/ 5 March 2015

Cosatu in the red, with over R15-million owed to it

Cosatu's R10-million annual rental at its offices in Braamfontein is one of the reasons the federation is in dire financial straits.
Cosatu's R10-million annual rental at its offices in Braamfontein is one of the reasons the federation is in dire financial straits.

Labour federation Cosatu is owed over R15-million in rent and subscription fees by its affiliates, according to the federation’s deputy general secretary Bheki Ntshalintshali.  

Cosatu publicly admitted on Thursday it was facing financial difficulties, and that it was looking for long-term solutions like creating more investment companies, to arrest the dire situation. 

The Sowetan reported on Thursday that the federation was considering pushing its employees to communicate via Skype and mobile  messaging application WhatsApp Messenger, to cut telephone bills. It also wants to look for a cheaper DStv option for their office bearers and freeze key positions and salary increases. 

Staff retrenchments are also on a list of cost-cutting measures being considered. 

But Cosatu president Sdumo Dlamini ruled out the possibility of doing away with the R4.5-million political levy, which is used, among other things, for bankrolling the ANC’s election campaign and supporting some of the South African Communist Party’s political programmes.  

Cosatu held a financial committee meeting last week at which it forecast a R4-million deficit for 2015, according to Business Day. This was due to Cosatu having been able to effect only a slight increase in affiliation fees, as well as not getting R1-million a month in affiliation fees from the National Union of Metalworkers of South Africa, along with legal expenses and other costs. 

Exorbitant rental
Ntshalintshali said that Cosatu has not been able to cope with the R10-million annual rental at its new offices in Braamfontein.

“We did not have to pay this much before – it is now impacting on our finances, especially [as we had] not planned for it in [our] subscription fees. 

When we opted for hire places like this [the new building], we did not budget for it. We never planned to pay rent because the building was owned by Kopano Ke Matla, Cosatu’s investment arm,” said Ntshalintshali.

He said initially the investment company undertook to pay for Cosatu’s operational costs, but later said Cosatu must foot the bill itself. Ntshalintshali said another thing that contributed to Cosatu’s financial woes was that it was unable to find clients to rent space at the new offices.

“For example, we wanted to use the whole second floor for activities like education. But we are unable to market it. We can’t have a boardroom, which we are using once [every three months]. 

“It’s a question of looking at our expenditure. We have the canteen here, for example. This people here are cooking and selling food, but they do it for free. They use electricity and water for free. These are some of the things that Cuba Properties, which runs the building with Kopano Ke Matla, should look at.”

Ntshalintshali says that there are unions occupying office space at the building – but aren’t paying rent. 

“The SACP is not paying, but we have their money from the political levy. The SACP is not a big issue, but other unions like Pawusa [the Public and Allied Workers Union of South Africa] and SAFPU [the South African Football Players Union] are. If unions were to pay what they owe Cosatu, it will be rich. If unions don’t pay, Cosatu will not survive.”

‘Wrong decisions’ to blame
Dlamini indirectly blamed Cosatu general secretary Zwelinzima Vavi for the federation’s financial mess. Vavi has been under investigation since last year for the sale of Cosatu’s old building and the purchase of the new one.

“We find ourselves [in this situation] because of wrong decisions that were taken before,” said Dlamini during Cosatu’s post central executive committee press conference in Johannesburg on Thursday.

The Cosatu leaders accused Vavi of failing to answer questions by Sizwe Ntsaluba Gobodo auditors. The auditing firm was responsible for a forensic report – which allegedly implicates Vavi – into alleged impropriety in the sale of Cosatu’s old head office, and the purchase of a new one.

Cosatu also announced it would hold its long awaited special national congress in July.

The federation also lashed out at Vavi for snubbing the central executive committee meeting, which took place from Monday to Wednesday this week. Vavi boycotted the meeting in solidarity with seven ‘rebel’ unions  which have vowed not to attend Cosatu meetings until Numsa is reinstated.

“The [CEC] meeting expressed deep concern against the general secretary of the federation, who continues to conduct himself in a manner that sought to define himself either above the organisation or to act outside the discipline of collective leadership. He has not attended three meetings, including this CEC, at which he was expected to play his leadership role,” said Ntshalintshali.