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SAMWU launches opposition to the restructuring of Johannesburg

SAMWU press statement and briefing document
7 April 1999

Press Statement: SAMWU responds to the restructuring plan for Johannesburg
Wednesday 7 April 1999 11am

The South African Municipal Workers' Union rejects the Igoli 2002 plan to restructure the city of Johannesburg and is calling for a moratorium on all restructuring with immediate effect.

The reasons for this demand come after careful consideration, and are as follows:

• Igoli 2002 fails to set out goals and time-frames for extending service delivery to the disadvantaged and therefore cannot guarantee transformation of the city in a way that will benefit the poor.
• Council has wasted hundreds of thousands of rands in shrouding Igoli 2002 in secrecy through hiring private consultants to design the process, rath er than making use of democratically elected Councillors and paid officials to drive transformation of the city in consultation with all the stake-holde rs.
• The plan has clearly not been based on a cost-benefit analysis or a socio-economic study of the needs of the community. Some of the most profitable assets, like the Fresh Produce Market, are up for sale at ridiculously low prices.
• SAMWU does not believe that there is a "financial crisis" in Johannes burg that could be improved by selling off profit-making and job creating asse ts. Any restructuring plan must first rectify areas of where money is being wasted. There also needs to be recognition that the government's GEAR economic policy has resulted in a decrease in real terms in the amount of money allocated to local government as a whole.
• Igoli 2002 sees workers as a "problem" in the style of the old aparth eid politicians, and has avoided the approach of negotiations and collective bargaining. There is currently an arbitration in process between the employer and the union because of a dispute over last year's restructur ing plans that have now been launched under another name. This double-dealing shows clearly that the employer uses bad faith bargaining as a tactic and brings into question the credibility of the Bargaining Council.
• A national framework agreement on municipal restructuring was conclud ed last year between all municipalities and COSATU which Igoli 2002 completely ignores. This brings into question the authority of national government i n driving negotiations around local government issues.
• The union has not been consulted on the restructuring process, which will radically alter the conditions of service of members, especially in the services designated for privatisation. This contravenes the LRA.

For more information, please contact the Provincial Secretary, Phinda Mhlongo, on 082 9759844 or 011 3311032/3/4.

Press Briefing document
IGOLI 2002 - who will restructuring really benefit?

Introduction

Over the past month the Johannesburg Metropolitan Council has been implementing it's restructuring plan for the city, known as Igoli 2002.

Igoli 2002 is based on different forms of privatisation, including rationalisation, outsourcing and termination of activities. The plan will have far-reaching strategic and political effects on the city, especially on people's living standards. It will influence restructuring in every city in South Africa.

Public Sector Restructuring

Historically, the workers' movement in South Africa has never confined struggle to the narrow interests of organised workers only. The South African Municipal Workers Union is committed to affordable and efficient public sector delivery. SAMWU believes that delivery should be accountabl e to the communities we service. SAMWU is prepared to accept the responsibilities this entails, in the workplace and in the community.

Historical and international experiences demonstrate that public sector restructuring is the only way to alleviate poverty and reconstruct societ y. This is the only way to rid South Africa from the apartheid inequalities that still dominate people's lives. Restructuring is also the only way to make the provisions of our constitution a reality - particularly the Bill of Rights which guarantees all South Africans the right to basic services, including the poorest of the poor.

It is against this historical and human rights backdrop that SAMWU has carefully considered the employer's restructuring plan - Igoli 2002 - and formulated a union response.

The SAMWU response

We agree that the city is in dire need of transformation. Johannesburg st ill reflects the legacies of apartheid. The city is unsafe, services are inefficient or non-existent and are delivered in an unequal manner along the lines of former race-based delivery patterns. There is insignificant job growth in the city and massive unemployment. For the majority, the unemployed, the aged, women and children living in the townships and informal settlements there has been very little or no improvement in livi ng standards. In contrast, residents of the northern suburbs still get best quality services (even when boycotting rates payment). Any significant transformation of Johannesburg into a people's city must start from the point of rectifying these historical inequalities.

Transformation must be guided by a developmental approach, with defined objectives and time-frames. This process must include the democratic participation of all stake-holders including labour and communities, if it is not destined for failure before it starts.

It is SAMWU's view that:

1. Igoli 2002 has not been a democratic process, and has not taken into account the needs of the community or workers.

2. Some of the restructuring proposals in the plan do not even make economic sense.

3. Igoli 2002 is a violation of existing Bargaining Council agreements a nd National Legislation. After careful consideration, and many attempts to reconcile differences with Council, the union has decided to reject Igoli 2002 for reasons which wil l now be outlined.

1. Igoli 2002 has not been a democratic process which has taken into account the needs of the community or workers.

a) Stake-holders have not been consulted Igoli 2002 is not a product of a democratic consultative process. Igoli 2 002 is based on the work of the Committees of Ten and Fifteen which were set up by the Gauteng Legislature in 1997 and inspired by the policies of the Development Bank of South Africa. The plan was refined to it's present form at an employer workshop called "Bite the Bullet" held on January 19th 199 9. The employer is now informing and imposing Igoli 2002 on the stake-holder s at the same time. Unions, communities, and democratically elected councillors have been actively excluded from the formulation of the plan. This undermines the spirit of the White Paper for Local Government and th e Constitution.

b) Council has undermined it's own procedures for democratic involveme nt In it's haste to implement restructuring, the employer has ignored it's own democratic procedures for tendering and interviewing. Kagiso Financial Services has been engaged to arrange the tender of the sale of the Metro Centre, without participation by any stake-holders. The Fresh Produce Mar ket was put out to tender without consulting stake-holders. The Landelani Recruitment Project, an employment agency, was hired at the cost of R120 000 to recruit the Chief Financial Officer and the Labour Relations Officer t o the City Manager's office. Stake-holders did not participate in intervi ewing as per normal procedures.

c) Wasting money on outsourcing political decision making Council is wasting the very money they are trying to save by keeping Igol i 2002 shrouded in secrecy. The planning process so far has been driven by highly paid consultants who are making far-reaching decisions without consulting anyone but a few top officials. Councillors are already electe d and paid to make political decisions in consultation with unions and communities, and taking into account social needs of constituencies. Yet only a tiny, elite group of Councillors have been involved in Igoli 2002.

2. The restructuring proposals of the plan do not make developmental sense

a) Any solution must start by looking at the problems Igoli 2002 contains no analysis of the problems which face the city, let alone the source of these problems. The motivation for restructuring is presented as the solution to Johannesburg's "financial crisis". But the city deficit is only R257 million - hardly a "financial crisis" for a large metropolitan council which spends millions every year on cellphone bills and high salaries for top officials. It is common knowledge that national government has considerably reduced the amount of money allocated in real terms to local government in this year's budget. This is part of the GE AR macro-economic policy of cutting social spending and privatising municipal services. The "financial crisis" is merely a screen for implementing thes e unpopular policies.

b) The solutions presented do not even make economic sense The solutions to the deficit do not engage with the real problem. The Fre sh Produce Market is on sale for R200 million, yet it turns over more than R 1 billion every year, with R23 million in profits alone. Ten thousand farme rs supply fruit and vegetables to the market every month. About two hundred thousand agents, hawkers and storekeepers are involved with the sale of those vegetables throughout the Southern African Development Community. Igoli 2002 means that the future of this job-creation asset hangs in the balance. Similarly, the Rand Airport is being privatised as a non-core asset with no economic analysis having been done on the amount of revenue it could generate for the city with the future expansion of Johannesburg. In a city which so desperately needs to spend every available financial resource on extending services, there is still tremendous wastage of mone y. There are five Metropolitan Local councils - each employing a Chief Executive Officer, Strategic Executive Officer for every department withi n each council and other high ranking executives earning over R20 000 per month. Millions are spent on executive salaries.

c) The plan does not have a developmental approach A major flaw in Igoli 2002 is that it contains no approach to guide the c ity towards reconstruction and development. The plan states in it's outline that Igoli 2002 will result in "a world class city." Yet it does not outline a ny concrete service delivery targets, human resource strategies, job creatio n goals or time-frames for any of the above. None of the plans to "corporatise" assets not immediately designated for privatisation give any direction about the medium and longer-term plans for how corporatisation will benefit the people of Johannesburg. Council has not indicated any willingness to take-back the service provision responsibilities of the utilities once infrastructure has been built by the private sector. Inste ad, Igoli 2002 uses corporatisation to leave the door wide-open for full-scal e privatisation at a later stage.

d) No cost-benefit analysis has been done It is unclear what hidden costs to the community restructuring will bring. For example, privatisation of the Fresh Produce Market not only affects municipal workers, but also the 210 000 people indirectly and directly employed in the fruit and vegetable sector, the nutrition of the communit y, and the many people who work there. It is unclear from Igoli 2002 how stripping the city of it's assets and creating an uncertain future for the people involved with each asset will meaningfully transform the city.

e) Workers are seen as a "problem" The Council sees workers, or service providers, as a problem and not as a human resource that should be democratically involved in restructuring an d improving service delivery. Workers have been completely excluded from Igoli 2002. The approach of Council to labour does not befit the times we live in, where negotiated agreements and centralised bargaining is the order of th e day. Rather, Council has chosen to act in the same way that the apartheid government would have done - to define labour's role in restructuring a s a narrow one where workers merely carry out the tasks set for them by their bosses.

f) Igoli 2002 will not remove inequalities Inequalities in Johannesburg are widespread and entrenched. Igoli 2002 do es not explain how selling off core assets will remove these inequalities. T he private sector who will buy up core assets has no political responsibilit y to iron out inequalities. It is likely that Igoli 2002 will cause Johannesburg to remain a racist city, with the poor getting poorer.

3. Igoli 2002 is a violation of existing Bargaining Council agreements a nd National Legislation a) Arbitration outstanding Igoli 2002 is being implemented while there is an arbitration pending ove r unilateral restructuring between SAMWU and the employer. The arbitration, scheduled for April 6th 1999, has arisen as a result of a deadlock betwee n SAMWU and the employer over unilateral restructuring carried out last yea r by the Council's Committees of Ten and Fifteen. By pushing through implementation of the very same restructuring plan under a different name , the employer is demonstrating extremely bad faith towards labour relation s and legislation.

b) Collective agreements violated On June 30th, 1997, the National Labour Relations Forum for Local Governm ent (now the South African Local Government Bargaining Council) agreed that the public sector was the preferred option for service delivery. This means t hat local government restructuring must take place to the best of the public sector's ability before the private sector can be considered. Igoli 2002 violates this collective agreement.

c) Labour Relations Act contravened Section 64 (4) of the Labour Relations Act of 1995 stipulates that unions must be consulted in cases of workplace restructuring when this results in changes in conditions of service. Igoli 2002 is radically restructuring t he workplace. SAMWU was presented with Igoli 2002 for information only, and was not consulted on the plan's implementation which had already begun.

d) COSATU/Government agreements violated In December 1998, COSATU signed the Municipal Services Partnership Framew ork Agreement with South African Local Government Association (SALGA). SALGA is the body to which all municipal employers belong, including the Johannesb urg Metropolitan Council. The Framework Agreement confirms the Bargaining Council agreement and thus Igoli 2002 is in violation of the Framework Agreement.

e) Government policies violated The Council's unilateral restructuring violates the departmental policies of the Department for Constitutional Development and the Department for Water Affairs and Forestry. Both departmental guidelines affirm the Bargaining Council decision that service delivery must be restructured within the public sector service by the democratic participation of all stake-holder s.

f) National Legislation violated The Water Services Act of 1997 states that private sector participation in the delivery of water must only be after all public sector options have b een exhausted. This is violated by Igoli 2002.

4. The SAMWU demands

• SAMWU demands an immediate moratorium on all local government restructuring.
• SAMWU demands that negotiations be set up to begin the process of restructuring the city in a democratic manner, including all stake-holders, especially poorer communities.
• Restructuring must fall into line with national legislation, policies and collective bargaining agreements.
• The restructuring of Johannesburg is the task and responsibility of all who live and work in the city.