At the GDS on June 7, 2003, the NEDLAC constituencies – government, organised Business, organised Labour and Community groups – signed a set of far-reaching agreements aimed at achieving common developmental goals. This report surveys progress in implementing the GDS agreements.

The GDS arose from a call by the President for a Summit where the NEDLAC constituencies could find ways to address together the central challenges facing South Africa. In the months leading up to the Summit, the constituencies reaffirmed their common vision of making South Africa:

1. the leading emerging market and destination of first choice for investors whilst retaining and expanding social equity and fair Labour standards;
2. a productive economy with high levels of service, a highly skilled workforce and modern systems of work organisation and management;
3. a society in which there are economic opportunities for all, poverty is eradicated, income inequalities are reduced and basic services are available to all;
4. a society in which our people, our most precious resource, are given the opportunity and support to develop to their fullest potential; and
5. a society that promotes the values of social equity, fairness and human dignity in the global economy.

The constituencies identified the following as priorities for collaborative work:

1. Promoting and mobilising investment and creating decent work for all.
2. Ensuring economic empowerment for all, especially for black people, workers, people with disabilities, women and youth.
3. Eradicating poverty and addressing the legacy of under-development.
4. Strategically engaging globalisation to the best advantage of the country.

After intensive engagement, agreements were reached on

• More jobs, better jobs, decent work for all
• Addressing the investment challenge
• Advancing equity, developing skills, creating economic opportunities for all and extending services
• Local action and implementation.

The parties noted that the GDS would not deliver an immediate cure-all. Rather, it should identify areas for short-term action, while laying the basis for broad on-going social dialogue and partnership leading to longer term sustainable actions.

This document summarises progress in implementing the main commitments of the GDS agreements. The GDS reports are based primarily on inputs received from each of the parties to the GDS agreement. Furthermore, many of the GDS agreements entail far-reaching processes that will take time to unfold and outputs in this regard cannot be measured easily after a single year.

Ultimately, the GDS agreements provide a framework for collective efforts to consolidate and expand South Africa’s economic and social achievements in the years ahead. Progress needs to be measured against this broad aim, assessing the NEDLAC constituencies’ broader collaborative work and participation as well as adherence to specific clauses in the agreements.

From this standpoint, critical progress is reflected in the parties’ continued effort to work together to address South Africa’s developmental challenges. Where the parties have not met every obligation, the shortcomings reflect in part the capacity problems of the constituencies and NEDLAC itself.

The Implementation Framework and way forward
Summary of commitments

In section 1.5, the GDS agreement commits the parties to

• Disseminating the GDS agreements to their structures through a joint communication strategy;
• Making issues arising from the GDS agreements standing items for NEDLAC chambers and structures, finalising details through task teams, and the Executive Council conducting an annual review; and
• Engaging further on some issues, specifically section 3.1.4 of the agreement, which seeks to increase productive investment; decent work and the problem of casualisation; extending social dialog at local level; and practical implementation matters.

All the parties have disseminated the GDS agreements through their own structures and publications, as well as through a joint communications task team.

Government has publicised the GDS widely through the National Imbizo Focus Week in October 2003.

COSATU distributed the GDS agreement to 2 500 delegates from all sectors of the economy at its Eighth National Congress in September 2003, and published summaries and assessments in its journal, The Shopsteward. Individual unions and federations have published summaries of the GDS in their publications, reaching more than a million readers.

FEDUSA and NACTU distributed copies of the GDS agreement in their respective structures.

Business has disseminated the GDS undertakings through its structures.

NEDLAC structures have consistently reviewed implementation of the GDS agreements. A co-ordinating committee representing the constituencies allocated specific elements of the agreement to NEDLAC Chambers and, where necessary, focused task teams. Unfortunately, the task teams in particular have not met regularly

Engagements on investment have taken place in the Public Finance and Monetary Chamber as well as in the Financial Sector Task team.

The Department of Labour has commissioned considerable research on casualisation. The research report is to be submitted to Cabinet before the end of September 2004 and, once approved, will inform further engagements with social partners.

1. More Jobs, Better Jobs, Decent Work for All.

To support employment creation, the parties agreed on measures to facilitate public investment, support an Expanded Public Works Programme (EPWP), develop common sector strategies geared to growth and employment creation, support local procurement, SMEs and co-ops, and monitor employment.

In the GDS, government committed to expand infrastructure investments both to create employment directly and to provide the basis for stronger economic activity in general. The other constituencies agreed to support these initiatives, including through assistance with planning, design of partnerships with private enterprise and communities, support for management and maintenance of state assets, promotion of labour-based construction techniques and identification of appropriate projects. They agreed to set up a structure at NEDLAC to work in partnership on these efforts.

NEDLAC has established a task team on public investments. In the President’s State of the Nation Address in May 2004, the government committed to providing detailed and enhanced investment plans from state-owned enterprises, including development finance institutions, by September 2004.

The other constituencies have generally engaged in public investment initiatives through their support for EPWP, as discussed below. The Business Trust is discussing support for Community rehabilitation programmes with the government.

EPWPs are essentially government programmes delivering infrastructure and services through relatively labour-intensive methods, with special remuneration systems and training. The parties agreed that EPWP should be provided on a large enough scale to have a substantial impact on employment and social cohesion. Some programmes in the EPWPs will take the form of the National Youth Service Programme.

All the constituencies agreed to help identify appropriate projects and mobilise members’ support for EPWP. In addition, Labour said it would work on partnerships through the Job Creation Trust. Business committed to providing skills and expertise to enhance project design and management, and to exploring potential synergies between corporate social investment and EPWP.

The President launched government’s EPWP programme at Giyani in May 2004. Government reported considerable progress in developing the framework for EPWP, setting up oversight at Cabinet level, establishing plans for infrastructure, environmental and social programmes, and communicating the programme throughout government.

In the Community constituency, the Youth Council has launched a project to fence national transport routes, which has already obtained three contracts and to provide approximately 2700 employment to young people over the next two years.

Labour has participated in EPWP through the Job Creation Trust, established following the 1998 Presidential Jobs Summit. It has approved R67 million for projects, including micro production of goods and services as well as infrastructure construction and maintenance, creating around 6500 mostly permanent jobs.

Jobs created through Labour’s Job Creation Trust, are as follows;

• Agriculture 2 837
• Education and Training 148
• Social Infrastructure 692
• Community Facilities 501
• Manufacturing 436
• Home industry 359
• Commercial 272
• Tourism 184
• Environment 42

In addition, NUMSA has submitted proposals on EPWP to the Engineering Sector Summit, and SADTU has committed educators to identifying potential projects through educator support and maintenance and improvement of school infrastructure.

For Business, the Business Trust is engaging with the Department of Public Works around the formation of a facilitation fund to support EPWP in both the public and private sectors and to encourage Businesses to provide learnerships and internships for people exiting EPWP.

Government has reported at least twice to NEDLAC about its EPWP plans. The involvement of constituencies in EPWP is expected to be strengthened and made more systematic by regular meetings of the dedicated task team/s established for this purpose.

The constituencies agreed that sector strategies based on stronger collaboration between stakeholders were needed to restructure the economy toward equitable, employment-creating growth. They agreed to pay particular attention to sectors that could have a strong impact on overall employment creation, sustainable livelihoods and communities, equity and economic expansion.

In addition to on-going processes in metals and engineering, chemicals, construction and ICT, the parties agreed to develop strategies for the labour-intensive sectors of clothing and textiles, agriculture and agro-processing, tourism, call centres and back-office processing, and cultural industries.

Government has committed to convening a meeting twice a year of leaders of Business and Labour in the designated sectors. Business committed itself to establishing mechanisms to facilitate the secondment of experts to work with government and also to release shopstewards to work on development of sector strategies and for training to ensure an informed workforce.

NEDLAC has continued to facilitate engagement between Business, Labour and Government on sector strategies for metals and engineering, the financial sector, chemicals, construction and ICT. The parties in several of these sectors have used FRIDGE funding from the dti to explore the issues, as provided in the GDS.

For all these sector processes, progress is generally slow but steady. Engagements around the chemicals industry in particular have begun to identify viable downstream activities that could create new employment opportunities.

At least one Industry Development Council has been established, as agreed at the GDS. .

At the GDS a number of sectors made specific commitments relating to investment and strategies for their sectors. The following progress has been reported:

Labour has concluded and implemented a secondment of a dti official to the union (SACTWU) to implement certain GDS-linked trade union projects.

The parties recognised that local procurement can support employment creation, SMEs and co-operatives, as well as economic growth in general. Constituencies agreed to increase support for the Proudly South African (PSA) campaign, and to introduce a label of origin in the clothing sector. They also committed to a strong campaign to raise consumer awareness of local content over Christmas 2003. Finally, government agreed to advance South African interests around procurement in trade negotiations.

The state procurement process is on the agenda of the Trade and Industry Chamber. The National Treasury reported on proposals to encourage local procurement by government departments where appropriate.

Government has improved funding for PSA. Business has continued to engage with the campaign, both to ensure broader membership of PSA (there are now almost 2000 members) better compliance monitoring mechanisms are being developed. The PSA is working with producers and unions on a campaign around the clothing label of origin.

To support the buy-local campaign over Christmas 2003, the NEDLAC constituencies and the PSA ran a joint campaign, including leafleting at sales outlets and placing articles in internal publications. COSATU, FEDUSA and NACTU Shopstewards structures mobilised support for the campaign.

Sactwu and 23 major retailers agreed to a Declaration on local procurement in December 2003, for a six month period. In the Declaration, retailers commit to increasing the level of sourcing from local manufacturers, introducing a label of origin on clothing items, supporting manufacturers to improve their performance, and sourcing only from companies that adhere to the country’s Labour laws. The signatories have about 5 500 stores in total, reaching the vast majority of consumers. This agreement expired in June 2004. SACTWU and the Clothing retailers have been locked in negotiations for the last few months with a view to extend the agreement for a further two years. The Nedlac Manco has become involved in the efforts to address the stalemate in finalising the long term agreement with the retailers.

The Cape Town Fashion Festival was held in December 2003, as a trade union initiative to promote the profile of the local industry, and it reached hundreds of thousands of people in the country’s most sustained and largest sector promotion campaign. The Festival consisted of a dozen flagship activities, including

• A Fashion and Lifestyle Expo of local companies
• A Fashion Gala Night, celebrating the country’s top fashion
• The City Catwalk, the world’s longest fashion catwalk
• The Spring Queen Fashion Show
• Fashion shows at the V&A Waterfront and Cavendish Square
• A Fashion Imbizo, consisting of more than 20 policy or workshop sessions
• A fashion-in-film Festival
• A fashion partnership between Cape Town and Florence, Italy.

The Youth Council, in the Community constituency, has informed rural and semi-rural communities about PSA through billboards and leaflets, and elements of the co-operative movement have committed to buying local.

The parties agreed that support for SMMEs is critical for employment creation, and requires a holistic approach to integrate them systematically with the main economy. A critical element remains transformation of the financial system as agreed at the Financial Sector Summit in August 2002.

Constituencies agreed to propose improvements in dti programmes for small enterprise promotion, and to include access for SMMEs in the FRIDGE review of procurement policies. They would support accelerated and expanded land reform. In conjunction with government’s Multi-Purpose Community Centres (MPCCs), they would set up support nodes for SMMEs, Labour and co-ops that would provide telecommunications and Business support services.

Business would consider extending the life of the Business Trust. Community would promote training in government tender procedures. Labour would engage in small enterprise forums to represent workers’ interests.

The Trade and Industry Chamber has discussed support measures for SMMEs and will start discussions on the revised SMME strategy. The dti and GCIS launched three pilot MPCCs in 2003, and plan ten more. The newly trained Community Development Workers will use these resources to mobilise communities, including providing support for SMMEs.

Government, Labour and Business have intensified interactions with SETAs to improve SMMEs’ access to training. They included SMME access in the joint FRIDGE study on procurement.

As noted above, the Job Creation Trust supports a range of micro enterprises. COSATU’s recruitment campaign targets smaller employers. The union-inspired Cape Town Fashion Festival specifically targeted small Businesses and home boutiques for support with marketing, and exposure at the Fashion and Lifestyle Expo.

It has been agreed in principle to extend the Business Trust for a period of five years subject to finding agreement on a framework for this and the resources required. A joint committee of Government and Business has been established to oversee the process.

The parties strongly committed to strengthening the co-operative movement, focusing on HIV/AIDS support, financial and consumer services.

By November 2003, the NEDLAC Co-operatives Taskteam would develop a supportive policy framework. The framework would include fiscal and procurement measures as well as access to finance, accounting services, and training and, where appropriate, land. SETAs and the national education system would provide education and training on co-operatives. In 2004, NEDLAC would host a conference on co-operatives.

Government in particular committed to defining an enabling legal framework, supporting co-operatives through broad-based BEE programmes, establishing dedicated structures in the dti, and organising and funding a study tour to look at international best practice. With the NEDLAC constituencies, it would organise and pay for an education campaign in each province.

The NEDLAC Co-operatives Taskteam has met regularly, often for full days. Most of the time has been used to debate the government’s proposed Co-operatives Bill.

The taskteam has also reviewed inputs on the proposed co-operatives study tour and conference. Most of areas have been agreed to save for a couple that remain unresolved.

The dti has established a directorate on co-operatives. As agreed in the GDS, the Co-operatives Bill provides for the establishment of a body to advise the Minister.

The Community sector has launched associations of housing co-operatives and funeral societies.

For organised Labour, COSATU have worked with government departments and the ILO to establish a co-operatives support project. In addition, NEHAWU, SAMWU and NUMSA manage financial co-operatives; SAAPAWU and NEHAWU have set up producer co-operatives largely to rescue jobs.

The constituencies agreed to engage for six months following the GDS on practical methods for reporting on total employment by government departments, parastatals and publicly listed companies on total employment, and for inclusion of employment in the JSE Sustainability Index.

In addition, the constituencies recommitted themselves to ensuring that restructuring retains jobs where possible, in line with the NEDLAC Social Plan, and to doing more to support the use of the Workplace Challenge programme.

NEDLAC established a taskteam on employment monitoring. The initial meeting made various proposals for reporting by the public service and parastatals.

Business has developed a proposal for reporting which is a subject for discussions at the Nedlac task team meetings.

The Business Trust has convened a working group including Labour and Government representatives to examine the employment data and try to reach consensus on overall trends.

A comprehensive industry database on job losses, retrenchments, liquidations and closures has been set up by organized Labour in the clothing, textiles and footwear sectors.

The parties agreed that, at around 15% of the GDP, investment was too low to drive growth in production and employment. They therefore agreed:

1. To encourage investment of 5% of investible income in appropriate financial instruments, where necessary creating these instruments.
2. To recommit to fulfilling the agreements of the Financial Sector Summit.
3. To review the impact of administered prices and import-parity prices on the investment environment.
4. To support the extension of retirement funds to all workers, and to that end, following the GDS, to consider the development of national sectoral funds. In addition, NEDLAC will convene a national trustees' conference to consider the challenges they face.
5. To investigate ways to improve access to land and the approach to funding for housing.

Government, Business and Labour have tabled position papers on the agreement on financial investments at NEDLAC’s Public Finance and Monetary Chamber. These are being discussed by the Chamber.

The Millenium Labour Council has commenced a discussion on the 5% target.

The Financial Sector Charter agreements were reached by Business on the basis of commitments it made at the Financial Sector Summit. The constituencies are addressing the mechanisms for participation by Labour and Community representatives in the Charter Council.

NEDLAC established task teams on administered prices and import-parity pricing. The task team on administered prices, drawn from the Trade and Industry and Public Finance and Monetary Chamber, has met twice. It agreed to approach FRIDGE to fund two studies, on the impact of administered prices for economic and household infrastructure.

The Public Finance and Monetary Chamber has set up a subcommittee to organise the Retirement Funds Trustees Conference, now scheduled for later in the year. Labour has held a workshop to develop positions in preparation for the conference.

Following the major job losses in the clothing, textiles and leather sector, Sactwu has entered into a Declaration with the Financial Sector, in which a number of asset managers with investments in the retail sector, and benefits consultants who manage the mandates, commit to support the buy local campaign, and to influence investment decisions to benefit the local economy, in part through information and education to Trustees.

In terms of local issues, the GDS agreements address planning, economic development, access to infrastructure and service delivery mechanisms.

The constituencies agreed that government would establish a framework to strengthen participation by constituencies and communities in the Integrated Development Planning (IDP) process. The Labour and Community constituencies would encourage their locals to help design, mobilise and support development processes and programmes, particularly in terms of Ward Committees and IDPs.

Business would also mobilise local Business to participate in IDPs, once a framework was established. It would also use the IDP process to explore potential synergies between corporate social investment and government priorities.

The framework for the constituencies to participate in local development is to be tabled at Nedlac for consideration. Local structures of the other constituencies have participated in some IDP processes.

The parties agreed that local government tender processes and licensing procedures should be simplified where possible.

To improve communication, especially with SMMEs, the number of MPCCs should increase. Government agreed to extend the number from 37 to 60 by the end of 2004. Business would explore using MPCCs to communicate with SMMEs.

Labour would continue to use the Job Creation Trust to support small and micro enterprise. Business would work with the dti to provide services to established and emerging Businesses. The parties agreed to explore synergies between local economic development sub-sector strategies and sector strategies.

By mid-2004, government had established 57 MPCCs, and will reach 60 by the end of the year. The Chambers of Commerce and Industry of South Africa (CHAMSA) will make the structuring and functioning of MPCCs a focal point for delivery over the second half of 2004.

Business is in the process of creating forums, building on existing structures, at the local level to focus on local economic development in interaction with local government.

The parties’ efforts to support SMMEs and engage on sector strategies are detailed earlier in this report. The sector strategy processes are still underway, and the impact on local economic development remains hard to assess.

The parties agreed that local governments must ultimately take responsibility for delivery of infrastructure and local-government services. Still, they saw some scope for co-operation with other stakeholders, especially to develop new infrastructure and improve existing infrastructure. Critically, these partnerships must enhance access for the poor and ensure sustainability. The parties recognised Municipal Service Partnerships as a framework for investments that could support municipal infrastructure while adequately managing risk and building capacity.

The parties did not report specifically on progress with municipal service partnerships.

4.4. Service delivery mechanisms

Government committed to improve service delivery by expanding its investment in municipal investment.

Local authorities would work with the SA Building Industries Federation and regional Master Builders’ Associations to address backlogs in planning approvals. The construction industry, with the Construction Industry Development Board, would develop a simple guide or checklist for public servants to manage the construction process. Business would also work with government to improve capacity in this area.

Government and Business both said they would work to develop the skills of emerging contractors, including through quality control, mentorships and the construction SETA.

If appropriate financial mechanisms are established, Labour would support the direction of financial resources, including retirement funds, to low-income housing programmes that support the densification and integration of our communities.

In the 2004/5 budget, the government reported a substantial increase in funding for municipal infrastructure and free basic services.

SAFCEC has embarked on a development programme for emerging contractors. The aim is to build black contractor capacity within the industry and improve the very high failure rate.

The Construction Industry Development Board has made significant progress towards standardization and proficiency in the industry by publishing the Standard for Uniformity in Construction Procurement, which incorporates best practice. It has also developed the Toolkit delivery management system in collaboration with National Treasury as the basis for consistent and improved public sector infrastructure delivery. The Toolkit underpins the planned implementation of government’s Infrastructure Delivery Improvement Programme (IDIP) that will be rolled out in a phased approach over the next 2 years commencing with a pilot roll-out from July 2004.

Organised Labour will table proposals on low-income housing at the Retirement Trustees Conference later this year.

This review points to very considerable progress in implementing the GDS agreements. The most successful areas have been around the EPWP, sector strategies, local procurement and skills development.

The process of implementing sensitive and often interest-laden issues with stakeholders could never be easy.

In the making of South Africa’s democratic dispensation, we did not choose the path of least resistance for that is always the path of least foresight. We had to do the right thing and that’s always difficult. It is exactly for this reason that Nedlac has grown over the years as much as it has. When Nedlac started, the parties had come through some difficult years and needed an address that could encourage and facilitate social dialogue. Even if nothing else was achieved, building bridges between the different parties will remain an eminent and unique accomplishment for the council. In spite of all the differences and tensions, the social partners have a much greater understanding and respect for each other than ever before.

Implementing the GDS commitments is war cry of all the Nedlac constituencies, seeing the desired impact of these efforts is the dividends that we all want to see. Successful implementation of the GDS is the investment from which not only are the Nedlac constituencies want to see results, but entire society.

• The implementation of the agreement that 5% of the funds held by institutional investors be invested in the real economy.
• Sector strategies and partnerships can emerge from Summits and are not necessarily nationally based.
• Government Departments to become champions for the various GDS themes of the GDS.
• Improving the role of SETA’s and ensuring that there is an alignment between GDS and NSDS priorities;
• Discussions on other factors that have direct or indirect impact on achieving the GDS stated objectives.
• Promoting local Procurement
• Improving investments in the Economy.