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Country analysis > South Africa Last update: 2020-11-27  
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Growth and development summit agreement - 7 June 2003

 
SECTION 2: MORE JOBS, BETTER JOBS, DECENT WORK FOR ALL

  1. Introduction

    1. South Africa has experienced a persistent structural unemployment problem and, with it, household poverty and vulnerability. The constituencies seek to promote sustainable jobs, more jobs and better jobs - in short, decent work for all. The constituencies agree that a range of immediate interventions is required and have reached agreement on the following:

      1. Public investment initiatives
      2. Expanded public works programmes
      3. Sector partnerships and strategies
      4. Local procurement
      5. Small enterprise promotion
      6. Support for co-operatives
      7. Jobs impact and monitoring


    2. The constituencies aim to halve unemployment by 2014. The agreements in this document are part of our collective efforts to achieve this objective.


  2. Public Investment Initiatives (PIIs)
    Constituencies record the following agreements:

    1. An expansion in public investment initiatives (PIIs) to develop and maintain economic and social infrastructure by government, state-owned enterprises and developmental institutions, in order to facilitate growth, improve productivity, create jobs and promote urban and rural development. Many of these initiatives will be mainstream infrastructure projects with a very strong construction and labour-based component.


    2. Examples of projects that have the greatest potential for job creation include:

      1. Road construction
      2. Dam construction
      3. Rail construction
      4. Construction of multi-purpose centres (MPCCs)
      5. Construction of schools, clinics, prisons
      6. Major renovations and maintenance programmes of public buildings (including prisons, schools, clinics, offices, railways and sanitation)
      7. Construction of harbours such as Coega
      8. Electrification


    3. To this end, constituencies agree:

      1. To address bottlenecks in infrastructure planning and project management for infrastructure development and maintenance.
      2. To strengthen the design and terms of public-private partnerships, public-community partnerships and construction contracts, taking into account relevant legislation and Section 5.3 below.
      3. To assist in improving the implementation of infrastructure planning at national, provincial and local level, urban and rural development, and productive investment.
      4. To promote effective and accountable management and maintenance of assets, infrastructure and goods.
      5. To promote labour-based construction methods and to identify the types of projects where a deliberate choice in favour of labour-based methods is feasible.
      6. To identify projects and programmes that can be proposed for implementation.
      7. To mandate an appropriate structure through Nedlac to work in partnership to achieve the above.
      8. To provide details of projects that fit this framework.


    4. Business commits to mobilise and make available its skills and expertise, within a framework to be agreed after the GDS, with a view to enhancing the proper project design and management of these projects. Further, business will explore the potential for synergies between corporate social investment and these initiatives, including support for skills transfer to local communities.


  3. Expanded public works programmes
    Constituencies record the following agreements:

    1. Expanded public works programmes (EPWPs) can provide poverty and income relief through temporary work for the unemployed to carry out socially useful activities. These EPWPs will be designed to equip participants with a modicum of training and work experience, which should enhance their ability to earn a living in the future.


    2. It is agreed to launch projects that provide short-term jobs in the communities with a greater emphasis on providing and/or improving basic and essential infrastructure in the communities. Examples of projects in this category include, amongst others, the following:

      1. School cleaning and renovation
      2. Community gardens
      3. Erosion control and land rehabilitation
      4. Removal of alien vegetation
      5. Community irrigation schemes
      6. Fencing of national roads
      7. Dipping schemes
      8. Access roads in rural areas
      9. Tree planting
      10. Maintenance of schools, clinics, drainage, roads and public buildings.


    3. It is agreed to launch projects that cover social services that are provided by the social cluster departments with a view to meeting basic needs. Examples of projects in this category include the following:

      1. Integrated community home-based care for people living with HIV/AIDS
      2. Early childhood development (ECD) and integrated community home-based care for children of working mothers
      3. Integrated community home-based care for the aged
      4. Food distribution
      5. School feeding
      6. Feeding at clinics
      7. Food voucher


    4. Such EPWPs must be large enough to have a substantial impact on employment and social cohesion, especially for young people, women and the rural poor. Some programmes in the EPWPs will take the form of the National Youth Service Programme.


    5. To this end the constituencies agree the following:

      1. EPWP projects must not displace existing permanent jobs
      2. EPWPs will be multifaceted and demand driven. Constituencies will identify opportunities for such projects and initiate these, and will seek resources from both the public and private sectors to finance the programmes
      3. While projects themselves will be executed on a non-profit basis, project initiators may include national, provincial and local government departments and agencies, NGOs, CBOs, trade unions, and private companies
      4. Management of the programme must include the following:
        1. distribution of resources to project initiators.
        2. development and implementation of a strong communication strategy to inform potential applicants and keep the public informed of the success of the programme.
        3. a detailed study of experience with public employment schemes in South Africa in order to develop best practice and learn from past experience.
        4. The development and implementation of measures to monitor spending in order to minimise wastage and leakage through inefficiency or corruption and to deal with corruption firmly.


    6. Payment to participants in the schemes will be as set out in terms of Ministerial Determination Number 3 (25 January 2002) 'Special Public Works Programmes', which is based on the 1999 Nedlac agreement on public works programmes. This determination sets out the basis on which both task-rated and time-rated workers will be paid.


    7. Relevant and targeted training is essential to the success of PIIs and the EPWP. Training will be a central component to ensure that workers attain relevant and marketable skills and those who have never worked gain valuable exposure to the world of work. To this end:

      1. SETAs may support training for participants in EPWPs, who should have time off to participate in relevant and targeted training programmes.
      2. Participants in EPWPs will be given a record of their competencies and a reference to assist them in gaining employment after they leave the scheme.
      3. Training programmes may include the following:
        1. Basic literacy (ABET)
        2. HIV/AIDS awareness
        3. Health and safety
        4. Social entrepreneurship
        5. Industrial relations
        6. Vocational skills, e.g. construction, agriculture
        7. Life skills
        8. Entrepreneurship
        9. Project management
        10. Community development
        11. Project-specific skills
        12. Co-operatives training


    8. Labour commits to contribute to EPWPs by:

      1. Supporting members and locals to sponsor, identify and/or initiate projects
      2. Working to set up partnerships with the Job Creation Trust
      3. Supporting the overall programme, which is important to enhance skills development and minimise disputes over pay and conditions
      4. Supporting skills development and certification in jobs programmes, including efforts to ensure alignment with SETA programmes and the National Qualifications Framework (NQF), and to develop modules on industrial relations


    9. Community will assist in the mobilisation of participants in EPWPs and in the identification of potential projects at the local level.


    10. Business commits to mobilise and make available its skills and expertise, within a framework to be agreed after the GDS, with a view to enhancing the proper project design and management of these projects. Further, business will explore the potential synergies between corporate social investments and these initiatives, including support for skills transfer to local communities.


  4. Sector Partnerships and Strategies

    1. The constituencies agree that effective use of sector strategies, based on sector co-ordination and partnerships in identified sectors, is needed to restructure the economy toward equitable, employment-creating growth.


    2. To this end the constituencies agree to the following:

      1. They will pay particular attention to sectors that can have a strong impact on overall employment creation, sustainable livelihoods and communities, equity and economic expansion.
      2. Effective strategies require a process that empowers government, business and labour, and where appropriate community, to identify strategic interventions required to achieve sector goals and to develop sector collaboration and partnerships.
      3. Sector Summits and sector forums can prove important for the purpose of ensuring communication and agreement-reaching amongst stakeholders in a sector. Summits serve not to finalise sector processes, but to support greater inclusivity, to help set timeframes and provide a framework for explicit agreements and commitments. Constituencies to a sector summit should ensure broad communication and buy-in from stakeholders.
      4. There must be sufficient commitment by all major stakeholders in terms of resources and time, including strong teams and mandating structures. Constituencies may use the dti's Sector Partnership Fund to support capacity in sector strategies.
      5. Constituencies in a sector process may jointly use the Fund for Research into Industrial Development Growth and Equity (FRIDGE) funding at Nedlac to ensure that policy proposals and strategies are informed by credible evidence.
      6. Every sector strategy should include a process to support implementation as well as monitoring, evaluation and further development where necessary.
      7. The linkages or synergies between sectors should be explored as part of the overall process.
      8. Stakeholders in a sector should be allowed to determine the most appropriate engagement mechanism for their sector.
      9. Where a process to develop a sector strategy has been agreed by the stakeholders in the sector, that process is recognised by all constituencies as the primary discussion forum on strategic issues affecting the sector as a whole.
      10. Successful sector strategies require commitments from government, business, labour, and where appropriate, from community. A key element for success is constructive engagement amongst the constituencies.
      11. In order to be effective, sector engagement may include the following issues:
        1. Decent work
        2. Marketing and branding
        3. Market access (domestic penetration and exports) and related matters
        4. Infrastructure
        5. Production for basic needs
        6. Skills development
        7. Support for innovation, research and development
        8. Regulation
        9. Broad-based black economic empowerment
        10. Small enterprise development, including co-operatives


    3. The following sectors are already engaged in a sector summit process:

      1. Metals and engineering
      2. Chemical
      3. Construction
      4. Information and Communication Technologies (ICT)

      Other sectors, such as environmental goods and services, are considering the formulation of sector strategies.


    4. In addition, the development and implementation of strategies for the following labour-intensive sectors will be prioritised:

      1. Clothing and textiles
      2. Agriculture and agro-processing
      3. Tourism
      4. Call centres and back-office processing
      5. Cultural industries including craft, music, film, publishing and other media


    5. Government agrees to convene a meeting twice a year of the leaders of business and labour in prioritised sectors to review progress in accelerating and unblocking investment, creating jobs, lowering costs and improving efficiency, meeting critical skills needs, and increasing investment in research and development.


    6. Business commits to:

      1. establishing a mechanism to facilitate secondment of experts to work with government
      2. releasing senior shop stewards to work on the development of sector strategies and for training to ensure an informed workforce


    7. In addition, at this stage, the following sectors make specific commitments that they wish to be recorded as part of the Growth and Development Summit:

      1. Automotive
      2. Chemical
      3. Metals and engineering
      4. Mining
      5. Oil
      6. Pharmaceuticals
      7. Sugar
      8. Textiles and clothing


    8. Current partnerships and strategies

      Sector strategies and partnerships are being pursued to varying degrees in a number of sectors:

      1. The automotive sector has established an industry development council that addresses key challenges facing the sector. Partnership in this sector has been critical for the success of the Motor Industry Development Programme (MIDP).
      2. The mining industry held a summit in 2001, out of which the Sector Partnership Committee was established. The Sector Partnership Committee has a number of subcommittees that have dealt with issues such as minerals beneficiation, rural development, the social plan and minerals promotion. A number of successful post summit Sector Partnership Committee meetings have been held including participation by government Ministers and business and labour leadership.
      3. The clothing and textile sector has held a sector summit and has completed a sector strategy, which has been presented to the dti.
      4. Role-players in the printing industry value chain have initiated the Print Industry Cluster Council. Role-players include the paper industry, publishers, government departments (Department of Arts and Culture), libraries, printers and paper and board packaging.
      5. Business and government in the agricultural sector have developed a sector strategy, which they are in the process of implementing.
      6. The partnership between government and business to market South Africa as a tourist destination is another example of what sector partnerships can achieve. This is reflected in the manner in which international tourism promotion is managed. Business leaders sit on the Board of South African Tourism and private sector expertise was used to develop an internationally competitive marketing strategy. Government significantly increased funding to drive the international marketing campaign. Business, through the Business Trust and a levy under the Tourism Business Council, made a valuable contribution.


    9. In addition, the following sectors make specific commitments that they wish to be recorded as part of the Growth and Development Summit:

      1. Automotive industry
        The South African new vehicle manufacturing industry plans, collectively, to invest in excess of R15 billion, over the course of the next five years, in automotive product, local content and export development and the expansion of the industry's productive infrastructure.
      2. Chemical industry
        The chemical industry has developed a pipeline of potential capital-intensive projects with a varying degree of certainty in terms of proceeding to investment stage. The total investment over the next five years is estimated at R10 billion. A number of potential constraints to the successful implementation of investment projects have been identified. In order jointly to seek ways to overcome these constraints the industry proposes that execution of one project be used as the basis for developing a "best practice" model that can be applied to the sector.
      3. Metals and engineering
        The metals and engineering sector has established a permanent Industry Policy Forum (IPF), through which major issues affecting the sector can be discussed, especially with regard to job creation and job retention. A major project aimed at devising strategies to facilitate both the creation and retention of quality employment within the sector is currently underway. Recommendations from the project will be aimed at maximising growth, employment creation and job retention possibilities throughout the various sectors of the metal and engineering industries. A Sector Summit Steering Committee is discussing proposals for possible stakeholder agreements in the sector summit in important areas such as the trade regime; preferential procurement in respect of local content; skills development in the metals and engineering industry in respect of both production workers and management; issues relating to raw material inputs; assistance for small and medium sized enterprises in the metal industries as well as improvement in supply-side measures for metal industries companie
      4. Mining industry
        The mining industry has some R100 billion in approved capital projects, excluding maintenance capital for the next five years (based on current market conditions).
      5. Oil industry
        The oil industry is going to invest, by 2006, some R10 billion in refinery upgrades to produce "clean fuels," i.e. unleaded petrol and lower sulphur diesel. These clean-fuel projects should create a number of jobs in the engineering sector, and will result in South Africa enjoying better fuels. This is in addition to their ongoing investment plans, which can be expected to be of the order of R2 billion per annum.
      6. Pharmaceutical industry
        There is a limited fine chemical manufacturing sector in South Africa, which has the necessary international approvals to manufacture active pharmaceutical ingredients (APIs). The potential for this capacity to be enhanced could be explored as part of the chemical industry project pipeline approach. The output of a project pipeline of appropriate active pharmaceutical ingredients could provide a platform for the downstream manufacture of generic medicines as well as for the export of APIs.
      7. Sugar industry
        The sugar industry is investigating the potential to develop a sugar beet industry, which would include cultivation and milling and by-products like animal feed, taking into account environmental impact. Successful execution of this project depends on a number of factors. Other investigations include the establishment of milling facilities closer to small-scale growers in KwaZulu Natal and the potential to establish cane plantations in new areas.
      8. Textile industry
        Business in the industry has committed to strategic interventions and targets in growth in sales and employment, penetration of value-added export markets, consolidation of the industry's' domestic market presence, world class manufacturing standards, skills development, capital investment, transformation and environmental compliance. The immediate establishment of a Textile Industry Development Council is the crucial first step in ensuring that this occurs.


    10. Business commits to exploring the potential synergies amongst the sector approaches described above with a view to establishing stronger value chains and to encouraging other sectors to consider the potential benefits of collective action.


  5. Local Procurement

    1. Procurement policies serve a number of objectives including:
      1. Saving and creating jobs
      2. Broad-based black economic empowerment
      3. Co-operative development
      4. Small enterprise promotion
      5. Growing the local economy


    2. This section specifically addresses the job creation aspect of local procurement, while other measures on procurement, BEE and enterprise development, including co-operatives and small enterprise, are dealt with in Section 4.


    3. Local procurement, wherever possible, provides an important means of saving or creating jobs, promoting small enterprises and co-operatives, and securing growth of the South African economy.


    4. The constituencies record that the Proudly South African Campaign is an important means of taking the message of local content, fair labour standards, environmental sustainability and quality products and services to the nation. To this end, the constituencies commit to intensify support for the campaign and its objectives. To this end, it is agreed that each constituency will consider how it can strengthen support for the initiative and what overall approaches to implementation could be adopted to increase participation. Business will establish a stronger interaction between its representatives on the board of Proudly South African and its member organisations to ensure continuous updating on the initiative. Business will further encourage member organisations to, in their turn, develop sector-specific approaches to extending the membership of Proudly South African in key sectors. In this regard, one of the objectives could be to ensure that membership in a sector reflects the structure of the sector in the economy. In addition business will commit resources to examining ways in which the long term sustainability of the initiative can be assured, including, how verification of performance by members can be strengthened and in particular, ways in which verification mechanisms can be aligned with existing initiatives within sectors, to improve performance in the areas of quality, labour standards and environmental performances. In this regard the ways in which the Proudly South African brand can enhance consumer confidence in companies subscribing to the initiative, will be investigated.


    5. Constituencies recognise the potential value of a label of origin in giving consumers better information in their buying decisions. A label of origin requirement will be introduced in the clothing sector. This will be used as a pilot scheme before such a requirement is considered for other consumer goods.


    6. The constituencies commit to supporting a strong campaign aimed at raising consumer awareness on local content over Christmas 2003 and taking into account the objectives given in paragraph 2.5.1 above.


    7. Procurement policy is an important instrument that government uses to achieve various objectives as reflected in 2.5.1 above. In market-access negotiations, when the issue of procurement is raised, the government will seek to advance South Africa's interests.


  6. Small Enterprise Promotion

    Constituencies agree that:

    1. Small enterprise promotion, and especially the development of black-owned small enterprises, is a crucial component of job creation in the economy.


    2. Small enterprise development must be based on respect for and observance of labour standards for workers and the promotion of decent work.


    3. Small enterprise promotion and development requires a number of measures, including:

      1. Improved linkages to large-scale enterprises
      2. Access to affordable transport, water, electricity, telecommunications, and other basic services
      3. Access to retail networks
      4. Relevant and easily accessible training in entrepreneurial, industrial relations and productive skills
      5. Access to capital
      6. International and export marketing assistance
      7. The implementation of the resolutions for the transformation of the financial sector as agreed in the Financial Sector Summit held in August 2002.


    4. In order to ensure the promotion of small enterprises, the constituencies agree the following:

      1. As part of its ongoing review of existing systems of support for small, medium and micro enterprise, the dti will consider proposals from constituencies on how to improve small enterprise promotion. The Nedlac constituencies will ensure that their constituencies are made more aware of existing programmes to support small enterprise.
      2. The Nedlac constituencies are currently conducting a review of procurement in the public and private sectors. As part of the review, they will consider ways to ensure greater access for small suppliers.
      3. Constituencies agree to support the acceleration of the land reform programme of the Department of Agriculture and Land Affairs, and to propose ways to ensure a substantial expansion in scope and acceleration of the programme, specifically the development of small producers in agriculture, taking into account the agricultural sector strategy.
      4. Small enterprise promotion is directed at support for entrepreneurs and workers of small enterprises and is intended to obtain a net employment increase and overall benefit in the economy;
      5. Constituencies will endeavour to improve access by small enterprise to physical, commercial and professional infrastructure by establishing business, co-operative and labour support nodes, especially in townships and rural areas, and ensuring the upgrading of physical infrastructure within these nodes, including access to fax and internet facilities and establishing legal, accounting, industrial relations and business support clinics. These nodes will form the basis for the establishment of small and informal business and co-operative clusters. MPCCs can play an important role in this regard.


    5. Business will consider extending the Business Trust beyond its original five-year lifespan, including specific Business Trust programmes such as the Tourism Enterprise programme.


    6. To ensure greater procurement from small enterprises, especially black-owned businesses and co-operatives:

      1. Community will promote training in government tender procedures.
      2. Labour will ensure that the interests of workers in small enterprises are represented in small enterprise forums.


  7. Support for co-operatives

    Constituencies agree that:

    1. Co-operatives provide an important vehicle to:

      1. Create and develop income-generating activities and sustainable, decent employment
      2. Develop human resource capacities
      3. Increase savings and investment
      4. Improve social and economic well-being
      5. Establish and expand a viable and dynamic distinctive sector of the economy, which includes co-operatives, that responds to the social and economic needs of the community.


    2. The scope for significant increases in employment through the development of co-operatives requires a supportive policy framework. It is agreed that organised labour and community organisations will, in partnership with government, and with the support of business, initiate and strengthen co-operatives at all levels.


    3. The constituencies endorse the Recommendation on the Promotion of Co-operatives adopted by the ILO in 2002. The ILO recommendation states that the adoption of special measures should be encouraged to enable co-operatives, as enterprises and organisations inspired by solidarity, to respond to their member's needs and the needs of society. Examples of these special measures include:

      1. Grants, fiscal dispensation, procurement provisions and access to EPWPs
      2. Services such as accounting, human resource development and management information services
      3. Access to finance and provisions for investment
      4. Access to land through the land reform programme


    4. The Nedlac Task Team on the co-operative strategy will consider ways in which the special measures identified in the ILO recommendation will be included in the strategy, as well as resourcing and timeframes. The work of the task team will be prioritised, with a view to a final report being presented by November 2003.


    5. In the context of this section, a particular focus is necessary on the creation and the strengthening of HIV/AIDS support co-operatives, to address the urgent challenges in relation to the HIV/AIDS epidemic; co-operative banks to address the lack of access to financial services; and consumer co-operatives to provide for lower prices of goods and services.


    6. It is agreed to promote education and training in co-operative principles and practices, at all appropriate levels of the national education and training system. Constituencies will, through their SETA representatives, promote special programmes in this regard.


    7. Government will implement this agreement through:

      1. Implementing an appropriate regulatory system that allows co-operatives to register and gain a legal persona based on criteria that ensure democratic governance, transparency and accountability. Government will table legislation in Parliament in this regard during 2003.
      2. Implementing the Broad-based Black Economic Empowerment Strategy, which emphasises and promotes the role of co-operatives in achieving greater equity.
      3. lmplementing a comprehensive co-operatives development strategy in partnership with the other constituencies. A draft of this strategy is currently being discussed in Nedlac.
      4. Establishing a fully-fledged unit within the dti for co-operatives development.
      5. Establishing a co-operatives advisory board.
      6. Organising and funding a study tour to examine best practice in co-operatives development in which all constituencies will be invited to participate during 2003.
      7. Organising and funding an education campaign in each province, in partnership with all constituencies, to popularise co-operatives.
      8. Developing appropriate offerings to provide institutional and financial support for the development of co-operatives in consultation with all constituencies.


    8. The Constituencies agree that Nedlac will convene a national co-operatives conference in 2004 to review progress in building a strong co-operatives movement in South Africa.


  8. Jobs impact and monitoring

    1. The constituencies commit to using their best endeavours to avoid job losses and to promote decent work. In this context, the constituencies recall that S189 of the Labour Relations Act (LRA) specifically provides that parties attempt to reach consensus on measures to avoid retrenchments, or minimise the number of persons retrenched.


    2. The constituencies agree that there is a role for the public and private sector to report, in a publicly accessible form, on total employment. To this end, it is agreed that there is scope for government departments, parastatals and publicly listed companies to include information on total employment in their annual reports, and for the JSE Sustainability Index to contain a section on employment.


    3. The constituencies agree to engage with each other over a six-month period following the GDS, to develop a set of practical methods for achieving the above.


    4. The constituencies recommit themselves to active labour market policies, including:

      1. Ensuring that restructuring retains jobs where possible, in line with the Nedlac Social Plan agreement.
      2. Doing more to publicise and ensure the use of the Workplace Challenge programme.
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