Wednesday, August 06, 2008

South African Workers Stage One Day General Strike Against Rising Costs

Mass Cosatu strike grips South Africa

Aug 06 2008 14:28

Masses of workers supported a national strike against rising living costs on Wednesday, paralysing transport services and immobilising businesses.

The Congress of South African Trade Unions's (Cosatu) countrywide strike against rocketing electricity prices affected a range of services and businesses, including buses, trains, taxis, schools, mining companies, shops and factories.

"It is looking excellent," said Cosatu spokesperson Patrick Craven. "Johannesburg looks like a Sunday."

Tens of thousands of protesters had gathered for marches in Pretoria, Durban, Cape Town, Ladysmith, Klerksdorp, Polokwane and Witbank. Police had been deployed in all these areas to keep the peace.

Gold mining operations were affected substantially, with AngloGold Ashanti saying no shafts were operating while Harmony and Gold Fields said its operations were limited.

The strike has damaged South Africa's image, Efficient Group economist Dawie Roodt said. "You can't put a rand value on what it has done to our image. I believe the strike is the second story on the BBC today."

He said that the strike hit both the mines and the vehicle industry. "There's a difference between a strike in manufacturing and a strike in services -- with manufacturing, the impact will always be more severe," he said.

The strike's consequences will probably be more severe than he anticipated, Roodt said. However, he pointed out that South Africa has become used to strikes and that the mines know how to handle labour actions. "They have emergency plans."

He said the only good thing that could be said for the one-day stoppage is that it provided an "emotional release", adding: "People are suffering with the high food, fuel and electricity prices -- being able to strike allows them to release their frustrations."


However, Russell Lamberti, economic strategist at the Econometrix consultancy, said the one-day strike was unlikely to have a significant effect on the economy.

"Producers will gain back what is lost today. When production levels return to normal, they will work extra hard to make it up for the rest of the month. Only after a one-week or two-week strike, you will see a significant impact."

Lamberti said the strike showed a misunderstanding of economic issues within the unions. "The unions are striking against something they can't control. Food and fuel prices are determined by global markets and not by policy. It's not a conspiracy against the poor."

He added: "The only appropriate national policy in the long term is to encourage and incentivise people to produce more food and boost the agricultural economy. The global demand for food is growing, especially with the industrialisation of China and India, so make sure that you produce more food and be able to export it."

According to Lamberti, there is no really effective short-term national-level solution to higher food prices. "If you put a price cap on bread for example, you mess with the supply chain. You will eventually face shortages of basic goods and commodities, as were seen in communist countries."

"Now that the global economy is becoming so interconnected, countries are learning that they don't have as much policy autonomy as they thought. As a country you can choose to isolate yourself to create more policy autonomy, but then you miss out on the benefits and opportunities of free trade and rapidly growing foreign markets, as well as the benefits of strong global economic growth."

He said there is no easy way to deal with inflation. The government's interest-rate policy has been appropriate, given the severe inflation pressures -- albeit somewhat painful.

"If you don't respond with higher interest rates, you face potential runaway inflation that hurts the poor even more in the long run."

He said the average Cosatu member "doesn't really care that much about global economic dynamics".

"Many Cosatu members feel marginalised and believe that government should provide the solutions to their grievances. This, possibly, has something to do with an apartheid mindset where it was the state that played such a dominant role in denying many their economic opportunities."

Strike may hinder coal production

Meanwhile, the Chamber of Mines warned that the strike would hinder coal production and ultimately affect electricity supply by Eskom.

Deputy communications adviser Jabu Maphalala said the protest against the rise in electricity prices was counter-productive.

"A strike will impact on mining production, including coal production," he said. "Earlier in the year, when there was an electricity crisis, part of the problem Eskom had was the depletion of coal stockpiles, which formed part of the discussions between labour, Eskom, the government and the mining industry.

"But the strike today [Wednesday] by the people will affect the production of coal-mining companies, which ultimately has an impact on Eskom's success in generating electricity," said Maphalala.

De Beers says effect 'minimal'

Diamond miner De Beers said that the impact of the strike on its diamond production was "minimal". According to spokesperson Tom Tweedy, "Diamond production on the five mines De Beers operates in South Africa continued with there being minimal impact from today's stayaway."

The protest was a protected industrial action in terms of section 77 of the Labour Relations Act and was therefore respected by De Beers, he added.

Participation in the industrial action varied from mine to mine, department to department and shift to shift in the various mines.

Based on an average across the mines, 25% of employees in the bargaining unit (being 2 612 employees of the 4 198 De Beers Consolidated Mines employees in South Africa) did not attend work on Wednesday.

"As one might expect to be the practice of the company and the union, the rights of employees have been upheld and we are pleased to say we have not received any report of intimidation on any of our mines," Tweedy added.

De Beers operates mines in the Northern Cape, Free State and Limpopo province. The five mines are Namaqualand, Kimberley, Finsch, Voorspoed and Venetia Mine.

Ministers 'should resign'

Cabinet ministers who did nothing to prevent the current electricity crisis should be forced to resign if workers lost their jobs as a result, Cosatu general secretary Zwelinzima Vavi said in Cape Town.

Addressing more than 3 000 demonstrators who had marched to Parliament in protest against the power crisis and the rising cost of living, Vavi said it was unfair to expect workers to pay for mistakes committed by others.

"Should a single worker lose a job, the ministers will have to go. They are making us pay for mistakes committed by other fellows," he said.

The fact that the government had allowed Eskom to hike electricity prices by 27% demonstrated that it did not have the interest of the poor at heart, Vavi said.

Workers have much to celebrate over the fact that a majority of serving Cabinet ministers will not be coming back after the expiry of their term next year. "The government ministers have proven their inefficiency beyond reasonable doubt."

The crowd gathered at Keizergracht Street from early morning, before embarking on a 600m march to Parliament. Singing liberation struggle songs and chanting anti-government slogans, the marchers responded with excitement when Vavi bid farewell to President Thabo Mbeki, saying the workers would not miss him.

Crowd swells in Durban

By midday, a protest march had swelled to about 4 000 people in Durban. As they marched slowly along Pixley ka Seme Street carrying placards and posters, helicopters circled and police posted themselves at intersections along the route.

Along the way, marchers sang songs about African National Congress president Jacob Zuma. The crowd carried placards reading: "Down with high fuel prices".

Meanwhile, the South African Clothing and Textile Workers' Union (Sactwu) by midday reported that 93% of its members had not gone to work.

Andre Kriel, the union's deputy general secretary, said: "In KwaZulu-Natal, dozens of large factories including Lilanie Clothing (with more than 1 200 workers), Allwear (1 200 workers), Playtex (970 workers) and Profortune (700 workers) reported full participation of workers in the protest action."

He said the union was proud that it managed the shutdown of the industry "in a manner that is sensitive to the needs off its customers".

Gauteng action

In Johannesburg, metro police dispersed 2 000 protesters who were burning tyres on the Honeydew stretch of Beyers Naude Drive.

Spokesperson Wayne Minnaar said police addressed the crowd who had gathered in support of the Cosatu strike and asked them to disperse.

The crowd complied and police removed the burning tyres. "We are going to monitor the situation the whole day because these protesters might return," Minnaar said.

Earlier on Wednesday the protesters danced and sung in the road, blocking Beyers Naude Drive as far as Peter Road in Honeydew, said Minnaar.

"Beyers Naude has since been opened and the traffic is flowing freely," he said.

In Pretoria, a Cosatu delegation delivered a memorandum of grievances to the Department of Minerals and Energy shortly before 1pm and said that electricity tax should not be borne by the poor.

The memorandum -- which was received by departmental spokesperson Bheki Khumalo -- called on the government to invest in power generation and the launch of an energy-efficiency campaign.

Khumalo gave his apologies to the protesters on behalf of the Minister of Minerals and Energy, Buyelwa Sonjica, who was not available. He said Sonjica was in the Democratic Republic of Congo to discuss electricity issues between the two countries.

The protesters, wearing red T-shirts and some holding sticks, then continued peacefully down Visagie Street towards the Union Buildings while a police helicopter circled overhead.

Bus and train services in Gauteng came to a complete halt in the morning. "There are no trains running in Gauteng, obviously due to no staff," said national Metrorail spokesperson Sibusiso Ngomane.

"We will review the situation at 2pm and we might be able to run some trains in the afternoon subject to staff availability," he added.

Metrorail was running services on a "very limited scale" in the rest of the country.

"There are no buses running," Johannesburg City spokesperson Nthatisi Modingoane said. "Normally we try to make sure that we have a skeleton staff in the morning, but today the drivers did not show up."

Effects felt countrywide

Listed retailer Foschini was hit by the strike, spokesperson Doug Murray confirmed on Wednesday.

"We're still trying to establish how many branches have been closed," Murray said. "The closures are mainly in the Johannesburg CBD, Pretoria and Durban."

Stores in the Edcon Group were also affected, said a spokesperson who did not wish to be named.

Foschini stores include @home, American Swiss, Markham and Totalsports, while Edcon stores include Edgars, Jet and CNA.

Source: Mail & Guardian Online
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Strike hurts mining, factories

Aug 06 2008 12:11

South Africa's giant mining companies were badly hit by a strike on Wednesday over rising power, food and fuel prices that threatened to bring the continent's biggest economy to a standstill.

As global mining leaders such as Anglo Platinum, the world's top producer of the precious metal, counted their losses, powerful unions prepared for marches across the country.

Mines, refineries, car makers, textile factories, businesses and construction of stadiums meant for the 2010 Soccer World Cup could all be affected. Workers and students stayed at home after public transport was disrupted.

Analysts say a complete shutdown of the economy could spook foreign investors and further dent slowing growth, seen at about 3% this year from an average 5% over the past four years.

"Workers have not shown up for early shifts," said Lesiba Seshoka, spokesperson for the 300 000-strong National Union of Mineworkers.

The nearly two million-strong Congress of South African Trade Unions (Cosatu), an ally of the African National Congress, says the action was a warning to employers not to sack workers because of a downturn in profits due to a power crisis.

In the mining sector -- backbone of the economy -- workers are particularly fearful of job cuts after a five-day power cut in January and the rationing of electricity to mines slashed output and earnings in this top precious metals producer.

"We are adamant that workers should not be asked to pay for government's failure to invest in electricity," Cosatu's spokesperson Patrick Craven said.

Political battle

Cosatu has previously said it also wants to fight President Thabo Mbeki's market-friendly and pro-business stance, and has urged the government to subsidise essential commodities while demanding higher wages for workers.

Unions are much closer to ruling party leader Jacob Zuma, who is the frontrunner to succeed Mbeki as president next year. Some investors fear Zuma would mean a shift to the left.

Angloplat said its biggest mine, Rustenburg, had been hit by 30% absenteeism due to the strike.

Harmony, the world's fifth biggest gold producer, said on Wednesday that all its South African mines had been affected by the protest, and it expected to lose up to 135kg of gold.

Car maker Volkswagen's South African unit said it would have no production on Wednesday as a result of the strike, but there was no impact at the country's largest oil refinery in Durban, officials said.

Metrorail suspended all trains in Gauteng as workers failed to show up at work.

The strike is supporting a recovery in world platinum prices , which have slipped sharply in recent days, though its impact has been muted by ongoing fears over the demand outlook.

South African markets shrugged off the strike and the Johannesburg's bourse's blue-chip index soared 2%.

The rand was slightly weaker against the dollar, but analysts said the move was merely an extension of a long-awaited correction after a seven-week rally.

"I don't think it is specifically due to the strike, it is part of the correction that started late on Monday," Citibank sub-Saharan Africa specialist Leon Myburgh said.

Threat of vandalism

Shop owners in Johannesburg's central business district closed their doors on Wednesday morning after protesters threatened to vandalise their property.

A South African Press Association reporter on the scene said about 100 protesters were wandering through the streets of Johannesburg, even though there was no march planned in the city.

Diskom shop attendant Sevha Mahori (39) said a group of protesters tried to break into the shop in the morning, threatening to vandalise its goods if its workers did not participate in the strike action.

"We are trying to call our boss to find out of we should go home and wait for the strike to end," he said.

Slow start to Free State protest

Workers were seen gathering in Thabong, Welkom, in the Free State on Wednesday morning for a protest march. About 1 500 workers gathered while waiting for more workers to arrive.

In Welkom the protesters were expected to march from the Phillip Smith Hall in Thabong to the Matjhabeng Municipality buildings in town. In Bloemfontein, the national call for protest action seemed to have had little or no effect as transport and business structures ran normally during Wednesday morning.

In other smaller centres in the province there was no visible indication of any protests.

Commuters stranded

Commuters in Johannesburg were left stranded on Wednesday morning as bus and taxi drivers participated in the stayaway.

"As we speak, there are no buses running," Johannesburg city spokesperson Nthatisi Modingoane said.

"Normally we try to make sure that we have a skeleton staff in the morning, but today the drivers did not show up. We are urging commuters to try and arrange an alternative mode of transportation. We apologise for the inconvenience caused," he said.

He said he did not see many taxis running either as he drove to work.

A Sapa reporter at the Noord Street taxi rank in the Johannesburg city centre said about 500 commuters had been left stranded.

Taxi drivers said the rising costs of petrol are affecting their businesses.

"The association spoke about this and they agreed that all the taxis at Noord taxi rank would not be working today," said taxi driver Moses Mosemola, who was sitting on the pavement and reading a newspaper.

"We received a warning about not working today," he added, but denied that he had been intimidated by anyone.

Some of the frustrated commuters had travelled from Pretoria and Midrand early in the morning when taxis were still running, but now they cannot commute to their destinations in Johannesburg.

Malebo Hlase, from Pretoria, was scheduled to write her learner's test for her driving licence in Soweto on Wednesday.

"But I found no taxis in Johannesburg and now I can't write my learners," an upset Hlase said.

Another commuter, Brendon Smith, said Cosatu should have arranged alternative transport for those who did not want to participate in the stayaway.

"This is absurd. If they stop production everyone is going to face the repercussions and the economy is going to drop," said Smith.

Taxi drivers did not want to say whether they would start working later in the day, but about 50 taxis were parked at the rank and the ticket box was open.

Electrical engineering student Samiksha Rampersadh (23) who lives in Linden and normally takes a bus to Wits University, said she would not be able to attend her lectures on Wednesday morning.

"There are no buses and sometimes, when you are desperate for transport, you can take a taxi. But there are no taxis either this morning. I am missing all my lectures," she said.

'Biggest strike'

Meanwhile, the South African Democratic Teachers Union (SADTU) has also called on its 235 000 members to "fully support" the national strike.

"Teachers suffer as a result of increased prices -- like all other workers. We are a part of Cosatu and fully in support of the action led by the federation," said Sadtu general secretary, Thulas Nxesi.

In Gauteng, Cosatu members would gather at the Pretoria City Hall on Visagie Street at 10am. They would then march to offices of the Department of Minerals and Energy Affairs and thereafter to the Union Buildings.

"Workers can rest assured that all those who participate in the strike will be protected by law except for those performing genuinely essential services," said the union federation.

On rising interest rates, Cosatu's leadership said the government should find other ways to deal with inflation, which has a negative effect on economic growth. - Reuters, Sapa

Source: Mail & Guardian Online
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