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Cablegate: South Africa: November 2008 Labor Notes

R 041356Z DEC 08
FM AMCONSUL JOHANNESBURG
TO SECSTATE WASHDC 6337
INFO DEPT OF LABOR WASHINGTON DC
AMCONSUL CAPE TOWN
AMCONSUL DURBAN
AMEMBASSY PRETORIA
AMCONSUL JOHANNESBURG

UNCLAS JOHANNESBURG 000192


ECON POL AID AMB DCM HR

E.O. 12958: N/A
TAGS: PREL PGOV ELAB ETRD SF EIND ECON EFIN EMIN ELTN
ENRG
SUBJECT: SOUTH AFRICA: NOVEMBER 2008 LABOR NOTES

Summary
-------

1. This is the November, 2008 issue of the U.S. Consulate
Johannesburg's Regional Labor Office monthly notes. Topics in
this issue are as follows:

- Skills shortage one cause of concern for South African water
quality
- South African Airways staff opposed to outsourcing
- Poor management hinders South African skills development
programs
- COSATU aims to influence South African economic policy
- COSATU affiliates urged to `invest in ESKOM'
- COSATU concerned by a rise in unemployment
- COSATU calls for harsh punishment for companies guilty of
price fixing
- COSATU looking for a more developmental focus in monetary and
fiscal policies
- Vavi urges union federations to unite
- South African government calls for mines to invest in safety
- The South African Democratic Teachers Union (SADTU) supports
Outcome Based Education (OBE)
- Stats SA reports that a large number of people with critical
skills remain unemployed
- South African Immigration to Australia and its impact on
Skills Shortages
End summary.

Skills shortage cause of concern for water quality
--------------------------------------------- -----

2. Research commissioned by the Development Bank of Southern
Africa (DBSA) points to a looming water crisis in South Africa
because of a lack of skills. Agricultural and drinking water
have the real potential to become unusable as salts, untreated
sewerage, industrial effluent, and toxic algae contaminate dams
and rivers. To make issues worse, there has been little
maintenance or expansion of the nation's aging water
infrastructure. The DBSA report stated that the biggest driver
of poor water is `a lack of expertise and skills at municipal
level to ensure compliance with water legislation, and a
shortage of skilled engineers and qualified professionals at
municipal level as well as in water affairs.'
Source: Financial Mail November 28, 2008


South African Airways staff opposed to outsourcing
--------------------------------------------- -----

3. Outsourcing remains a contentious issue between beleaguered
(and unprofitable) South African Airways and its unions. The
South African Transport and Allied Workers Union began a strike
on November 29 over the outsourcing of the airline's call
centers. The strike action was expected to weigh heavily on SAA
operations and on December 1 SAA noted it had reached an
agreement with the union that would reverse call-center
outsourcing decisions.

Source: Sunday Times November 30, 2008


Poor management hinders South African skills development programs
--------------------------------------------- --------------------

4. A Human Sciences Research Council (HSRC) report said poor
management and data collection was the reason South Africa's 23
Sectoral Education and Training Authorities (SETA's) had failed
to combat a critical skills shortage. The report speculates
that this `robbed' the Department of Labor an opportunity to
show South African business the worth of its statutory $6 billon
annual investment to the SETA campaign. The Transportation SETA
was also the victim of a major fraud scheme which depleted the
SETA's training budget.

Source: Business Day November 26, 2008


COSATU aims to influence South African economic policy
--------------------------------------------- ---------

5. The Congress of South Africa Trade Unions (COSATU) is
engaged in a major rebranding dubbed `Walking through the Doors'
to strengthen policy expertise and influence economic policy.
South African Economist Neil Coleman has been appointed as the
coordinator of the project and has established four academic
panels to advance policy alternatives in economics, retirement
fund reform, and labor market growth. Coleman emphasized that
that the ANC would have to shift its policies, especially
inflation targeting, to meet goals of increased job creation.

Source: Financial Mail November 21, 2008


COSATU affiliates urged to `invest in ESKOM'
-------------------------------------------

6. COSATU President Sdumo Dlamini has asked COSATU affiliates
to consider investing in power utility Eskom. The beleaguered
state electricity provider needs to raise at least $34 billion
to implement its capital expansion program and reduce a critical
electricity shortage. The South African Government has lent
Eskom $6 billion and COSATU hopes its affiliates can help make
up the shortfall by investing in the company. Affiliates have
been asked to invest in ESKOM instead of placing pension fund
money with brokerage houses and offshore. Dlamini indicated
that investing in Eskom will ensure job creation, economic
growth, and prevent further electricity price hikes.

Source: Business Day November 28, 2008


COSATU concerned by a rise in unemployment
------------------------------------------

7. COSATU expressed concern that South Africa's unemployment
rate rose from 23.1% in the second quarter of 2008 to 23.2% in
the third quarter. When coupled with a 0.4% fall in the total
number of people employed to 13,655,000, STATS SA figures
suggest that 4,122,000 are officially unemployed. COSATU
fretted that the small increase sounds alarm bells because it
reverses a succession of growth in the South African economy.
COSATU said South Africa needs to focus on monetary policies
that combat poverty and unemployment and on other socio-economic
policies that promote growth, the creation of decent jobs, and
the eradication of poverty.

Source: COSATU National Spokesperson Patrick Craven November
01, 2008


COSATU calls for punishment for companies guilty of price fixing
--------------------------------------------- -------------------

8. COSATU has welcomed a court decision to dismiss an
application by Clover Industries and Ladysmith Cheese for leave
to appeal against a price fixing charge. COSATU agreed with
Judge Denis Davis that any form of price fixing should be rooted
out and are pleased to hear that the court will not allow
technical arguments to delay the process. The Competition
Tribunal will sit on January 19, 2008 to hear charges (including
price fixing, abuse of dominance, and fixing trading conditions)
against Clover Industries, Parmalat, Ladysmith Cheese, Woodlands
Dairies, and Milkwood Dairies. COSATU has long followed this
issue and was one of the first to note the possibility of price
fixing well before the judicial system took up the cause.

Sources: COSATU National Spokesperson Patrick Craven November
17, 2008


COSATU looking for developmental focus in monetary policy
--------------------------------------------- ------------

9. COSATU General Secretary Zwelinzima Vavi called for a
developmental approach to monetary and fiscal policy noting that
`current monetary policy is to use interest rates as a blunt
instrument to achieve a rigid inflation target'. Vavi proposed
that South Africa `develop a policy, which uses multiple tools
to combat excessive inflation, while promoting employment and
growth.' Vavi stressed the need for a basic income grant and
said that everyone should enjoy income support as a right and
that no person should fall through the cracks. COSATU has
intensified pressure on ANC leadership to implement socially
friendly policies.

Source: ABSA Capital SA Morning Market Search November 06, 2008


Vavi urges union federations to unite
-------------------------------------

10. COSATU General Secretary Zwelinzima Vavi attempted to mend
a long-standing split by addressing the Federation of Unions of
South Africa (FEDUSA) for the first time. In his November 6
address, Vavi urged unions to stand together against
`unscrupulous politicians' adding that `only unscrupulous
politicians hell-bent to use our divisions in order to use us
against one another for their selfish political ends stand to
benefit from disunity.' He defended COSATU's alliance with the
ANC by saying it was the only way to ensure that labor wielded
the power it deserved. Vavi hoped that a new ANC government
would allow the union movement to reach its full potential and
asked FEDUSA to unite with COSATU in a `black Christmas'
campaign to highlight the financial struggles of workers.

Source: The Star November 07, 2008


South African government calls for mines to invest in safety
--------------------------------------------- ---------------
11. The Mine Safety Commission has concluded that mine
fatalities remain unacceptably high despite a reduction in
annual fatalities from 742 in 1994 to 220 in 2007. The South
African government is considering new legislation that would
subject company executives to prison and hefty fines if
violations continue. The National Union of Mineworkers is
lobbying hard for South Africa to adapt the proposed legislation
with criminal culpability while mine owners remain opposed.
Anglo Gold commented that `we all need to work together on
safety and not against each other with threats; if they make
laws too onerous skilled people will leave the industry.'

Source: Times November 20, 2008


Teachers Union (SADTU) supports Outcome Based Education (OBE)
--------------------------------------------- ---------------

12. The teachers union has publicly declared support for
Education Minister Naledi Pandor on Outcome Based Education
(OBE). General Secretary of SADTU Thulas Nxesi stated that the
union would resist increasingly prominent critiques that call
for OBE to be scrapped. They believe OBE is the best model when
teachers are supported with appropriate textbooks, professional
development, and resources from district officials.

Source: Business Day November 24, 2008


Stats SA reports people with critical skills remain unemployed
--------------------------------------------- -----------------

13. The latest figures from Stats SA illustrate that the ranks
of the jobless include a large number of people with critical
skills and previous work experience. Government does not
categorize discouraged job seekers as unemployed. Another
feature of the new Quarterly Labor Force Survey is that
`discouraged' workers are now classified as not economically
active - in other words, out of the labor force, while in the
past they were classified as unemployed. If the 1.07 million
discouraged workers (as now more narrowly defined) are added to
the ranks of the unemployed, the number of unemployed rises from
4.12 million to 5.19 million and the rate of unemployment rises
from 23.2% to 27.6%.

Source: South African Institute of Race Relations Labor
Bulletin November 2008


Immigration to Australia and its impact on Skills Shortages
--------------------------------------------- --------------

14. The Australian High Commission detailed that on average
4,500 South Africans immigrate to Australia each year (another
3,000 enter on other programs and then legally convert to
immigrant status). This year's numbers stand to be higher. The
High Commission found that most South Africans moving to
Australia were skilled and fell between the ages of 26 to 45.
Immigrants to Australia cited affirmative action and crime as
the primary reasons for departure. The High Commission noted
that Australia does not actively promote its immigration
policies in South Africa because of the ongoing South African
skills shortage.


Source: Australian High Commission meeting with U.S. Consulate
in Johannesburg staff


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