Mining: Labour unrest comes full circle
When rock drill operators downed tools at Lonmin's Marikana mine in North West in August, few could have foreseen that it would spread like wildfire, with high wage demands and hardened stances spilling over into other sectors.
Protests over the past eight weeks have seen the number of striking workers reach between 80 000 and 100 000 at any given time. As wage agreements were reached at some mines such as Lonmin and Impala Platinum, disputes reared their heads at others. Workers at Xstrata and Kumba Iron Ore mines have added to the numbers and the 28 000-member strong South African Transport and Allied Workers' Union has stood firm on its wage demands.
Johnny Goldberg, chief executive of Global Business Solutions, said the strikes paralleled those of the late 1980s and early 1990s in terms of violence.
"The cause then was different – there was an expectation to break free from apartheid," Goldberg said. "Here, there is an expectation for a better life."
But the violence is unprecedented. "Typically, violence escalates when democratic processes are at their weakest," said Gavin Hartford, an independent strategy consultant. "Employees have felt unrepresented and have taken matters into their own hands."
On Wednesday, 12 000 dismissed Anglo Platinum workers marched on the National Union of Mineworkers' (NUM) offices in Rustenburg to revoke their membership and express their outrage, despite having participated in an unprotected strike not organised by any union.
Investec group economist Annabel Bishop said there was a changing profile of union membership, namely "younger, more militant individuals who are deemed to have had a loss of faith and respect with traditional wage negotiation processes".
This week Impala Platinum – which recently completed a recount of union representivity in its workforce – found that the NUM membership had dropped from 70% to 13%. The Association of Mineworkers and Construction Union is said to represent the largest share of the Impala workforce.
The current strikes in some ways echo the 1973 Durban strikes when workers organised themselves and rose up against their employers. Starting at a textile company in January 1973, the strike mushroomed into other sectors until all of Durban's major industrial complexes faced strike action.
These Durban strikes have often been described as a turning point in the confrontation between South Africa's minority rulers and the worker majority, resulting in the re-emergence of the labour movement, which had been suppressed by the government.
It is expected that the recent strike action will also transform the labour landscape as wage negotiations continue and investigations attempt to find the cause of recent protests.
Since August there have been at least 51 deaths related to strike violence. The death toll reached 48 at Marikana after two shootings were reported last weekend. Workers at Anglo Platinum buried a colleague who died after clashes with police. At Petmin's Somkhele mine in KwaZulu-Natal, a security guard was hacked to death and on Tuesday one transport worker died after suffering a blow to the head.
According to a workers' survey conducted by trade union federation Cosatu and released in August, about half of its members involved in a strike thought violence was necessary.
So far, more than 15 500 employees – at Gold One, Atlatsa Resources and Anglo Platinum – have been dismissed as a result of illegal action. In an unprotected strike, employers reserve the right to dismiss striking workers. But labour analysts say the number of unprotected strikes at the moment is unusual and indicates a growing disenchantment with unions. The Cosatu survey found that, for most aspects of union work, between 50% and 60% were satisfied with services.
Halt in production
In 1987 Cyril Ramaphosa led the NUM on a three-week strike after a wage deadlock with the Chamber of Mines. The strike resulted in a halt in production at half of South Africa's gold mines and at least one-fifth of the coal mines, and cost the industry millions of rands a day.
Ramaphosa is credited with growing the union's membership from 6 000 in 1982 to 300 000 in 1992. But those days are behind him. His Shanduka Group owns the controlling share in Incwala Resources, Lonmin's black economic empowerment partner, and the NUM is fast losing ground.
The Cosatu survey also reported that a third of union members believed there was corruption in their unions – the highest levels being in the NUM. Of those who claimed to have personally witnessed this, the main accusation was that members accepted bribes from management.
Analysts say any wage increases will undoubtedly lead to long-term job losses and the adverse effects of strike action on the economy are becoming clearer with each passing day.
"With close to four times as many low-income earners compared to those in the middle class, it is crucial for South Africa's future stability that more low-income earners get drawn into a level of employment that provides a decent wage," said Bishop.
"Equally important is more, as opposed to less, labour flexibility. More labour flexibility will improve hiring rates; less will make firms think twice about anyone they were thinking of taking on."
Goldberg said: "You can only see the bigger picture if you have effective leadership and that's what's missing here."
Dependence on labour
In its latest employment index, released this week, Adcorp said South Africa's mines were responding rationally by reducing their dependence on labour. Since 1986 employment in the mining sector has declined by 37.7% – from 839 000 to 523 000 – in a period in which production levels were roughly flat. Adcorp said since the mid-1960s the ratio of capital to labour (a measure of mines' capital intensity of production) had increased by 959%.
The reality of the international market and the domestic economy meant the average worker was getting poorer in light of rising costs, Goldberg said. Ironically, the effects of the strike, prompted by financially stretched workers, may hit them the hardest.
The prolonged strike provoked a reaction this week from the economy when the rand on Monday dipped to its lowest level in three-and-a-half years at R9 to the dollar.
"With food prices already on a sharp upward trajectory due to high international grain and edible oil prices and transport costs climbing due to high oil prices, the rand's weakness will exacerbate the cost of living for the remainder of this year, coming at a time when tensions are already high over wage demands," said Bishop.
A weaker rand also means inflation will be pushed up and will likely end the South African Reserve Bank's rate cut cycle.