Keynote address by the Minister of Labour, Membathisi Mdladlana on the occasion of the National Skills Development Conference: The route to economic growth

Programme Director
Honourable Members of Parliament
Members of the National Skills Authority and Skills Education and Training Authorities (Setas)
Leaders of community organisations
The trade union movement
Business community
Government
Education and skills development providers
Distinguished representatives of the donor community and Media representatives
Ladies and gentlemen

On 20 October 1998, the Republic of South Africa assented to Act no 97 of 1998 known as the Skills Development Act. In exactly a year's time - we will be celebrating ten years of the existence of this Act. With a year to go, I think it is prudent on us to remind ourselves of the reasons that informed the promulgation of the Skills Development Act. When Parliament assented to this act, it was aimed at, and I quote:

"Providing an institutional framework to devise and implement national, sector and workplace strategies to develop and improve the skills of the South African workforce, to integrate those strategies within the National Qualifications Framework contemplated in the South African Qualifications Authority Act, 1995, to provide for learnerships that lead to recognised occupational qualifications, to provide for the financing of skills development by means of a levy-grant scheme and a National Skills Fund, to provide for and regulate employment services; and to provide for matters connected therewith."

With a year to go, is the institutional framework that we have put in place devising and implementing national, sector, and workplace strategies to improve the skills of the South African workforce? Are we providing learnerships that lead to recognised occupational qualifications? Are we providing for and regulating employment services?

I am raising these questions because I was informed that the National Skills Authority (NSA) wants to use this conference to reflect on the challenges that we are all facing on the skills development front. Whilst it is tempting for all of us to exclusively focus on the National Skills Development Strategy (NSDS) and discuss whether it has achieved or not achieved the objectives it has set for itself, I believe that - done in isolation from the Skills Development Act, this would not take us anywhere. So, I am not going to talk to you about the NSDS and what it has achieved and not achieved, you have seen the video and have documentation in your files that will tell you all the nice things about the NSDS. My job as the Minister is unfortunately not only to come here and be nice. I am here to serve the people, whose voice is represented by the South African legislature which assented to the Skills Development Act.

The institutional framework that we undertook to provide under the Skills Development Act resulted in the formation of Sector Education and Training Authorities, the National Skills Authority, and the National Skills Fund. Have these institutions helped us to devise and implement strategies to improve the skills of the South African workforce?

In its discussion document for the national policy conference in June this year, the African National Congress raised two critical issues affecting SETAs which we will need to reflect on. The African National Congress (ANC) noted that, "In the case of SETAs, in particular, it has also become increasingly clear that the social pact agreed to between government, business, and labour was either too premature or simply not feasible." This statement goes to the core of the governance mechanisms we have set up in relation to all the skills development institutions created as per the Skills Development Act. The question is not only about the capacity of the state, it is also about the capacity of our social partners. This is the same concern that haunted us at the Growth and Development Summit. Recent bad media coverage of some of our SETAs has also brought this issue into sharp focus. For the first time since we established SETAs, last week I had to put one of them under administration. There is currently also a serious case before the courts involving the Transport SETA. As we celebrate the great strides we have made and honour some of our shining examples, we similarly cannot pretend that these developments are not talking place under our noses. Bapedi bare, "Pudi ya ja leotša e fetetša tše ding!"

Secondly, the Skills Development Act required of us to devise and implement national, sector and workplace strategies. The national skills development act, sector skills plans, and workplace skills plans are some of the strategies we put in place in an attempt to fulfil this requirement. We must however accept that, through no fault of ours - we have generally been shooting in the dark. Employers have not been co-ordinating their efforts sufficiently in this regard. Even us as government, we did not coordinate our efforts early enough with skills located with Department of Labour (DoL), education located elsewhere, and industrial and macro-economic policies located in another planet. You cannot have a national skills development strategy that does not respond to broader government goals, or a sector skills plan that does not relate to targeted sector growth strategies.

Our National Industrial Policy Framework, in targeting key sectors and combing these into five related clusters, puts manufacturing at the core of the country's economic development. Can we afford to wait for 2010 before our skills development interventions respond to these targeted interventions? At the same time, we have seen a number of charters agreed to by social partners that incorporate skills development and employment equity issues. Are our skills development interventions responding to these charters and addressing their skills development needs?

We further compounded these problems by allowing employers to develop individual workplace skills plans that have nothing to do with the country's skills needs or our employment equity imperatives. That is why, nearly ten years since the promulgation of the Skills Development Act, our research is finding that:

"Coloured and African learners were enrolled for learnerships with National Qualifications Framework (NQF) levels lower than list the opposite seems to be true with white learners."

Whilst this is historically reflective of South African society in general, we might want to think of ways in which our learnership interventions could help reverse this trend. South Africa's economy is growing mainly in the intermediate and high skills categories, which is where we have a shortage of well qualified black learners. Our employment equity reports have also shown us that transformation at these high skill levels has not taken place because employers claim there are no qualified blacks in these categories. It is therefore problematic that instead of helping us to reverse this trend, SETAs seem to be exacerbating the problem.

The ANC has proposed that in order for us to resolve these institutional and national / sector strategy issues - we should reduce the number of SETAs come 2010. We need to reflect on this during commissions as we have no excuse to continue shooting in the dark as we have previously been doing. Our understanding of the nature of the problem that we are dealing with, and its magnitude, is better today than yesterday.

Ladies and gentleman, allow me to focus on the other two issues that I think are very critical and core to our skills development mandate, as alluded to in the Skills Development Act. One of these issues relates to the pursuit of learnerships that lead to recognised occupational qualifications. During August this year, I tabled, together with the Minister of Education, a joint Statement on the National Qualifications Framework. This was after a process that - unfortunately - lasted for almost four years. We have agreed on the establishment of a Qualifications and Quality Council for Trades and Occupations to become a counterpart of the Council on Higher Education's Quality Committee and Umalusi. It will focus on providing qualifications development and quality assurance over trades and occupations. Whilst this development is better late than never, its success will rely on all of us. But we will not succeed if what my research is telling is correct, where some of our SETAs are displaying, "an absence of complete personal and contact details of learners as well as learners' post-learnership status." This is a basic management information weakness that is simply unacceptable. The recognised occupational qualifications that we provide also have to respond to what our economy needs. Currently, our research tells us that "a third of the learnership population enrolled for NQF level one and two learnerships, while almost another third enrolled for NQF level 4 learnerships," and only about 19% of learners at NQF level 5 (7%), 6 (1%), and 7(11%). Does this spread respond to our intermediate and high skills needs as a country?

Fellow 'revolutionaries' - if you may allow me to honour you in that manner - let me conclude by raising one last critical issue which I think has been an indictment to everything that we have attempted to do in the last nine years. The Skills Development Act in 1998 required of us 'to provide for and regulate employment services.'

After an almost ten year slumber, I am happy to announce that we are currently developing skills development regulations that will make it compulsory for employers to register vacancies and placement with the Department of Labour. Such a registration process by employers would enable the Department to enhance an employment services system that would match job seekers to job opportunities, skills development opportunities, and social insurance. This intervention would also enable government to systematically deal with the scarce skills issue, linked to Accelerated and Shared Growth Initiative for South Africa (AsgiSA) and the Joint Initiative on Priority Skills Acquisition (Jipsa) process, in that the skills base and gaps of the South African workforce would be available in one central database. It would also provide a foundation for our assessment of employment and unemployment trends, sectors creating jobs and those losing jobs, and the necessary interventions beyond the labour market.

Such an intervention would be in line with a recent ILO report (2006), which argues that, "A robust capacity of employers and workers to adapt to changes that affect work and the labour market without costly disruptions or high unemployment provides a competitive advantage to countries. This has stimulated renewed interest in the role of active labour market policies as a means of encouraging change through 'protected flexibility.' Such policies facilitate the matching of labour supply and demand through an array of programmes that include employment services and labour market information, training, public works and support for enterprise development. Countries that have a high ratio of trade to GDP tend to have high levels of spending on active labour market policies. Furthermore, spending on active labour market policies is also positively co-related with workers' perceptions of security."

Let me conclude by saying that I firmly believe that, if we were to go back to the letter and spirit of our Skills Development Act, we would stand a better chance of realising the skills revolution I spoke about when we launched the first NSDS in 2001. Our people are no longer waiting patiently, but have become restless, and the ladder that I always refer to - is beginning to shake.

I thank you

Issued by: Department of Labour
18 October 2007