After an extended period of rolling blackouts and threats of more, South Africa’s State-owned electricity utility Eskom is bracing for a full frontal attack from the militant NUMSA trade union which has threatened to picket its head office tomorrow. NUMSA wants roughly 20 000 of its members who work at Eskom to join the other 200 000 on the national strike which started today. Because the electricity utility is classified as an Essential Service, the law prohibits its workers from striking. The electricity provider is calling in the national security forces to ensure those employees who want to continue working (and, presumably, keep their jobs) can do so without being intimidated by the picketers. Eskom’s spokesman Andrew Etzinger, who is confident that the nation’s lights will stay lit, provided us with an update today on CNBC Africa’s Power Lunch. After the chat Gugu and I had with Etzinger is a discussion with Pietman Roos of SACCI.- AH
GUGULETHU MFUPHI: 220 000 of the members of the National Union of Metalworkers of South Africa are embarking on strike action today, and they are expected to embark on the strike at Eskom tomorrow. Andrew Etzinger, Spokesperson for Eskom joins us on the line. Andrew, the question of the legality and whether these workers are allowed to strike has come up in my discussion. Perhaps you can elaborate . Are they not deemed to be essential services and is this strike illegal?
ANDREW ETZINGER: Right, there are a couple of aspects to this strike. Firstly, where our power stations are in operation, the strike would be illegal because that would interfere with an essential service and we have informed our Employees of that. For our existing power stations, the strike is illegal and we have informed our employees that they would face disciplinary action if any industrial action were to proceed. Where it becomes a little grey is in the construction of our new power stations and we have three large power stations on the go at the moment: Medupi, Kusile and the Ingula power stations and here we have workers on site who are employees of contractors, who would come on and undertake a variety of duties. That is where we’re currently seeing a peaceful situation, but nevertheless, some action being taken at Medupi. There’s a picket outside of Medupi power station. At Kusile power station, the NUMSA members are not at work, but the civil construction is continuing nevertheless, so there are different aspects of Eskom. Certainly, where we are at risk of not supplying power – that would definitely fall under the ambit of an essential service and industrial action is not permitted.
ALEC HOGG: How many staff does Eskom have, Andrew?
ANDREW ETZINGER: 43 000 employees of which, just under half would be potentially involved with NUMSA. These are mainly blue-collar workers at our power stations, and in our transmission and distribution businesses. At the construction sites, we’d normally have about 16, 000 workers on each of the sites (Medupi and Kusile), and today, at Kusile we’re down from 16, 000 to 10, 000. That gives you an idea.
ALEC HOGG: It does indeed, so about 20, 000 who are employed by Eskom would be classified as NUMSA members, but on the other hand, also as providing an essential service. Does that mean that they’re not allowed to go on strike?
ANDREW ETZINGER: That’s exactly what that means. Once again, for the power stations which are actually operational that is the situation. From our side, it’s not only about keeping the lights burning although, of course, that is very important. It’s also about protection of our assets, our power stations and power lines etcetera, and in addition, to make sure that workers who do want to come onto site are not intimidated. From our side, contingencies are in place.
We’re working together with the Security Forces to protect each of those.
ALEC HOGG: Tomorrow, NUMSA has threatened to picket Megawatt Park (Eskom head office). I’m not sure if it’s going to be your power stations as well. Do you have Security Forces on hand to make sure that nothing goes out of hand then?
ANDREW ETZINGER: Certainly, we do and it’s really our understanding (as you say) that the national demonstration today will move out to our various sites from tomorrow, and we’re prepared for that.
GUGULETHU MFUPHI: Andrew, what measures have you put in place to ensure that there will be no power disruptions?
ANDREW ETZINGER: Unfortunately, I can’t go into too much detail. These are closely guarded plans when it comes to our system security and obviously, national key points also have a certain layer of protection over them. Other than to say that we are working with the relevant security and intelligence community to protect each of those. Fortunately, when it comes to winter, we have sufficient power – except for that critical power early in the evening – but if there were minor disruptions here or there during the day that would not give us a problem.
ALEC HOGG: So the lights should stay on?
ANDREW ETZINGER: Yes, certainly. I’m sure your lights are on in the studio and ours are on right around the country. It’s just from 5:30pm to 6:30pm where we do see a spike. During the day, we currently have a number of power stations actually idling as we speak, simply to get ready to meet that hour every day, so it’s a strange situation.
ALEC HOGG: Well Andrew, as long as you keep the lights on, you will remain Gugu’s favourite person, as she told us earlier.
GUGULETHU MFUPHI: One of…
ALEC HOGG: All of a sudden, it’s ‘one of’. Andrew is the only Spokesperson from Eskom and the only guy who’s been consistently there – all the time – through good and bad.
GUGULETHU MFUPHI: It says a lot about his character, doesn’t it?
ALEC HOGG: He’s a good man.
GUGULETHU MFUPHI: Let’s touch on another man’s character today.
ALEC HOGG: Well, for more on the NUMSA strike, we’ll be joined by Pietman Roos, a Senior Policy Consultant at Sacci. You just heard what Andrew Etzinger had to say, Pietman. The lights will stay on, but will the engineering sector keep producing?
PIETMAN ROOS: It’s a big problem because what we have is the context of a platinum strike just ended. The entire economy is in a very fragile state at the moment. We have investors from outside of the country looking at South Africa – looking at the cold, hard facts. What’s happening with the GDP? Government debt is escalating. There are many issues around. Do we really want to initiate a strike that’s going to hurt the economy and most likely, cause a downgrade in our credit ratings?
ALEC HOGG: I don’t think anybody outside of the NUMSA executive, feels any differently. You often say on this program ‘it’s motherhood and apple pie’. We all know what shouldn’t happen, but it is going to happen. We have a class war that the socialist element in our society are trying to wage, but the important thing from Sacci’s perspective is that you have lots of members who have debts and who have bonds to pays. They have salaries to pay of people who want to go to work. Solidarity won a court action yesterday to be able to go to work – that trade union. As far as SEIFSA is concerned, this lockout that they’re trying to implement, which will stop your members from being able to operate: are you in support of it?
PIETMAN ROOS: I’m not completely familiar with the details of the lockout, but I think it illustrates the framework in general. We have these massive unions. The question I have is ‘does the union leadership really speak for the individual members’. Last time we spoke about industrial relations we talked about the secret ballot and how there are motions from the Minister of Mining at least, to reintroduce it into South African legislation. I believe that would be a very positive step because essentially, there’s an agency problem. There’s a problem in that the union leadership is not responsive to the needs of the individual workers.
GUGULETHU MFUPHI: Key concerns there, but let’s bring another voice into this discussion. Earlier, we spoke to Kaizer Nyatsumba – he’s the Chief Executive of the Steel and Engineering Industries Federation of Southern Africa (SEIFSA) about the steel and engineering industry’s position as the strike opens. Let’s take a look.
KAIZER NYATSUMBA: When the international recession took place in 2008, the metals and engineering sector suffered across the world, including in South Africa. In South Africa, we have not yet survived that recession. There has been significant growth, but we’re still about 15 percent below where were in 2008, in terms of production. In terms of our contribution to the GDP, we’re again about five percent less, so we have many companies in the metals and engineering sector that are struggling to survive. A number of them are even before the onset of the negotiations – contemplating downsizing, and so the kind of increase that would have to be given now, would have to bear the context in which we find ourselves. Many companies are saying ‘yes, we can do seven percent for higher earning artisans and eight percent on the lower end of the scale, but we can do no more’.
ALEC HOGG: Well, Kaizer makes some very good points, but I’d like to pick up on what you said earlier Pietman, that there’s an agency problem. It’s almost as if the employers have abdicated their responsibility for engaging directly with employees and it’s now coming back to bite.
PIETMAN ROOS: Well, if you look at the situation with Lonmin, they wanted to speak directly to the miners and they had to go to court to be able to send them SMS’s, and the Union actually tried to stop that. Everybody needs to operate within the law. That’s the problem. That’s the virtue of South Africa. We respect the law and corporates respect the law as well. You can’t just go around the industrial relations framework, which is why it’s essential to get the policy right.
GUGULETHU MFUPHI: Pietman, it’s interesting to see the numbers that were mentioned there by Kaizer – that production is 15 percent lower than what it should be and contribution to GDP is also five percent less. With the current economic situation in South Africa, where some say we’re on the brink of a recession as well as these new strikes that have come on as developments, is the outlook for the engineering and metalworkers’ fraternity slightly bleaker now?
PIETMAN ROOS: It’s definitely bleak. Another problem is that your larger corporates may have built up an inventory to ride out a few weeks of striking activity, but the problem is their suppliers. They might not be able to do so and their orders are stopping for this period. I was in Rustenburg on Wednesday last week, and I spoke to a gentleman who is supplying pipes and hardware to mines. He told me he hasn’t been receiving any income for six months. He has one month left. If he doesn’t get the money, he has to close down. And this is a black entrepreneur – your typical kind of business that the government wants to see thrive. It’s affecting everybody, and not just the immediate industry that’s hit by the industrial action.
ALEC HOGG: You need to hit rock bottom before you can start improving. It’s almost like with the platinum strike and now with the NUMSA strike: maybe someone’s going to get shaken up. Maybe the cages will finally get rattled. Is that your hope?
PIETMAN ROOS: Yes, but there are levels of ‘rock-bottom’. There’s ‘Zimbabwe rock-bottom’ as well. But I think the rock bottom we’re heading towards is an acute intensification of mechanisation in any industry where there are high levels of unionisation. That would be the obvious move for anybody who is faced with unions that are frankly, not being responsive to what the economic contexts are.
GUGULETHU MFUPHI: It’s almost funny that the same thing they’ve been fighting for will come to pass anyway – cooperating at an economic level.
ALEC HOGG: It’s not an economic fight. It’s a class fight and the sooner we understand this…we might actually be able to get to the core of it because this has nothing to do with 12 percent versus eight percent.
PIETMAN ROOS: Not at all.
ALEC HOGG: And you can see with AMCU, they went on strike for five months to get R360 extra per month. They’ll take ten years to get that money back. It has nothing to do with that. There’s another issue at play here. Why not call it what it is?
PIETMAN ROOS: You’re right. It depends on how much time we have to discuss it. It’s also the prospect of improving your life – that’s what I believe is fundamentally behind all these wage increases. It’s not that you don’t have a TV now, but there’s the hope that you might buy a TV in six months, a car in 12 months, and a house in 24 months. That process is somehow frustrated by perhaps, unscrupulous credit lines being given to the miners as well as the high cost of living, because government is not providing all the services it should.
GUGULETHU MFUPHI: Pietman, thank you so much for joining us today. That was Pietman Roos. He’s a Senior Policy Consultant at Sacci.
