Earth shifts under the Tripartite AllianceThe lines between government and business have been blurred says Gareth Newham, Head of the Crime and Justice Programme at the Institute of Security Studies (ISS) in Pretoria.
By Susan Miller
South Africa's Trade and Industry Minister Rob Davies attended a series of investor meetings in London recently in an attempt to quell nerves after the fatal shooting of 34 miners by South African police on August 16 at Lonmin's Marikana mine.
Another ten people, including two police officers, died in the week leading up to the shooting.
"We have not seen an impact on foreign direct investment," he asserted. "The impact has largely been felt in the shares of the companies concerned."
However, the impact has been felt elsewhere – horror at the police action has been expressed worldwide.
In South Africa civil leaders like Desmond Tutu spoke out and Financial Mail editor Barney Mthombothi wrote 'we cannot, as has been our won't, apportion blame, or hide behind the tattered skirts of apartheid and its legacy…is this what we struggled for?'
And it's at the very heart of government that many fingers have been pointed. Mthombothi pointed to the governance of the Tripartite Alliance - the ANC, SACP and the Congress of South African Trade Unions (Cosatu) - as 'a temple of nothing but greed, self-serving avarice'.
And as worker relations sour, Cosatu's role in the Tripartite Alliance is coming increasingly under the spotlight.
After all as Gareth Newham, Head of the Crime and Justice Programme at the Institute of Security Studies (ISS) in Pretoria says, the lines between government and business have been blurred by the ANC's investment arm Chancellor House, hugely active in the mining and construction industries.
"Ideally government should be a kind of mediator between labour and business… but in South Africa it gets conflated because of the conflation of big business and the ANC," he said.
Newham said increasingly the ANC's interests were thought "to be too closely aligned to management and business – and Cosatu and its affiliates (like the National Union of Mineworkers) are seen in the same light."
NUM's waning influence was illustrated when only 6.3 percent of shift workers reported for work at Lonmin on deadline-day Monday September 10th.
And this after Lonmin management, the NUM, Solidarity and Uasa signed a peace accord, which the ¬newly active Association of Mineworkers and Construction Union (AMCU) refused to sign, saying it had not been part of the process leading to it.
And Davies is right - the continuing strike has impacted on business – Lonmin's London listed shares plunged 6.8 percent on August 16 and another eight percent the next week.
Importantly the gold industry has been affected. A third of the workforce at Gold Fields, the world's fourth-largest bullion producer, downed tools in an illegal strike on September 10.
This was only days after its management resolved an earlier illegal strike by 12,000 of its workers at its KDC East mine over worker discontent with the local branch of NUM.
Gold Fields share price shed more than 2.5 percent as news of the latest wildcat strike spread.
Reuters reported that this discontent with NUM has allowed AMCU to recruit on Lonmin, Impala Platinum and Aquarius Platinum.
They are also active at Anglo American Platinum.
And it's not just the miners but poor communities around South Africa who have been protesting – often violently – about service delivery, including the provision of electricity and water, and the slow rate of change.
The ANC has improved living standards since coming to power 18 years ago but 60 percent, or about 23 million, still live in poverty and 28 percent are jobless, according to government data.
"The dividends of development weren't spread across the population as a whole," Dirk Kotze, a politics professor at the University of South Africa, told Bloomberg. "There is a high explosive potential. It is just not a labour dispute anymore, it is much more emotional."
Township residents staged 113 protests against a lack of housing, sanitation and other services in the first seven months of this year, more than in any other year since monitoring began in 2004, according to Municipal IQ, an independent local government research group.
At the heart of these protests is a lack of skilled and engaged leadership, says Newham.
"Protests usually only break out or become violent after people have tried numerous times to speak to a local councillor or to get to the mayor to address their concerns… So at the heart of a lot of the stuff is that lack of response and we also saw that with Marikana."
Newham suggests that recent events illustrate "that certain groups don't think that Cosatu are representing them".
"Marikana is an expression of that – AMCU and many other unions are just completely opting out of the labour system with their grievances. They don't even bother using the labour legislation to try and strike – they have wildcat strikes –like Nactu, the breakaway group from Sactu. The pressure within the alliance is now building."
The shooting of the miners – and alleged torture of miners in custody – shocked South Africans who thought they had seen the back of state violence after 1994.
However, Newham says that it "all starts on top…the people in charge of the police …know virtually nothing about policing". It's the reason why "the police don't go to a crime scene, the reason why they have such a low conviction rate if cases get to court, there's police corruption and other abuses."
While economic analysts did not immediately predict a drop in investor confidence in South Africa, Peter Attard Montalto, Nomura's London-based emerging-market economist, told the Wall Street Journal that if strikes spread and the Lonim situation wasn't resolved it could lead to a downgrade of South Africa's sovereign credit ratings.
Newham believes the consequences of Marikana will be felt for some time. " Would you really want to start up mining in a situation where there is a possibility that your entire workforce will go on a wildcat strike and start killing people or that they will get shot dead by the police?"
And what about brand South Africa? "With the police, the only way they knew was to shoot people dead and then charge them with murder! It sounds internationally that there is something seriously wrong in this country," says Newham.