R 041356Z DEC 08
FM AMCONSUL JOHANNESBURG
TO SECSTATE WASHDC 6337
INFO DEPT OF LABOR WASHINGTON DC
AMCONSUL CAPE TOWN 
AMCONSUL DURBAN 
AMEMBASSY PRETORIA 
AMCONSUL JOHANNESBURG

UNCLAS JOHANNESBURG 000192 
 
 
ECON POL AID AMB DCM HR 
 
E.O. 12958: N/A 
TAGS: PREL PGOV ELAB ETRD SF EIND ECON EFIN EMIN ELTN
ENRG 
SUBJECT: SOUTH AFRICA:  NOVEMBER 2008 LABOR NOTES 
 
Summary 
------- 
 
¶1.  This is the November, 2008 issue of the U.S. Consulate 
Johannesburg's Regional Labor Office monthly notes.  Topics in 
this issue are as follows: 
 
- Skills shortage one cause of concern for South African water 
quality 
- South African Airways staff opposed to outsourcing 
- Poor management hinders South African skills development 
programs 
- COSATU aims to influence South African economic policy 
- COSATU affiliates urged to `invest in ESKOM' 
- COSATU concerned by a rise in unemployment 
- COSATU calls for harsh punishment for companies guilty of 
price fixing 
- COSATU looking for a more developmental focus in monetary and 
fiscal policies 
- Vavi urges union federations to unite 
- South African government calls for mines to invest in safety 
- The South African Democratic Teachers Union (SADTU) supports 
Outcome Based Education (OBE) 
- Stats SA reports that a large number of people with critical 
skills remain unemployed 
- South African Immigration to Australia and its impact on 
Skills Shortages 
End summary. 
 
Skills shortage cause of concern for water quality 
--------------------------------------------- ----- 
 
¶2.  Research commissioned by the Development Bank of Southern 
Africa (DBSA) points to a looming water crisis in South Africa 
because of a lack of skills.  Agricultural and drinking water 
have the real potential to become unusable as salts, untreated 
sewerage, industrial effluent, and toxic algae contaminate dams 
and rivers.  To make issues worse, there has been little 
maintenance or expansion of the nation's aging water 
infrastructure.  The DBSA report stated that the biggest driver 
of poor water is `a lack of expertise and skills at municipal 
level to ensure compliance with water legislation, and a 
shortage of skilled engineers and qualified professionals at 
municipal level as well as in water affairs.' 
Source:  Financial Mail November 28, 2008 
 
 
South African Airways staff opposed to outsourcing 
--------------------------------------------- ----- 
 
¶3.  Outsourcing remains a contentious issue between beleaguered 
(and unprofitable) South African Airways and its unions.  The 
South African Transport and Allied Workers Union began a strike 
on November 29 over the outsourcing of the airline's call 
centers.  The strike action was expected to weigh heavily on SAA 
operations and on December 1 SAA noted it had reached an 
agreement with the union that would reverse call-center 
outsourcing decisions. 
 
Source: Sunday Times November 30, 2008 
 
 
Poor management hinders South African skills development programs 
--------------------------------------------- -------------------- 
 
¶4.  A Human Sciences Research Council (HSRC) report said poor 
management and data collection was the reason South Africa's 23 
Sectoral Education and Training Authorities (SETA's) had failed 
to combat a critical skills shortage.  The report speculates 
that this `robbed' the Department of Labor an opportunity to 
show South African business the worth of its statutory $6 billon 
annual investment to the SETA campaign.  The Transportation SETA 
was also the victim of a major fraud scheme which depleted the 
SETA's training budget. 
 
Source: Business Day November 26, 2008 
 
 
COSATU aims to influence South African economic policy 
--------------------------------------------- --------- 
 
¶5.  The Congress of South Africa Trade Unions (COSATU) is 
engaged in a major rebranding dubbed `Walking through the Doors' 
to strengthen policy expertise and influence economic policy. 
South African Economist Neil Coleman has been appointed as the 
coordinator of the project and has established four academic 
panels to advance policy alternatives in economics, retirement 
fund reform, and labor market growth.  Coleman emphasized that 
that the ANC would have to shift its policies, especially 
inflation targeting, to meet goals of increased job creation. 
 
Source:  Financial Mail November 21, 2008 
 
 
COSATU affiliates urged to `invest in ESKOM' 
------------------------------------------- 
 
¶6.  COSATU President Sdumo Dlamini has asked COSATU affiliates 
to consider investing in power utility Eskom.  The beleaguered 
state electricity provider needs to raise at least $34 billion 
to implement its capital expansion program and reduce a critical 
electricity shortage.  The South African Government has lent 
Eskom $6 billion and COSATU hopes its affiliates can help make 
up the shortfall by investing in the company.  Affiliates have 
been asked to invest in ESKOM instead of placing pension fund 
money with brokerage houses and offshore.  Dlamini indicated 
that investing in Eskom will ensure job creation, economic 
growth, and prevent further electricity price hikes. 
 
Source:  Business Day November 28, 2008 
 
 
COSATU concerned by a rise in unemployment 
------------------------------------------ 
 
¶7.  COSATU expressed concern that South Africa's unemployment 
rate rose from 23.1% in the second quarter of 2008 to 23.2% in 
the third quarter.  When coupled with a 0.4% fall in the total 
number of people employed to 13,655,000, STATS SA figures 
suggest that 4,122,000 are officially unemployed.  COSATU 
fretted that the small increase sounds alarm bells because it 
reverses a succession of growth in the South African economy. 
COSATU said South Africa needs to focus on monetary policies 
that combat poverty and unemployment and on other socio-economic 
policies that promote growth, the creation of decent jobs, and 
the eradication of poverty. 
 
Source:  COSATU National Spokesperson Patrick Craven November 
01, 2008 
 
 
COSATU calls for punishment for companies guilty of price fixing 
--------------------------------------------- ------------------- 
 
¶8.  COSATU has welcomed a court decision to dismiss an 
application by Clover Industries and Ladysmith Cheese for leave 
to appeal against a price fixing charge.  COSATU agreed with 
Judge Denis Davis that any form of price fixing should be rooted 
out and are pleased to hear that the court will not allow 
technical arguments to delay the process.  The Competition 
Tribunal will sit on January 19, 2008 to hear charges (including 
price fixing, abuse of dominance, and fixing trading conditions) 
against Clover Industries, Parmalat, Ladysmith Cheese, Woodlands 
Dairies, and Milkwood Dairies.  COSATU has long followed this 
issue and was one of the first to note the possibility of price 
fixing well before the judicial system took up the cause. 
 
Sources:  COSATU National Spokesperson Patrick Craven November 
17, 2008 
 
 
COSATU looking for developmental focus in monetary policy 
--------------------------------------------- ------------ 
 
¶9.  COSATU General Secretary Zwelinzima Vavi called for a 
developmental approach to monetary and fiscal policy noting that 
`current monetary policy is to use interest rates as a blunt 
instrument to achieve a rigid inflation target'.  Vavi proposed 
that South Africa `develop a policy, which uses multiple tools 
to combat excessive inflation, while promoting employment and 
growth.'  Vavi stressed the need for a basic income grant and 
said that everyone should enjoy income support as a right and 
that no person should fall through the cracks.  COSATU has 
intensified pressure on ANC leadership to implement socially 
friendly policies. 
 
Source:  ABSA Capital SA Morning Market Search November 06, 2008 
 
 
Vavi urges union federations to unite 
------------------------------------- 
 
¶10.  COSATU General Secretary Zwelinzima Vavi attempted to mend 
a long-standing split by addressing the Federation of Unions of 
South Africa (FEDUSA) for the first time.  In his November 6 
address, Vavi urged unions to stand together against 
`unscrupulous politicians' adding that `only unscrupulous 
politicians hell-bent to use our divisions in order to use us 
against one another for their selfish political ends stand to 
benefit from disunity.'  He defended COSATU's alliance with the 
ANC by saying it was the only way to ensure that labor wielded 
the power it deserved.  Vavi hoped that a new ANC government 
would allow the union movement to reach its full potential and 
asked FEDUSA to unite with COSATU in a `black Christmas' 
campaign to highlight the financial struggles of workers. 
 
Source:  The Star November 07, 2008 
 
 
South African government calls for mines to invest in safety 
--------------------------------------------- --------------- 
¶11.  The Mine Safety Commission has concluded that mine 
fatalities remain unacceptably high despite a reduction in 
annual fatalities from 742 in 1994 to 220 in 2007.  The South 
African government is considering new legislation that would 
subject company executives to prison and hefty fines if 
violations continue.  The National Union of Mineworkers is 
lobbying hard for South Africa to adapt the proposed legislation 
with criminal culpability while mine owners remain opposed. 
Anglo Gold commented that `we all need to work together on 
safety and not against each other with threats; if they make 
laws too onerous skilled people will leave the industry.' 
 
Source:  Times November 20, 2008 
 
 
Teachers Union (SADTU) supports Outcome Based Education (OBE) 
--------------------------------------------- --------------- 
 
¶12.  The teachers union has publicly declared support for 
Education Minister Naledi Pandor on Outcome Based Education 
(OBE).  General Secretary of SADTU Thulas Nxesi stated that the 
union would resist increasingly prominent critiques that call 
for OBE to be scrapped. They believe OBE is the best model when 
teachers are supported with appropriate textbooks, professional 
development, and resources from district officials. 
 
Source:  Business Day November 24, 2008 
 
 
Stats SA reports people with critical skills remain unemployed 
--------------------------------------------- ----------------- 
 
¶13.  The latest figures from Stats SA illustrate that the ranks 
of the jobless include a large number of people with critical 
skills and previous work experience.  Government does not 
categorize discouraged job seekers as unemployed.  Another 
feature of the new Quarterly Labor Force Survey is that 
`discouraged' workers are now classified as not economically 
active - in other words, out of the labor force, while in the 
past they were classified as unemployed.  If the 1.07 million 
discouraged workers (as now more narrowly defined) are added to 
the ranks of the unemployed, the number of unemployed rises from 
4.12 million to 5.19 million and the rate of unemployment rises 
from 23.2% to 27.6%. 
 
Source:  South African Institute of Race Relations Labor 
Bulletin November 2008 
 
 
Immigration to Australia and its impact on Skills Shortages 
--------------------------------------------- -------------- 
 
¶14.  The Australian High Commission detailed that on average 
4,500 South Africans immigrate to Australia each year (another 
3,000 enter on other programs and then legally convert to 
immigrant status).  This year's numbers stand to be higher.  The 
High Commission found that most South Africans moving to 
Australia were skilled and fell between the ages of 26 to 45. 
Immigrants to Australia cited affirmative action and crime as 
the primary reasons for departure.  The High Commission noted 
that Australia does not actively promote its immigration 
policies in South Africa because of the ongoing South African 
skills shortage. 
 
 
Source:  Australian High Commission meeting with U.S. Consulate 
in Johannesburg staff 
 
 
PASSEN