Once-powerful Cosatu hurt by strife, job cuts

Once one of South Africa’s most powerful political forces, the labour movement is floundering as infighting and job losses deplete its ranks and the governing African National Congress rides roughshod over union demands for policy change.

The main labor federation, the Congress of South African Trade Unions, has seen membership slump from a peak of 2.19 million four years ago to 1.8 million, following the expulsion of its largest affiliate, the National Union of Metalworkers of South Africa, for withdrawing electoral support from the ANC.

Now a decision by mining companies, including Anglo American Plc’s Kumba Iron Ore unit, to fire about 32,000 workers because of plunging commodity prices will add to a 25.5% jobless rate and strip unions of more members and their dues.

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While the weakening of the unions erodes a once key check on the ANC’s power to govern, it could backfire and jeopardize the party’s control of some of the biggest cities, such as Pretoria, the capital, in local government elections due between May and August. The ANC has won more than 60% of the vote in every election held since 1994.

Workers’ Interests

“Cosatu and its active membership base has always provided a useful avenue for the ANC to electioneer,” Mike Davies, founder of the political advisory company Kigoda Consulting, said. “Where policies are seen to be detrimental to workers’ interests, it’s going to be much harder for the ANC to convince those disenchanted Cosatu members to throw significant weight behind it.”

The government has been able to disregard union demands to ban private employment agencies, scrap electronic highway tolls and abandon new tax laws that seek to discourage workers from cashing in their pension funds when they resign or retire.

The changes to the way pension funds are taxed are “an outrageous and blatant act of provocation by the ANC-led government that will have dire and lasting consequences on the relationship between government and the workers,” the labor federation said in an e-mailed statement on Jan. 13.

The government rejected the accusation.

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Recent Protests

Once capable of attracting tens of thousands of workers to its rallies, Cosatu has mustered little more than 1,000 at some recent protests.

“We are well aware that the leadership battles of the past four years have weakened us and that we are not the force we used to be,” Cosatu spokesman Sizwe Pamla said. “Our affiliate unions were also weakened by the leadership battles and the economy.”

Growth in Africa’s second-biggest economy will probably slow to 0.8% this year, the World Bank said Tuesday, compared with a government estimate of 1.5% in 2015, under pressure from the commodity-price slump, the worst drought in more than a century and slowing demand from China. A weaker currency is fueling inflation, adding to the threat of job losses. The rand fell 0.3% to 16.2582 per dollar by 8:35 a.m. in Johannesburg on Wednesday, extending the decline for the past year to 30%.

Founded in 1985, Cosatu was a key ally of the ANC in its fight against white-minority rule and has been staunch supporter of the ruling party since the first multiracial elections in 1994. Its won major concessions, including the adoption of laws that made it more difficult for companies to fire workers. In 2007, the federation was central in helping President Jacob Zuma wrest control of the ANC from Thabo Mbeki.

Unity Unravels

Cosatu’s unity began to unravel in 2013 when its president, Sdumo Dlamini, fought with General Secretary Zwelinzima Vavi, who was later expelled. The 365,000-member metalworkers’ union sided with Vavi and accused Cosatu of pandering to the ANC and big business. Numsa has failed to carry through on its threat to set up its own workers’ party to oppose the ANC, mainly because of a lack of funding.

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“Government no longer has to feel terrified about Cosatu,” Steven Friedman, director for the Center for the Study of Democracy, said.

The ANC, whose leader Zuma, deputy Cyril Ramaphosa and Secretary-General Gwede Mantashe cut their political teeth in the mineworker unions, denies sidelining its labor partners.

"The ANC sees its relationship with Cosatu as being strong,” ANC national spokesman Zizi Kodwa said.

Many of Cosatu’s top leaders see the federation as the stepping stone to a career in politics and wouldn’t want to damage their prospects of being appointed a lawmaker or cabinet minister by breaking ranks with the ANC, the Center for the Study of Democracy’s Friedman said.

And while Cosatu’s political sway may have diminished, it’s still a major power broker in the workplace and may use its structures there to rebuild, according to Tony Healy, principal partner at labor advisory company, Tony Healy & Associates.

“Cosatu is no longer the force it was, but it is not a spent force either,’’ Healy said.

- Bloomberg