There is something fishy about this 22% wage settlement
A couple of weeks ago South Africa was reeling as details of the “Marikana Massacre” emerged. Against an appalling socioeconomic backdrop 44 people (among them mineworkers and security personnel) lost their lives in a melting pot of trade unions, mine man
Although we agree the living conditions of Rustenburg’s platinum miners contributed to the tragedy we are not so sure that trade unions can escape blame. The thousands of mineworkers did not go out on an unprotected strike of their own volition. If newspaper coverage of the events leading up to the shooting is to be believed, then we must consider the influence of rival unions the National Union of Mineworkers (NUM) and the Association of Mineworkers and Construction Union (AMCU).
Meddling with a two-year wage agreement
Government, ruling party officials and certain political / economic commentators may turn a blind eye to union involvement in the tragedy, but the rest of us should not. To date AMCU has blamed NUM – both NUM and the Congress of South African Trade Unions (Cosatu) have blamed AMCU – and Cosatu has gone so far as to suggest that NUM needs protection from so-called “counter revolutionaries”.
It seems almost certain that AMCU, relative newcomers to the Rustenburg mining environment, were eroding NUM’s support base at various platinum mines in the area. Going as far back as February 2012 the violent disruptions at Impala Platinum’s Rustenburg operations were “pinned” on disputes between these two organisations. The bottom line is that AMCU-affiliated rock drill operators were instrumental in the illegal strike which broke a two-year bargaining agreement with the majority union and eventually drew out Lonmin’s entire workforce
A puzzling negotiated settlement
The Commission for Conciliation, Mediation and Arbitration (CCMA) confirmed on Tuesday, 18 September 2012 that the Lonmin Marikana strike was over. “Worker representatives informed us this evening that agreement has been reached – they have accepted Lonmin management’s latest offer and will return to work on Thursday 20 September," said CCMA director Nerine Kahn. The CCMA facilitated negotiations between workers and Lonmin. And they got the mine to offer very near to the R12500 the workers were demanding!
Lonmin said that striking miners would receive a pay rise of up to 22% as well as a R2000 once-off incentive “bonus” to return to work on Thursday, 20 September 2012. In terms of the agreement rock drill operators would receive R11078 a month before deductions, production team leaders R13022 and operators R9883. Lonmin’s acting chief executive Simon Scott told Sapa that “the agreement and subsequent return to work [was] only one step in a long and difficult process [that lay] ahead for everyone who has been affected by the events at Marikana. It is essential in helping secure the futures of our tens of thousands of employees and all those who rely on Lonmin in the region”. The listed platinum miner would communicate the financial impact of the settlement to its shareholders in due course.
The quantum of the agreement took many by surprise. Why – given Lonmin’s recent successful application to the Court’s to have the strike declared illegal – was the mine so generous? It could just as easily have fired all of the striking workers as settled with them… A second question might be why the mine took so long to put this deal on the table. Unfortunately we are not privy to the closed door negotiations nor informed of any political pressure that must certainly have been brought to bear.
Is this the beginning of a non-union wage negotiation trend?
Marikana is going to change how disgruntled workers interact with their employers. Our concern is that the formula applied here will wash over to other mines and sectors and drive the costs associated with mineral extraction and manufacturing to unaffordable levels. We also wonder whether this settlement can be considered a true union-negotiated one. It seems the workers – the church – and the CCMA are more to thank for the settlement than NUM or AMCU. Companies will have to closely examine their policies on union recognition and bargaining arrangements, among others.
As for foreign direct investment into the mining sector the writing is on the wall. It is almost impossible to reconcile a 22% wage hike with the Word Economic Forum (WEF) 2012 Global Competitiveness Survey that Ranks South Africa 52nd out of 54 countries surveyed. Mining sector output, most notably in the gold mining sector, has been in decline for decades.
I have no doubt that the executives at large multinational mining conglomerates will adopt an “anywhere but South Africa” capital allocation strategy. The trend already evidences in the capital expenditure plans of large locally-listed resources companies with global operations. Their biggest “greenfield” investments are in South America, Australia, Canada, North America and the rest of Africa...
Paying the rest of South Africa more
The 22% wage hike achieved by Lonmin’s striking workforce has wider economic implications too. It will undoubtedly place pressure on both private and public sector employers to pay their workers better. How will government, for example, placate its police officers, nurses and teachers when details of the Lonmin wage settlements are widely publicised.
Editor’s thoughts: If mineworkers’ minimum wages are nearing the R10000/month mark we must surely consider whether domestic workers and farm workers minimum wages are at fair levels! We should also be asking whether private companies can still advertise bookkeeping and admin positions at R4000/month. Do you think government will significantly increase legislated minimum wages in other sectors of the economy? Please add your comment below, or send it to [email protected]
Comments