second problem: the restructuring of the formal sector, with huge job losses, since the emid-1980s. This restructuring has several aspects. They include: =B7 The loss of jobs in gold mining, =B7 The devastation of many of our manufacturing industries since the economy was opened up, starting in the early 1990s and worsened by big tariff cuts in 1997, and =B7 The restructuring of the public sector to commercialise key services =96 and the loss of huge numbers of jobs.

In short, we inherited a high level of unemployment from apartheid =96 and the restructuring of the formal sector since then has made the problem worse. Overcoming these structural problems will not be easy, and will take a long time. But government has not tabled a co- ordinated strategy to overcome poverty and unemployment. Although it improved some government services for our people, it has not worked to restructure the economy toward job-creating growth. Instead, economic policy, at least until very recently, was geared narrowly to cutting government spending, holding down inflation and growing exports.

These government policies contributed to soaring unemployment. On the one hand, cuts in government spending and high interest rates cut back on economic activity in general. Moreover, the privatisation and commercialisation of services destroyed hundreds of thousands of jobs and drove the price of basic services beyond the reach of many of our people. On the other hand, although exports have grown, especially in the auto industry, they did not create jobs. Indeed, even the auto industry lost jobs in the past ten years.

COSATU has welcomed some shifts in government=92s policy in recent years, in particular the growth in the budget and the review of industrial strategy. But these shifts are not enough to transform our economy to meet the needs of our people and create jobs. Government still has not changed its industrial policy to create employment. The high value of the rand will make the situation worse. This brings us to the political challenges. Because of course the big question for COSATU is why the government that we elected, led by the ANC, is not doing more to transform the economy toward job creation and equity. The ANC has made some big gains recently.

The opposition is now virtually reduced to Inkatha and the DP. Of these, only the DP has put forward its own positions, which are just an agenda for capital. COSATU welcomes the ANC=92s gains, which must be reaffirmed in the elections next year. But we still disagree with the government on economic policy. The fact is that government has not been able to sustain a strategy to transform the economy toward greater equity. In large part, this reflects unrelenting pressure from capital. COSATU, together with the broader democratic movement, has failed to counter this pressure. In this context, government has proven unable to put forward and pursue a strong transformatory vision. Instead, it has more and more fallen back on support for black capital in a narrow sense.

But some of the measures to build up black enterprise, such as privatisation and outsourcing, could actually impoverish and disempower the majority of black people, who far from being capitalists form part of the working class. In this situation, it is critical that workers maintain unity. One of the most potent weapons in the hands of South African capital is the splintering of the labour movement, with NACTU and FEDUSA alongside COSATU. The creation of yet another labour federation, CONSAWU, is bad news for workers. Instead of working towards one single national and even more powerful federation, the unions that have affiliated to CONSAWU have chosen to further fragment the workers=92 voice and increase the power of capital.

We are aware that the new federation is bankrolled by World Council of Labour, which is largely a conservative movement from the divided past of the international labour movement. The World Council of Labour has split unions in many parts of Africa and elsewhere. Discussions with this new federation will therefore be even more difficult than the discussion with NACTU and FEDUSA. Let me repeat the call we have been making: in the context of the challenges we face, the need to create one federation in one country cannot be over-emphasised. Comrades, COSATU sees the upcoming Growth and Development Summit, which we have demanded for more than two years, as an opportunity to come to deal with these problems. It should give us a springboard both to deal with debates in the Alliance. It should bring together key stakeholders, including business, around a strong development strategy to place the country on a path of job- creating growth.

We noted with regret the request of the Minister of Labour to the President that the GDS be postponed to June 7, 2003. Again let us emphasise, we did not ask for a delay in the GDS. When we met the Minister recently, we did point out him that we were way out of schedule of the process envisaged by the Ekurhuleni Alliance Summit held in April 2002. We pointed out that, unless all parties dropped everything else to focus on engagements at NEDLAC, the GDS still risks being just an expensive press conference. But that does not mean that COSATU is not ready. We have developed our proposals months ago, and submitted them in the Alliance before anyone else. We cannot accept blame for lack of seriousness in the face of the challenge at hand. The little reprieve we now have must help the Alliance to carry out fully the resolution of the Ekurhuleni Summit. The Summit agreed on a process that would be led by the Alliance.

This would include finding agreements on the areas that have divided us in the past. As part of uniting the people=92s camp, too, the Summit resolved that the Alliance should engage with other people=92s organisations. The resolution fell short of fully complying with COSATU=92s call for a =93Peoples Summit.=94 But it still made progress in defining a strategic approach to the GDS based on greater unity within the democratic movement. For this reason, we heralded the Ekurhuleni Summit as a victory for millions of workers who participated in the previous national campaigns and general strikes in pursuit of our demands. We want everyone in the Alliance to work to realise the Summit declaration. We must cement unity of the Alliance and deal with areas of conflict before going to negotiate with government and business NEDLAC. Otherwise the GDS will not lead to the strong strategies with the mass support needed to overcome poverty and unemployment.

Government only just gave us their proposals for the Growth and Development Summit. There are some good things in these proposals. Certainly government now has an improved understanding of the importance of the social wage and basic services for our people. And of course we have always supported the skills development strategy, although it still needs a lot of work. But government=92s proposals fall far short of a co-ordinated strategy to restructure the economy. Above all, they do not give any ideas on how to guide the formal sector in order to create jobs in the long run. There is no understanding at all that we cannot continue with business as usual =96 we need targeted measures to ensure that the economy retains and creates decent work for our people. A few more programmes to support for SMEs and create learnerships won=92t be enough.

In this context, COSATU is fighting for some basic changes in economic policy. First, we want business and government to prioritise employment creation. Every big business and every government department should have to report annually on how it is helping to overcome the jobs crisis. Second, we need to restructure the formal sector. Government must do more to support production to meet basic needs and support labour-intensive activities, rather than just exports. COSATU sees the sector job summits as critical to restructuring the economy in this way, but government and business must engage more seriously. Government should also bolster its infrastructure and redesign its housing programmes and the IDC to ensure they contribute more to job creation.

Third, to overcome the dualism we inherited from apartheid requires far-reaching improvements in basic infrastructure and housing, education and skills development, land reform and support for small and micro enterprise. It also involves restructuring the financial and retail sectors fundamentally, a process we started with the Financial Sector Summit last year.

Finally, there are some short-term measures that would help. These include the urgent implementation of the Proudly South African campaign by government and big business; a review of monetary policy to reduce interest rates and push down the value of the rand; a further relaxation in the fiscal stance; and a big expansion in public works and community service, in order to provide income relief and meaningful employment urgently for the unemployed.

Comrades, What are the implications of these complex issues for our development as a= labour movement? Even if we achieve success at the GDS, we will not see a quick solution to= the problem of joblessness. That means, as the report to this Central Committe= e points out, that we have to find new and more aggressive solutions to the problem of membership losses resulting from rising unemployment. First, we need to focus much more on recruitment =96 that is, successful recruitment, consolidated through stop orders, ser= vice to members and educational work. To achieve this aim, we have to review all o= ur processes for recruiting and serving our members.

We need to understand wh= y some groups of workers don =92t join unions, and find ways to meet their needs. In every major employ= er, COSATU affiliates should be the only union or at least the main one. And w= e need to reach much more into smaller employers as well. Second, we need to ensure that every union has a realistic scope and a sustainable size, through mergers if necessary =96 including with unaffiliated unions. We recognise that mergers in thems= elves pose serious organisational challenges. But COSATU has long argued that on= ly large industrial unions can survive in the current economy.

Third, in terms of policy, we need to prioritise engagements around employ= ment creation. The key processes now are the Growth and Development Summit, the= sector summits, negotiations on trade and Proudly South African, and restructuring the public sector. Last year =92s Organisational Review Report pointed to the mushrooming in our policy= capacity =96 now we have to target it to address the key challenge of joblessness. Fourth, we need to consider how the disagreements on economic policy and t= he transition to democracy affect the nature of our movement. After all, many= workers joined COSATU historically in part because they wanted to particip= ate in the broader struggle. How many people here joined just to get a higher = wage and a pension scheme? We need to improve our political education and debates so that we can deal= with the more complex challenges we face without demoralisation or unnecessary fights in the Alliance. And we need to find a way to speak to and relate t= o young people who did not go through the struggle against apartheid, and wh= o may not have any emotional attachment to unions or the liberation movement.

Finally, with the pressure on membership and wages, finances will continue= to be a problem. The report to the Central Committee suggests the need to foc= us much more on financial management and controls. Otherwise a small decline = in subs can lead to a big deficit and a financial crisis. And in the current contested environment, we cannot afford that kind of problem. Comrades, As you can see, this Central Committee must help us meet serious challenge= s. Its proposals will go forward to our Congress in September. But we also expect some short-term help from the Central Committee.

In particular, we need to find ways to help those unions with serious financi= al and organisational problems. We need to initiate a realistic organisationa= l review process that doesn =92t require resources we don =92t have. And we need to lay the basis for a renewed recruitment campaign= and for engagement at the Growth and Development Summit, in Sector Job Summits= , in the approaching wage negotiations =96 and in the elections next year. Comrades, At this historic moment, we remember our president, Elijah Barayi, who tog= ether with countless others worked so hard to build this movement.

We draw stren= gth from the memory of Moses Mabhida, JB Marks, Harry Gwala, Dorothy Mokgalo, = Sam Ntuli, Sam Ntambane, Bheki Mkhize and countless other worker martyrs =96 heroes and heroines who carried the red flag flying before us. This is their movement, this is the movement of those deep down in the belly of the world sweating for little money, as we usually sing in their honour. It belongs to our factory workers, nurses and teachers; and to those vulnerable workers being abused in the farms and doing domestic work in the bosses=92 homes.

This movement belongs to all of us. Its survival and strength is critical for our country and our democracy. We must and shall do every thing in our power to preserve it for generations to come.

That is the challenge of this Central Committee. We cannot fail!