Lucien van der Walt (2021), “The Defence and Strengthening of Collective Bargaining in the Context of Municipal and Working-Class Crisis,” presented to SA Municipal Workers Union Collective Bargaining Conference, Sunnyside Hotel, Johannesburg, 15-16 March.
PDF of talk HERE (full text follows)
The Defence and Strengthening of Collective Bargaining in the Context of Municipal and Working-Class Crisis
Paper presented to SA Municipal Workers Union Collective Bargaining Conference, 15-16 March 2021
Prof Lucien van der Walt, Director: Neil Aggett Labour Studies Unit (NALSU), Rhodes University, Makhanda (Grahamstown)
www.lucienvanderwalt.com
www.ru.ac.za/nalsu
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Thank you for inviting me to speak at your collective bargaining conference. I am Professor Lucien van der Walt of the Neil Aggett Labour Studies Unit (NALSU) at Rhodes University. We are involved in worker education, labour-related research and engagement with unions and other worker organisations. Congratulations on your recent congress, and the achievement of holding this during the lockdown.
I have been asked to speak on the issue of defending and strengthening of collective bargaining.
To do this, I will look at three main issues:
1. The larger context in which collective bargaining is taking place.
2. The actors in municipal collective bargaining.
3. Strategic issues for the union.
Let me turn first to
1. THE LARGER CONTEXT IN WHICH COLLECTIVE BARGAINING IS TAKING PLACE.
Collective bargaining takes place in a very difficult context.
Even before the pandemic, SA had reached an unprecedented 10 million jobless. Another 2 million have since been added, partly because of the world economic crisis of 2007, and partly because of internal issues in SA, economic growth has been slow, has not generated significant numbers of new jobs, and private investors have taken a wait-and-see attitude. Rather than expand existing facilities or build new ones, the tendency has been to sit tight.
And, to put it simply, while the crisis will affect everyone, the working-class and poor are the main victims. 12 million unemployed, in a country where each worker supports up to 6 people, is already a humanitarian disaster.
We must give credit to the SA state for acting decisively when the pandemic hit. But no state, anywhere, seems able or willing to act decisively to deal with poverty and unemployment. There are over one billion unemployed or underemployed worldwide.
And unemployment and poverty drives conflict, which we see in the desperation to get into universities, leading to clashes on NSFAS, the push for job security and higher wages by state employees, a push to maximise overtime to keep salaries up, massive debt levels.
Why are we in this mess?
First, there are serious long-term problems in the SA economy. While by far the most developed in the continent, it is not globally competitive compared to other Newly Industrialised Countries [NICs]. This means local industries cannot compete with cheap imports – which is why our textile industry is dead – and cannot break into overseas markets – which is why our main exports remain food and minerals. The effect is that we are slowly deindustrialising, as our factories stall or close. For example, manufacturing was close to 30% of GDP in 1985; today it is under 20%.
Second, the state has proved unable, overall, to address this problem – with a few exceptions like the auto sector, which has expanded:
1. Although ESKOM is the 4th largest profit-making company in Africa and one of the largest power companies in the world – it is bigger than local giants like Anglo-American [AAC] or MTN – it is unable to provide a reliable power supply.
2. The chaos in the ruling party, which creates worry for any long-term investment, also means firms do not want to commit for the long-term. In fact, AAC, which in the late 1980s controlled half of the Johannesburg SE, has largely left SA i.e., that most famous example of what we might call WMC, and one of the top 100 firms worldwide in the 1980s, has largely left SA.
It is not clear on a day-to-day basis what the state will do. For example, we have seen over the last week conflicting messages from the ruling party about the mess in NSFAS. There is a refusal to make, and stick to, hard decisions, no clear coordination, and no clear plan anywhere.
3. The state lacks capacity, I mean the basic ability to design and operate effective economic policies. As one example, the NDP set out ambitious targets to change the economy by 2030. It had no clear budgets, no concrete timelines, contradicted two other national development plans, and stalled.
But the state relies on tax. The less economic growth, the less tax, the less government revenue. The state is earning less, and it can only cover the gap by borrowing or by spending less. The state’s debt is now the highest in a century, topping even that of the apartheid state in the years of war and revolt in the 1980s. The state on other words cannot fill the gap left by the slow capitalist economy.
Simply saying “tax the rich” more is no solution. We live in a world where big firms choose between countries, and higher taxes run the risk of either throttling more investment, or in chasing investors away. In the 1980s, SA capitalists could not leave the country despite martial law and massive unrest, as they were blocked by law and policy. None of these measures are in place anymore, and that is exactly what has allowed big firms like SAB, AAC and Gencor to fly the coop, that is, globalise. As SA becomes less important to them, their willingness to deal with SA problems falls. But the same problems they face in SA will face any other investor, so that it is a mistake to think investment lost as companies leave will be made up by new companies entering.
Rather, we are in a race to the bottom with rival economies, where countries that build on the basis of cheap labour, like China, are rewarded while countries with labour laws protecting unions and workers, like South Africa, are punished.
This is the world of neo-liberal globalisation.
It is also not just a question of how much money the state gets through tax, but also of how it is spent:
1. The state, esp. in the Zuma state capture years, has actively looted the economy and the tax funds to benefit a small elite of politicians and big business. Although the state increased spending rapidly from 2008, focussed on infrastructure like roads, rail and power, vast amounts were captured through “state capture.” ESKOM’s debt is R500 billion. To give an example of how large that is, the entire budget of a municipality like mine, Makhanda, is less than 1.5 billion.
Other state-owned corporations require ongoing bailouts, every MP earns a salary of well over a million plus bonuses plus free housing and there are 400 of them; and at least R150 billion a year disappears to corruption and wasteful expenditure, according to COSATU’s 2021 budget statement.
As Sowetan columnist Prince Mashele noted, “When you steal money, it runs out at some point.”
2. Many state activities are based on absorbing existing resources, rather than generating new ones. Obviously, many services the state provides can never be profitable e.g. how can you make a road or a street light profitable? And obviously the economy cannot work without things the state provides, like roads, lights, and education. But in a capitalist economy you need both capitalist growth and an effective state to ensure there is money for state services, and the state delivers, but what we do not seem to have either.
To put it simply: the state is going bankrupt. This is because of problems in the capitalist economy, involving big private business, and problems in the capitalist state, involving the politicians and senior managers, including those of state corporations like ESKOM.
2. THE ACTORS IN MUNICIPAL COLLECTIVE BARGAINING
This brings us to the municipalities. As we know, this is something of a crime scene. In the 2017/2018 financial year, just one out of ten got a clean audit countrywide, and where in where in the 2019/2020 financial year just one municipality in the entire Eastern Cape was clean.
While a lot of attention has focused on large-scale corruption – in effect, the large-scale grand theft and mismanagement exposed at the Zondo commission and by many studies – municipalities have been marked by extensive corruption. This has been true of ANC-run municipalities especially – most municipalities with a clean audit are in the Western Cape – but as the DA / EFF coalition governments in Tshwane and Johannesburg showed, corruption is not unique to one party. In both those cities, there was ongoing corruption under the new parties. It is s systemic problem and cannot just be vanished by an election.
What makes this corruption possible, on the one hand, is the decentralised tender system in municipalities whereby provision from the private sector is decentralised; every municipality deals in hundreds of these contracts, and few municipalities can monitor this properly: there is too much going on.
On the other hand, as in the provincial and central state, there is what we can call a consequence-free environment.
Municipalities face few consequences for corruption, people involved in either corruption or maladministration face few consequences, and loyalty to specific parties and to specific factions inside those parties offers the best insurance.
What this means is that, at the municipal level:
1. Income for municipalities is declining.
As central government gets less money for tax over time – and 2020, the worst year for economic growth in 100 years in SA, will have massive tax losses – it cuts wherever it can. This is austerity. One visible example is the stand off with civil servants pay, where the state has withdrawn from a three-year agreement. Another is the disaster in NSFAS which now directly is triggering protests at universities, with a student protest nation-wide today.
But this also means that there are cuts in transfers from central government to municipalities, as the state lacks resources or chooses to prioritise other projects. For example, when NSFAS first became a grant, in 2018, R13 billion was cut from municipalities to help fund students. NSFAS grants in 2018 cost R50 billion. If all years at university were to be free, at this rate adjusted for inflation, the state would have to find over R600 billion a year from somewhere; this is more than the total health and welfare budgets.
2. The problems in municipalities mean that many are not very efficient at collecting the local fees and taxes they levy. The economic situation of 2020, and the fact that many municipalities did not operate smoothly and consistently, means municipal revenues are down. In Makhanda, current estimates are that the municipality has collected just over half the usual amount – 60% of what it collected in 2019. Corruption also rears its head here: the AG stated in 2018 of municipalities that “on average almost 60% of the revenue shown in the books will never find its way into the bank account.
3. Municipalities struggle to deliver the basics. This has led to ongoing so-called “service delivery protests.” I do not, personally, like this term as it simplifies what people demand and think and treats residents as a sport of angry customer. But whatever term we use, at least 10,000 have taken place since the 1990s, involving millions of people. That is more protests than under the las decade of apartheid. All that keeps the state safe is that these are scattered and generally lack a programme for larger changes.
It has also led to increasing reliance by aggrieved residents on the courts. The UPM [Unemployed Peoples Movement] won a High Court case in January 2020, the provincial government instructed to dissolve the Makana council (which runs Makhanda) for human rights violations arising from abject failures in services and infrastructure. The ruling is, however, being contested by the municipality and the Eastern Cape provincial government.
The provincial state settled out of court with resident’s association Let’s Talk Komani in June 2020, fending off a dissolution of the municipality with a financial recovery plan. But this was not in place by the end of November 2020, nor were their report backs, according to the Independent Komani Residents Association.
Both municipalities have meanwhile been found guilty of maladministration in a rash of separate cases, and for contempt of court for failing to abide by court rulings for redress. Meanwhile in December 2020 the municipal manager of Kgetlengrivier was sentenced to 90 days, and a residents’ association given control of the area’s sewage works, to be paid by local and provincial governments.
3. STRATEGIC ISSUES FOR THE UNION
What does this analysis suggest for the strategy of the union in current CB, and going forward?
1. We are in a very adverse collective bargaining environment.
In the private sector, a recent court judgement established that agreements cannot be automatically extended to non-parties, effectively exempting, and rewarding, hard-line anti-union employers. There is a growing use of precarious / casual labour, and a shift to smaller staff.
In the state sector, we see central government withdrawing from a three-year wage agreement. This matter is now in the Constitutional Court, after the Labour Appeals Court ruled in favour of government. The simple reason is that the state is running out of money: the aim was to save around R37 billion for 2021 . There are post freezes, a push for early retirement and a drive to cut R160 billion by end 2024.
At the municipal level, too, there is a similar pushback. One example is growing use of EPWP workers, as a source of cheap, non-union labour exempt from the NMW. I believe the next speaker will analyse trends in CB in the sector, so I will not get into this now.
2. Unions are in a serious state. Let me be very clear about what I mean, and what I do not mean. SA unions are actually very powerful, compared to other countries. Our union density rate – the percentage of workers enrolled in unions – is among the highest in the world, and union numbers stayed quite stable to the start of 2020 despite massive unemployment. Numerically, our unions are the largest after Nigeria – and some of our unions, such as NEHAWU and NUMSA, are larger than the entire union federations of certain nearby countries.
Repeated predictions by the left, as well as the right, that the unions are collapsing are simply not accurate. But there are serious issues:
• The decline in workers control in unions, and the capture of union resources by small groups, corruptly or not, allowing patronage network and subversion of democracy.
• The amassing of billions of Rands in union investment arms, while union education, offices, and media are starved, and while unions lack organisers and fail to undertake mass organising campaigns. Unions are richer than under apartheid, but do not use their money well, with much of it sitting in capitalist investments.
• Cutting up the same cake. Rather than making serious inroads into the masses of unorganised – two out of three workers – unions compete with one another for the same workers.
• Unions sitting on both sides of the table. This is a serious problem where unions have overlaps with management, whether that is management in the state or in the private sector. it can involve a union organising workers while also being a shareholder in the firm being organised; unions allowing senior management to become members of the union; and unions being allied to political parties that control government, which is the single biggest employer.
We need a long march to rebuild the unions, from the basic levels upwards.
3. The need for a working-class programme based on a serious analysis of where we are. There is much to say on this, but these are some of the key issues:
One of these is statism. What I refer to is the belief that the state is a potential tool of mean is that Most unions, regardless of federation, see the state as a tool for emancipation. This faith can be seen everywhere: the belief that the problem in the state is either that of a few bad apples, requiring either a reform of existing parties or the election of a new party, and endless union proposals for the country’s economic crisis, going back to 1994, which envisage the state acting to transform the economy in a pro-poor, pro-worker direction.
This approach is based on another problem: voluntarism. This is the notion that what counts are a few good ideas and a few food people. Applied to the state, this leads to the idea that the problems, the oppressive character of the state, are all due to a few bad people, or a few bad policies; for the private sector, the key idea is that the problem is the attitudes of managers, and the solution then becomes to have a more transformed management.
Now, obviously we want less corruption, better policies and more racial and gender equity, and should always fight for reforms, but we also need to be realistic about how much change is possible, while we are under capitalism.
The problems, as I have indicated, go way beyond a few individuals; they are built into the very structure of our capitalist society, and we cannot keep hoping there is an easy fix:
• We have a crisis-ridden semi-industrial economy with mass unemployment and declining investment by state or private sector, based on a cheap black labour system.
• The problems we face in the economy will not be fixed by breaking up monopolies, by having more BEE, by roadshows for investors or by yet another government plan big on ambition and short on capacity, timelines, or money. All that this will do is shuffle around the elites – who gets what – while most people are getting crumbs from the table.
• The state is going bankrupt. At the current rate, we will be on our knees asking for an IMF or World Bank loan in the next 5 years. Things will get worse, not better. We cannot wish this problem away or take refuge in simple slogans like “tax the rich” more. We are in a vicious circle, where even winning legitimate demands around state sector wages or NSFAS will bring the day of bankruptcy closer.
• Elections will not change this, as the problems are much deeper than a few corrupt individuals. Corruption did not start, or end, with Zuma in the presidency. I do not have time to go into a long discussion of this, but the use of state resources to create wealthy elites – by corruption, by preferential policies, by cadre deployment – goes back to before 1994, with the NP’s –anerisation, and the homelands, and continued post-apartheid, with BEE. This is why even the “New Dawn” ANC cannot shake off the Magashules and Mabuzas.
• Corruption is not a simple moral problem, but it is part of a form of systematic class formation, whereby elites – lacking resources outside the state – use state resources to secure wealth and power. It is a common pattern in countries in Africa, South America, and East Europe. It can involve corruption, but also preferential tendering and other state aid.
In effect, the ruling class, in the economy and in the state, are part of the problem but the working-class and poor are facing the harshest effects. Rather than see this, unions often prefer to appeal to one wolf – the state – for protection against the other wolf – private capital – rather than see they are part of the same pack.
4. Elements of a programme
We need to think very carefully how we frame collective bargaining issues in this context.
Of course, we need to continue the battle for wage security, better conditions including proper health and safety in the context of the pandemic —we heard earlier 14,000 muni workers contracted the disease – and to win secure jobs and the insourcing of EPWP workers and casuals.
We must defend collective bargaining and leverage our power.
But our revolutionary working-class imagination must not be reduced to ritualistic protests and wage demands. We need to think how can build autonomous power – outside the state, the parties and the employers – and win allies across the broader working-class masses.
And we need to frame this in the context of a:
• Crisis in the municipalities.
• The humanitarian disaster of mass unemployment and deindustrialisation.
• Capitalist economic crisis and a corrupt state, running out of money.
• The deep divisions in the working-class, which we can see in many dimensions: GBV, attacks on immigrants, union rivalry, race divisions, and let me underline thus by political parties.
• A largely defensive period of struggle, where we try to simply maintain our gains.
We need to think therefore how we balance the specific interests of specific groups of workers, with the general interests of the working-class including our communities and the unemployed masses.
And we need to remember we have serious power, by virtue of being based at the workplace, the heart of the capitalist economy, where wealth is generated. This is despite the problems we face as unions. So, the issue is how to build and extend this power, for ourselves and the larger working-class.
We need then to think about reframing collective bargaining to go beyond simple wage and workplace issues, important as those are:
1. The first issue here that we need to engage is alliances with communities. Yes, it is true that workers are part of the community, but the larger issue here is how we relate to eh actually-existing conditions in the towns – esp. the townships – and to the movements that have emerged.
You will know there is a powerful narrative outside in the bigger society that presents the workers in the municipalities as a major problem. Even the most recent issue of the African Communist raised issues around how the bad work of some state employees casts a bad light in all.
Of course, it is not workers who plundered the municipalities: they are not in charge of securing state grants, ordering tar or new pumps or parts for trucks; equally, it is not the workers’ fault that the elites have run the country into the ground. It is also not workers who lead to collapse and to intervention for administration to fail.
But the union needs to champion the fight against corruption and be seen to do so; it must ensure its comrades work to deliver the best possible.
But we need to tackle this seriously, and this means, first, ensuring excellent service delivery – as much as it is possible – in the townships; and second, acting as whistle-blowers and watchdogs regarding corruption; and, third, entering into serious engagements with the resident’s associations, not just SANCO, but the non-party ones.
2. This means we also need to take a stand on the issue of the court cases that are coming up.
Residents have grown frustrated with protests and have headed for court cases. But many of these ends up with simply issuing munis with instructions, which get ignored, or go under administration, which does not change much – the previous speaker has indicated these issues, such as no outcomes and protection for the guilty – or dissolution – leading to new elections, and then no real change.
Can we think of working with residents who use law more creatively to ensure more transparency, or pursue charges against guilty individuals?
What about where, as in where the residents’ association was given control of the area’s sewage works, to be paid by local and provincial governments?
What is our position on the new drive to get broken services placed under the control of residents, rather than municipalities?
Can we start to think about worker-community control of municipal services, so they become truly public services rather than state services, so we deliver to ourselves – prioritising the township s—rather than have to beg for delivery?
How do we link service delivery and a progressive agenda to end the system of township ghettoes into both our CB but also into larger working-class, socialist strategy?
CONCLUSION: A WORKING-CLASS IMAGINATION FOR A NEW SOCIETY
When I say that we see these problems in the economy, state and society are structural I am not saying give up. I am saying: we need to think of a new structure – a just and democratic society – and how to get there. I am saying we need to think beyond fiddling with what we have and aiming at something new; we need to really change society.
And with a vision, we need to start to think about our strategy. We need to aim at:
• Building working-class unity and a working-class front, including but not restricted to unions. This includes alliances with residents’ groups.
• A politics of open debate and tolerance, and high personal standards, so we can start to act as people suitable for a better society, rather than corrupted by this one.
• Maximising autonomy and independence from the economic and political ruling class.
• This includes including developing our own media to shift the debate in the country, cooperatives for the unemployed and educational institutions for skills as well as class consciousness. As Malaika Mahlatsi has noted, there is much to learn from Solidarity’s efforts to build its own R300 mn university. But there is also something to learn from what is happening in Kgetlengrivier.
• Closing union investment arms and using these funds to build the movement.
• Building our capacity to resist, win gains, and ultimately govern society directly, for the mass of the people, outside and against the existing power structures of capitalism and the state: working-class counterpower. In doing so, shift the balance of class power, so that victories impossible today, may become possible tomorrow.
There is limited scope for reforms, but we must win them; but the idea that we can reform capitalism profoundly, as proposed by social-democratic and Keynesian thinking, which has influenced the unions from the RDP in 1994 to the present, is utopian. The hope the state can save us, also, is utopian. Rather, we need to aim at working-class counterculture – understanding what is wrong, and how to change it – and counter-power to change the world by taking power – from below.
Lucien van der Walt 