Business should support “Buy Local” Campaign – COSATU

23 June 2020

Outcomes of the COSATU National Leadership Meeting

The Congress of South African Trade Unions held a special National Leadership meeting on the 22nd of June 2020, which was attended by the Presidents and General Secretaries of all affiliated unions and provincial structures. The meeting considered and engaged in wide-ranging discussions around the national political situation, the socio-economic context and organisational assessment. The meeting reflected on the continuing pandemic and economic crisis that is decimating jobs and livelihoods of workers.

Covid-19: The meeting saluted all health workers and other essential service employees for their bravery and dedication in fighting the deadly Covid-19 virus. Across the country, brave and dedicated doctors, nurses, community health carers, paramedics, allied health, social service practitioners, cleaners and morgue workers are facing an extraordinary assignment of taking care of the nation under extreme situations. These heroes and heroines are overworked and under-resourced in our overloaded health facilities. We demand that they be paid the necessary danger allowance and also be provided with the necessary Personal Protective Equipment without exception.

The Inspectorate on Occupational Health and Safety under the Department of Employment and Labour (DEL) claims that currently about 60% of public health workplaces are compliant with the health and safety legislation and regulations.  This 40%non-compliance rate is scandalous and reflects badly on employers and the DEL itself.

The Covid-19 virus has thrived in workplaces that generally limit the rights of workers as workers are disempowered to exercise any labour rights for fear of victimization and abuse by the employers. Non-compliance and the abuse of workers’ rights is the biggest threat to the containment of the Covid-19 virus in the workplace. Compliance with the various directives from the government in response to the virus is not merely a nice to have but it is a matter of life and death. This means that we need more labour inspectors if we are to win the fight against the pandemic.  The Federation welcomes the additional appointment of 500 labour inspectors in this regard as a step forward.  But even this is not enough to cover more than 2 million places of work.

Economy: We look forward to the upcoming supplementary budget speech to be delivered by Minister Tito Mboweni. We hope for massive infrastructure spending going forward and a stimulus package of more than R1 trillion to kickstart the economy.

We expect the government to act decisively to encourage local businesses to support the “Buy Local” Campaign to increase local production and stimulate job creation. This is in line with plans to revive South Africa’s economy so that millions of jobs can be created, and unemployment can be decreased. It is disconcerting that 65% of our imports are manufactured goods because this is an indication of high import penetration and massive dislocation of domestic firms. There is a need to shift our policy to import substitution trade policy which will not protect sectors through tariffs but also through industrial finance and local procurement and interest subsidies.

We need further intervention at SARS to ensure a massive expansion of its customs enforcement capacity. Millions of jobs are going to be lost because of the lockdown and the Covid-19 outbreak; therefore, decisive action needs to be taken to boost the local manufacturing industry.

We expect the National Treasury to allocate substantial resources to the Departments of Trade, Industry and Competition; Tourism; and Small Business Development and other economic cluster departments so that the 14 industrial sectoral master plans can be properly resourced and that the badly needed economic relief for heavily battered sectors of the economy can be provided to prevent their collapse. We need interventions that are geared at saving jobs and begin the process of rebuilding the economy.  Key sectors needing massive relief include manufacturing, retail, hospitality, tourism, entertainment, and transport.

We reiterate our call for the imposition of tighter capital controls to maximise the resources available for productive domestic investment. Such capital controls would include the regulation of short-term capital flows and the penalising of speculative capital. Even the most developed economies do introduce necessary temporary measures to prevent a mass exodus of capital outflows during a time of crisis or to protect their currencies. The liberalisation of capital and exchange controls has facilitated massive outflows of capital over the past few years, depriving the country of badly needed resources for productive domestic investment.

The government needs to abandon its austerity measures amidst the flattening of the rates of final household consumption, the proposed draconian cuts in the public service wage bill are likely to plunge the economy into a deeper depression, with even worse consequences in terms of the township economy and poverty in rural areas. Our rising unemployment rate is already at a catastrophic scale – which loudly calls for a paradigm shift away from the Neoliberal macroeconomic straitjacket.

It is tragic that so far the government has been focused on implementing a framework of monetary and fiscal policies that do not place employment creation as a priority.

We need a macroeconomic framework that will help address the basic needs of our people, transform the economy, strengthen the public service, renew efforts to build a capable developmental state and address the triple challenges of unemployment, poverty and inequalities in our society.

Retrenchments: The Federation is deeply troubled by the number of retrenchments that are already taking place across all the sectors of the economy. We are angry that government is doing nothing to hold the private sector accountable or intervene to save jobs.

In fact, many of the companies throwing workers into the unemployment queue are State Owned Companies including SABC, SA Express, the SAA Group.  Many companies are using the current crisis to do what they have been planning to do for a long time. This includes replacing workers with machines. Over half the companies interviewed by TIPS indicated they would retrench on average between 15% and 20% of their staff once the UIF TERS Covid-19 payments end. 

COSATU wants to see all companies receiving relief from government to be compelled to retain workers. All companies that retrench should not receive any assistance from the government. Any public stimulus funding must be conditional on job retention and incentivised for job creation.

The Federation would like to see continued UIF Ters Covid-19 relief for individuals and companies under distress and this would have to be scrutinised for financial viability and options.  Workers who cannot resume work due to the lockdown restrictions should be assisted like those over 60 years or with co-morbidities.

Additional support must include:

– Sectoral support from other government departments like Tourism; Small Business Development; Transport; Trade, and Industry etc;

– Unblocking the delays in releasing the R200 billion stimulus funding availed through the banks: and

– Additional stimulus and relief funds from the government on the 24th of June supplementary budget.

An R1.6 trillion infrastructure programme and the unlocking of impact investments to increase it from the current 2% up to the allowed 10% governing alternate investments under Regulation 28.

We need urgent sectoral meetings to discuss sector interventions that need to be undertaken to save jobs and stop retrenchments. Retrenchments should be used as a last resort and daring, and creative ways need to be explored to stop jobs bloodbath.

We need massive state intervention to save jobs and it does not help for the Minister of Finance, Tito Mboweni, and the President to be purveyors of bleak prospects for our economy. The government needs to be providing solutions to save jobs, to stop company closures and retrenchments.

The state cannot shirk its responsibility by trying to address this economic crisis through free-market policy interventions. We need the state to increase its investment in the economy, increase funding to the “training of layoff schemes” and provide funding for worker cooperatives to take over closed factories or those in liquidation/insolvency.

In situations, where retrenchments are inevitable, the federation demands retrenchments with a human face, where people are properly eased out of employment with some semblance of dignity, including re-skilling them. We still contend that the Department of Labour needs to amend the law in order to require all retrenchments to be referred to CCMA for approval than merely notification and consultation.

Increase the statutory severance package: The meeting reiterated its call for the Minister of Employment and Labour to increase the statutory severance package given to retrenched workers to four weeks for each completed year of service.

This minimum severance pay is set by section 41 (2) of the BCEA at one week’s remuneration for each completed year of service.  This payment has remained unchanged since statutory minimum severance pay was introduced by the LRA in 1996. The current severance pay package of one week per year of service is grossly inadequate and must be increased as a matter of urgency. 

Unemployment Insurance Fund: We note that the UIF has distributed over R26 billion to over 4 million workers. The problems that have been detected have to be fixed fast to ensure that the UIF systems work and deliver on time.

COSATU wants to see more money for UIF to ensure that workers will be taken care of beyond the month of June. The Department of Employment and Labour need to crack the whip and deal with employers who are failing to pay deducted workers money to the UIF. The UIF has about 11 million workers on its books and this means that close to five million workers are not part of the system and this needs to be fixed. At the right time, the agreement to bring in public servants into the UIF fold needs to be implemented.

The COVID-19 pandemic has exposed several gaps in the unemployment insurance fund with the exclusion of public sector workers, informal workers as well as freelance workers from contributions. This has left particularly freelance as well as informal sector workers vulnerable and without income protection for the duration of the lockdown.    

The UIF Act requires an amendment that will identify mechanisms to ensure that those that are self-employed, informally employed as well as freelancers are included into the Act as contributors to the UIF in order to receive benefits from the Fund in instances of unemployment or temporary unemployment.

The Covid-19 pandemic also makes a case for recommendation 204 of the International Labour Organization, which seeks to formalize the informal sector. Formalization protects the rights of workers, affording them the opportunity to be organized into a union of them of their choice and contribute to the unemployment insurance fund.   

Pension withdrawal relief plan: The Federation is angered by Finance Minister Tito Mboweni’s failure to respond to our proposal for workers to be allowed to access some of their pension money to keep afloat during the lockdown.

The leadership of COSATU wrote to the Minister requesting him to issue an emergency Directive through Emergency draft regulations  to allow workers who were not paid 100%  of their salaries to access part of their retirement fund savings, as income replacement for COVID-19 emergency financial relief. 

The minister has failed to respond to this proposal and the situation, and this is totally unacceptable. Millions of workers are struggling and this indifferent attitude from the minister is denying them an opportunity that would have cushioned their financial hardship.

We call on the Minister to take the plight of these workers seriously and make sure that this intervention forms part of a sweeping package to be announced in the upcoming reprioritisation budget to combat the economic havoc caused by the coronavirus outbreak.

We have made it very clear that the intervention will not compromise the pension funds but will put money back into the pockets of working South Africans and inject funds into the economy.

Cancellation of historical student debt: The meeting restated its call for government to intervene and endorse the campaign for the cancellation of student debt for all those workers and the graduates who remain saddled with historical liabilities relating to the funding of their education. A disproportionate number of young workers that enter the labour market are heavily indebted with historical debt largely acquired through student loans. 

The Federation wants to see government and institutions of higher learning cancelling these academic loans for new workers entering the labour market and graduates that are sitting at home.

Public Service increases: COSATU hopes that the issue of nonpayment of salary increases for public servants will be rectified by the supplementary budget. These workers deserve better, especially now that they are carrying the nation on their backs and are frontline soldiers in the fight against a deadly virus. We also demand that government work with the GEPF to mobilise some of the worker’s retirement savings to fund the Government Employees Housing Scheme (GEHS). This will go a long way to helping the hundreds of thousands of workers with no access to housing.

Corruption: We are deeply troubled by the ongoing corruption in both the public and private sectors. It is deeply disturbing to see that some in government are using the current crisis to continue to loot and use the tender system to steal from government.

Government needs to act decisively to deal with the scourge of corruption. This crisis is supposed to ensure that every cent goes to serving its intended purpose. Therefore, corruption of any kind must not be tolerated. The government must lead decisively to root out all forms of corruption that might rear its ugly head as we endeavour to raise funds to fight the spread of the dreaded Covid-19 virus.

Gender-Based Violence/Femicide: Cosatu is troubled by an increase in the incidents of abuse directed at women and children and we call on government and community organisations to partner in the fight against the scourge of femicide. We need mandatory minimum sentences imposed against all perpetrators of gender-based violence. This problem has reached crisis levels and we need an appropriate response to deal with it and the time for platitudes and statements of condemnations is over.

Racism: The meeting expressed its outrage at the extent to which racism is deeply entrenched and vicious in the US, particularly against Blacks and other minority groups. This is insincere because it is happening in a country purporting to be the world’s leading democracy that never misses an opportunity to lecture other countries about human rights. We offer our unequivocal support to the global campaign against racism in South Africa, the US, in Israel, in parts of Europe and everywhere else. We fully support the UN Inquiry into racism in the US.

Cuban Solidarity: The Federation salutes the Republic of Cuba for its role in helping the global response to the coronavirus pandemic. Cuba has managed to send hundreds of health professionals all around the world to save lives. We condemn the aggression of the Trump administration against the Cuban people.

Solidarity with Zimbabwe: The meeting called for President Cyril Ramaphosa to use his Chairpersonship of the African Union to campaign for the removal of sanctions against Zimbabwe. Millions of innocent people who are facing starvation and death because of COVID -19 are punished because of their corrupt and dictatorial leadership. A thriving and prosperous Zimbabwe is good for South Africa and the entire continent.

We offer our unwavering support to the resilient people of Zimbabwe.

Issued by  Sizwe Pamla, COSATU National Spokesperson, 23 June 2020

Source: Politics Web at https://www.politicsweb.co.za/politics/business-should-support-buy-local-campaign-cosatu