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Sat Nov 01 06:04:42 SAST 2014

Strikes will continue if businesses don't adapt

Kariem Hoosain | 10 December, 2012 00:01
A resident runs away from a burning barricade after adding a tyre to it during a strike called by the Confederation of South African Trade Unions in the small farming town of Franschoek, near Cape Town, December 4, 2012 . Last month workers in the farming belt around Cape Town went on the rampage, blockading roads with rocks and setting vineyards and warehouses ablaze.
Image by: MIKE HUTCHINGS / REUTERS

IF BUSINESS continues to apply the same solution framework to labour issues as always, there is every reason to expect the unrest and wildcat strikes experienced by the mining and agriculture sectors this year to spread to other sectors next year.

Currently, that framework tries to frame labour unrest primarily as a wage or political issue when it is far more than that.

Vaguely realising this, businesses point to their Corporate Social Investment initiatives, many of which fall broadly in line with a strategic framework that reflects the problems they and their workforce deal with. They publish extensive CSI reports detailing their progress. But, all too often, the underlying ethos is one of doing the least possible to meet the minimum compliance requirements.

Workers, on the other hand, have had enough, and are beginning to understand that it is wrong that many of them live in desperate poverty, while the companies to which they give their labour flourish and report ever-increasing profits. They have become aware of the often huge disparity between the top earners and the rest of the staff, and the significant bonuses awarded to CEOs and executive teams.

While no one denies senior executives should be incentivised appropriately, the amounts sometimes paid as bonuses are out of kilter in the context of the current economic environment, and given the levels of poverty and unemployment threatening our social stability and economic viability.

The events of the last few months demonstrate that it has become imperative that business moves away from the narrow path of CSI and begins to look at business strategies more comprehensively, making human rights and social compliance part of their strategies. If companies want to avoid being named and shamed, they need to start demonstrating proactive knowing and showing.

Many of the benefits of incorporating human rights and social compliance issues into the fabric of a business are obvious. But, perhaps they require further clarification.

Doing so mitigates the cost of non-compliance and consequent loss of shareholder and/or brand value, either through business interruption or through cost regulatory action, such as penalties and fines.

Human rights and social compliance enhances brand and business reputation, and strengthens the licence to operate from a regulatory perspective and a social perspective.

This mitigates the possibility of civil litigation, and provides improved access to markets and trading partners who are increasingly seeking human rights and social compliance values in their engagement with suppliers and customers alike.

Having a business that is a leader in human rights and social compliance matters is likely to improve staff morale and productivity, and provide retention benefits.

An effective human rights and social compliance business focus requires the business to set up appropriate governance structures, which in the context of South African legislation is a Social and Ethics Committee, as required by the Companies Act. They must develop a forward-thinking human rights and social compliance strategy, supported by the appropriate policy framework and business processes and procedures. Successful businesses should also incorporate human rights and social compliance into their capacity building and training programmes for staff, and ensure they effectively monitor their performance.

If business wants labour unrest and destructive business interruptions that often accompany wildcat strikes and other labour unrest to be resolved, a paradigm shift is required.

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