NEDLAC 2007/08 Annual Report briefing

Meeting report

National Economic Development and Labour Council (NEDLAC): Annual Report 2007/08: Briefing
Mr Herbert Mkhize (Executive Director, NEDLAC Secretariat) and Mr Umesh Dulabh (Chief Financial Officer) briefed the Committee on the NEDLAC 2007/2008 Annual Report.

Mr Mkhize noted that NEDLAC comprised of four chambers and one unit, namely the Trade and Industry Chamber, Labour Market Chamber, Public Finance and Monetary Policy Chamber, the Development Chamber and the Standing Committee Section. He noted that the four Chambers comprised of six representatives each, representing Labour, Government and Business. The Development Chamber was the only chamber that had an additional six members representing the community. The Standing Committees Section dealt with Section 77 notices, demarcations and the Technical Sectoral Liaison Committee (TESELICO).

He then outlined the work of each of the Chambers. The Labour Market Chamber worked very closely with the Department of Labour (DoL) on issues that pertained to the labour market. It was noted that all labour market policies emanated from this Chamber, where decisions were reached by consensus.

The Public Finance and Monetary Policy Chamber dealt with the South African fiscal and monetary policies. NEDLAC played a very important role in reviewing and scrutinising the Medium Term Budget Policy Statement (MTBPS) before the Minister of Finance delivered his address. Mr Mkhize noted that the monetary policy was managed by the South African Reserve Bank (SARB). It was very difficult for NEDLAC to influence monetary policy as these policies emanated from Government.

Mr Mkhize stated that the Development Chamber was in essence the most powerful Chamber of the four, as it had to review policy decisions that had been taken in the other remaining three Chambers. The Development Chamber comprised of an additional six members that represented the broader South Africa community as a collective. It was important for the Development Chamber to play a more proactive role in the meetings of NEDLAC as it was tasked to ensure that NEDLAC attended to the developmental agenda of South Africa. This Chamber had a right of veto, which should be used by it to advance the plight of ordinary citizens. Mr Mkhize said that the Development Chamber was an important platform for civil society organisations to engage with key stakeholders on a whole host of issues.

He noted that the Trade and Industry Chamber advised Government on the South African trade policies. It was instrumental in assisting the Government in identifying the problems with the Economic Partnership Agreements (EPAs) between the European Union (EU) and Africa. It had made repeated calls for trade to be balanced and fair.

Mr Mkhize then noted that presently there were three Standing Committees (SCs), namely the SC on Section 77 Notices, the SC on Demarcations and the Technical Sectoral Liaison Committee (TESELICO). The SC on Section 77 Notices dealt with notices given by trade unions on their intentions to strike, as the right to strike was a constitutionally guaranteed right. The Demarcations SC determined which business sector belonged to each Bargaining Council. TESELICO dealt with trade policy issues. NEDLAC did not formulate trade policies, but merely advised Government. TESELICO also established the Competition Commission as well as the Competition Tribunal.

Mr Mkhize then described the processes undertaken by NEDLAC. Once the NEDLAC parties had agreed to a policy position they were not allowed to re-open discussions when a Bill that emanated from NEDLAC was discussed. Parties also had a duty to inform NEDLAC about any pitfalls that might arise out of an agreed position.

Mr Mkhize then turned to a discussion of the key outputs for 2007/08. He listed several Key Focus Areas (KFAs) such as the changing nature of work and atypical forms of employment, the Skills Development Bill, World Trade Organization (WTO) Trade Negotiations, promotion of the Small, Micro and Medium Sized Enterprises (SMMEs), Anti-Poverty Strategy and policy on Competition.

The strategic objective of the changing nature of work and atypical forms of employment (casualisation) was to address the challenge of the atypical forms of employment in South Africa, and was aligned with the Decent Work Country Programme Project. This discussion was still under way as there had been many parties who had given their comments. The Minister of Labour had indicated that this should be resolved speedily as many casual workers found themselves working in very precarious conditions.

NEDLAC had concluded the Skills Development Amendment Bill, which would provide an internationally recognised and effective accreditation and monitoring system for South Africa that would assist in skills development amongst the rural poor, women, youth and the disabled.

Mr Mkhize said that NEDLAC supported the South African Government’s position in terms of the WTO Trade Negotiations, and that the strategic objective had been to position South Africa favourably within the WTO multilateral system. This was an ongoing process, as NEDLAC wanted to ensure that all social partners were united behind a common position that sought to drive a developmental agenda in the WTO-Geneva talks. He said that there was a still a stalemate between developing and developed countries on the international trade regime.

Mr Mkhize added that NEDLAC had concluded an agreement that detailed the necessary guidelines responsible for the attainment of competitiveness and development of the South African economy. NEDLAC was also busy working on a framework agreement to address poverty in South Africa. It had finished a key policy framework that would facilitate and promote SMMEs, with special focus on procurement.

Mr Dulabh then tabled and took Members through the financial statements, noting the operating expenses and the current asset position (see attached document for details).

Mr Mkhize then detailed the key priorities that NEDLAC had identified for the future. In order to provide an effective and professional service to South African society, NEDLAC had decided to build capacity within the NEDLAC Secretariat, and to codify its relationship with Parliament. In the area of land and agrarian Reform, it was necessary to sharpen South Africa’s response to the global economic crisis as well as to enhance better policy coordination and greater synergy. It had already begun, and would continue with a review of the Growth and Development Summit Agreements, amongst other issues.

Discussion
Ms A Dreyer (DA) said that traditionally there was a very close relationship between big business and government as these two entities were mutually dependent on each other, but that this often did not take full account of workers’ rights and job creation. She noted that NEDLAC had not played a proactive role in the promotion of SMMEs, which played a very significant role in the labour sector as they provided jobs to many people. She said that SMMEs did not have the substantial bank balances of big business and could thus not afford to keep an office at NEDLAC, which might result in their marginalisation by NEDLAC.

She further noted that she felt uneasy with the term ‘decent work’ as she thought that the use of this term might infer that an unskilled worker such as a street sweeper or labourer might not be engaged in “decent” work. To her mind, all legitimate work was “decent” work. She said that many businesses chose to casualise their workforce due to the restrictive labour laws in South Africa. She supported the idea of casualisation, as this could provide mothers, students and other individuals who needed only part-time work with an opportunity to access some money and build up valuable skills in the process.

Mr Mzondeki disagreed with Ms Dreyer on the meaning of “decent work”, stating that this referred not only to the form of work itself, but also the environment and other factors within which that work took place. He said that it was concerned with whether or not people were being granted or denied their basic rights.

Mr E Mtshali (ANC) asked whether it would be possible for NEDLAC to visit those businesses that practised casualisation. He said that casualisation was “Slavery of the 21^st Century” and believed that it should be abolished. He noted that people might work for years for one company, without being permanently employed, and there had been cases where people who had worked for a long period were then summarily fired, without benefits or any other rights. Many waitresses were required to work late shifts and had to organise their own transport to and from work. Mr Mtshali said that the corrupt social system was to blame for the emergence of casualisation and suggested that NEDLAC and its affiliates find an alternative that would be beneficial to the workers.

Mr Mkhize replied that as the head of NEDLAC he had limited powers and could only do so much. He noted that if SMME promotion was not on the agenda of NEDLAC then no other Chamber would take up this topic. He stated that he did not have the right to dictate to members of NEDLAC on their agendas. He noted that he could raise the issue of SMMEs as a concern by the Committee, as it was true that SMMEs drove job creation in South Africa.

He added that it was incorrect to say that Government had not done anything to assist SMMEs as the then-President Mbeki had ring fenced ten areas for SMME procurement. He stated that the issue of SMME procurement was difficult, and that the current procurement policy framework had to be bypassed to accommodate SMMEs.

Mr Mkhize then addressed the remarks on casualisation. He said that the jury was still out on whether casualisation would be legislated for, as there had been tensions in NEDLAC about the viability and relevance of casualisation. The DoL had done a review of compliance in existing frameworks and how other institutions dealt with casualisation, but no concrete answer was forthcoming. NEDLAC had decided to encourage robust debate on this matter, as there were several diverse opinions. He said that the Changing Nature of Work and Atypical Forms of Employment was an international best practice model that enjoyed support amongst government, civil society and the private sector.

He added that the Cooperatives Strategy was nearly concluded after the initial one was withdrawn by the Minister after it was launched. The Minister withdrew the initial strategy as it was deemed to be weak. He said that the Cooperatives Law on Labour Standards would go a long way at prohibiting unlawful business from flourishing. He noted that there had been reports that this tendency was a growing one that had been exacerbated by the global economic crisis.

Ms Dreyer noted that Members were still waiting for the NEDLAC report on weathering the global economic crisis that was supposed to have been presented to Parliament.

Mr Mkhize replied that the draft rescue package would have major consequences for South Africans as it meant that Government had to scale down on the Expanded Public Works Programme (EPWP) as well as certain Health programmes, especially where home care based workers were concerned. He said that NEDLAC was in discussion with all relevant stakeholders to address all pertinent issues.

Mr M Mzondeki (ANC) stated that there was a definite need to call NEDLAC officials back to explain in detail their key focus areas, as the presentation did not cover these in full.

Mr Mzondeki asked whether the issue of specifications for people with disabilities had been clarified with taxi and bus manufacturers. 

Mr Mkhize responded that the issue of specifications had not yet been concluded as NEDLAC had called on the disabled community to play an important role in discussions with the manufacturers. Many manufacturers indicated that it was too expensive to incorporate the specifications. He said that the Minister of Transport indicated that the issue had to be resolved speedily. The Community constituencies would also be encouraged to take up this issue.

Mr Mzondeki added that the low profile of the Development Chamber had to do with a lack of capacity within the Chamber itself, and asked NEDLAC to provide assistance. He asked whether NEDLAC had a plan in place that ensured that adequately skilled people filled vacancies. He raised his concern with the lack of capacity and skilled people who worked for the Labour Sector Education Training Authority (SETA) and those who served on the Board. He noted that NEDLAC had not done much to ensure that competent people were employed by the SETA, and that its progress in terms of the Cooperative Strategy left much to be desired.

Mr Mkhize replied that the ineffectiveness of the Development Chamber could not be ascribed to a lack of capacity, but rather due to lack of an agenda. He said that community constituencies should use the platform provided to make a real difference and that NEDLAC would always provide capacity if the Development Chamber needed it. He said that this lack of an agenda and the Development Chamber’s involvement in the agendas of the other three Chambers had made it very difficult for the Development Chamber to assert itself.

He further noted that SETA was plagued by corporate governance issues as SETAs were administered by a Board of Directors. The senior management of SETA was summoned by NEDLAC to explain why they had problems. It was decided to send all SETA board members through a university course that was specially designed for that purpose. He said that NEDLAC supported the view that the right people should fill the positions.

He added that funds had been set aside for each Chamber to spend on specific issues or programmes affecting their different constituencies. He noted that NEDLAC had no control over how this money was spent by the constituencies, once the transfer of funds had been made. He stated that NEDLAC had called a meeting with the community constituencies to engage on how best they could play their rightful role within NEDLAC.

The Chairperson said that many women had complained about the inclusion of the Women’s National Coalition as the official body that represented all South African women. She noted that she had a problem with it as it was thought to have been dissolved.

Mr Mkhize answered that NEDLAC could not get involved in the internal affairs of its members as there were various processes that had to be followed when dealing with issues of this nature. He said that many other organizations such as the Solidarity Trade Union wanted to join NEDLAC, but due to restrictions was not allowed to join. He said that this was an issue that should be taken up by the community constituencies.

Ms Dreyer said that she had a problem with the approach of NEDLAC, as it wished to prescribe to political parties what they could and could not do during the legislative process. She said that Members had been mandated to scrutinise legislation and to hold Government to account.

Mr Mkhize noted that NEDLAC respected the sovereignty of Parliament, as the latter was ultimately responsible for legislation. He said that he was under no illusions about the role of NEDLAC in South African society and that the ‘parties’ mentioned in the Annual Report referred to the various NEDLAC partners and not political parties.

The Chairperson asked Mr Mkhize to expand upon and explain his comments that NEDLAC had no control over how the Chambers spent their grants.

Mr Dulabh said that each chamber had been allocated funds that had to be used for capacity building and other organisation and institutional matters. He said that that at the moment only the chambers had offices at the NEDLAC head office, and that some chambers spent some of their funds on research.

He added that since the inception of NEDLAC all unspent money had been transferred to a reserve account, as the chambers were not allowed to hold unspent money in their accounts. These chambers had been instructed to spend all the money they had received during the previous financial year, as all unspent money would now revert back to the National Treasury. He noted that the only reason why there was an apparent deficit was that the chambers were urged to spend all their money from previous financial years.

An official from the Department of Labour indicated that the deficit that was shown was a deficit on paper, and not a real deficit, as the National Treasury had approved the spending of unused funds from previous years.

Mr Dulabh said that NEDLAC staff did not normally undertake international travel, but if they did, then it would normally be to attend WTO meetings, in which case Government paid the costs. He said that much of the technical expertise of the various NEDLAC chambers was located in Cape Town, which also meant additional travelling costs.

Mr Mkhize said that the Public Finance Management Act (PFMA) was very strict on how public finances had to be administered, and that NEDLAC had received an instruction to spend all the money that was left over in its reserves. He said that these monies were now being used to pay for current activities that had not been planned for.

The meeting was adjourned.