COSATU Central Executive Committee, 25-27 February 2008

The Congress of South African Trade Unions held a scheduled meeting of its Central Executive Committee from 25-27 February 2008. The meeting comprised the National Office Bearers and representatives of all affiliated unions.

The meeting was honoured with the presence of three leaders of the African National Congress - President Jacob Zuma, Deputy President Kgalema Motlanthe, and Deputy Secretary General Thandi Modise.

Political report - The meaning of Polokwane

Tomorrow we will release a political report presented by the General Secretary on behalf of the NOBs collective to the CEC. It is important that this report/political paper, assessing the meaning of Polokwane, be read in conjunction with this statement. The CEC debated the paper and decided on the following key issues:

1.The CEC was clear that the working class must defend the gains made in Polokwane and repel the rightwing backlash that seeks to drive a wedge between the leadership in Luthuli House and the Union Buildings. The DA has been urging President Mbeki to ignore the democratic wishes of the ANC conference and directives from Luthuli House. Underlying this response is a fear of a radical shift in the policy direction of our society, demonstrating that the privileged will do everything to protect their interests.

2.The NOBs will establish a small group of comrades with technical expertise at the policy level from within the Federation and outside. This group will use the report's rich analyses and, in conjunction with the CEC Political Commission, submit concrete proposals on what is to be done. Some of these proposals will be submitted to the Alliance Summit scheduled for April and others to the CEC.

3.COSATU dominated the play in Polokwane but its finishing was poor at the policy level. The gaps identified by the report on such issues as macro economic policy indicates this weakness. In this context as part of point 1 above, COSATU should ensure that policy gaps identified are addressed in the coming Alliance Summit, the ANC elections manifesto, and in engagements with government departments.

4.The CEC Political Commission, working with the task team of policy experts, should think hard about ensuring that space is not open for the rightwing elements to reverse the gains of Polokwane after the 2009 elections. We seek to ensure that the cabinet, the presidency, premiers, mayors and strategic staff such as the DGs, who play a critical role in the interpretation and implementation of the policy, are people loyal to the ideas of the workers and the poor.

5.COSATU will discuss with the ANC and the SACP the need to co-opt more trade union and civil society leaders to ensure that the ANC NEC's representation of the ANC's constituency is improved. We shall also argue in these discussions that a certain number of the COSATU leaders be invited to the NEC as ex officio members who will have full right to speak but not vote in the NEC. This will strengthen the voice of working people in the NEC. The CEC Political Commission will discuss this and make concrete proposals on people to be co-opted and those who must serve on an ex officio basis but not be bound by the decisions.

6.COSATU will in the near future develop a programme to strengthen the capacity of the CEC to engage with the complex policy debates, in particular on socio-economic matters.

7.COSATU will with vigour pursue the congress mandate for the debate between itself and the ANC on the need for a Pact or programme of action on governance.  COSATU will no longer sign a blank cheque! The Polokwane resolutions and the ANC programme for 2008 lays a good foundation for this agreement.

8.COSATU will avoid taking a triumphalist approach post Polokwane. To us the struggle continues - power concedes nothing without a struggle. We rely on the strength of our organisation and its cohesion as well as the unity within the Alliance and the rest of the democratic movement to tilt the balance of forces. This will happen on the ground systematically every day. Celebrating the gains and going to sleep on the belief that the Messiah will take them forward and would resist when these resolutions are contested will be suicidal. We shall mobilise for progressive change all the time. In this regard the recruitment campaign will be further strengthened and every effort made to strengthen the organisation where it matters the most - at the shop floor.

9.The campaign to save the ANC from the clutches of the technocrats who sought to bureaucratise the liberation movement is far from being over. The 'rescue mission' post-Polokwane is on. We shall continue to work with the comrades within the ANC to ensure that the 1996 class project is dislodged everywhere. In this context the COSATU Provinces who had identified leaders of the ANC they prefer for the forthcoming ANC provincial conference are within their rights, in line with the 9^th National Congress resolution to do so. The provinces should take a more nuanced position though, and avoid being perceived as an external force that imposes leaders on ANC members. The best strategy is to work with comrades within the ANC who eventually have a final say on the matter. COSATU in this regard must redouble its efforts to swell the ranks so that the leadership reflects more the ANC bias towards workers and the poor.

10. The CEC noted with concern that two months after Polokwane the Alliance hardly exists in pockets of areas in the country, in particular in the Eastern Cape. Regrettably the victimisation and use of state institutions to deal with individuals for political reasons continues unabated in such areas as the Nelson Mandela Metropolitan Council. Members of the SAMWU and in particular the leadership of the union have been the main focus of this systematic attack by the now disbanded ANC REC in the area. The COSATU CEC says enough is enough! It is a political ticking bomb, that may lead to violent conflicts in that area between those using the council to mete out vengeance against those they perceive to have supported the current national ANC leadership within the council, in the Alliance and in SAMWU. We raised this matter sharply with the ANC leaders present in the CEC and we shall continue to raise it in the future.

11. In addition to the point above, COSATU remains concerned about the general weaknesses of the governance in the Eastern Cape. If no intervention is made soon, including redeploying comrades with no capacity to other areas where they can still make a better contribution, our efforts to build a better life in the Eastern Cape will continue to be a pipe dream for the majority of its citizens.

12. COSATU must defend its cohesion and coherence. Ill-discipline will no longer be tolerated. Decisions taken by the majority after following due democratic processes must be respected by all comrades who are in the leadership, without exceptions. For far too long COSATU has tolerated the situation where leaders form part of democratic structures that debate issues but then outside they act against these very decisions they were part of. A disciplinary committee is going to be established to enforce the code of conduct that the November 2007 CEC adopted. The NUMSA General Secretary and the former President of COSATU will be subjected to disciplinary action for ill discipline. The chairperson of the Gauteng Province in particular and the Gauteng POBs in general were warned that if in future they show any sign of disrespect for collective decisions they will be subjected to discipline in line with the code of conduct. 

13. While it was agreed that we have to be cautious to avoid rocking the boat and the fragile unity post-Polokwane, it must never be a matter of unity at all costs. The ANC members have spoken! They now want to see that their efforts were not vain. Whilst we know that change comes progressively and on occasions slowly, our patience is running thin. We want change today as our situation demands drastic improvement.

14. In the first two months after Polokwane, COSATU and the SACP committed a mistake of celebrating and admiring the sterling work of the new ANC leadership that was defending their space and the Polokwane resolutions. This was a mistake. From now forward COSATU must act on an understanding that the current epoch is of high contestation, and move to ensure that the new leadership is backed through and through. When it makes mistakes and makes statements that have a potential of reversing the gains of Polokwane, COSATU must speak out! We must not drop our guard. The best assurance for COSATU is not undertakings by leaders but a concrete programme with clear implementation strategies, monitoring and evaluation. 

15. The CEC looked at the ANC Conference resolutions, to identify major areas of progressive advance, or consolidation of existing progressive positions of the movement within an overall progressive framework. In terms of the 'big' crosscutting issues, key areas of advance include:

• Clearer elaboration of the notion of a progressive developmental state, with a bias towards the working class, a less neutral relationship to capital and a more democratic and less top-down character;
• A shift from the notion of growth as the solution (and an emphasis only on intervention in the '2nd economy'), to an acceptance that the current growth path as a whole has to be fundamentally shifted, to be redistributive and employment creating. The resolution calls for "an effective strategy of redistribution that builds a new and more equitable growth path";
• An important new emphasis on inequality, where previous documents only focused on poverty and unemployment. The economic transformation resolution now states: "The central and most pressing challenges we face are unemployment, poverty and inequality";
• A partial move away from the emphasis on the market and competitiveness, and greater emphasis on the role of the state in driving the economy, a state led industrial strategy, an expanded role for state ownership, and a more interventionist approach to use of mineral resources;
• While the original economic policy document had repeated references to the 'correctness' of government economic policy, its continuity, and denied the need for any shifts, all these references were removed from the final resolutions.

ANC President's so-called corruption trial

The CEC had a discussion on the renewed NPA endeavours to drag the name of the ANC President into the mud. The NPA wasted no time to pronounce that they will charge Jacob Zuma as soon as he won the highly contested ANC President's position. The CEC calls on all the 2 million members of the Federation to debate concrete steps that must be taken to stop these continued shenanigans and use of state of institutions to pursue political objectives. We still hold the view that this is nothing else but a political trial. As mandated by our 9^th National Congress we reiterate our call that the charges be dropped and he be reinstated to his position as the Deputy President of the Republic of South Africa.

Electricity crisis

The CEC discussed the huge national crisis caused by the shortages of electricity that has led to load shedding. We are now facing a new threat of a job loss wave that our country can simply not afford. Already it is public knowledge that 12 000 mining jobs are on the line. Some of the manufacturing based unions reported that they too are being warned by employers that if this load shedding goes any further they will be approaching them to start retrenchment consultations in line with the Labour Relations Act. This comes at the time when unemployment is sitting at 38,3% and poverty at around half of the population with inequalities growing.

The CEC is adamant that workers should not be asked to pay for government's and Eskom's crazy mistakes. It is a known fact that Eskom did request government to act to ensure that more power stations were built to avoid this catastrophe way back in 1997. Government failed to act and now workers are asked to understand.

The reality is that the government must shoulder the blame for its plans to privatise Eskom and do nothing when warned about the amount of investment that would be required to meet the expected rise in demand for power.

There was a strong feeling that the pain not being fairly distributed, with poor consumers bearing the brunt of the power cuts and that the tariff structure must be geared in favour of poor consumers.

COSATU will submit a Section 77 notice as soon as possible so that should the current threats of jobs losses materialise we are able to invoke sympathy strikes across the economy. We know that this would not itself solve the crisis the country is facing but at the same time the pain of this mess must be felt by all, including the captains of industry. Above all, should a single job be lost due to this crises we shall ask the political leaders who ignored the Eskom's request for more investment be held accountable. If workers are going to lose their jobs because of ineptness on the part of leaders, why should those leaders keep their jobs?

Having said that, we agree and will cooperate fully with National Recovery Plan which includes an energy efficiency campaign, a stakeholders' forum, phasing out inefficient light bulbs, and a pro-poor tariff structure. Load shedding must avoid social impact, and not disrupt essential services like hospitals. There should be rationing for large-scale consumers. The plan supported the rollout of solar energy for domestic hot water. We shall release the full CEC policy position later.

Price-fixing and the Competition Commission

Shan Ragaburuth, the CEO of the Competition Commission, reported on work being done to prevent price-fixing and check that mergers do not lead to over-concentration of ownership.

The Commission is exposing the extent of price fixing practises in some food companies, which COSATU has repeatedly condemned as a criminal practice which is effectively theft from the poorest consumers. Already the bread producing companies have been busted and the Commission says it has a prima facie case against milk and pharmaceutical companies.

This recent spate of anti-competitive conduct has again put the efficacy of the competition regime in South Africa in the spotlight. Bread and milk are basic foodstuffs to the majority of the poor people in SA and the majority of people cannot afford ever-escalating medical costs. But none of this matters to these firms as long as they make profits.

However the penalties meted out against the firms involved in conspiracies to rob the poor are not a sufficient deterrent. The Competition Act does not regard market concentration, which is largely responsible for this problem of cartelisation, as necessarily bad. The Trade and Industry Minister has indicated that the law will be strengthened to deal with problems of anti-competitive conduct. This presents a window of opportunity for COSATU to participate actively in the process to ensure that competition regime advances a developmental agenda.

With this we will be able to raise areas we want to see amended in the competition legislation to protect jobs; and secondly to table our jobs and poverty campaign demands.

Our 9th Congress has called for a campaign for the review of the Competition Laws to, among other things, safeguard workers' jobs and anti-competitive behaviour. The CEC agreed that we require:

• Harsher penalties for restrictive practices. We need to hold those criminally liable for any anti-competitive behaviour in the context of the Competition Policy Review Project.
• The amendment of the Act to give competition authorities powers to investigate concentration levels in the economy to address the problem of monopoly power. Currently the competition authorities are empowered by the Act to deal with potential negative effects of market structure by controlling mergers.
• The Commission to strengthen its advocacy work to ensure that consumers, workers and competitors know their rights. Learning from the European examples, enforcing competition law should not only be institutional structures but members of public can also claim damages against cartels. Perhaps the Act must be amended to also make it possible for South Africans to claim damages.
• The state to intervene and set up mechanisms to control prices of basic food and household necessities.
• Greater state intervention and responsibility in the food chain such as storage and infrastructure handling, milling, wholesale and retail trade facilities.

Regarding the high food prices, we have decided to submit a Section 77 notice that will force all the farmers, food manufacturers and retail bosses to engage with us. We want to know which amongst them is profiting at the expense of the poor. Should any of them not address our concerns we shall embark on a strike to force action on their part.

We shall engage the ANC and the SACP as well as the rest of the trade union movement and civil society to form a broad front against high food prices and poverty. Food security is absolutely important if we are to build a caring society.

Socio-economic challenges

The CEC received a report on the significant economic challenges that continue to face the majority of working people and the poor. Our unemployment rate remains one of the highest in the world, with current economic growth projections indicating a reversal in declining unemployment. Even when unemployment was declining after 2004, however, the jobs were predominantly in the services sectors, such as wholesale and retail, construction and private security.

These jobs are extremely precarious, with little security, low wages, poor working conditions and low levels of compliance with basic conditions. They do very little to lift workers out of poverty.

Though it is important to acknowledge the significant strides government has made in reducing poverty, challenges remain, predominately in communities in the former Bantustans, other rural communities and the sprawling informal settlements throughout the country. This is exacerbated by poor service delivery, and continued cut-offs in basic services, in addition to the rising cost of these services and food, which wreaks havoc on poor households and communities.

Economic growth remains higher than in earlier periods, though the brisk growth of the 2003-2006 period has slowed down somewhat.  In the December 2007 Reserve Bank Bulletin, growth dropped from 5.5% in the first quarter to 4.75% in the third quarter of 2007. 

The slow down is attributable to global and domestic factors including the fear of global recession, rising interest rates in South Africa and the unstable energy supply. The recent budget announcement indicates growth for the next year slacking to 4% of GDP. Surely any lower growth projections would impact on our development challenges.

With the emphasis on the state playing a major role in the economy, emerging out Polokwane conference, we measured our expectations of the budget against the ANC policy resolutions. Though the budget identifies the right policy choices and recognises the challenges we face, it does very little to live up to those challenges facing our society. 

In contrast, the rich will benefit from the budget, especially the reduction in company tax and revision of exchange controls.  When it comes to allocations to the poor on social grants, however, the scale of the increase is miniscule.  While the overall budget growth 4% in real terms this is slower compared to previous periods and reduces the level of total expenditure. The budget does not live up to the President's message of 'business unusual' or the ANC's call for intensified war against poverty.

Meanwhile the growing gap of income in SA is exposed in the 4th Annual Mabili report on Directors and CEO Salaries for 2007. Steve Booysen of ABSA received an all-inclusive package of R17.5m, while Sean Summers of Pick n Pay got R10.19m per annum. Sean sold off some of his shares in Pick n Pay worth R13.5m during the year of review making his total take home package R23.69m per annum.

In contrast to these disgusting and exuberant pay salaries, the minimum wage in ABSA is R50 000 all-inclusive per annum (R4167 per month). At Pick n Pay the minimum wage is R400 per month (R4 800 per annum) for a worker. The ABSA CEO, Steve Booysen's package is 350 times more than what an ordinary worker would earn in one year. Summer's package is 790 times that of the minimum earned by a worker employed in a Pick n Pay store.

This clearly indicates that our country is getting richer but more unequal, with many of the working poor, unemployed and poverty stricken communities not reaping the benefit of our growth. Growing inequality contributes to low economic growth and increasing poverty

The CEC agreed that we require:

• A Basic Income Grant of R100 to each person.
• Extending the Child support grant, with a more limited means test, to 18 years of age.
• Identifying an anti-poverty strategy across government, with improved co-ordination between departments
• Increased capacity for municipal and provincial governments with high levels of poverty.
• Entrenching the democratising of our participation at a community level to deal with poverty elimination and service delivery
• Identifying indigent households and their core needs
• Identifying what basic services should be accessible to every household and how they will be funded, and develop a strategy to reduce the number of poor households cut off or excluded from government services due to non-payment.

Existing conservative monetary policy, by focusing narrowly on reducing inflation, does not support development, growth and employment. The goal of keeping inflation within a band of 3-6% is also restrictive.  The CEC reaffirmed that a developmental state should not seek short-run gains through artificially low interest rates.  Consideration should be given to a more flexible inflation targeting that takes into consideration high fuel and maize prices OR the scrapping of the bands or shifting of the inflation bands altogether.

Ultimately, the long-term commitment to low inflation, and real low interest rates, are more likely to provide the macro-economic environment required by the developmental state. However this should not be done at the expense of meeting the overwhelming developmental challenges faced by South Africa.

Wage bargaining

The CEC was presented NALEDI's Annual Report on Wage bargaining, entitled 'Bargaining for a Living Wage'. It gave statistics to confirm that South African workers face enormous problems of unemployment, casualisation and low pay. All these problems are being aggravated by the accelerating rise in the prices of basic commodities, which is eating away the average increases negotiated last year.

The CEC agreed to the report's conclusions which were that while much of the hostile and adversarial relations which defined the apartheid labour market, have given way to multilateral labour institutions and consensus mechanisms for the pursuit of "economic development, social justice, labour peace and the democratisation of the workplace" as desired by the Labour Relations Act, yet fourteen years after the formal dismantling of apartheid, the labour market remains a highly contested terrain.

The slow pace of job creation has seen official unemployment increase by more than 10% from 1994 to stand at 25.5% but when counting the discouraged work seekers the figure jumps to 38,3% in 2007, poverty remain high and inequalities have deepened, as measured by the Gini Coefficient. Though the rate of women's participation in the economy has improved, the majority of the unemployed are women, and in comparison with men, women earn on average lower wages. African women are predominant in the informal sector and in poor, low-wage, non-standard jobs.

A distinctive feature of the labour market fourteen years into its transition is the growth of atypical forms of work inside the formal economy and the extensive growth of the informal economy. As South Africa charts its course half way through the 2014 target for halving unemployment and poverty, it is highly unlikely that at the current pace of economic growth and job creation, the country will be anywhere close to achieving that objective.

The need for better collective bargaining strategies cannot be overemphasised. The increasing number of unemployed, the rise in atypical forms of employment and the decline in bargaining councils all mean that the ability and strength of the workers to bargain for a living wage has come under severe pressure. Rolling back these setbacks is a challenge that requires unions to mobilise more creatively and more actively, particularly amongst atypical workers.

The CEC broadly agreed that the benchmark figure for the 2008 bargaining round should be to accept nothing below double figure percentage increases. Demands must take account of the rising levels of inequality. It was agreed that we must prepare for solidarity action, with the NOBs in charge, and convene a Living Wage Committee. Affiliates must submit timetable of bargaining.

SABC Board

The CEC approved the steps to challenge the appointment of a non-representative SABC board at the High Court.

There is no possibility that the ANC MPs may try to reverse the decision, and therefore we are going to proceed with legal action.

May Day

A programme of rallies for May Day 2008 was agreed, and is attached as an annexure. The theme will be: "Defend democratic gains - Fight unemployment! Crush poverty and inequalities - create decent work now!". It was agreed that COSATU would refuse to submit to pressure from government departments to hold joint rallies with other federations, as a precondition for receiving financial support. The ANC leaders were reminded of the ANC's January 8th Statement that stated:

"We must also build a vibrant trade union movement working with our ally, COSATU. Millions of workers do not enjoy the rights enshrined in the Constitution and our labour laws as they have been casualised or sub-contracted. Farm and domestic workers still do not enjoy the many rights granted to all workers. Faced with this reality, we have no option but to support efforts to organise all workers into COSATU."

The CEC also agreed to mobilise support for the events to commemorate the 15th anniversary of the deaths of Comrades Chris Hani and OR Tambo in April 1993, and to remember Moses Kotane and Solomon Mahlangu.

Accidents

The CEC paid its respects to the workers who have recently lost their lives in the shocking spate of fatal accidents at the Assmang factory in Cato Ridge and the mine workers who continue to be maimed in the barbaric mine accidents. We shall step up our efforts to the bosses at the CEO held accountable for these accidents.

Willy Madisha

The CEC received the report of the Commission of Enquiry into allegations involving the COSATU President, Willy Madisha. It decided to release the copy of the report publicly in the light of the misrepresentation by some in the media and unauthorised sources in the Federation which all combined to misinform the public about the real facts behind the establishment of the commission and its terms of reference.

The CEC accepted the Commission's findings and recommendations and unanimously resolved to remove Willy Madisha as President of COSATU in terms of Clause 9.6.1.3 of the COSATU constitution. An Acting President will be elected at next CEC in May 2008.

Special Browse Mole Consolidated Report

The CEC discussed the Parliament Joint Standing Committee on Intelligence report and welcomed the statement, which fully vindicates the Federation's view that the Directorate of Special Operations, better known as the Scorpions, produced the Special Browse Mole Consolidated Report illegally and in contravention of their mandate.

The report claimed that a conspiracy, both inside South Africa and on the continent, was fuelling ANC president Jacob Zuma's presidential ambitions.

COSATU has consistently maintained that the report was designed to destabilise and foment divisions within the ANC, its allies and South African society in general. It was produced and distributed by former apartheid security service and retired intelligence officials to as part of political battles within our movement, and that Jacob Zuma was being targeted to satisfy the political agenda of some people who operate clandestinely.

The report to parliament confirms that the DSO made use of informants, information peddlers and private intelligence companies to produce the report. The Committee chairman, Siyabonga Cwele, noted that "the DSO ... fell prey to information peddlers and that they took no corrective measures after the report was produced.

"They [the DSO] did not take any action against the senior special investigator from whom the leak originated. They also neglected to take action against the illegal activities of those who were involved in the production of the Browse Mole report." COSATU has called for the Scorpions' integration into the South African Police Service, and we demand that those responsible be identified and arrested.

Statement issued by the COSATU Central Executive Committee February 28 2008