Ramaphosa Wants Stability as S. African Labor Fractures

The Congress of South African Trade Unions, the ruling party’s biggest ally that’s threatening to split, needs to restore stability to ensure the economy isn’t undermined, African National Congress Deputy President Cyril Ramaphosa said.

“The ANC wants to see an effective Cosatu, which will continue championing the rights of workers,” Ramaphosa told reporters in Johannesburg yesterday. “We are concerned about strikes that tend to be long and continue to urge unions and employers to try to find a settlement as quickly as possible.”

The ANC will contest its toughest ever election on May 7 amid a three-month strike that’s idled the world’s biggest platinum mines and with its biggest ally, the 2 million-member Cosatu, in turmoil. The National Union of Metalworkers of South Africa, the nation’s biggest labor union and Cosatu’s largest affiliate, has dropped its support for the ANC and may form a breakaway labor group to contest elections in future.

“Labor divisions are definitely having a negative impact on economic growth,” Thabi Leoka, head of South African research at Renaissance BJM Securities in Johannesburg, said by phone today. “We haven’t really come out of the global growth slump, so we can’t afford to have our own domestic problems that slow down our growth even more.”

Photographer: Alexander Joe/AFP via Getty Images

A platinum mine worker wearing a cap reading "Amcu" sits with others during a protest after mine workers rejected a fresh wage offer at a public meeting in Marikana. Close

A platinum mine worker wearing a cap reading "Amcu" sits with others during a protest... Read More

Photographer: Alexander Joe/AFP via Getty Images

A platinum mine worker wearing a cap reading "Amcu" sits with others during a protest after mine workers rejected a fresh wage offer at a public meeting in Marikana.

Workers at Anglo American Platinum Ltd. (AMS), Impala Platinum Holdings Ltd. (IMP) and Lonmin Plc (LMI) have been on strike since Jan. 23 to demand higher pay, costing the producers about 15.5 billion rand in lost revenue and workers 6.9 billion rand in income, according to the companies.

Vavi’s Suspension

Tensions within Cosatu came to a head when the federation’s leaders tried to oust General Secretary Zwelinzima Vavi in August 2013. They suspended him for having an extra-marital affair with an employee he hired and accused him of alleged misconduct related to the procurement of Cosatu’s headquarters. Vavi apologized for the affair, while denying any other wrongdoing. The High Court in Johannesburg overturned his suspension on April 4.

The ruling party’s discomfort with the rifts in Cosatu was serious enough that it dispatched Ramaphosa, a former union leader, to mediate between its factions.

Vavi and Numsa, his staunchest ally, have said his suspension was part of a political plot to silence his criticism of the ANC and President Jacob Zuma. Under Vavi, Cosatu has campaigned against the ANC’s 20-year economic plan that calls for an easing in labor rules, opposed the implementation of electronic road tolls around Johannesburg and criticized the party for not taking a stronger stand against corruption.

ANC Alternative

“We have been inundated with calls asking why are you waiting until 2015, we need an alternative to the ANC,” Numsa President Andrew Chirwa said in an interview in Johannesburg on March 16. “Cosatu has no spirit to fight and is weak, that is why we think workers are on their own.”

Twenty years after the ANC came to power, South Africa’s jobless rate of 24 percent is the highest among more than 40 emerging markets tracked by Bloomberg, while a fifth of its 53 million people lack formal housing and 2.3 million households don’t have proper toilets.

Cosatu is also losing support among workers in the mining industry. Its affiliate, the National Union of Mineworkers, has been ousted by the Association of Mineworkers and Construction Union as the biggest labor group in the platinum industry. Tension between the two unions has sparked violent clashes in the past two years, culminating in the deaths of 34 people on Aug. 16, 2012 when police opened fire on a crowd of striking mineworkers at Lonmin’s Marikana mine.

“There’s a 50 percent chance that Numsa won’t be part of Cosatu,” Tony Healy, an independent labor consultant, said by phone from Johannesburg. “If they form the social movement it doesn’t just fragment Cosatu but also the ANC’s support-base. The ANC had such a heart-warming story in 1994, but now it seems to have lost its way.”

To contact the reporter on this story: Amogelang Mbatha in Johannesburg at ambatha@bloomberg.net

To contact the editors responsible for this story: Nasreen Seria at nseria@bloomberg.net John Bowker

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