The national budget must not be used to increase the support to looted and indebted SOEs. A more progressive way to finance the rescuing of Eskom would be to tap into the resources of the PIC and the GEPF. Shifting Government Employee Pension Fund (GEPF’s) investments away from shares to bonds specifically made to deal with the SOE debt crisis is critical to saving Eskom (and other SOEs) from privatisation and austerity.
This move will not put workers’ pensions at risk. Firstly, pensions are a defined benefit i.e. ‘defined’ in the sense that the benefit formula is defined and known in advance and therefore guaranteed. Secondly, because contributions will exceed pension pay-outs even if some of the excess resources of the GEPF is used to save Eskom. Lastly, through greater investment in the real economy through the PIC will ensure the potential for massive job creation, which will reinforce the contributions to the pension fund securing pensions for future retirees as well.
26 August 2019
The National Executive Committee (NEC) of the South African Federation of Trade Unions (SAFTU) met in its ordinary session on the 21 – 23 August 2019 in Johannesburg. The meeting was attended by the SAFTU National Office Bearers, the affiliated unions Presidents, Deputy Presidents, General Secretaries, Deputy General Secretaries as well as the provincial chairpersons and secretaries of the federation.
The NEC discussed several critical organisational and socioeconomic issues and analysed the international balance of forces and how this impact on our country.
1. Building SAFTU and rebuilding the trade union movement
The NEC acknowledged that SAFTU created an excitement after its launch which saw massive support for the national general strike and marches on the 25 April 2018 but allowed a lull after that. The lull has caused SAFTU to lose the momentum and relevance. Extraordinary time was spent discussing the organisational challenges facing SAFTU and her affiliated unions.
It was agreed that the only way SAFTU can regain the trust of both its members and the working class as a whole is to take practical steps build the engines of the organisation, strengthen its structures and take up campaigns to improve the lot of the working class.
The NEC agreed that no stone must be left unturned in strengthening the 29 SAFTU affiliated unions. Unions must be strengthened so that they can defend members’ jobs, defend them against abuse by management in the workplace, and ensure that their trade union and political consciousness is increased. Only when they conscious as a proletariat can they see the value of providing solidarity to each other within and outside their unions. Without this work, workers will see no value in belonging to any union.
More must be done to ensure that the 212 registered unions are convinced to affiliate to the only independent, democratic and campaigning federation. SAFTU will facilitate more mergers and integrations between affiliates and salutes the strides made in unifying its municipal unions – DEMAWUSA and MATUSA as well its media and information technology unions – ICTU and MWSA.
The NEC agreed that at the centre of the paralysis at SAFTU is the membership fee of R1 per member, agreed to by its founding congress. A discussion is currently underway to increase this so that SAFTU can have a fully functional head office and provincial structures that are capable of driving the sustenance of local structures and SAFTU campaigns. This discussion will be concluded in the SAFTU Central Committee to be held on the 18 – 20 November 2019.
2. Political Crisis
SAFTU analysed the results of the elections held in May this year. The writings of Frantz Fanon capture the mood of the South African masses.
“The peasant who goes on scratching out a living from the soil, and the unemployed man who never finds employment do not manage, in spite of public holidays and flags, new and brightly-coloured though they may be, to convince themselves that anything has changed in their lives. The bourgeoisie who are in power vainly increase the number of processions; the masses have no illusions. They are hungry; and the police officers, though now they are Africans, do not serve to reassure them particularly. The masses begin to sulk; they turn away from this nation in which they have been given no place and begin to lose interest in it.”
Indeed, the masses are sulking. According to the IEC, there are 36,5 million people who are eligible to vote yet only 26,7 million registered. This means 9.8 million people did not register to vote. Of the 26,7 million who registered only 17 million voted. This means that 9,7 million of the registered voters did not vote. Therefore 19,7 million voters have lost confidence on our elections politics and are not inspired by any party to participate in the elections.
Further, a staggering quarter of a million decided to spoil their votes. This trend has been established since 1999. This communicates an unequivocal message to political parties: “we do not trust all of you! We have no faith in politics anymore!”
There is a deepening crisis of representation in our political system. None of the political parties enjoys any legitimacy. The trade union movement itself is facing the same crisis of representation, with only a mere 24% of the working population belonging to unions. Civic society and the rest of the working-class formations have been tremendously weakened.
The cry of our people is unequivocal, and the question they are asking is ‘who represents us.’
The main driver of the disillusionment is the growing number of South Africans trapped in degrading poverty, catastrophic levels of unemployment, world record inequalities, runaway corruption, frightening levels of crime, dysfunctional public healthcare and education, landlessness, propertyless, etc.
Regrettably, the ANC and its allies, notwithstanding the free-fall of support, remain resolute that the failed big business-friendly economic policies that reproduce these conditions shall remain. The champagne cocks are popping in the Johannesburg Stock Exchange. There has been an excitement in the big business chambers not only in our country but also in New York, London, Paris, etc. that the status quo will be maintained at fever pitch – the rich will continue to be richer and the poor poorer.
This situation is succinctly captured again in the Frantz Fanon excellent writings in the “pitfalls of the national consciousness.”
“The people stagnate deplorably in unbearable poverty; slowly they awaken to the unutterable treason of their leaders. This awakening is all the more acute in that the bourgeoisie is incapable of learning its lesson.”
The NEC noted this ruling party is in an irreversible decline that no faction inside it is capable of stopping the decline. The ruling party is more divided than even before its Nasrec conference with factions involved in a fight to the death of both factions. At the graveyard, there will be tombstones of both factions. The factional fights are not based on political and ideological difference, but the push to get closer to the feeding trough. It is this obsession with internal battles that have defocused the leadership of the ruling party from the crisis facing the country.
The ruling party has continued to lose urban working-class support as demonstrated by the free fall of its support in all the metros. Two-thirds of the ANC voters now are from the rural areas.
This situation is captured succinctly by an Italian Communist, Antonio Gramsci who while in prison had this to say about the crisis of capitalism. This can be applied to our political situation as well.
“The crisis consists precisely in the fact that the old is dying and the new cannot be born; in this interregnum a great variety of morbid symptoms appear.”
― Antonio Gramsci, Prison Notebooks https://www.goodreads.com/work/quotes/82926
In the May 2019 elections, while the majority did not vote those who voted, voted for the continuation of the status quo. The left is disjointed and fragmented and does not speak in one voice. Those who voted rejected the divisions as demonstrated by the fact that the first and second-largest parties are the pro-big business neoliberal parties in varying degrees. If this continues the shift to more rightwing politics will be consolidated with more attacks on the working class through attacks on the workers right to strike, neoliberal economic policies, austerity measures, intensified job loss blood bath and privatisation. This reality is already happening.
SAFTU will convene its Political and Ideological Commission and will identify critical issues to be discussed in the Central Committee to be held in November and the five-day symposium to be held in the first quarter of 2020. The working-class formations that convened in Soweto in July 2018, the local left and socialist parties and other left and socialist-oriented political parties in Latin America and Europe will be invited to discuss how we could go about helping create a Workers Party capable of uniting the working class and the poorest of the poor, using the international experiences of other parties.
3. Socioeconomic crisis
The GDP shrunk by a massive 3.2% in the first quarter of 2019. This was the second-highest decline in a decade. In the first quarter of 2009, the GDP declined by 6.1%. At the time, the international economic turmoil. SAFTU blames this to a combination of factors which includes religious adherence to neoliberalism, austerity measures, corruption and mismanagement of the economy that led to the near-collapse of the State-Owned Enterprises – SOEs.
The first quarter labour force survey reported that a massive 200 000 jobs were lost slaughtered in the first quarter. In the second quarter, 573 000 more jobs were lost with only 114 00 created all in the informal sector and only 5000 in the agriculture sector.
We now have 10,2 million South Africans are unemployed. The unemployment figure for Black Africans is 43%, and Black African females are 47%, and the Eastern Cape has an unemployment rate of 47% and 7 of the 9 provinces have an unemployment of more than 40%.
Violence directed at the most vulnerable members of the community – the elderly, women and children is getting worse. There are drugs epidemic afflicting, in particular, the black youth. The levels of despair are demonstrated by police statics that demonstrates that our country is the headquarters of the world when it comes to service delivery protests.
The challenge will continue to worsen until the ANC led Alliance government dishes an obsession with pro-big business economic policies that have dismally failed the country.
Our country is one of those that, after the liberation of the majority, the former oppressors lose nothing, and the so-called liberated remain the face of poverty, unemployment, inequalities, crime, propertyless and landlessness.
If these figures were to afflict any part of the democratic world, the governing party would fall immediately or surely in the next elections. In our country, the party that drove the economy to this tipping-point wins 57% of those who still border to vote. In our country, there has not been a single march and demonstration to respond to this.
SAFTU NEC unanimously agreed that this business, as usual, must be put to the end. The working class has a primary responsibility to mobilise itself for itself and all segments of society to put to the end this misery.
The NEC has adopted a programme of action to lead and to mobilise for massive resistance to this calamity of job losses, extraordinary levels of crimes, drugs epidemic, violence against women, destruction of our environment and for climate change, etc.
Mobilisation starts with the support of Multichoice fighting against job losses today the 26 August as well as the members of GIWUSA who are going on a strike for a living wage at the Glass Sector involving companies like Nampak Glass, Consol Glass, PG Glass, Shutterpruffe and Saint Gobain. The NEC agreed that never again should it allow workers to fight isolated struggles or unions organising in the same sectors to fight in silos. All these and countless battles (see attached programme) shall be coordinated by SAFTU provincial structures which shall ensure massive community support of every battle.
SAFTU agreed that it is not enough for SAFTU and the working class to limit its response to mass action, strikes and demonstrations. It is in this context that we have also made policy proposals that we attach in this statement.
4. International balance of forces
The NEC observed that we live in troubling times. Across Europe, the far right is advancing and growing in confidence.
In France, the Front National candidate Marine Le Pen entered the run-off for the French presidency in 2017 for only the second time in the party’s history. She took 10.6 million votes, double what her father achieved in 2002.1 http://isj.org.uk/fascism-in-europe-today/ In Austria, a party established by former SS officers, the Freedom Party (FPÖ), has entered government in coalition with the centre-right. In Germany, Alternative für Deutschland (AfD), formed only six years ago, has radicalised to the right. It came third in the 2017 federal elections.
In last September’s general election in Sweden, once seen as the stronghold of social democracy, the Sweden Democrats, a party formed by Nazi street movements in the late 1980s, increased their vote for the fifth consecutive election to 17.5 %. In Italy, the anti-migrant Lega has become the driving force of the country’s coalition government. In Hungary, the increasingly authoritarian regime of Viktor Orbán and his Fidesz Party combines anti-Muslim racism with barely concealed antisemitism through the baiting of the Jewish philanthropist George Soros.2 http://isj.org.uk/fascism-in-europe-today/
In Britain, arguably the biggest far-right street movement in British history has coalesced around Tommy Robinson, the former leader of the English Defence League (EDL), with a radicalised UK Independence Party (UKIP) pitching itself as the natural political home of such forces.
This is not the whole picture. The radical left is a significant force across much of Europe. Mass protests against Donald Trump; strikes across Belgium, in Portugal’s public sector and by nurses in Ireland; the sustained mobilisations in France by the Gilets Jaunes (Yellow Jackets), the wave of school student protests across Europe demanding action on climate change; all these underline the potential for resistance
The impact of neoliberal assaults and spiraling inequality and the pressures this has created, combined with austerity, have hollowed out claims that neoliberalism’s promotion of the market and business interests can deliver for the mass of the population. This, in turn, has translated itself into a crisis of the political system, with those parties most identified with neoliberalism, conservative and social democratic alike, seeing their social roots and electoral ebbing. This has created space for ‘outsiders’ on the left but also the far-right to grow.
The crisis has hit social democratic parties, especially hard. In the German federal elections in 2017, the SPD received its worst share of the vote since 1949, 20.5 %, half what it achieved in 1998. The French Socialist Party plummeted to just 7.5 % in the 2017 parliamentary elections, after holding the French presidency from 2012 to 2017. The Dutch Labour Party, a regular party of government in the post-war Netherlands, crashed to under 6 % of the vote in 2017. Moreover, while the Social Democrats in Sweden topped the poll in the 2018 general election, their vote fell below 30 % for the first time since 1920.
However, conservative parties have not been immune. So, the German Christian Democrats also received their worst result since 1949 in the 2017 election, while in France the main party of the right, Les Republicans, failed to get into the final round of the 2017 presidential election. The Austrian People’s Party, the main conservative party in post-war Austria, sought to stem eroding support by gambling on a turn to the right under its new leader Sebastian Kurz, adopting the racist programme of the fascist FPÖ, with which it now governs in coalition. The crisis of the mainstream parties has driven the push to resort to racism in an attempt to shore up support, yet far from undercutting the support for the far-right, it only makes its views more acceptable.
Neoliberalism, race and culture
The neoliberal restructuring of society, especially when combined with austerity, lead to intensified competition among workers if the notion that “there is not enough for everybody” takes hold. Such sentiments, especially where the experience of collective struggle does not challenge them, can be mobilised in a racist direction.
The impact is not just on the working class. Sections of the middle class can also become gripped by a fear of social relegation in the whirlwind of uncertainty and spiralling inequality. The Marxist sociologist Oliver Nachtwey describes a middle class in Germany that, after decades of upward social mobility, now sees itself threatened by a “downward escalator”: “For large sections of the German middle class…it is not the actual threat of disaster that has increased, so much as the worry of disaster. The ‘status-worried middle’ has in particular been struck by a kind of panic. It seems to many people that their own stability is at an end, that ‘collapse…is completely possible’.”35
This leads to a sharper battle to maintain status.
To a certain degree, the middle class has abandoned solidarity with the weak; it has built security by shutting itself off. Where there was previously a certain liberality, more rigorous ideas of morality, culture and behaviour have now returned. With increased fears of “contamination” and “infection”, people seek the greatest possible distance and strict isolation from the “parallel society” of the lower class.”36
Nachtwey goes on to argue: “For the lower middle class, it is a harsh social competition, the struggle for a prosperous life, and the disappointed expectations of ascent and security that lead to a ‘brutalisation’ of social conflict…[where] fear of downward mobility produces very specific authoritarianism”.37 http://isj.org.uk/fascism-in-europe-today/
More broadly, the acceptance of neoliberalism across the ruling class has reframed the discussion of racism. The central tenet of neoliberalism is that the market creates a meritocratic society where an individual’s rewards are the result of effort and talent. Failure is the fault of the individual, while collective inequalities—such as lower levels of income or higher presence in the prison population—must be due to cultural practices within particular communities, not the racist institutions of capitalist society. As Neil Davidson and Richard Saull note: “Culture is left as the only explanatory residue for apparent behavioural traits that do not conform to a ‘meritocratic’ neoliberal subjectivity”.38 http://isj.org.uk/fascism-in-europe-today/
SAFTU Proposals in response to the worsening socioeconomic crisis and jobs loss blood bath
1. SAFTU has advanced a demand for a R500 billion stimulus
This economy requires a kick-start to reverse the current falls in the levels of investment by private investors and the state. Too many citizens are unemployed. Too many South Africans are too poor and have no purchasing power to buy goods produced in the economy. The small number of the rich do not buy locally produced goods but consume luxury goods often important from other countries. Thus, the rich create jobs elsewhere in the world and not in South Africa.
We need a serious and real economic stimulus to kick-start economic activity while creating investment in long-term sustainable growth. For examples, we need massive investments in the following activities:
1) Housing, to address the 15% backlog and to break down the apartheid spatial development patterns which remain entrenched post the democratic breakthrough
2) Investment in better-tarred streets and water infrastructure in all townships
3) Building human infrastructure such as roads and bridges in rural areas
4) Water conservation by building dams to help prepare for the anticipated water crisis as a result of climate change.
We argue that South Africa can raise resources to attain the goal of an R500 billion stimulus, through:
1. Introduction of a wealth tax and solidarity tax,
2. Implementation of legislation such as a general anti-avoidance tax act to halt tax-base erosion, profit shifting and the loss of the country’s resources to illicit financial flows, that not only reduce the tax-base but more significantly perpetuate income inequality.
3. A review of the corporate taxes that were around 45% during the apartheid era but driven down to 28% after 1994.
4. The review of personal income tax to ensure that those who can pay more make more contributions to the fiscus.
2. Monetary Policy (inflation versus growth)
Is it reasonable to argue that the difference in policy in the US and South Africa is the difference between an established central bank in the US, which knows what it is doing and acts decisively if need be, versus a Reserve Bank in South Africa, run by a committee which is too timid and too inert to do anything in time.
Economists may argue that the structure of the economies is different. For example, perhaps they will point out that the labour markets are different, the share of government consumption to GDP is higher in SA versus the US, and the share of business financed by banks versus the market is fundamentally different.
Having said this, however, we understand that cash returns from money market investments currently generate a return of inflation plus 3%-4%. This is not normal, as long-term (10yr) average cash returns are approximately inflation plus 1%. That means there is no incentive for institutional investors to take risks when risk free assets generate these sorts of returns in a low growth environment. Institutions can simply put away their funds in money market portfolios and generate a decent return of 3%-4% above inflation by investing cash in the safest asset class in the market.
SA inflation becomes the central point as usual when we have to consider the actions of the Reserve Bank. Some believe this should be the only consideration, while others believe growth should be as central as inflation. On this question of inflation, we need to ask if the Reserve Bank is attempting to control something when it has little ability to influence in the current situation.
Housing, utilities and transport are major contributors to inflation, having contributed 1.1% and 1% (of a 4.5% increase) in May this year. Key drivers being the Rand/$ exchange rate, oil prices, and food and electricity prices. How much control does our Reserve Bank have over these elements? It has taken the stance of “you go first, and I will follow”. The expectation that a bankrupt fiscal position will determine a direction for the monetary authorities to follow is irresponsible. As such, SA institutions have also adopted the wait and see position’.
The situation is complex to articulate, but the outcome is simple to understand. We are in a low-growth environment. We need institutional investors to take risks by investing in the real economy. This means investing in SMEs, infrastructure, venture capital, private equity, Agri, capacity building, etc. These are a long-term investment that require patient capital. We need the Reserve Bank and private sector investors (retirement funds and corporates) to take the lead.
Let us call this what it is: a short-sighted but well incentivized ‘investment strike’ supported by the Reserve Bank’s stance on monetary policy. The long-term impact is negative growth, further downgrades, currency weakness, imported inflation and flight of capital. It is amazing that SA institutions are encouraged (by SA investment advisors) to allocate as much of their capital as possible to offshore investments (up to 30% for retirement funds), while the country begs for investment partners. On the other side, very little is done to encourage using unlisted investments that support growth and development.
3. Impact of a Rate Cut
SAFTU calls for a 3% cut in the interest rate. We need a monetary policy decision that cuts interest rates and lowers the cost of borrowing, resulting in higher investment activity and the purchase of consumer durables. The expectation that economic activity will strengthen may also prompt banks to ease lending policy, which in turn enables business and households to boost spending. In a low interest-rate regime, stocks become more attractive to buy, raising households’ financial assets.
This may also contribute to higher consumer spending and makes companies’ investment projects more attractive. Having said this, low-interest rates also tend to cause the currency to depreciate because the demand for domestic goods rises when imported goods become more expensive. The combination of these factors raises output and employment as well as investment and consumer spending.
– We should focus on growth and control inflation within our control parameters, but not pursue a sole inflation mandate at the expense of growth.
– Should the SA economy continue to fail to deliver growth, downgrades will eventually come even if inflation is within the target band.
– Under the current environment, maybe we should accept a downgrade if it comes as a result of credible creative policy options that are being implemented to address unemployment, poverty and inequality.
– We should focus on the consumer, which means jobs, ability to access financial markets (to borrow), increase disposable income and stop increasing taxes that impact the consumer, the long-term effects of which are negative for the economy).
4. Retirement funds and prescribed assets
Retirement funds allocate investment according to Regulation 28, which relates to prudential limits as per the Pension Funds Act. This allows pension funds to allocate up to 10% of their funds to unlisted investments in the real economy. Outside of the GEPF and Eskom Pension and Provident Fund, most pension funds have not allocated much to this asset class, but around 1% – 2% at best.
To put this into perspective, the retirement funds, including GEPF, make up over 4.4 trillion Rands (2017 Registrar of Pensions Funds Annual Report) with the GEPF making up 40% of this figure. A full allocation to unlisted investments would unleash at R240 billion (excluding the GEPF) for investments into unlisted investments. These could be allocated to SME financing (credit funds or equity funds), climate funds, infrastructure finance, water solutions, off-grid solutions, Agri, private equity and other unlisted opportunities that will provide a real opportunity to yield results.
Is there capacity to allocate these funds?
The answer is two-fold. South Africa has deep capital markets and depth of skill within the financial services sector. We have one of the best financial services sectors, not just in Africa but globally. If you make it mandatory for the R240 billion to flow into unlisted investments, you will see how the market allocates resources to allocate this capital in a prudent manner.
Punish investors that do not allocate by forcing them into prescribed assets or through a mandatory allocation into a fund run by investment professionals that are chosen through a process by the Financial Sector Conduct Authority and National Treasury.
In the context of the investment crisis, corruption at the PIC and issue of Eskom and other state-owned enterprises, AIDC has done critical research that illustrates how these 3 issues can be addressed simultaneously.
The Minister of Finance, Tito Mboweni, has announced that government will bailout Eskom using R59 billion from the fiscus over the next 2 years. Whilst it is critical that we bailout Eskom, we foresee that tapping into government budgets will ultimately result in deepening of the austerity agenda [Borrow more money from the finance industry from old and new imperialist powers or from international institutions and cripple the national budget with more interest payments. More austerity and finally privatisations then follow logically].
So, the national budget must not be used to increase the support to looted and indebted SOEs. A more progressive way to finance the rescuing of Eskom would be to tap into the resources of the PIC and the GEPF. Shifting Government Employee Pension Fund (GEPF’s) investments away from shares to bonds specifically made to deal with the SOE debt crisis is critical to saving Eskom (and other SOEs) from privatisation and austerity.
This move will not put workers’ pensions at risk. Firstly, pensions are a defined benefit i.e. ‘defined’ in the sense that the benefit formula is defined and known in advance and therefore guaranteed. Secondly, because contributions will exceed pension pay-outs even if some of the excess resources of the GEPF is used to save Eskom. Lastly, through greater investment in the real economy through the PIC will ensure the potential for massive job creation, which will reinforce the contributions to the pension fund securing pensions for future retirees as well.
Ultimately, worker’s needs to make this decision and demand greater control over the PIC and the GEPF – which is effectively workers money.
If we understand corruption in relation to a narrow class project and a regime of accumulation for the creation of a black bourgeoisie. The new political elite who came into power post-94 wants to join the old capitalist class as rulers of the economy. The problem they faced is that to accumulate they need access to capital – this is where corruption at the PIC and all SOEs arises. This is why changing personnel is not enough. We need to transform these state institutions to serve the interests of the majority. Here the role of organised workers is key.
AIDC is in the process of finalising the research, which we will produce in an accessible booklet by September. We would welcome doing briefings and trainings on the content of the booklet for SAFTU and its affiliates.
Government has the power to change the fate of SMEs in South Africa, by:
– Channeling investors’ spending to favour institutions that have devoted the necessary resources towards the SME growth agenda.
– Imposing penalties on institutions that are on an Investment Strike, through additional taxes on funds that are invested in cash instruments.
– Channeling more than 30% directly to SMEs from the R800bn public procurement spend:
Building a captive market for SMEs (that is where employment will be created)
Building an efficient payment mechanism that is suitable for SMEs
Designing terms of references for SMEs
Tracking progress at a quantitative level and reporting on a monthly basis
Holding one’s procurement officers and finance officers accountable
6. 4th Industrial Revolution
We talk more about outcomes than about the key inputs and what has to be done to achieve the outcome. With regard to the 4th Industrial Revolution, the reality is that we need fast, cheap, widely accessible broadband in order to help grow this economy, deliver quality, cost-effective education and to innovate. Just like power (electricity), broadband has become a critical input in our economy. Make these critical inputs accessible very cheaply, and this economy will produce results. Therefore, it is important to ensure that we have the right broadband infrastructure that is accessible and cheap.
If all institutions attach themselves to a cause bigger than themselves (SA growth and development), they will continue to grow accordingly. Broadband providers need to reduce the cost of data immediately. If not, their licenses to operate in South Africa need to be reconsidered.
South Africa ranks 35th in Africa, out of 50 ranked countries, with an average 1GB prepaid mobile data charge of $7.84. Egypt is the cheapest with a $1.13 charge for the same package. The purchase of 1GB costs $1.19 in Namibia, $2.02 in Mozambique, $2.49 in Kenya, $2.62 in Ghana, $2.68 in Uganda, $2.79 in Nigeria, $3.55 in Zambia and $5.07 in Lesotho. (Source: Research ICT Africa March 2019)
SAFTU Central Committee will have a focused discussion on how the South African trade union movement and the country should prepare for what is already a reality that is destroying jobs.
7. The climate crisis threatens the future – The Environment Challenge
Global carbon dioxide emissions from fossil fuel energy combustion grew by 34% from 2000 to 2010. Leading research institutions estimate that as a consequence, global average surface temperatures will increase by between 1 and 6 degrees Celsius during this century, with the most recent estimates projecting that the high end of this warming range is the most probable if no swift action is taken. Coal, oil and gas dominated the 20th century as sources of fuel, and allowed human productivity to increase exponentially. Yet these same resources are now polluting the atmosphere and damaging the environment on which we depend on for human survival. The transition away from fossil fuels is not one of convenience, but of moral and ecological necessity (World Watch Institute, 2013).
Every day, we are presented with a range of ‘sustainable’ products and activities—from ‘green’ cleaning supplies to carbon offsets, but with so much labelled as sustainable’, the term has become ‘sustainababble’, at best indicating a practice or product slightly less damaging than the conventional alternative. Is it time to abandon the concept altogether, or can we find an accurate way to measure sustainability? If so, how can we achieve it? And if not, how can we best prepare for the coming ecological decline? (World Watch Institute, 2013)
The Stockholm Environment Institute notes the following key concerns regarding a ‘just transition’ from fossil fuels to renewable energy:
– Governments are introducing new ‘just transitions’ policies to help workers and communities move away from fossil fuels.
– Most policies assume that justice goals will be achieved by helping those dependent on coal, oil and gas move into new roles; however, there is little critical reflection on what justice means in the context of an energy transition away from fossil fuels.
– There are a number of gaps in current just transition policies when viewed through a justice lens. For example, no policies contain measures to improve the lives of people currently marginalised in the energy system.
– Creating just and equitable transition policies requires collecting data on the current distribution of the harms and benefits of the energy system and mapping out how this will change as fossil fuels become a less-prominent part of the energy mix.
– By taking justice considerations into account, transition policies are more likely to limit social and political resistance, win a broad consensus, and achieve effective implementation (Piggot, Boyland, Down, & Torre, 2019).
The roots of the environmental challenge in South Africa
South Africa is responsible for 98% of Africa’s air pollution and 86% of Africa’s waste production. Two thirds of our rivers are under severe stress and much of our ground water sources are polluted, especially in heavily mined and farmed areas. Acid rain is also a problem in Mpumalanga, Gauteng and parts of North West Province.
South Africa relies on fossil fuels to generate electric power, process minerals and operate vehicles, resulting in productivity losses and mortality due to high concentrations of air pollution, namely fine particulate matter (FPM). A recent study indicates that 7.4% of all deaths in South Africa in 2012 were due to chronic exposure to FPM, costing the country up to 6% of its GDP (Altiere & Keen, 2019).
Air pollution monitoring data, provided by the South African Air Quality Information Service, was compared to background values. Background values indicate the concentrations that would be expected if there was no human-derived pollution (Altiere & Keen, 2019).
Stations with consistently high FPM concentrations typically occurred near townships, which are commonly poor, overcrowded and inadequately serviced areas. The main sources of FPM included domestic combustion, pollution emanating from highly industrialized areas such as Secunda (a town built amidst the Mpumalanga coalfields and the largest source point of CO2 in the world), coal yards and commonly adjacent coal-burning power stations, many of which were previously moth-balled plants that have since been re-commissioned due to power shortages (Altiere & Keen, 2019).
South Africa is often referred to as the 30th driest country in the world, a claim based on its average annual rainfall of 500mm compared to the world average of 860mm (Winter, 2018). By 2035 water demand is expected to exceed supply by 10%. If planned water schemes aren’t carried out, the Institute for Security Studies estimates that this gap could increase to 21%.
South Africa has a number of specific challenges that make it difficult for achieving water security. These include:
– The geographic position of a country that influences climate and weather systems.
– Rapid population growth and increasing water demand.
– Limited investment in water infrastructure and projects.
– Corruption and mismanagement of water resources resulting in public mistrust and lack of confidence in leadership of state departments.
– Fragile social and institutional capacity which threatens effective governance (Winter, 2018).
– Corporate abuse of and pollution of atmospheric water, ground water and surface water sources, especially agribusiness and mining.
Since 2013 nearly every region in South Africa has experienced some form of drought and water shortages resulting in water restrictions in urban areas and in the agriculture sector. Two thirds of South Africa’s rivers are in a good condition while the cost of restoring degraded river systems is increasingly prohibitive. (Winter, 2018).
In Mpumalanga, 79 967 hectares of agricultural land currently under maize and soya bean production will be taken over by mining activities within the next five to 10 years. Furthermore, without taking expected yield improvements into consideration, it is estimated that about 447 581t of maize and 49 889t of soya beans could be taken out of production from this area over the next 20 years, if all the current and proposed future mining (on prospected areas) takes place (MUNNIK, 2016).
At current rates of pollution and the destruction of air, water and soil as a result of poor planning and naked greed would see large parts of South Africa become uninhabitable in the face of climate change and impending climate catastrophe and if left unchallenged would undermine food and water security and sovereignty. The country urgently needs to plan for a post mining society instead of considering mining as a ‘sunrise’ industry.
The current social reality
Given the environmental crisis sketched above, where is South Africa socially at the moment?
According to the World Bank, “The triple challenge of high poverty, high inequality, and high unemployment persists. Poverty remains high for an upper middle-income country with more than half (55%) of the population of South Africa being poor at the national upper-bound poverty line of ZAR 992 per person per month in 2015 prices.” (World Bank Report on Overcoming Poverty and Inequality in South Africa”) (Essop, 2018).
The Reality of the Climate Crisis in South Africa
Back in 2007, the United Nations Human Development Report declared that “climate change is the defining human development challenge of the 21st Century”. “Failure to respond to that challenge” they went on to demonstrate, “will stall and then reverse progress built up over generations not just in cutting extreme poverty, but in health, nutrition, education and other areas.” Over a decade later, the world has largely failed to heed that warning and as a result the grim realities of climate change are increasing and wiping out progress on development the world over.
In South Africa, the realities of climate are already here. Studies show that already our country has faced deepening inequality and is 10-20% poorer https://mg.co.za/article/2019-04-24-climate-costs-south-africa-10-of-its-gdp as a result of human-caused climate change. In just the past year we have seen a slate of devastating climate impacts which have truly brought home the impacts of climate change. In KwaZulu Natal, raging floods washed away homes and roads, killing over 70, displacing nearly 1500 people, and costing KwaZulu Natal over R1 billion https://www.dailymaverick.co.za/article/2019-04-29-kzn-floods-cause-damage-of-over-r1bn-province-wants-disaster-declared/ in damage.
In the Eastern Cape, ongoing drought is ravaging the province <https://www.dailymaverick.co.za/article/2019-08-12-food-drought-and-fury-un-land-report-brings-the-truth-to-sas-climate-corrupt/> , leaving many communities without access to water and posing a widespread threat to food security. In August, the University of Fort Hare and Walter Sisulu University had to close due to water shortages <https://www.news24.com/SouthAfrica/News/two-eastern-cape-university-campuses-closed-over-water-shortages-20190813> . In the Western Cape, the city of Cape Town barely escaped reaching day zero and had to enforce water restrictions. Looking forward, if we do not act on climate change, Cape Town’s drought is expected to potentially become the new normal for the city and droughts will become even more severe https://qz.com/africa/1502002/cape-town-will-see-more-severe-droughts-say-scientists/ .
In broader southern Africa, our neighbours are also feeling the brunt of climate change. In the space of just one year, Mozambique was hit with not one, but two massive cyclones. Cyclone Idai was one of the worst tropical cyclones on record to affect Africa and the Southern Hemisphere, leaving 1300 people dead and impacting more than 3 million others. Over 90 percent of the city of Beira was destroyed. Shortly after, Mozambique was devastated yet again by their strongest storm on record https://www.theguardian.com/world/2019/apr/25/cyclone-kenneth-mozambique-hit-by-strongest-storm-ever, Cyclone Kenneth, which destroyed 80% of the homes in the Macomia district.
Further inland, Zimbabwe is facing a climate disaster of its own. A severe drought has left much of the country reeling from water shortages. In Harare, over two million people https://www.climatechangenews.com/2019/07/15/two-million-zimbabwes-capital-no-water-city-turns-off-taps/ have been left without water access as the city resorted to turning off people’s taps to deal with the water shortages.
This is the reality of climate change. As we pump more greenhouse gases into the atmosphere through burning fossil fuels and deforestation, the planet warms. A warmer atmosphere holds more water, so it rains less, thus leading to increased drought. However, because the atmosphere holds more moisture, when it does eventually rain we get much more extreme rainfall, causing increased flooding.
This past year South Africa, Zimbabwe, and Mozambique, along with countries across the world, have truly felt that the climate crisis is not some distant threat. Rather, as scientists confirm, it is already here and if we fail to act, we risk undermining so much progress on development and equality and threaten the vital ecosystems upon which human society deeply depends.
However, scientists also tell us that we still have a brief window of time to act if we are to avert some of the worst consequences of climate change, but we will require transformative action. In 2018, the Intergovernmental Panel on Climate Change report warned https://www.theguardian.com/environment/2018/oct/08/global-warming-must-not-exceed-15c-warns-landmark-un-report that we need to reduce global greenhouse gas emissions by 45% by 2030 and to net zero by 2050 to keep warming from going above 1.5°C above pre-industrial levels – a level beyond which scientists warn we will face much higher risks of runaway climate change which threatens human civilization as we know it.
Mobilising for climate justice and a just transition internationally
The 1.5°C target was fiercely advocated for by the global South, especially African countries, small island nations and least developed countries, who are all especially vulnerable to climate change. After years of global South-led advocacy, in 2015 the Paris Climate Agreement agreed to keep warming well below 2°C and aspire to meet 1.5°C. Despite the Paris Climate Agreements, many governments are failing to take adequate action https://climateactiontracker.org/global/temperatures/ on climate change to meet those targets and collectively our efforts fall far short of 1.5°C.
In response to such government inaction, in the last year millions of young people https://www.theguardian.com/environment/2019/mar/19/school-climate-strikes-more-than-1-million-took-part-say-campaigners-greta-thunberg around the world have taken to the streets, striking from school to demand climate action. The voice of young people is vital as it is their future that will be most impacted if we further fail to act on the climate crisis.
South Africa is one of the worst actors on climate change, as we are the fourteenth largest greenhouse gas polluter in the world, the worst polluter relative to our GDP, and the largest polluter on the African continent. In response South Africa’s youth and civil society is mobilising for climate action. During Youth Month in 2019, young people and their allies mobilised in over a dozen actions across the country https://www.dailymaverick.co.za/article/2019-06-17-this-youth-day-young-people-are-demanding-climate-justice/ demanding climate justice and action from the South African government.
The demands put forward during Youth Month included that the government declare a climate crisis, take action to move to 100% renewable energy, and undertake transformative action to ensure a more socially and ecologically just future for South Africa. A climate justice memorandum delivered to the https://docs.google.com/document/d/1MvZU7trSmVjLrvFqC7iZ1eFOcIVjl_HUuZrJBOI1JhE/edit?usp=sharing presidency https://docs.google.com/document/d/1MvZU7trSmVjLrvFqC7iZ1eFOcIVjl_HUuZrJBOI1JhE/edit?usp=sharing , demanded that “this must include a just transition for workers and place priority on socially owned renewable energy which brings benefits and energy access to all South Africans equitably”.
Then, in May, South African youth stood with youth across the globe, to call on all adults to join them in a Global Climate Strike https://www.theguardian.com/environment/2019/may/23/we-need-everyone-youth-activists-call-on-adults-to-join-climate-strikes on 20 September (see: GlobalClimateStrike.net <https://globalclimatestrike.net/> ). The strikes are taking place to put pressure on governments in the build-up to a Climate Action Summit being hosted by the UN Secretary General. The Summit is calling on governments across the world to increase their ambition on climate change and civil society is mobilising to push governments to take more ambitious action.
Many unions around the world have declared support for the student strikes and will join in a variety of actions in political protest on September 20 and during the week following. In France, the General Confederation of Labour (CGT) is preparing two days of action on the urgency of the climate crisis. In Germany, Verdi, Germany’s 2nd-largest union (2 million members) https://www.cleanenergywire.org/news/german-labour-union-calls-2-million-members-join-climate-strike is joining the strikes. In Australia, nearly 30 unions https://www.schoolstrike4climate.com/partners are supporting the climate strikes.
We know that the voices of labour will be crucial to ensure that the transition is just and does not leave behind workers or communities. A crucial Intergovernmental Panel on Climate Change report tells us that to meet the 1.5°C target will “require rapid and far-reaching transitions in energy, land, urban and infrastructure (including transport and buildings), and industrial systems”. Such a transformation their report suggest, holds the potential for ensuring better progress on poverty alleviation and significant economic opportunities which can create a better, more equal and prosperous world. However, those opportunities will only be realised for all if we ensure justice is central to the transition.
International examples of unions fighting for and winning just transitions
We have seen that unions can and need to play a leading role in ensuring a just transition away from fossil fuels. In Germany, unions played a leading role in negotiating a just transition away from coal. In 2018, Germany’s government-appointed “coal commission” developed the pathway https://www.reuters.com/article/us-energy-coal-germany/germany-to-move-ahead-quickly-on-implementing-coal-exit-idUSKCN1PL001 for the full closure and transition of the coal industry by 2038. It involved a process with representatives from unions, industry associations, coal regions, scientists, local communities and environmental NGOs. The coal commission has recommended afunding package https://www.reuters.com/article/us-germany-energy-coal/germany-to-phase-out-coal-by-2038-in-move-away-from-fossil-fuels-idUSKCN1PK04L of €40 billion to support the coal regions.
In Australia’s Latrobe Valley, in response to the closure of coal plants, unions helped form the Latrobe Valley Authority which worked with local people, councils, industry, education providers and governments to secure the economic future of the Latrobe Valley, and ensure a just transition. The federal government provided AUD43m in support for infrastructure, job creation, diversifying the regional economy and re-training funds. Additionally, the provincial government provided an additional AUD266m over 4 years, the largest regional assistance package in Victorian history.
Alberta, Canada, agreed to phase out coal by 2030 and put in place measures to protect the coal workforce and dependent communities. In response to consultations with communities and workers affected by the coal phase-out, the Alberta government adopted the Coal Workforce Transition Fund (CAD 40m), which provides income support to coal sector workers. It also put in place the Coal Community Transition Fund (CAD 5 million), which supports economic diversification and development in the region. Finally, the Community & Regional Economic Development Program secured ~CAD 30m over two years to increase investment in rural communities around Alberta.
In Spain, after years of struggle, coal unions won a landmark deal with a €250 million Plan del http://www.industriall-union.org/spanish-coal-unions-win-landmark-just-transition-deal Carbón http://www.industriall-union.org/spanish-coal-unions-win-landmark-just-transition-deal , which replaced subsidies to the coal industry with a plan for a just transition away from coal, with sustainable development plans for coal mining regions. The highly detailed agreement has been praised by unions as a model and provides a package of benefits to miners and their communities. About 60 per cent of miners – those age 48 and older, or with 25 years’ service – will be able to take early retirement. Younger miners will receive a redundancy payment of €10,000, as well as 35 days’ pay for every year of service. Miners with asbestosis will receive an additional payment of €26,000.
Building on Spain’s victories for a just transition, in 2019 the Spanish Socialist Party won an election running on a Green New Deal https://www.commondreams.org/news/2019/04/29/running-green-new-deal-and-economic-justice-socialists-prevail-spains-snap-election , which is “an economy-wide mobilisation involving participation from local communities, civil society, unions, and businesses, with an industrial policy that treats decarbonisation as an engine of job creation.” The Green New Deal envisions “a bold transformation of the economy to tackle the twin crises of inequality and climate change. It would mobilise vast public resources to help us transition from an economy built on exploitation and fossil fuels to one driven by dignified work and clean energy”. It is also a platform which is increasingly uniting progressive forces by providing a robust progressive vision, which connects climate justice to broader struggles for justice, which counters the rise of right-wing populism and fascism.
In the United States, unions have been leading efforts for a Green New Deal. In Washington State, unions helped lead a broad coalition https://jobscleanenergywa.com/about/ to push for a Green New Deal which centred union job creation and a just transition for workers. Unfortunately, it failed to be passed due to multi-national oil and gas corporations spending $32 million to oppose it. The coalition did subsequently pass a ground-breaking 100% clean energy policy https://www.vox.com/energy-and-environment/2019/4/18/18363292/washington-clean-energy-bill , which included strong labour provisions and related tax incentives negotiated by the building and construction unions. The bill also includes several provisions regarding equity, including an energy assistance program for low-income households, equitable distribution of benefits, reduction of burdens to vulnerable communities, short- and long-term public health and environmental benefits, and energy resilience and security.
In New York State, unions and environmental justice activists worked together http://inthesetimes.com/working/entry/21924/climate-and-community-protection-act-new-york-labor-unions-cwa-seiu to successfully pass an ambitious bill which would require a just transition to 100% clean energy by 2040 and a net zero economy by 2050. 40 % of New York’s climate funding will go towards projects in low-income, vulnerable communities, and it will require all green projects to have high labour standards, including the requirement for a prevailing wage. New York State has been heralded as a powerful example of how unions and climate justice activists can work together to push for a transformative climate justice agenda that centres worker and community needs.
Mobilising for a Just Transition in South Africa
In South Africa, many labour unions have been consistently calling for, and actively supporting, a just transition away from fossil fuels since at least 2012. Labour unions played a leading role in forming the One Million Climate Jobs Campaign (OMCJ), an alliance of labour, social movements and popular organisation. OMCJ’s research showed that transformative action on climate change is one of the greatest job growth and creation opportunities for South Africa, potentially creating over a million new climate jobs in sectors like renewable energy, public transport, electric vehicle manufacture, construction and agriculture. The OMCJ Campaign stressed the need to mobilise to build immense political will to ensure a transformative climate justice agenda is pursued.
NUMSA, NUM, the Alternative Information and Development Centre, Trade Unions for Energy Democracy and the Transnational Institute, and several other union formations, recently formed the New Eskom coalition https://www.new-eskom.org/about-us , which is working to develop a road map to establish a new public electricity system, which:
Is fully public and serving the people;
Secures a democratic and just energy transition; and
Works towards a socially owned renewable energy system.
Their platform recognises that in the context of South Africa’s deep inequality and poverty we need a transformation of our energy sector which not only provides a just transition for workers, but also ensures that a transition to renewable energy benefits all South Africans, especially the poor and vulnerable.
The South African government has been discussing the need for a just transition in several venues, including the National Planning Commission, which is working to develop a vision for a just transition for South Africa. In 2016, DEA and the EED commissioned work to draft the National Employment Vulnerability Assessment (NEVA) and Sector Jobs Resilience Plans (SJRPs). In 2019 the same departments contracted consultants to undertake a review of the drafted documents to strengthen the content, identify gaps and make the SRJPs ready for implementation.
However, recent analysis has pointed to the limitations of the SJRP currently being undertaken, observing that it is little more than a data-gathering exercise and ‘will not undertake any modelling nor propose particular decarbonisation and coal phase-out pathways’ (J. Burton A. M., 2019).
In addition to a lack of concrete plans for a just transition, South Africa’s current commitments on climate change have been ranked https://climateactiontracker.org/countries/south-africa/ as “highly insufficient” https://climateactiontracker.org/countries/south-africa/ . If other countries had the same level of ambition as South Africa, we would be heading for a world of 3-4°C of climate change. South Africa’s draft Low Emission Development Strategy recognises the vital importance of keeping warming to 1.5°C, but also demonstrates how collectively South Africa’s current policies and plans fall far short of meeting what’s needed to achieve that target.
Thus, it is clear that much more robust action is needed from the South African government to ensure its fair share of action for 1.5°C https://climateactiontracker.org/countries/south-africa/ , which would see South Africa move to net zero emissions before 2050. Ensuring such action takes place and is fair and just would require a transformative policy agenda, which South Africa is currently lacking.
The lack of concrete government plans and actions for a just and rapid transition to renewable energy and broader climate action, speaks to the need to redouble our efforts, mobilise and build political power to demand more urgent action take place. Examples from across the world show that when unions and climate justice activists mobilise together, we can win ambitious plans for a just and rapid transition away from fossil fuels as part of a broader transformative agenda which works towards economic transformation. Building on that tradition it is time for labour and climate justice activists to stand together and mobilise for a just transition to renewable energy and a for transformative climate justice agenda which tackles the interconnected crisis of poverty, unemployment, economic stagnation, environmental degradation, and climate change.
8. ESKOM and Electricity
Ensuring the inevitable transition in the energy sector is accompanied by energy sector transformation driven by the unions, the working class and communities
It is now clear – to all but the last few with vested interests in the fossil fuels industry – that the low-cost wave of storage-backed wind and solar energy is all consuming. The continued trend towards lower and lower costs of electricity generation by wind and especially solar is not the only sector of the energy market to be disrupted. A recent study by French bank BNP Paribas shows that oil is now “in relentless and irreversible decline” for light duty vehicles. Imagine for a moment what this means for coal-fired electricity generation.
In South Africa, it is public knowledge that Eskom have a detailed decommissioning schedule for their existing coal generators. By 2040, or so it is planned, only Majuba, Medupi and Kusile will remain, and by 2050, Majuba will also be retired. That is of course if Medupi and Kusile are ever successfully commissioned.
The reality on the ground is that the generators are old, have been poorly maintained, is generally operating in flagrant violation of air pollution legislation, and is in effect ‘auto-retiring’ one unit at a time, and sometimes two.
What Eskom don’t seem to have is a plan of how to mitigate job losses and socio-economic impacts of affected communities when units of the coal generation are finally decommissioned or retired. Neither do they appear to have a plan on how best to replace the generation capacity associated with plant retirements.
If we all woke up tomorrow morning, and the entire Eskom coal fleet was gone, only to be replaced by A: a brand new “Toyota Corolla” coal fleet (aka one the actually works); or B: a storage-backed wind and solar fleet – the wind and solar fleet would cost R100 billion per year less to finance, maintain and operate than a new coal fleet. That’s per year, and at current prices for storage, wind and solar, not future guaranteed lower prices, especially in the case of storage. Note that the storage includes a small component (3% of total annual output) of stored (compressed or liquified) gas. With the continued drop in storage costs, this small amount of gas may not even be required by the time the fleet is fully retired.
It is worth noting, that had this discussion around a replacement fleet taken place five or so years ago, the “Toyota Corolla” fleet would have cost around R100 billion less per year than a replacement storage-backed renewable fleet – such is the rate of change in the energy supply industry.
Some facts and figures
There are currently around 80 000 total direct jobs in the South African coal mining industry. About 50% of the coal mined is sold to Eskom. So about 40 000 direct coal mine related jobs are linked to Eskom. It turns out that this is about 1 job per MW, as Eskom has about 40 000MW of total installed coal-fired nameplate capacity.
None of the existing coal-fired power stations employ more than 1000 people (other than Medupi and Kusile that are still under construction). This adds up to about 10 000 jobs in total, or about 0.25 jobs per MW. So, for each 1000MW of retired coal-fired units, there are approximately 1 250 direct jobs lost, in coal mines and power stations combined.
An efficient coal-fired power plant should run at about an 80% capacity factor, meaning that the annual output is 80% of what the theoretical output would be if the plant operated at full nameplate capacity every hour, all year long. In order to replace 1GW (1000MW) of coal plant, it would be necessary to build about 3GW of solar PV, or just over 2GW of wind. It turns out that there would be slightly fewer direct operations and maintenance jobs associated with the 3GW of solar PV or 2GW of wind – in fact around 1 000 direct O&M jobs would be created for the 1 250 jobs lost.
Consider the following though. If 2GW per year of the coal generation is decommissioned (my recommended minimum amount), it will require the construction of 3GW of solar PV and 2GW wind per annum – forever. This is because when the entire coal generators have been replaced, the new storage-backed wind and solar generators will require replacement or at least extensive refurbishment. The estimated permanent direct construction jobs for a fleet of this magnitude would be of the order of 60 000, approximately 40 000 for the 3GW of solar, and 22 000 for the 2GW of wind.
These direct job figures do not include the following:
Jobs related to very large energy storage systems, primarily battery energy storage systems (BESS);
Jobs related to the construction of the requisite open-cycle gas turbine generators and the associated gas handling and storage facilities;
Jobs related to the decommissioning of the coal generation and associated infrastructure;
Jobs related to the environmental restoration of both the coal-fired plant as well as the closure of the coal mines;
Jobs related to the rehabilitation of old coal mine land for best possible future land use;
Jobs related to agricultural activity linked to the release of significant water rights and water storage facilities currently servicing the coal-fired power stations;
Jobs related to possible component manufacture that can be underpinned by an orchestrated large and ongoing build programme of this nature; and
Lastly but potentially most importantly, jobs created by a stabilisation and decrease in electricity tariffs in the future.
Charting a course to a just transformation
Who then to lead us through this transition and use the unique opportunity linked to the retirement of the coal fleet to champion transformational change in the energy sector?
There are no signs from within the ranks of Eskom. None of the political parties seem to fully grasp the severity of the situation – or the opportunity that it provides to invoke sweeping and breath-taking reform. Speaking of breath-taking, few people in South Africa are aware that many of those born in Mpumalanga close to the coal mines and power stations are not employed on the mines or the power stations. They generally fail the minimum medical thresholds for corporate or public service employment, primarily due to respiratory and associated asthmatic ailments. Not enough said!
Attempts have been made through most of the available channels to get the urgency of the situation, and the possible solutions heard: The Department of Energy (DoE) and all of the IRP hearings; the energy regulator (Nersa) and all of the Nersa hearings; Eskom; the IPP office of the DoE; the Development Bank of South Africa (DBSA); the Industrial Development Corporation (IDC); some of the National Planning Committee meetings held in Mpumalanga; the Eskom pension fund; multiple bodies representing the private sector; and some of the trade unions – so far to no apparent avail.
It is clear (to me at least) that the transition/transformation needs to be led and managed by the workers and local communities most affected by the impending changes.
In Mpumalanga, there is very significant transmission infrastructure, designed to transmit electricity to all corners of South Africa, especially to the economic heartland of Gauteng, and the mines, smelters and manufacturing facilities in Gauteng and its surrounds.
When a power station is retired, the affected workers and communities should have (or negotiate to have) first rights to involvement and ownership of any replacement generators.
As far as is possible, practical and economically sensible, as much of the replacements should be built in the immediate proximately of the retired power stations and associated mines – in fact, in many cases, old coal mines represent ideal sites for solar PV-mines (aka PV-farms). This will ensure that jobs lost due to power station retirement can be replaced by construction and other related (rehabilitation and land-use repurposing) jobs in the vicinity of the job losses.
It turns out that although Mpumalanga has seven% less annual solar energy yield than the Northern Cape, this is more than compensated for by the fact that it has no transmission evacuation constraints, is closer to the economic heartland of Gauteng (lower transmission losses), and has three % higher energy yields in winter than the Northern Cape. This is due to closer proximately to the equator – and winter is when electricity production is at a premium.
9. Pension Funds
The entire storage wind and solar (SWS) generators can be financed by pension fund money. If current electricity prices are capped to no more than CPI increases, investment in the new SWS fleet (Eskom-Lite?) by pension funds will underpin returns to pension fund beneficiaries of the order of two percentage points higher that averaged performance over the past ten years. Those entities willing to be lead funders (for example lead pension funds such as union or Eskom pension funds), can expect additional returns of approximately two- to three-percentage points.
10. Working with the manufacturing circle
At the previous NEC and the Special Central Committee, we reported that we have started a dialogue with the Manufacturing Circle to respond to the deepening deindustrialisation of the economy. In fact, most of the bleeding is actually taking place in the manufacturing and mining. Most jobs are being created in the informal economy.
Since the world economic crisis of 2008/2009, some 400 000 jobs have been lost in the manufacturing sector. The contribution of the manufacturing sector has declined from 15% in 2008/09 to under 13% in 2018. International experience shows the manufacturing sector should be contributing 20% of GDP.
It is proposed that we should sign a series of agreements with the manufacturing circle aiming at changing this situation. The first such an agreement should be a buy local awareness campaign focusing on growing tomatoes in Limpopo
It is also agreed that the agreement between SAFTU and Manufacturing Circle should be broadened to include all the partners of the Proudly SA.
11. Sovereign credit ratings, emission reduction targets and climate change
The potential global support and all round good will for a worker/community led accelerated retirement of the Eskom coal fleet – largely on their own terms – rather than becoming collateral damage bound to occur in a poorly planned retirement scenario, is incalculable. Correctly managed and orchestrated, it has the potential to reverse the trend of sovereign and Eskom credit down-grades, address unemployment both directly as part of the building the new generators, and also directly by stabilising the price and price trajectory of electricity, thus boosting sectoral economic growth.
Importantly, South Africa through the workers and communities, will lead the way in accelerating emission reductions well in excess of country commitments. It would be nothing short of a breath of fresh air.
12. Social Crisis
In the context of the levels of unemployment, poverty and inequality it is unavoidable that South Africa would have also very high levels of crime and abuse of women and children.
Our country has a terrible culture of violence that we must eradicate. We are country at war with itself. In 2015/2016, 18,683 people were murdered which was a 4.9% rise from 2015/2017. This means 51 people die every day! The latest statistics from the police indicate that the average figure is now at 57.
What should shock us even more is what the Treasury official Rendani Randela told parliament when he said “Criminals know they have little chance of being caught. Should they be arrested, they know the chances are even less that they’ll eventually appear in court. And, should they appear in court, the chances are even less that they’ll be found guilty,”
Even more frightening statistics demonstrate that our judicial system is as sick as the perpetrators of crime. We are told that the police arrest only half of those responsible for all the crimes reported annually. Of those arrested a meagre 42% eventually appear in court; the rest are released. And less than a third (30%) of the suspects who do appear in court are found guilty.
In 2009 according to the police statistics, the conviction rate for murder in this country was 13% and for rape is 11.5%. But other estimates in 2014 said the conviction rate is as low as 10%. This means even if we were to go back to the days of hangings, these will be the pathetic numbers we deal with. The deterrent to crime will only be when criminals know they will be arrested when they commit crime, they will be convicted and will stay in jail.
Rape, targeting women and girls, is a serious problem in South Africa
The 2016/17 Victims of Crime statistical release reported that 250 out of every 100 000 women were victims of sexual offences compared to 120 out of every 100 000 men. Using the 2016/17 South African Police Service statistics, in which 80% of the reported sexual offences were rape, together with Statistics SA’s estimate that 68,5% of the sexual offence’s victims were women, we obtain a crude estimate of the number of women raped per 100 000 as 138. This figure is among the highest in the world. For this reason, some have labelled South Africa as the “rape capital of the world”.
Most studies and media reports on crime against women focus on violent crimes. It is difficult to find a study on the experiences of women on theft of personal property, street robbery, fraud and other non-violent crimes. Although these crimes are in general not gender-based, we will present estimates disaggregated according to gender in order to determine whether there is any gender difference in the level of victimisation.
Cape Town’s Cape Flats have been turned into a war zone. It is estimated that nearly 2,000 people have been killed in Cape Town’s gang warfare so far in 2019. The government deployed the SANDF, but the killings simply escalated. Last weekend 47 people died of knife and gunshot wounds.
At the launching congress we reported that there is a drug epidemic in our country in particular amongst the youth.
We can truly conquer criminality when we succeed uprooting the triple crisis of poverty, unemployment and inequality which are all intractably linked to the capitalist exploitation.
But in the meantime, what should the working class cannot afford to do is to say we are waiting for socialism to arrive when our sisters, husbands, mothers and daughters and sons are being butchered in the streets.
SAFTU through the working class formations will get organised workers to connect with the street committees and other organs of people’s power to fight the escalating crime levels and put pressure on the dysfunctional justice system to be more efficient.