SACP Address to the SACTWU 12th National Congress

Delegates at the South African Communist Party (SACP) Congress held in July 2012., a photo by Pan-African News Wire File Photos on Flickr.

Address to the SACTWU 12th National Congress by Jeremy Cronin, SACP Deputy General Secretary

22 August 2013

On behalf of the SACP I bring greetings of solidarity to the 12th Congress of SACTWU. SACTWU is a union that is stable, militant, democratic and strategic. I trust that the delegates to this Congress appreciate just how important these attributes of SACTWU are at this time of considerable internal challenges within the broader COSATU federation, and in the midst of an all-round offensive against organised labour in SA.

This 12th National Congress is, therefore, not just about SACTWU - it has a wider responsibility. It is in this context, under the absolutely pertinent theme of your Congress ("Unity, cohesion and radical transformation for sustainable growth and decent work") that you are convening over the coming days.

Next year as South Africa goes to elections to vote for a 5th democratic administration, we will also be marking 20 years since our democratic breakthrough of 1994. That democratic breakthrough didn't come on a plate. It wasn't won with a lottery ticket. It was a breakthrough brought about by decades of heroic struggle by millions of ordinary South Africans, drawn overwhelmingly from the ranks of the working class and the rural and urban poor.

We are now nearly 20 years into our democracy. What has been achieved? What are the tasks that remain? We need to ask these questions honestly, collectively - as workers, trade-unionists, as the national democratic alliance, as South Africans - we need to take collective responsibility for our country, its people, and our democratic struggle. Where necessary, we must be prepared to be self-critical, not to lament, not to point factional fingers at comrades, but to draw collective lessons to take us forward.

Above all, we must not give way to the unceasing, hostile, anti-worker, anti-union, anti-government avalanche of pessimism and arrogance that comes from reactionaries, conservatives, right-wingers, opposition parties and much of the commercial media.

These forces never sincerely supported our
1994 democratic breakthrough, nor our 1996 Constitution that calls for the thorough transformation of our society based on democratic majority rule.

This is why the ANC at its 2012 Mangaung National Conference correctly called for a second, more radical phase, of our ongoing national democratic transition. It is a resolution that is perfectly captured in the theme of this 12th National Congress - "Unity, cohesion and radical transformation for sustainable growth and decent work".

But, if the truth be told, we should have proclaimed a second more radical phase, focused particularly turning our political advances into social and economic transformation, immediately after the 1994 political breakthrough. One of the question I want to pose in this intervention is: Why has it taken us nearly 19 years to appreciate the need for a second, radical phase of our democratic transition?

The reactionaries and conservatives blame anything and everything on the ANC-led government, on the Alliance, on organised workers, and on the so-called inflexible labour market. The implicit message is often a racist message - "You see what happens when THEY take over?". "Things were so much better before 1994" - we are told by those who weren't in prison, who weren't forced into exile, who didn't have to leave school in Grade 3, who weren't living in some desolate, forced removal dumping ground.

Some black heroes of the white cocktail circuit preach the same doomsday message - some of them even harbour electoral ambitions. They are turned into fashionable (but seasonal) media celebrities, oppositionists hero-worshipped for "speaking" (in fact, it's usually tweeting) so-called "truth to power". As the organised working class we must extend our ambitions far beyond tweeting truth to power - we must make power truthful, and truth powerful - and that requires a powerful and united working class, and a broad national democratic movement - as your slogan says: "Unity, cohesion and radical transformation".

The ongoing capitalist crisis

As we move towards the 20th anniversary of our democratic breakthrough, we find ourselves as South Africans in the midst of the gravest global capitalist crisis since the 1930s. It began in 2008 in the financial heartland of the world capitalist system - in the US financial sector - with a 100-year old bank, one of the big 4 in the US - Lehman Brothers, a bank that was too big to fail - failing. The other major US banks had to be rescued through what was, in effect, the nationalisation - not of their assets, not of their power - but of their debt. The contagion quickly spread to the Eurozone with relatively large and developed economies like Italy and Spain beset with recession, massive unemployment rates, and the destruction of workers' retirement funds.

Our major export market for manufactured goods, agricultural produce, and platinum (for catalytic converters) has been Europe.

Depressed demand there has impacted upon us. It is not fortuitous that the sector of mining in SA that first felt the tremors of the global capitalist crisis was the platinum sector with the tragic impact around Rustenburg that we all know about.

In the first years of the global capitalist crisis, China, India, Brazil and other developing economies had continued to grow significantly. But sooner or later the depressed state of their major export markets in the US, Europe and Japan was bound to impact upon them. In 2012 a second phase of the global capitalist crisis began. China, India, Brazil and other major developing economies began to slow, and in some cases falter.

In the years before 2012, incredible growth rates in China had spurred a commodities super-cycle - based on a huge demand for coal, iron-ore, manganese, chrome and other industrial mineral inputs. With China's growth now slowing, and with the Chinese government seeking to shift their economy up the value chain, the demand for industrial minerals like coal, iron-ore, etc has plunged. In the recent period, China has even been re-exporting iron-ore from its vast accumulated stock-piles, much of it, no doubt, originally from SA.

This is the very difficult global context in which SA's relatively new democracy is now functioning. The US has sought to re-float its own stagnant economy by "printing" money, billions of dollars of money unsupported by any real economic productive foundation.

This is what is called "quantitative easing". They say "money doesn't grow on trees" - but in the US, this is virtual money that simply by-passed even the biological stage of growing as a tree, to be turned into pulp, to become paper. It's fictional money (but with real financial market power).

With floods of easy money available in the US, and with US interest rates very low - much of this easy money has then poured into developing economies with higher interest rates and relatively liberalised financial markets like SA. This is hot-money, not money invested for the long term, into bricks-and-mortar, not money invested into jobs. It is speculative money that comes in quickly and can go away just as fast. It is borrowed cheaply in the US, and earns quick speculative profits in economies with higher interest rates.

This flood of easy money into SA (as elsewhere) artificially sent the Rand exchange value shooting up, with a grave impact on the competitiveness of our manufactured exports in particular. Then, when the US Federal Reserve Bank Governor hinted (just hinted) at easing up on the quantitative easing - this hot money suddenly poured out of our country in great volumes to so-called "safer havens" - sending the Rand's exchange rate value now plunging down, way below a realistic rate, disproportionately impacting on the cost of our imports, notably fuel.

What did our local sooth-sayers, our local market praise-singers, all those talking heads that get rolled out in the media to explain what is happening in our economy, what did they say? How did they explain these developments? Did they analyse the global capitalist crisis and connect the Rand's destructive volatility to it? Did they help South Africans to understand the hugely problematic nature of footloose, globalised, financialised capitalist corporations? Did they wonder if, perhaps, our own financial markets, including our exchange control regime, was under-regulated and over-liberalised?

No. No. And No again. What was their explanation for the Rand's volatility? They blamed the trade union movement, they blamed labour market inflexibility, and particularly they blamed President Zuma! This last was a very interesting explanation - because at exactly the same time that President Zuma was delivering his supposedly offending speech, exactly the SAME currency volatility, the SAME dramatic outflow of money was being experienced across a string of developing economies - Brazil, Chile, Colombia, Indonesia, Turkey, and many more.

If we are to make sense of our situation; if we are not to collapse into lamentation and Afro- or any other kind of pessimism; if we are to develop organisational unity, based on clear strategic perspectives - it is critical to step back a little and not get overwhelmed by the myopic gossip of the day.

Let's travel back to 1994.

Democratic SA was born into a changed global conjuncture - it was different from the 1950s, 60s, and early 70s. It was also different from the 80s. But did we sufficiently understand this? What were the models we hoped to implement? Were we hoping to model ourselves on the welfare states that propelled recovery and reindustrialisation in the post-WW2 developed economies in the North?

After WW II, important parts of the developed capitalist world - war-ravaged Western Europe and Japan - under the protection and tutelage of the US - experienced significant development. The years between 1945 and 1973 were golden years for the developed capitalist world - there was massive economic recovery, reconstruction and development, with re-industrialisation, the extensive expansion of social wages (social grants, unemployment insurance, social housing, public transport, public education and skills training). These advances were typically based on social accords/compacts between organised labour and national capital (in Britain, Sweden, Norway, Holland, Germany, Japan, etc.). Governments in these countries drove reconstruction and development programmes - a welfare state that enormously increased the productivity of labour, which generated profits for national capital, and taxes for the welfare state. A virtuous cycle developed. Workers accepted wage moderation in exchange for major social wage gains. Businesses accepted relatively high levels of taxation, which paid for state-led infrastructure and public services, which increased labour productivity, and re-floated demand on national markets.

Meanwhile the US, the one major capitalist power that was not within the direct theatre of war in the course of WW2, played a major role in financing (through Marshall Aid and other interventions) the reconstruction and development of Western Europe and Japan.

The US did this for two key reasons:
To create export markets for US manufacturers in textiles, clothing, cars, machinery, etc.

To create capitalist success stories in opposition to an enlarged socialist bloc in Eastern Europe and, after 1950, in China - remember this was the period of heightening Cold War competition.

In many respects, these policies were a success, at least for nearly 30 years. But, by the early 1970s, the internal national class contradictions (in Britain, Sweden, France, Germany, etc), and the global class/intra-imperialist contradictions began to burst the bubble.

The very successes of the welfare state had resulted in close to zero unemployment. This greatly strengthened the hand of the organised working class, with capitalists no longer able to rely on undercutting trade union advances through pitting the unemployed against the employed. The welfare state also meant that the working class had, in effect, a large strike fund.

For their part, national monopoly capitalists - now fully recovered from war-time devastation, no longer wanted to be bound by national accords. They wished to escape the discipline of an accord based on collective bargaining, and wage moderation in exchange for high taxation and re-investment into the national economy. They wanted to escape to other locations, to low wage destinations - including, at the time, South Africa under apartheid, and Brazil under a military dictatorship.

This marked the end of the golden epoch of capitalist welfarism, the end of the hey-day of social democracy and social accords in the developed capitalist economies. Under the various related banners of Thatcherism, Reaganomics, monetarism, globalisation, neo-liberalism, de-regulation, privatisation, PPPs, and financialisation - monopoly capital, which was increasingly transnational capital, went on the offensive against the organised working class, against the welfare state, against taxation of the corporate rich, against regulation and control of capital in favour of global and speculative freedom for capital.

What's the point of remembering all of this now in SA?

The new democracy in SA was born into a vastly changed world. But there were tendencies within SA, and indeed from within our movement, to hanker after a similar all-in social accord, a welfare state transformation, built around an all-in national social accord (an economic CODESA), particularly between South African big capital, the organised working class, and the new democratic state. There was also the belief that our own global status, underwritten by the iconic figure of cde Madiba - for having achieved a negotiated transition to a multi-party, non-racial democracy - would inspire a major inflow of Foreign Direct Investment into our country, Marshall Aid, a "post-apartheid dividend" - as it was sometimes called.

Looking back now to the mid-1990s, we can see that these hopes and dreams served to DISPLACE a different agenda - namely, a strategic agenda of immediately embarking upon a more radical, socio-economic Second Phase of the Democratic Transition.

In particular, we vastly over-estimated the patriotic credentials of South African monopoly capital (and its soon to emerge narrow BEE hangers-on). The implicit tripartite socio-economic accord that shadowed the 1994 democratic breakthrough, and the 1996 Constitution - brought real gains for the working class. In particular - thanks to the central role the trade union movement had played in the national liberation struggle - a progressive labour relations regime, and rights to organisation and to strike were entrenched within our Constitution and in legislation. These were (and they remain) important gains which must be defended. These are gains which also did not come as a result of a lottery ticket. They were advances won through decades of working class organisation, struggle and active participation within a broader national liberation struggle.

But if the working class entrenched important gains in the mid-1990s, South African monopoly capital was, ironically, an even larger beneficiary. Predictably, the hoped-for foreign Marshall Aid did not flow into SA. SA's iconic global status at the time did not translate into a significant flow of foreign direct investment. And so, to compensate for this, we were persuaded by South African monopoly capital, in particular, to liberalise, to de-regulate, to allow dual listings for Anglo, SA Breweries, SASOL, and others.

We were advised to open all our doors and windows to attract inward investment flows. Unfortunately, almost the exact opposite has occurred. Surplus generated inside of SA, through the sweat and toil of South African workers, has flown out of the open windows and open doors. Between 20% and 25% of GDP has been dis-invested out of country since 1994. Trade liberalisation in the first decade of democracy blew a cold wind through our textile and clothing sector, through our agriculture and agro-processing sector, and by 2001 a million formal sector jobs had been lost, despite GDP growth of over 5%.

What was the problem? Why did this happen?

The SASOL case

Let's take the case of SASOL, one of South Africa's biggest private monopoly companies - it admirably illustrates the wider reality of which we have been speaking. SASOL is SA's largest private company, a world-leader in a variety of energy and chemical technologies. It was established in 1950 as a public entity by the apartheid regime, partly at the behest of Anglo American and other mining corporate interests sitting on vast, under-utilised coal deposits at the time. SASOL developed a world-leading technology for converting coal into oil. The apartheid regime saw it as an important asset in terms of ensuring a degree of fuel self-sufficiency.

However, the cost of producing oil from coal was initially considerably more expensive than importing oil. Through the 1950s, 60s and into the early 1970s, the global price of oil was around $25 a barrel, whereas the cost of producing a barrel of SASOL oil from coal was possibly around $40. In order to keep SASOL operational, the apartheid regime not only subsidised the development of the technology and the construction of SASOL's vast production plants - it also subsidised SASOL on the price difference between its oil and imported oil. This meant that SASOL oil was (and still is) sold at the pump at the same price per litre as other petrol, regardless of the actual production and transport costs.

Billions and billions of rands of taxpayers' money have, therefore, been poured into SASOL in order to make it the giant that it is today. In 1979 SASOL was privatised by the apartheid regime, with shares being sold at a discount to (white) monopoly capital, particularly in the mining sector.

Today, as we speak, SASOL now supplies some 35% of our petrol needs. It is a massive and strategically critical national asset. BUT, and this is a huge but, the global price of oil is now well above $100 a barrel, but SASOL sells at the pump at the import parity price. This means WE ARE ALL SUBSIDISING SUPER-PROFITS FOR what is now A PRIVATISED SASOL.

It is in this context that for many years the SACP has been campaigning for a windfall (or super-profits) tax to be imposed on SASOL. We recognise it is a key strategic national asset. It is not a question of making it non-viable with a crippling tax. We recognise that it employs tens of thousands of workers. So it can't be a question of demolishing it. But it can't be right that a for-profit, private company established and subsidised for many decades out of SA taxpayers' contributions can be allowed to make super-profits. With the global oil price at around $110-120 a barrel and with SASOL's cost of producing the same barrel equivalent at around (perhaps) $40 - they are absolutely creaming it.

In 2006, with the global oil price around $60, our Treasury did, in fact, establish a Task Team to look at the windfall tax proposal. In 2007 the Task Team recommended that a windfall tax should be imposed. However, instead, Treasury reached a "gentlemen's" agreement with SASOL. In exchange for waiving a windfall tax, SASOL would use its massive surplus profits to invest in a new coal-to-oil plant in Limpopo (the "Mafutha" project).

Meanwhile, the price of imported oil has more or less doubled since 2006, and SASOL's net profits have soared even more. In 2012 its net profit was a staggering R24-billion….but there is still no Mafutha.

And now, to add injury to insult, a few weeks ago, SASOL announced that it will be investing some R200bn in a gas-to-liquid plant in ….not Limpopo….but…wait for it…. Louisiana, USA!! In theory, SASOL remains a South African company - but with its dual listing, its new Canadian CEO, and with this huge commitment to the USA, SASOL's priorities are effectively no longer substantially South African.

Even a neo-liberal media commentator like David Gleason, writing in the "Business Day" is appalled:

"Born courtesy of taxpayers…SA's biggest company and world leader in various critical energy technologies is investing ever more deeply in the US than it is here. This may be the right thing for the company, but is it right for the country?"

This is the SASOL story. What are the lessons we can derive from it? Basically that SA monopolies have amassed huge assets, some still remain within our country - but we need to use state power and worker power to leverage these for developmental objectives. These massive assets are not going to spontaneously find their way into job creating investment in our country all on their own, or simply as a result of a gentlemen's agreement. Similar trajectories to the one we have examined in the case of SASOL can be uncovered (obviously with different variations) for all of the major private monopoly capitalist firms that we encountered in mid-1990s - SA Breweries, Old Mutual, the four big banks, the mining houses, the big construction companies, the dominant players in the retail sector.

Our misreading of the situation in the mid-1990s

We thought, in the mid-1990s, that we were dealing with the South Africa equivalents of Fiat, or Volvo, or Renault, or Volkswagen in the late 1940s - Italian, or Swedish, or French, or German corporates devastated companies in midst of the ruins of war-devastated economies. In other words, perhaps we thought we were dealing with national capital that OBJECTIVELY, from the sheer perspective of a return to viability, had an interest in committing to a major national reconstruction and development programme, major economic and social investment.

In SA, the local reality (never mind the global context) was quite different in the mid-1990s. It is true that monopoly capital in SA did suffer a decline in profits in the course of the 1980s, because of political instability, because of economic and financial sanctions, because the white minority regime preoccupied with regional wars and destabilisation was no longer spending huge sums on economic infrastructure. But it was a monopoly capital sector that was not on its knees. It had vast profits and resources. The wars were fought on distant battlefields in Southern Angola and Mozambique, in the highlands of Zimbabwe, in the remote north of Northern Namibia. Unrest was largely confined to ghettoised townships on the outskirts of our cities, towns and villages. The working class's major weapon was the stay-away - there were few factory occupations. Factories, mines, railway lines and harbours within SA were not destroyed - as they had been in Europe or Japan (or in Angola or Mozambique). Much of South African monopoly capital (including SASOL) was complicit in supporting and profiting from the regional wars of destabilisation.

But by the late 1980s South African monopoly capital was in favour of some kind of "Democracy Lite", a nominal democratic transition - not in order to lay the basis for a second phase of radical socio-economic transformation - but rather as a spring-board out of global sanctions, a spring-board to disinvest out of the country the billions of rands of surplus that had been bottled up within the country, partly as a result of sanctions, partly as a result of tough exchange control measures that were then in place. Their intentions were not remotely patriotic - they wanted a return to "normality" in order to escape from a relatively powerful trade union movement, in order to escape from non-racial democratic majority rule, in order to pursue profit maximising in low-wage economies and in tax havens. In other words, whatever the "patriotic", "rainbow" nation rhetoric, the underlying logic meant that we were dealing with monopoly capital not of the 1945 era, not with monopoly capital that quoted Willie Brandt or Olaf Palme, but rather monopoly capital of a very different era, disciples of Thatcher, Reagan and the Chicago School.

They used their vast media and ideological power to browbeat us into believing that reconstruction and development would be best served by implementing a macro-economic package that put a premium on fighting inflation, and on sweeping liberalisation and de-regulation measures. Of course, run-away inflation would not be good for anyone - but their rigid and dogmatic focus on inflation was not about the good of SA, but about ensuring that their vast Rand-denominated surplus that they wished to disinvest would hold its value when converted to dollars our pounds sterling.

In the face of this massive haemorrhaging of potentially productive capital, we have become more and more reliant on transfusion-fixes of volatile, short-term hot money. This leaves us hugely exposed to volatile fluctuations of currency and vulnerable to the judgements of the Ratings Agencies - with appropriate names like Moodys and Standard & Poor. These agencies, closely connected to monopoly finance capital, are populated by 30-year olds in New York and London, with no understanding of SA, and with even less sympathy for our developmental objectives - they are the very agencies, by the way, that notoriously failed to predict the current global capitalist crisis.

Above all, our dependency on short-term inflows means that we have to keep relatively high interest rates to attract this hot money. High interest rates have favoured the increasing financialisation of our economy, while hammering medium and small enterprises, and the SMME sector.

Are things hopeless?

Are things hopeless? Are we locked into an endless vicious cycle? The answer is - ABSOLUTELY NO. Provided we learn lessons from our collective experience we can, and we must move decisively towards a more radical second phase of the democratic transition.

Over the last 10-years or so we have seen important shifts in government policy, supported by our Alliance formations. Privatisation has been swept off the table, we now appreciate the need for powerful state owned enterprises in strategic sectors of our economy - energy, logistics, transport. We now understand that it is not a question of growth first, trickle-down after - but that we have to place our economy onto an inclusive, a job-creating, developmental trajectory.

We have the NDP which (whatever its unevenness) recognises that we need a capable, developmental state to lead this process - not a tenderised, privatised, fragmented neo-liberal state. We have the New Growth Path document, which identifies key jobs-drivers, particularly in the real, the productive economy. We have the Industrial Policy Action Plan that focuses on re-industrialisation, on the beneficiation of our mineral resources and our agricultural produce. We have the R860-billion infrastructure build programme, under the Presidential Infrastructure Coordinating Commission, which focuses on unlocking economic resources in underdeveloped areas, and on building not just economic but also social infrastructure. We have the National Skills Accord - understanding that if we are to build a sustainable developmental trajectory, it can't be on the basis of competing for the lowest wages possible.

Nor are these just policies on paper.

All the statistic point to the fact that it is precisely this wide array of state-led social and economic interventions, along with many others, that is providing impetus to what growth there is in the economy.

This, then, is the context in which South Africa's working class and its organised sectors find themselves. It is an exceptionally challenging situation. The ongoing global capitalist crisis is provoking ever more desperate anti-worker and anti-people measures from those whose key priority is profit-maximisation. Everywhere, not least here in SA, the organised working class, the collective bargaining system, hard-won worker rights are portrayed as being the key hindrance to growth and prosperity.

The DA in its recent Economy Policy document identifies what it calls "Big Government" and "Big Unions" as the key enemies.

What then, are the tasks and challenges facing the working class in SA, and particularly its organised formations, most notably those within our allied formation, COSATU and its affiliates?

Challenges facing COSATU

We have travelled a long route around the globe and back into the last six decades of history in order to arrive at the key message that the SACP wishes to deliver to this critical SACTWU national congress.

We have done this very deliberately. We cannot understand the challenges confronting COSATU, still less develop a sustainable strategic response to them, without locating COSATU's current difficulties within a wider framework. The danger in any political situation, and particularly one that is fraught with difficult challenges, is that we easily become absorbed and overwhelmed by the front-page head-lines in sensation seeking commercial media. We end up chasing our own tails, and fail to carry the struggle to the real opponents of the working class. We can easily become absorbed by disputes between personalities and factions, by leaks and palace politics.

It is no secret that COSATU is going through perhaps its most difficult period ever. In the face of all kinds of disinformation campaigns seeking to blame the SACP for being behind alleged factionalism within the federation, as the SACP we have deliberately maintained a principled silence. Those, of course, who are making these allegations are often themselves located outside of COSATU, but have appointed themselves as "COSATU" spokes-persons. The anti-SACP allegations from their side amount to doing exactly what they accuse us of doing, meddling and factionalising through the media in what are essentially internal COSATU issues.

The internal difficulties within COSATU must be settled within COSATU, by COSATU through appropriate processes that respect worker democracy and the COSATU constitution. Any external meddling, however well-intentioned, will simply complicate matters. This is why the SACP has consistently said: Hands Off COSATU!

In this regard, it is also surely problematic, whether we are in the SACP, or the ANC, or COSATU, when any of us wage our internal battles through the media, or, worse still, by running to the courts.

When we say Hands Off Cosatu, this should not be misunderstood to mean that the SACP is a disinterested observer. As a consistent ally of COSATU, we treasure this left-wing, working-class, socialist axis between the Party and COSATU. Working together, and working actively to build an ANC that is a disciplined force of the left, we believe that we have played a major role over the past years - in rolling back the privatisation drive, in opposing the idea that any policy can be simply written-in-stone, in exposing tenderpreneurs and corruption, in campaigning for an active, state-led industrial policy, and in much else besides.

A weakened COSATU, a COSATU absorbed in internal leadership divisions, a COSATU in which the principle of worker-solidarity is undermined by competition between affiliates - is a COSATU that will weaken the entire liberation movement, undermining the prospects of advancing a Second, more radical phase of the Democratic Transition, and any prospects of rolling back monopoly capital and building an economy based on the principle of from each according to their ability, to each according to their needs.

The unity of COSATU is absolutely imperative - but it needs to be a unity based on principle and on an active programme of action - not on loyalty to one or another personality.

It has been said in some quarters that COSATU's alliance partners want to turn the federation into a "labour desk", that we want a toothless federation. Nothing could be further from the truth. We need a robust, independent and militant COSATU - a tame, conveyor-belt union federation would be useless - and it would quickly be outflanked, in any case, by demagogic, vigilante pseudo-unions of the kind that we have seen arising from time to time - Turning Wheels, the Five Madoda, UWUSA, and now of course AMCU.

We speak of the need for an "independent" trade union movement. But what do we mean by independence? For liberals in our society, "independence" means siding with so-called civil society in a permanent opposition to a democratically elected government, that happens to be led by an alliance partner. Of course government is not above criticism. Of course the working class must vigilantly defend its interests and carefully monitor that there is not corporate capture of government and of the bureaucracy.

But the trade union movement needs to bear in mind that it is itself not immune to corporate capture. Indeed, much of the tension and factionalism within COSATU affiliates is not related to genuine ideological differences, but to competition over access to investment arms and retirement funds. The SACP believes that a thorough review of the role of investment arms and pension funds in the union movement, and beyond, is imperative. COSATU correctly opposes government privatisation and excessive outsourcing - but to what extent have these investment arms and retirement funds, nominally under worker control, been outsourced to narrow, for-profit, capitalist interests? Have worker funds actually become Trojan Horses, planted inside the very heart of the union movement? In this regard we wish to salute SACTWU for the exemplary way in which its investment arm has been deployed not simply to make money, but to offer bursaries to the children of member-workers, by running one of the large HIV/AIDS campaigns by any trade union in the world, and through a range of other social investements.

Trade unions always need to navigate between two extremes. On the one hand, the bread-and-butter of any trade union movement must be the defence and advancement of the immediate interests of workers on the shop-floor - wages, conditions of work, health and safety concerns. A union that abandons this focus is a union that will quickly lose its way. But a trade union that simply confines itself to wage demands and other narrow work-place issues can easily find gains eroded by a reality outside the factory gate. Wage gains can be wiped out by non-existent or expensive and unreliable public transport, or macro-economic policies like trade liberalisation that simply wipe out jobs.

Progressive labour and economic legislation that isn't actively enforced by a combination of worker power AND state capacity (labour inspectors, effective customs controls over illegal imports) quickly becomes progressive legislation on paper only. That's why progressive trade unions cannot be simply workerist, economistic, simply the voice of "civil society" versus the state - progressive trade unions have to engage on the wider political terrain, not simply as another opposition, but also actively influencing and consolidating democratic state power and capacity.

When we speak of progressive trade unions needing to be active on the political terrain - we are not speaking of narrow politicisation. Trade unions are not political parties, and political parties are not trade unions. Which is precisely why our tried and tested Tripartite Alliance, of allied but independent formations, each with its own complementary tasks and strategic capacities, is absolutely the correct strategic approach to the challenges we face in SA.

The tripartite alliance is the space in which the organised working class in the trade union movement can cement an active unity with the great mass of unorganised workers, and the mass of proletarianised unemployed, the 37% of South Africans, the urban and rural poor. A labour movement that shuts itself off from this great mass of marginalised South Africans does so at its own peril. Either we organise this vast mass of people, or they will be (and often are being) used by monopoly capital, and by all manner of reactionary and demagogic forces. In this regard, we must say self-critically as Alliance partners that over the recent decade we have hardly succeeded in organising and mobilising the urban and rural poor - apart from during election campaigns.

Finally, let me say that I know that what I have been saying is preaching to the converted. Over the years, operating in an extremely difficult sector, SACTWU has consolidated itself as an exemplary union. On behalf of the SACP:

Let me salute SACTWU's R1-million solidarity donation to your sister affiliate FAWU at the time of the important farm-worker strikes in Boland.

Let me acknowledge the pioneering role that SACTWU has played in rescuing jobs in the face of factory closures. In particular, I would like to salute the Zenzeleni project, a unique worker-ownership project. There is also the major initiative in the former Frame Group of factories, managed by your own HCI investment arm. These are unheralded stories, examples that should be popularised and emulated in other sectors. They are not just about saving jobs, they are also learning experiences in which we demonstrate that production does not have to be driven by a narrow private profit motive.

I would also like to salute the manner in which SACTWU, not for the first time, has proceeded with its current moves towards a strike action. Although you are not legally bound to ballot workers before striking - once again you have meticulously done so, balloting some 40,000 workers. This is how we build worker democracy, how we build worker unity, how to consolidate unity between leadership, shops stewards and your mass base.

The SACP greets the SACTWU 12th National Congress, wishing it every success and trusting that it will mark another step forward in building working class power. Let your Congress Slogan become the slogan of our entire movement: "UNITY, COHESION AND RADICAL TRANSFORMATION FOR SUSTAINABLE GROWTH AND DECENT WORK!!"