Summit could make a real difference
The recent tragic events in Marikana that claimed the lives of 45 miners shone an uncomfortable spotlight on the mining industry and raised serious ques- tions about South Africa's political stability.
Marikana did not emerge like a lightning bolt out of a clear sky. It took shape against a backdrop of simmering tensions in society over high levels of unemployment and socioeconomic inequalities. There have also been growing assertions of public service delivery grievances, the weakening of the post-apart- heid social consensus built around dialogue and eroding industrial relations.
Most mine workers carry an added social burden of supporting a com- plex social arrangement spawned by the migrant labour system that is a legacy of apartheid. Research by Gavin Hartford on the conditions of mine workers highlights how they maintain a quasi-household in the informal squatter camps, but at the same time stretch their resources to send remittances to their fami- lies back in their rural villages. As Hatford notes, this is further aggra- vated by the reality of a very long migration work cycle.
Moreover, mine workers form part of South Africa's underclasses that are at the receiving end of economic hardship and poor quality of public services. As such, the wave of strikes that has engulfed the mining sector is a concentrated expression of much wider socioeconomic tensions that may yet play themselves out in an ugly fashion in society.
Apart from being a reflection of the economic challenges of our time, it is also evident that these workers no longer feel intimate with institu- tional processes such as collective bargaining as entrenched in the Labour Relations Act of 1995. They also have no confidence in negotiat- ing with the Chamber of Mines to find solutions to challenges in their respective sectors.
Where there is no sense of social inclusion in the broader economy, individuals and groups are prone to act in ways that maximise their own self-interests above those of the collective.
Mine workers perceive their union leaders as concerned mainly with securing their own interests and as much closer to company managers than ordinary workers. Their rejec- tion of union leadership, in particu- lar that of the National Union of Mineworkers, has been expressed by their preference for worker commit- tees as legitimate representatives of workers. In the wake of a settlement between Lonmin and the striking workers, which saw increases of up to R12 500 a month, workers in other sectors, such as gold, coal and iron ore, went on a wave of wildcat strikes. In their view, they were also entitled to high wage increases and considered mining houses to have deep pockets.
Because the mining sector is glob- ally integrated and remains one of the pillars of the South African economy, the wildcat strikes did not go unnoticed by outside players. It would be difficult to miss the con- fluence of dramatic developments: mounting violence leading to loss of lives; 41% of South Africa's gold sec- tor idle, including all of AngloGold Ashanti; total production loss upwards of R4.5-billion in the plati- num sector; and workers undermin- ing the rule of law by hijacking over R3-billion worth of mining equip- ment in the iron ore sector.
In the absence of leadership that is willing to grasp the nettle, South Africa's credit downgrade by Moody's should have been expected. As Moody's noted in its explanation, the South Africa government has exhibited weak institutional capabil- ities to address socioeconomic strain and the country's investment climate and future political stability are on shaky ground.
The failure of South Africa's politi- cal leadership to act boldly could further exacerbate the damage and lead to further contraction of the economy on the back of policy uncer- tainty and reluctance by firms to make long-term investment and hir- ing commitments.
Four sets of actions are required to build confidence. First, there is a need for long-term policy clarity, including on such matters as the role of the state in the mining sector. This debate needs to be cast differ- ently, with emphasis on the need for a roadmap to promote growth, com- petitiveness and increased invest- ment in the sector.
Accordingly, the ruling party will need to sustain a productive dia- logue with the mining industry to agree on long-term plans.
Second, there should be better institutional co-ordination in the economic cluster, with clear author- ity given to the national treasury to drive South Africa's economic policy, which is currently caught in a gridlock of multiple authori- ties that include the departments of trade and industry and of economic development.
Third, a high-level summit between government, labour and business is required urgently to develop a clear strategy aimed at stabilising the current industrial tensions in the sector.
This summit should also launch a process of reviewing the industrial relations framework, including the collective bargaining system.
Finally, public service delivery protests and a deep sense of relative deprivation will not go away while government performance at a local, provincial and national level exhibits strong signs of dysfunctionality.
Building capability and promot- ing efficiency in the public service should be one of the key priorities for the ruling party beyond Mangaung. A more enduring solution will emerge when the current ruling party withers away.
Dr Mzukisi Qobo is a political risk analyst affiliated with the Centre for the Study of Governance Innovation at the University of Pretoria, where he also teaches international politi- cal economy. He is also a member of the Midrand Group