SOUTH AFRICA: FEBRUARY LABOR NOTES

UNCLAS SECTION 01 OF 02 JOHANNESBURG 000041

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SIPDIS

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TAGS: ELAB ECON PHUM SF
SUBJECT: SOUTH AFRICA: FEBRUARY LABOR NOTES

REF: CAPE TOWN 36

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1. Summary: Finance Minister Trevor Manuel announced in his
February 20 budget speech that the amount of the child support
grant would be increased to R220 per month and that eligibility
would be extended up to age 15. The Treasury also plans to
combine all social insurance into one mega-fund. COSATU's
Central Executive Committee fired its President Willie Madisha,
ostensibly about financial irregularities concerning a donation
to the South African Communist Party. Mining company
Goldfields announced it would shed 13 percent of its workforce
over productions cuts forced on it by government-mandated
reductions in electricity consumption and supply. Emigration of
skilled labor from South Africa is rapidly increasing according
to newspaper reports. Two accidents at ferromanganese smelters
claimed seven lives in February. End Summary.

Finance Minister Raises Amount of Child Support Grants and
Increases Eligibility
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2. Finance Minister Trevor Manuel announced in February 20
budget speech that the amount of the child support grant would
be increased to R220 per month and that the age of eligibility
would be extended up their 15 th birthday as of January 2009.
The ANC policy document of January 2008 called for child support
grants to be gradually extended up to age 18. However, the
Treasury's estimates are that increased costs of the child
support grant and old age pensions will add R12.5 billion to the
budget over the next three years. In addition, the budget
proposed higher expenditures on school infrastructure, early
childhood development programs and tertiary education for a
total for R121 billion expenditure our of a R716 billion budget.
The budget also included a R9 billion conditional grant for
school books and buildings and nutritional programs.

Electricity Supply shortages cost jobs; Union threatens Strike
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3. The decision by the South African government to limit the
amount of power available to the mining sector in light of
ongoing electricity supply problems is having repercussion on
employment. Mining firm Goldfields announced on February 25
that it might cut up to 13 percent of its 53,000-strong
workforce to meet the imposed 10 percent cut in power use.
Many of the 6900 miners facing layoffs or early retirement are
members of the National Union of Mineworkers, which reacted
unsympathetically to the news and announced that it was
considering a mass action to protest electricity shortages and
associated job losses. Gold miner Harmony, according to
newspaper Business Day, cut 5000 jobs between October-December

2007. It and other mining firms have so far not announced any
additional layoffs.

COSATU Rivalries Cause Shakeup
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4. COSATU's Central Executive Committee (CEC),meeting in
Braamfontein from February 25-27, unanimously resolved to fire
its President Willie Madisha, a member and currently also
president of the South African Democratic Teachers Union.
Madisha got into hot water over the issue of unaccounted-for
funding to the South African Communist Party (SACP),which
Madisha claimed to have delivered to its General Secretary.
Madisha, considered by some COSATU members to be close to
President Mbeki, had also accused COSATU General Secretary
Zwelinzima Vavi of credit-card misuse. An interim President is
to be elected at the May CEC. COSATU's Education Secretary,
Anthony Dietrich, told us that the imterim President was likely
to be Sduomo Dlamini, a Swazi-born trade unionist coming from
NEHAWU, the health care workers union.


5. Meanwhile, COSATU's Western Cape Provincial Secretary, Tony
Ehrenreich, has been accused by his SACP provincial counterpart
of pushing COSATU members closer to the Democratic Alliance,
after Ehrenreich allegedly insisted that a COSATU event take
precedence over a rally organized by the SACP. Ehrenreich, who
has led a variety of events to draw attention to the plight of
shack-dwellers, the poor and the jobless, was accused of being
part of a "right-wing tendency."

Unified Social Insurance Fund Planned
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6. The Treasury's Budget Review statement contained a proposal
to merge existing social insurance funds in order to achieve
both administrative and financial economies. Currently, South
Africa has separately administered funds which fall under the
Social Welfare Department, the Labor Department, the Transport

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Department and the Health Department. The proposal will first
be discussed in NEDLAC, the National Education Development and
Labor Advisory Council.

Industrial Accident Claims Six Lives
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7. Six workers died in an explosion at the Assmang
ferro-manganese smelter in Cato Ridge on Sunday, February 24.
A furnace explosion sufficiently powerful to knock out the wall
separating it from the control room killed one worker on impact
and left others with burns sufficiently severe to result in
their deaths at the hospital. Other workers remain
hospitalized and the death toll may rise further. The chief
executive of the ferrous division of African Rainbow Minerals
said that the furnace would be out of commission for the
following six months, though other parts of the plant would
resume operations as soon as workers were convinced it was safe
to return to work. Assmang has already been under
investigation by the Department of Labor for ongoing workplace
health violations, as several workers have recently died of
manganese poisoning.


8. An explosion related to a converter at the Samancor
ferrochrome smelter in Witbank also killed one worker on
February 17.

Newspaper Reports that Skilled Labor Leaving South Africa
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9. Daily newspaper "the Star" reported in its February 11
edition that skilled labor was leaving South Africa. The paper
claimed that South Africa ranked as the fifth largest supplier
of skilled immigrants to New Zealand and Australia, with
migrants with a mining background being actively recruited to
work in Australia. The Star cited Ian Petty, the chairperson
of the Professional Movers Association, as saying that currently
three containers of household effects were being exported for
everyone imported, compared to a one-to-one ratio a year ago.
Petty said that inquiries about services were soaring. The
paper also quoted a service advisor at the British council
offices who commented that they had received a massive increase
in the number of candidates wanting to write the English
language tests required of potential migrants to the UK, Canada,
Australia and New Zealand. (Note: Consulate has been told that
the South Africa Statistical Service does not keep records on
emigration. End Note.)
COFFMAN