Trade Union Solidarity and Free Trade

Do trade unions matter in the Twenty-First Century? How are they responding to ongoing processes of neoliberal restructuring? In particular, what obstacles do they face in developing transnational solidarity against the rise of free trade? What is clear is that national labour movements in different parts of the world have, at times, responded differently to the deepening of trade liberalisation in recent years. This is because the immediate impact they face differs depending on their place within the structure of the global economy.

In a new academic article published earlier this month I explore these questions through a study of how the biggest trade union federation in South Africa – the Congress of South African Trade Unions (COSATU) – has reacted to both multilateral and bilateral trade liberalisation. COSATU

The article forms part of a special issue of the journal Globalizations, which considers the theme of ‘Free Trade and Transnational Labour’. My contribution also considers the extent to which COSATU has engaged in building transnational links with labour movements outside of South Africa and how effective these attempts have been.

COSATU was formed in 1985 and since the end of apartheid its membership has grown significantly. At its most recent National Congress in 2012 it reported a total of 2.2 million members across its 21 affiliated trade unions.

The post-apartheid era in South Africa has seen the government embrace the free trade agenda. This was most clearly demonstrated when it adopted its Growth, Employment and Redistribution (GEAR) strategy way back in 1996. Despite criticism from COSATU, this represented an acceptance of the neoliberal development model, and in particular the need for South Africa to unilaterally reduce its barriers to trade. At the time COSATU took the position that a more strategic engagement with the global economy was needed. More recently government policy has, to some extent, begun to reflect such a view. The ‘New Growth Path‘ launched in 2010 does place much more emphasis on employment and an active industrial policy although COSATU’s leadership has expressed some serious concerns that the subsequent ‘National Development Plan‘, which was launched in 2012, undermines this shift in approach.

COSATU has been active, to varying degrees, in seeking to build transnational solidarity against both further trade liberalisation within the World Trade Organisation (WTO) and a number of bilateral negotiations involving South Africa. However, these attempts reveal a number of challenges to transnational labour solidarity in the face of free trade. Ultimately, COSATU is first and foremost a national federation and as such it prioritises the needs of its members. As a result the protection of jobs and working conditions within South Africa are its core remit and a number of obstacles to transnational solidarity remain:

  1. Tensions within COSATU are currently high as a result of its relationship with the African National Congress (ANC) in the form of the tripartite alliance. One of the major unions within COSATU, the National Union of Metalworkers (NUMSA) has broken ranks by refusing to endorse the ANC in the forthcoming elections in May 2014 and has questioned the continued viability of the federation itself. Continuing to be in alliance with the ANC does make it difficult to then provide genuine resistance to the trade liberalisation agenda led by the government.
  2. COSATU’s experience of trying to develop solidarity with the European Trade Union Council (ETUC) over WTO proposals for Non-Agricultural Market Access (NAMA) highlights some of the specific issues faced by trade unions in the Global South. In this case one ETUC member, the European Metalworkers’ Federation, joined forces with the owners of the car industry in Europe to undermine the concerns raised by emerging markets, including South Africa, that NAMA would harm key labour-intensive sectors.
  3. At the regional level similar dynamics can be seen but this time it is COSATU that finds itself defending the interests of the dominant national trading power. During the negotiations towards a Free Trade Area within the Southern African Development Community (SADC), COSATU expressed concerns that the domestic clothing and textiles sector could be undermined by cheaper goods of lower quality produced in other parts of Southern Africa.

Given these difficulties in resolving the positions of different national trade unions maybe we should focus on the International Trade Union Confederation (ITUC), which claims on its website to represent ‘the global voice of the world’s working people’. However, ITUC’s approach to free trade agreements has been a reformist agenda based on securing the inclusion of basic labour standards to mitigate any negative impacts on workers. This has led to some of COSATU’s affiliates leaving ITUC. They argue that a more radical approach is needed, which seeks to resist the actual introduction of free trade agreements in the first place, rather than one that seeks to ameliorate their impact on labour.

Instead we may look to the Southern Initiative on Globalisation and Trade Union Rights (SIGTUR). Observations on SIGTUR’s most recent Congress do suggest that it may be a more appropriate avenue for federations like COSATU to focus its energies. Whether it can overcome all of the obstacles identified above remains to be seen.

In sum, workers the world over face common challenges in the face of neoliberal globalisation. These processes can be resisted and, despite some of the difficulties identified above, trade unions should continue to seek to develop solidarity across national borders.

* A limited number of free downloads of the full article are available at http://www.tandfonline.com/eprint/IBjNTuYMkh83UQdYKYAB/full

Why South Africa has ripped up foreign investment deals

This piece was originally published on The Conversation at https://theconversation.com/why-south-africa-has-ripped-up-foreign-investment-deals-20868

Over the past few months, South Africa’s government has cancelled foreign investment treaties with Germany, Belgium and Luxembourg, Switzerland, Spain and the Netherlands. The reasoning behind this tells us much about modern patterns of trade and development. As the nation looks to move on from the loss of Nelson Mandela, these moves to regain control over foreign investment will prove valuable.

Cancelling the treaties caused panic in South Africa’s mainstream business press and also led to the EU’s trade commissioner expressing his concern about the impact this might have on future investment in the country.

But South Africa is not acting alone. These moves represent part of a broader change of opinion among many developing countries towards investment treaties. It is no wonder when you consider large western companies are increasingly using the deals to launch legal challenges against developing countries in which they operate. The decision by arbitrators to award US$1.77 billion to Occidental Petroleum (an American oil corporation) in a case against Ecuador has spooked many developing countries.

The problem with these deals is they lock-in the rights of foreign investors. South Africa’s decision to terminate them will open up welcome space for the government to balance domestic development with the rights of overseas firms.

Firms over states

Bilateral Investment Treaties (known as BITs) are agreements between states that ensure a range of protections for transnational corporations. Crucially, they all include mechanisms for settling disputes between states and investor companies which, unlike the World Trade Organisation, allow firms to bring legal cases directly against states.

If a multinational company claims a state has seized its property in the “public interest”, under the terms of a bilateral investment treaty this dispute would then be resolved by international tribunals rather than national courts. The advantage these deals give to corporations over weaker states is clear.

Given that attempts to negotiate global investment rules collapsed years ago, bilateral treaties remain the main international legal mechanism for protecting the rights of multinationals. UN data suggests there are nearly 3,000 such deals in existence and nearly half of these will be due for renegotiation by the end of 2013.

In the post-apartheid years the ANC-led government sought to attract further foreign investment to the country, following the dominant neoliberal ideas of the time. The mid-90s saw South Africa sign a number of investment treaties with partner countries including 13 with current EU member states. This was a period when the number of treaties rose substantially across the globe, and South Africa felt compelled to compete with other potential investment locations.

New approaches

In more recent years the government has begun to acknowledge this strategy has failed to resolve South Africa’s socio-economic challenges. More specifically, it began to question investment treaties after investors based in Italy and Luxembourg launched a compensation claim in 2007. It was argued that the government’s Black Economic Empowerment measures in the minerals and energy sectors contravened investors’ rights, and a private settlement was reached in 2010.

Neoliberalism and an open-door stance towards multinational corporations has now been abandoned in favour of a development policy focused on a more strategic role for the state. Over the past few years the country’s “New Growth Path” has sought to create jobs via an active industrial strategy. This entails a specific focus on reviving manufacturing and boosting employment through state-led investment in infrastructure.

However, South Africa is still hamstrung by numerous bilateral trade and investment agreements. With these deals still in place, foreign firms found their advantages written into law, and the government simply did not have the policy space to implement the strategy it would like. It is within this context that the moves away from investment treaties should be understood.

South Africa is still a far from undesirable location for multinationals. Contrary to some recent scaremongering it remains very unlikely that the end of these deals will lead to a wholesale programme of nationalisation, and all existing investments are still protected for a further ten years.

Eventually, the government plans to replace individual deals with a single framework. This proposes, quite reasonably, that foreign and national investors should both be treated equally under South African law. Moreover, corporations are already afforded strong protection in the constitution.

Revoking the treaties removes one of a number of obstacles to South Africa being able to address its development challenges. Whether the government will make effective use of this space to develop policies that can start to address the triple challenge of poverty, unemployment and inequality remains to be seen. But it is space worth having.

Reflections on the Mandela Memorial Service

Tuesday 10th December 2013 saw the Memorial Service for Nelson Mandela held at the FNB stadium on the outskirts of Soweto. Rather unexpectedly, on my part at least, this became a more overtly political event than I was anticipating. Domestic South African politics was definitely not put on hold for the duration of the service. Most notably there were repeated choruses of loud boos aimed at current South African President, Jacob Zuma, from significant sections of the crowd. The biggest cheers seemed to be reserved for Barack Obama but interestingly, former South African President, Thabo Mbeki, was also well received. As a result the MC for the event and Deputy President of the African National Congress (ANC), Cyril Ramaphosa, repeatedly called for discipline from the crowd. Then towards the end of the service, when many had already left the stadium, Desmond Tutu showed his frustration at what he presumably thought was inappropriate behaviour for such an event. A news story in the South African press also suggests that the public broadcaster (SABC) was instructed to ‘cut away’ to try and hide the booing of Zuma.

So why did sections of the crowd react to Zuma in such a fashion? From watching on TV it was clear that some small elements of the crowd were clearly supporters of Julius Malema’s new political party (Economic Freedom Fighters). However, interviews with some members of the crowd broadcast on the BBC World Service suggest those booing came from a much wider constituency. Another report also suggested that sections of the crowd dressed in ANC colours joined in with the booing of Zuma.

So it seems the boos may have reflected a wider sense of disappointment with the performance of the current government and Zuma in particular. Some of the interviewees made direct reference to the accusations of corruption surrounding the upgrade to Zuma’s Nkandla homestead. South Africa’s Mail and Guardian recently published details of the core findings of the public protector’s provisional report on the so-called security upgrades to his home in KwaZulu-Natal, which suggests that the costs escalated from an original estimate of R27 million to R215 million. The provisional decision of the report is that Zuma will have to repay the state and face questions in parliament.

During the post-apartheid era, given that the ANC has been the main route to political power, much of the most significant debate has taken place within the party. In this sense, rifts within the ANC are nothing new. Bitter divisions led to the overthrow of Thabo Mbeki at the ANC’s National Conference in Polokwane in 2007. More recently branches of the ANC within the province of Gauteng (where the memorial service was held) failed in a bid to replace Zuma with Kgalema Motlanthe as ANC President at the Manguang Conference in December 2012.

A lively debate in South Africa has resulted as to whether the memorial service was an appropriate platform for citizens to display their feelings towards Zuma. The whole event clearly had a political agenda. I am sure it was no accident, given the recent focus of South Africa’s foreign policy, that the government gave the platform to the Presidents of Brazil and India and the Vice-President of China but not a single leader from Europe. This was not a funeral and given the frustrations of many, with the lack of socio-economic development and the increase in income inequality within South Africa since 1994, it is perfectly understandable.

How did Zuma respond? He delivered a rather dispassionate account of the familiar history of Mandela’s role in the struggle against apartheid. South African comedian, Trevor Noah, tweeted “did someone write this speech or is Zuma reading a Wikipedia page?”. There was precious little on the way forward for South Africa and in general it highlighted his significant limitations as a leader.

Does this all mean that the ANC will struggle to win the April 2014 election? In a word, no. However, there is clearly a rising tide of dissatisfaction within South Africa if levels of protest, as measured by police statistics, are a reliable indicator. South African academic, Peter Alexander, has called this the ‘rebellion of the poor‘ but what is interesting is that in an academic article published in 2010 he concluded that there was ‘no evidence that Zuma, or the ANC in general, were held responsible for people’s problems’ (Alexander 2010, p. 34)*. Maybe events on Tuesday suggest that the tide is beginning to turn. Nevertheless, an alternative ruling party remains a rather distant prospect.

* Alexander, P., 2010. Rebellion of the poor: South Africa’s service delivery protests – a preliminary analysis. Review of African Political Economy, 37 (123), 25-40.

The Marikana Massacre: One Year On

Can it really be a year since the fatal shooting by the police of 34 striking miners at Lonmin’s platinum mine in Marikana, South Africa? The shocking events captured by TV cameras made headline news around the world at the time. A memorial service was held on Friday 16th August 2013 to mark the anniversary of the massacre. At the time, comparisons were made to the Sharpeville shootings of 1960, which was one of the defining incidents of the apartheid era. In making such a comparison the implication is that Marikana was an event that will ultimately change the course of South African history. For example, eNCA’s documentary ‘The Marikana Massacre: Through the Lens’ introduces it as “a story that changed South Africa forever”. Now that the initial international outrage has passed, what has happened since? What are the legacies, if any, of the Marikana massacre? Has anything changed since this use of lethal force by the post-apartheid state?

Marikana
(Image: Jared Rodriguez / Truthout)

An obvious place to start is the ongoing Farlam Commission of Inquiry, which began its investigations in October of last year. It has made very slow progress – not a single police officer who was present on the day of the massacre has testified as yet. Delays have also resulted from a court battle over who should foot the bill for the legal representation of the miners. Meanwhile, the relatives of the deceased are unable to pursue a civil case for compensation until the inquiry has completed its investigation. The Congress of South African Trade Unions (COSATU) did call for an alternative ‘independent’ inquiry to consider the wider impacts of the mining industry, but has not backed this up with significant efforts to push for such an investigation.

What was most remarkable about the memorial service held at Marikana last week was the absence of the ANC. This decision is related to an ongoing feud between the ANC and the Association of Mineworkers and Construction Union (AMCU) who organised the event. The ANC’s nonattendance played straight into the hands of its opponents. It was described by a BBC reporter as having the feel of an opposition rally. Julius Malema in the guise of his new political party – Economic Freedom Fighters (EFF) – was in attendance. The EFF used its platform to define the problems at Marikana within its wider narrative of the need for the nationalisation of South Africa’s mines, which is problematically offered as something of a panacea for South Africa’s poor black majority.

Part of the cause of tensions within the workforce last year was a feeling amongst a number of the miners that the National Union of Mineworkers (NUM), which is affiliated to COSATU, was failing them. As a result some began to join AMCU and since last August we have seen AMCU gain momentum to the extent that just two days before the anniversary of the massacre, it was officially recognised as the majority union at the Lonmin mine.

A year later violent clashes between the NUM and AMCU continue.

The rise of AMCU at the mine is reflective of the increasing tensions within the wider trade union movement most recently demonstrated by the campaign by some within the largest federation to discredit Zwelinzima Vavi, COSATU’s Secretary General. Support for Vavi, who has been publicly critical of Zuma’s government, has exacerbated tensions within COSATU. There is clearly an increasing disjuncture between many trade union leaders and the rank-and-file, which is compounded by the political connections that result from COSATU’s continued membership of the tripartite alliance with the ANC and the South African Communist Party (SACP). It is the questioning of this relationship with the ANC that has helped AMCU to recruit members from the NUM.

So what has changed in South Africa since last August? Apart from increased divisions within the labour movement, very little! There appears to be limited faith in the ability of the inquiry to get to the truth of what happened last year and the distrust of the ANC is part of a wider and longer-term trend of sporadic and localised protest against the lack of progress enjoyed by the majority of the South African population. The events at Marikana last year raised serious concerns over how the ANC government responds to protest and critique. It seems highly unlikely that such criticism of the government will translate into meaningful change at the ballot box in elections scheduled for next year.

UK Aid to South Africa

The UK government’s decision to stop bilateral aid to South Africa in 2015 has aroused significant controversy. As a UK taxpayer and long-time observer of all things South African I feel compelled to blog about this one! Not least because it appears that the popular view within Britain is that this was a good decision. For example, 83% of respondents to a poll on the Guardian website agreed that the UK government was right to cut aid to South Africa.

Despite the fact that official development assistance (commonly known as aid) will always remain a ‘sticking plaster’ approach to the world’s development challenges, I would still suggest this policy is problematic. Not least, it is questionable even on the UK government’s own terms. Justine Greening, the UK’s Secretary of State for International Development, justified the decision on the grounds that “South Africa has made enormous progress over the past two decades, to the extent that it is now the region’s economic powerhouse and Britain’s biggest trading partner in Africa”. However, the suggestion that South Africa is now an economic powerhouse ignores the daily reality for the majority of its citizens. Inequality, poverty and unemployment remain entrenched despite it being nearly two decades since the end of apartheid.

Langa Township, Cape Town, 2005.

The HIV/AIDS pandemic continues to pose a major public health challenge. According to UNAIDS 5.6 million people are living with HIV in South Africa, which translates into a prevalence rate amongst 15-49 year olds of 17.3%. It is notable that HIV projects are currently one of the central elements of the British aid programme in South Africa. As a result, the International HIV/AIDS Alliance was critical of the UK government’s decision, suggesting that “withdrawing aid to middle income countries like South Africa altogether risks seeing investment made in the HIV response to date, as well as subsequent gains including broader health outcomes, undermined and worse rendered ineffective”.

Defending the announcement, Business Secretary, Vince Cable, suggested that South Africa (along with India) had achieved a ‘successful level of development’. Hmm, really Vince?! Take, for example, the UNDP’s Human Development Index as a measure of development. We find that South Africa has made virtually no progress over recent decades: in 1990 South Africa’s HDI was 0.621 and the latest figure for 2012 is 0.629 (UNDP, Human Development Report 2013, p. 149).

UK aid to South Africa has fallen from a peak of £40-million in 2003 to its current level of £19-million. What does this mean in the overall context of UK aid spending? Well, for 2011/12 DFID’s bilateral expenditure on development was £4,204 million, so development assistance to South Africa only represented 4.5% of this. However, for me, it is less about the money itself, although this has clearly been of some benefit in some targeted aid programmes; it is more about the ideas that this pronouncement reinforces. There are three aspects of the signal this decision sends which are troubling:

  1. It reinforces the popular perception that human development is merely about rising levels of GDP at the level of nation-states. We need to conceptualise underdevelopment in human terms, rather than taking a state-centric view of the world.
  2. It implies that, despite the damage done to Southern Africa through centuries of British colonial rule, and the support provided by successive British governments to the economy during apartheid, it is now not our responsibility to try to help those who continue to suffer the consequences of the entrenched inequalities that this historical relationship has contributed to.
  3. The underlying assumption behind the decision is that the neoliberal mantra of free trade will be the route to development for countries like South Africa.

All these assumptions should be challenged!