Statement by Minister Radebe
2 May 2001
Today, Cabinet has reaffirmed its commitment to the National Framework Agreement (NFA), as a mechanism to engage organised labour on strategic issues relating to the restructuring of State Owned Enterprises (SOEs). This commitment was previously endorsed in Governments' Policy Framework on Restructuring of SOEs titled "An accelerated Agenda Towards the Restructuring of State Owned Enterprises" that was issued in August 2000. It also is consistent with the position arrived at between Government and organised labour at an NFA Six a Side meeting held on the 19 July 2000, where it was agreed that the National Framework Agreement should be retained in its current form.
The interaction with organised labour over the last 18 months has seen considerable progress made in several key areas of SOEs restructuring that impact on organised labour. In the last 18 months, 3 NFA Six-a-Side meetings have been held with the last meeting held on the 12 March 2001. In accordance with the NFA, several sectoral engagements have also taken place with organised labour in the Telecommunications, Transport, Defence and Energy Sectors. As a result of our commitment to the NFA, several joint initiatives have been set up between organised labour and Government to afford organised labour the opportunity to present its views on the various restructuring initiatives taking place. For example, a joint working group of organised labour, Department of Public Enterprises and National Department of Transport are currently reviewing the detailed restructuring model for Spoornet and a report from this joint working group is envisaged to be tabled to responsible Ministers by the middle of May. This input by organised labour is likely to have a bearing on the restructuring model for Spoornet that would be adopted by Government.
In our interaction with Organised Labour via the NFA, Government recognises the need to strengthen the effective functioning of the NFA through improved coordination between the different Government Departments and the various SOEs. Government is in the process of strengthening the NFA secretariat to ensure more effective communication and coordination.
Government also acknowledges organised labour concerns that the spirit and intent of the NFA were in some instances disregarded by the Board of Directors and Senior Management of some of the SOEs. To ensure a consistent approach between the SOEs and Government in its approach to, and compliance with the NFA requirements, these items are being included in shareholder compacts to be signed off with the various SOEs. The shareholder compacts for Transnet, Denel and Eskom are programmed for sign off in early June 2001, after Cabinet approval.
At the last NFA meeting Government committed to secure the commitment of the Boards of SOEs and their respective management to the NFA process, beyond the inclusions in the Shareholder Compacts. To this end, I will on Friday, 4 May 2001 meet with the Chairpersons and Chief Executives of the major SOEs to finalise the contents of a memorandum of understating between Government and the SOEs thereby ensuring their compliance with the NFA as is relates to the restructuring of SOEs. It is important to point out that such a commitment to the NFA will be done within the principles of good Corporate Governance and with a clear understanding of the fiduciary responsibilities of the Board members appointed to the SOEs.
With specific reference to retrenchments that take place at an enterprise level, where these retrenchments are as a result of operational requirements this will be done it terms of the Labour Relations Act and, the Boards of the SOEs will be responsible for these actions. Noting that some of these operational requirements may result in significant job losses Government has requested that the SOEs advise the NFA secretariat of these events, notwithstanding the fact that they will be undertaken under the framework of the LRA. In instances where job losses are likely to result from the restructuring of the SOEs, that is sale or partial sale of SOEs these potential job losses will be dealt with within the framework of the NFA. Government is as concerned about the potential job losses currently occurring within our economy and is committed to deal with these matters sensitively. For example, during the SAFCOL restructuring we have secured a contractual commitment from the bidders to place a moratorium on retrenchments for at least 3 years post the sale.
It is therefore unclear as to why COSATU has chosen to query Governments' commitment to the NFA, or the developmental context within which SOE restructuring is taking place in South Africa. We wish to emphasise the Government's restructuring agenda is rooted to our commitment to establish vibrant and thriving SOEs geared towards the efficient and effective delivery of services to our people.
Enquiries:
Fani Zulu
Director: Communications
Ministry of Public Enterprises
082 451 0457