Estelle Randall
KWAZULU/Natal premier Frank Mdlalose’s desire for free trade areas in the region has put him on a collision course with organised labour.
Free trade areas, or Export Processing Zones (EPZs), are special enclaves in which a country’s normal trade and customs rules don’t apply. Investing companies _ usually foreign _ enjoy preferential treatment in imports, taxes and infrastructure, and freedom from industrial regulations.
Mdlalose told the Islamic Business Development Corporation earlier this month the province should take the lead in pressing for EPZs not only in Durban but also at Richards Bay and the Tugela Basin.
Slamming the move, Cosatu’s southern kwaZulu/Natal chairman, John Zikhali said the proposals would place government on a collision course with the labour movement and seriously disrupt both the economy and the “fragile political settlement” in the region.
Cosatu official Rohan Persad said Cosatu was prepared to go to the constitutional court to halt EPZs. Cosatu believed EPZs would undermine wages and working conditions negotiated countrywide and this was at odds with constitutional provisions for a uniform, national economic policy.
“EPZs are the same old regional development idea of the former bantustans, where companies tended to thrive only with wage and other subsidies and tax concessions. When these were removed, companies collapsed,” said Cosatu’s Jayendra Naidoo, labour convenor of the National Economic Forum.
Reservations about EPZs have also been expressed by the South African Chamber of Business and the Durban Regional Chamber of Business, which said in a statement that EPZs “discriminate between existing and prospective manufacturers. On a world basis they have achieved only marginal success.”
Naidoo questioned the competence of provinces to make trade policy. “We expect government to consult all stakeholders on such matters.”
Compounding the row is Mdlalose’s expressed intention to form an economic advisory council. The trade union federation sees this as an attempt to sideline its Regional Economic Forum _ the provincial counterpart of the National Economic Forum, which draws together labour, business and government.
Mdlalose could not be reached for comment, but Mike Sutcliffe, spokesman for provincial economic affairs minister Jacob Zuma, said Mdlalose had been “expressing his own view”. EPZs had been discussed by neither the cabinet nor the legislature; until the latter sat, no policy decisions could be made.