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Media Centre | COSATU Press Statements
CABINET DECISION ON REORGANISATION OF STATE ASSETS
COSATU PRESS STATEMENT 7/12/95
A senior delegation of COSATU met with Deputy President Thabo Mbeki, at his request, for a briefing on the Cabinet decisions on restructuring of state assets in two key sectors, to be announced at a press conference today in Pretoria.
COSATU's leadership, after being briefed on these decisions, expressed their shock and disbelief to the Deputy President on how the government is handling this critical area affecting transformation of our country. Our concerns relate both to the content and process of these decisions.
At the level of process, COSATU pointed out that the Cabinet decisions were premature, and pre-empted a number of agreements which had previously been reached with government, as contained in the attached memorandum submitted to the Nedlac Executive on November 30:
- The sectoral task forces on reorganisation of state assets ( transport, telecommunications etc) had made recommendations to the Cabinet without consultation with the affected unions, contrary to undertakings from Government;
- The understanding that a comprehensive review of state assets, and options in terms of their reorganisation, would be presented to the stakeholders at Nedlac has not been done;
- The agreement that government would institute a moratorium on unilateral restructuring by parastatal management, while the discussion on restructuring was taking place, has not been honoured. This unilateral restructuring, including mass retrenchments, and cutting of services to poor areas, continues to take place unabated;
- The impression is that some of the discredited restructuring plans of the old parastatal bureaucracy are now being uncritically accepted by government;
- The agreement that a coherent and comprehensive plan for the restructuring of state assets would be finalised, to achieve RDP objectives, has not materialised. The decisions which have been made are piecemeal, and appear to be more motivated by business imperatives, than by the desire to service the needs of the people;
- Although the Deputy President emphasised that these decisions were not cast in stone, and were subject to further discussions with stakeholders, in particular workers, the public perception would be created that government had taken a decision without consultation, and therefore was following a pre-determined agenda.
- It would be pointless for the unions to engage themselves in the process of negotiating the implementation of an approach which we fundamentally disagreed with. Our experience is that once you participate in a process after strategic decisions have already been taken, your interventions simply legitimise and rubberstamps someone elses agenda.
In relation to the proposals for the restructuring of Telkom and public enterprises in the transport sector, COSATU voiced its objections to Government's approach in a number of respects:
- No coherent strategy for these sectors has been determined, either in relation to telecommunications policy or transport policy. It is difficult to understand how, in isolation from such a policy government is able to take an informed decision on restructuring of state assets in these sectors. This makes nonsense of the current discussions of new telecommunications and transport policy and legislation for the country, if the vehicles for the implementation of this policy are fragmented and undermined ;
- The definition of 'core' and 'non-core' activities is highly contentious, and masks a covert privatisation agenda by business;
- The issue of how new capital and technology can be injected into public enterprises has not been properly canvassed. It may be that joint ventures, or strategic partnerships, with business could in certain instances achieve this objective. Other options may be more appropriate, however, and in certain instances joint ventures might undermine the RDP delivery functions of public enterprises. A proper weighing of the options, and a vision of restructuring, appears to be absent;
- The concrete experience of unilateral management restructuring in these two sectors is one of massive destruction of services and jobs, particularly in the poorer areas. Uncritical endorsement of current management restructuring will simply reinforce, and speed up these processes, even where enterprises remain in state hands. An example of this is the current destruction of transport services in the poverty stricken Eastern Cape region, on the basis that it is 'unprofitable' for parastatals to run services in these areas;
- The sale of assets for 'affirmative action' purposes, or the nature of the partners who are involved in joint ventures, is in COSATU's view irrelevant to the fundamental question, which is: what should the direction be of these enterprises, and how do we ensure that they meet the goals of the RDP. The goals of the RDP will be defeated if restructuring of enterprises benefits a new black elite, while the delivery of services is fundamentally undermined. The same applies to restructuring which only benefits multinationals, local business, or vultures in parastatal management who are fighting over the spoils.
- In some instances there is absolutely no conceivable justification for the restructuring envisaged by cabinet. It is impossible to see, for example, how the sale of housing stock held by Transnet into private hands, advances the housing policy of the RDP.
COSATU is calling on the government to suspend implementation of the second phase of the process of restructuring until a comprehensive evaluation of the restructuring options has been undertaken. It is in the interests of society that government does not allow itself to be stampeded into decisions by unaccountable managements and business interests, as this will fundamentally undermine the integrity of the RDP, and government's capacity to implement transformation.
COSATU will as a matter of urgency be mobilising workers and in particular affiliates involved in these sectors to discuss these proposals, and to give their views. We will also be calling on our communities to look at the implications of the restructuring. While workers jobs are being threatened, it is at the end of the day, the communities who are most under threat in terms of services which they rely on being subjected to the laws of profit.
COSATU will be having an urgent meeting with government on Monday, where we will attempt to convince them to review their current approach. Any public enterprise which goes ahead with unilateral restrucuring, with or without government approval, will feel the wrath of our members. We will also deal with those sharks who are attempting to colonise public assets as their own private property.
We are also making a call to our alliance partners, particularly the ANC, to ensure that a RDP agenda determines the restructuring process, and to resist the atttempts by other parties in the GNU, or business interests to drive the pace of change, for their own selfish interests
COSATU is considering convening a special national executive meeting to discuss a programme of action on this issue. This indicates the seriousness with which we view this matter.