Sept. 17 (Bloomberg) -- “We are sick and tired of the unions; they are liars,” says Adam Thlolwe, a worker at the world’s second-biggest platinum mining complex near Rustenburg, South Africa.
As Thlolwe and more than 40,000 workers defy the main labor unions and cripple the world’s biggest platinum industry, officials at the Congress of South African Trade Unions gather in Johannesburg today, facing accusations that they are too close to the government and companies to represent members’ interests.
“Cosatu’s leadership is in for a real grilling,” said William Gumede, the author of ‘Restless Nation: Making Sense of Troubled Times,’ who worked for the group from 1986 to 1995. “The difference between them and ordinary members, the gap is so wide. Senior leaders are essentially a part of the establishment, while ordinary workers are really struggling.”
The strikes over pay and working conditions, which are opposed by the National Union of Mineworkers, a Cosatu member, shut down operations at Anglo American Platinum Ltd., Impala Platinum Holdings Ltd., Lonmin Plc, the three biggest platinum producers, and Gold Fields Ltd. At least 45 people have died at Lonmin’s Marikana mine, 34 of them killed by police on Aug. 16 when they opened fire at protesters.
The strikes have cost the economy 4.5 billion rand ($547 million), President Jacob Zuma told the conference today.
“Employers and employees have the mechanisms to manage relations in the workplace; there is no need to resort to violence,” Zuma said. “History will tell you that un-unionized workers will become victims in the history of our system. Unionization is the only way for the workers to guarantee their conditions in the future.”
Cosatu, which has 2 million members, also faces a major debate at its four-day conference over whether to support President at the ANC’s elective conference in December. The group helped him oust Thabo Mbeki as party president in 2007.
“There may be a groundswell from the union members for change in the ANC leadership,” Gumede said. “Marikana is a symptom of all the frustrations that are going on in the country. The president has become a symbol of that.”
Cosatu President S’Dumo Dlamini told the meeting that the labor body must push for wealth distribution and “nationalization for the commanding heights of the economy” to thwart an attack from “the right wing and the demagogues” who’re trying to divide the alliance with the ANC.
“The problem in Marikana is not rivalry between unions nor can it simply be put as being a widening gap between leaders and members,” he said today in an e-mailed copy of his opening address to the meeting. “The central issue is that workers in the mines are rising against their continued exploitation by employers.”
The South African rand fell as much as 2.9 percent against the dollar after the Aug. 16 shootings, while the cost of protecting the nation’s debt using credit default swaps over five years rose 23 basis points between Aug. 15 and Aug. 31 to 152.
General-Secretary Zwelinzima Vavi and Dlamini were re-elected to five-year terms by the 3,000 delegates from Cosatu’s 21 affiliate unions after they were nominated unopposed, Stuart Murphy, an official from South Africa’s Independent Electoral Commission, said in an interview today.
Cosatu was formed by black trade unions in 1985 as they joined the ANC’s fight against white minority rule. Many of its members have risen to senior government positions. Deputy President Kgalema Motlanthe is a former head of the NUM, while Cyril Ramaphosa, who remains on the ANC’s top decision-making body and is one of the country’s richest businessmen, founded the union.
Ramaphosa is a non-executive director of Lonmin and has stakes in the company’s mines. Through his companies he owns the McDonald’s Corp. franchise in South Africa, a stake in a coal-mining venture with Glencore International Plc., and is the chairman of MTN Group Ltd., Africa’s biggest mobile-phone company, and Bidvest Group Ltd.
The mineworkers’ rejection of their traditional negotiators has allowed rivals such as the Association of Mineworkers and Construction Union and the Committee for Workers International, a communist group, to recruit platinum miners and lead the strikes.
“I’m not happy with NUM, they don’t represent us anymore,” said Mcdonald Motsaathebe, a 35-year-old worker at Anglo Platinum who says he earns 5,500 rand ($715) a month with a 1,700 rand housing allowance to care for his wife and seven-year-old daughter. “Our salary is low, our houses are bad. We will go to negotiate as the workers, we have our own leaders.”
Since the killings at Marikana, Julius Malema, the ANC’s former youth leader who has become one of Zuma’s strongest critics, has held rallies at mines urging workers to make the industry “ungovernable” and saying the traditional unions no longer represent workers.
“They have lost the plot,” Malema, who has campaigned for the nationalization of the mining industry, said in an interview. “NUM is representing the employer instead of representing the workers. They’re not interested in workers, but in investors.”
Vavi, the Cosatu general-secretary, says Malema and the AMCU are populists seeking to capitalize on the labor unrest.
“They are now able to play an opportunist game because they see a vacuum” in Cosatu affiliates’ leadership, Vavi said in an interview broadcast on Johannesburg-based SAFM today. “There are just too many unions that are facing a split from within.”
While the AMCU was formed by former NUM members, the South African Transport and Allied Workers Union and the Chemical Energy Paper Printing Wood and Allied Workers Union are losing members to a splinter group, he said.
Gumede foresees further divisions in the labor movement because of the perceived disconnect between the workers and the union bosses.
“We’re entering a period with extreme labor instability,” he said.