PRESIDENT JOSEPH MATHUNJWA’S MEDIA BRIEFING STATEMENT

10 August 2017

 

The Association of Mineworkers and Construction Union (AMCU) has raised concerns over the current situation in the South African mining sector. The Union highlights burning issues such as the Mining Charter objectives in the face of mass retrenchments and job losses.

The mining sector is under enormous pressure at the moment. External factors such as commodity prices and exchange rate fluctuations are exacerbating the situation which already faces internal challenges of regulatory uncertainty and low economic growth. All of these factors have their outcome in massive job cuts.

 

INTRODUCTION

 

The Labour Relations Act, no 66 of 1995 regulates the process of retrenchments on the basis of operational requirements primarily to keep companies profitable. Workers, as an economic resource are expendable in pursuit of profits for the owners of means of production and capital. This dialectic in the profit-led growth trajectory assumes that, if companies are profitable they would invariably accelerate economic growth.

 

However, the South African economy is facing numerous challenges facilitated by its poor manufacturing base and lack of capacity to create demand and absorb people into the labour market.

 

The unemployment rate is at an all-time high of 27.7% in the narrow definition and further retrenchments are compounding on an already bleak economic climate. The economy went into recession in the second of quarter of 2017, and South Africa was further downgraded into junk status by rating agencies. This makes the cost of borrowing for operating companies high and eliminating investment contingencies that could be used in dire times required to save jobs.

 

The situation facing the mining sector, one of the only real economies of this country with labour-intensive operations, is of concern to workers and society at large. This situation is affected by numerous issues beyond the narrow employer employee relationship. There are numerous variables at play which include amongst others:

 

  1. The performance of the South African economy, comparative to global players. Anglo Gold Ashanti recently chose to invest in the USA, purchasing platinum smelters at the expense of investing in South Africa. This choice in influenced by numerous attendant factors related to business systems and manufacturing capacity available in America and absent in South Africa. Ironically the same company that is retrenching workers in South Africa has created jobs in another country. This is externalization of employment and opportunities that could have been available to South Africans.
  2. The gold price has been very high in the past few years. However, returns on our export capacity have been affected by our current account trade deficit. This is because we import more than we export. Our companies choose import equipment and spares, rather than encouraging industrialisation and local beneficiation. These structural challenges, which were left unattended by our government, are affecting employment security as companies spend externally and create markets for other countries’ products, thereby exporting jobs. This is further exacerbated by unfavourable trade agreements which do not promote local manufacturing, beneficiation and job-rich growth. It is time that government reviews all trade agreements with a view to stimulating our economy and addressing our social justice needs.
  3. South Africa is known globally to be a resource-rich country with a strong mining base which is the anchor of our economy. This saw a mineral rush supported by cheap labour

of indigenous workers and migrant labour from the region. This also fueled the mass dispossession of land and a philosophy of profit at any cost. It is also the root of the colonial-biased structure of our economy, popularly referred to as white monopoly capital.

  1. Although the mining section is labour intensive by nature, it has been shedding jobs lately with more than 70 000 lost in the past few years. This is attributable to ageing mining infrastructure, supported by deep underground mining, which is dangerous and expensive. These brownfields have supported the South African economy for many decades. However, the challenge has been a lack of capacity to diversify our economy in order to create new industries to absorb workers should the lifespan of these mines run its course.
  2. Industrial relations are usually defined in terms of the employer-employee relationship, and the so-called labour problem regarded as less-than-expected outcomes of this relationship, including poor wages, job insecurity and unfair termination on the basis of operational requirements. Such a narrow industrial relations approach to the current retrenchment processes has no meaning. The fact is that there are overarching structural problems facing our economy. It is wrong to blame labour-related issues for economic problems, when it is clear that it is often the global attraction of other economies which form the basis of business decisions.

 

REQUIREMENT FOR LEADERSHIP FOCUS

 

Despite the challenges facing workers (both employed and unemployed) in this country, there is lack of targeted focus from the leadership of the country. People are caught in the political arena with narrow, selfish interests of jostling for power. This often happens through side-shows which captivate society and divert attention from real bread and butter issues.

 

Karl Marx in his base-superstructure theory, stated that it is the base, with control over the means and relations of production which shapes and influences the superstructure where politics are at play. The superstructure however, helps to maintain this base. The fact of the matter is that it is politicians who decide who will have, and who will not have.

 

In this cyclical relationship, the economic system influences the political landscape, while it is also supported by it. South African capitalism is supported by our constitutional democracy which constitution limits transformation through its property clause. Our constitutional democracy essentially supports and maintains capitalism and the status quo. This means that, in a country where the government is captured by capital, change and real transformation will sadly remain a pipe dream.

 

With the weakening of the ruling party, compounded by the proliferation of opposition parties, we see a split in the electorate. This split is essentially between the owners of the means of production on the one hand, and workers and the poor on the other. Capital knows full-well that this situation, although untenable, will remain in place for a long time. Our political leaders are oblivious to this reality and are caught in a web of cat fights to dislodge each other so that they can be managers of this white monopoly capital system. The undercurrent interests are not reflecting the dire challenges facing the nation. The politics that are at play have not attended to the structural issues that are affecting workers at large.

 

The current electoral system is defeating the will of the people. Instead of the people choosing their leader, we see the bureaucratic oligarchy being in control of deployment. This means that the favoured few make decisions, while the masses can only follow their shadows.

 

LIMITED ALTERNATIVES

 

Anglo Gold Ashanti is in the process of retrenching 8500 workers on the basis of their operational requirements. We are sparing no efforts in ongoing engagements to consider alternatives and

 

avoidance measures in order to save jobs. The discussions are at an early stage and will continue for the duration of the prescribed time in the Labour Relations Act, as amended from time to time.

 

We are mandated as a union to explore as many options to save jobs as possible and we will apply our minds and efforts to finding solutions with the employer. We are cognizant of the consequences of this process and its implications to the economy, the labour market and families of the affected employees. We know that on average each mine worker supports between 5 – 10 people on his wage and loss of employment in this case will affect up to 85 000 South Africans.

 

AMCU has seen how job losses also have an indirect effect on the communities surrounding such mass dismissals. The downstream economic effects are broad. It is almost certain that the surrounding towns of Fochville, Carletonville, Westonaria and even Potchefstroom will feel the effects of these job losses.

 

Only last week Sibanye Gold announced that it would be cutting 7400 jobs at Cooke shafts 1, 2 and 3, as well as Beatrix West. Earlier Bokoni Platinum Mine in Limpopo also announced last month that it would retrench 2651 employees. Once again, these jobs can be multiplied by 10 dependents per wage earner, meaning that it represents almost another one hundred thousand livelihoods. South Africa can surely not afford this blow in these times…

 

Mine bosses are quick to blame workers for their challenges, and often point to industrial action and collective bargaining as the causes of their financial problems. However, it should be noted that the gold sector has seen no prolonged strike for the past five years. Even more important is to note that wage increases in the gold sector barely matched inflation in the past decade. The argument that workers are to blame for these decisions, is therefore flawed and devoid of truth.

 

Some of the avoidance measures proposed by AMCU include the unbundling of mining operations into smaller operations with lower overhead costs. Such unbundling could drive real economic transformation in changing ownership patterns and structural injustice by shifting assets to historically disadvantaged South Africans.

 

While AMCU is actively engaging in these retrenchment processes, it also referred a protest action notice in terms of section 77 of the Labour Relations Act to the National Economic Development and Labour Council (NEDLAC). This notice will enable the Union to embark on nationwide

 

We are calling on all stakeholders, including the DMR to intervene where necessary so that a concerted solution driven initiative can be triggered to prevent this jobs blood bath. The MPRDA further needs to be reviewed in its licensing provisions to commission State reviews on the companies’ investment choices. Invariably more needs to be done to ensure that the country is a favourable investment destination.

 

The role of the state needs to be further reviewed in its participation in the economy to ensure that national assets such as minerals are not entirely left in the hands of private capital. There is scope for conversations related re-engineering the South African economy to stimulate growth and development in order to create demand that will lead to job creation.

 

It is important to note that these business decisions have the effect of exporting jobs and exporting wealth. The decision of Anglo Gold Ashanti to invest in foreign operations while mothballing local going concerns, as well as the decision by Sibanye to acquire Stillwater Platinum in the USA, together show investment in the job security of workers abroad. Seen against the socio-economic backdrop of past injustice in South Africa, and the dire need for social justice, this is highly unethical and totally unacceptable.

 

The job losses that we are discussing today have numerous spiralling consequences in the South African economy. As our Statistician General indicated a few days ago, the country must create a social safety net through job creation and not social grants. If these jobs are lost in the gold sector, it will mean an additional burden to the fiscus as these people will be rendered dependent on social security grants. We already have productive labour that is wasted through unemployment and surviving on limited fiscal resources of a shrinking tax base. We need to plug these leakages in order to grow and not continue to weaken the economy. We must force companies to make decisions that do not only favour maximum profit, but also invest in our country and our nation.

 

We will not be surprised when we see Sibanye Platinum, Lonmin and others follow suit, because it is the basis of capitalist thinking and the root of exploitation.