Clothing workers struggling to survive

The cost of being a clothing worker in Newcastle is high. It costs between R50 and R100 a week for a worker to travel to and from work. This is if one takes a bus or taxi and lives in Madadeni or Osizweni. Household electricity is R70 a week and rent on average about R40 a week.

The food and grocery expenses of low-wage workers are limited to basic goods.

Expenses are often greater than the legal minimum wage in Newcastle for a starting machinist, R416.50 a week, or even that of a qualified machinist, R489 a week. Despite this, commentators often refer to Newcastle when arguing for greater labour and wage flexibility with some Newcastle employers proposing a reduced minimum wage of R280 a week.

Would you be prepared to work 40 to 45 hours a week for R280? Would you be able to live off R416.50 a week?

That R416.50 a week is considered “too high” is indicative of the skewed values of our society. While clothing workers are often lambasted for wanting higher wages, few people complain about the income of executives, including at the clothing retailers where many of the garments made in Newcastle end up. For example, one clothing retailer chief executive earned R8.55 million in the past year. It is the equivalent of R164 000 a week – about 400 times more than a clothing worker.

The fact is that poverty wage workers may have a job, but their quality of life is little better than the unemployed. Even the demands of a very basic standard of living outstrip their means. In order to cope, workers employ a range of survival strategies including not eating for a few days during the week, relying on the support of their extended families and borrowing money from microlenders at great cost.

We often hear that “half a loaf is better than none”, it is an opinion heavy with the hypocrisy of classism, articulated by the comfortable who are divorced from the realities of life for poor people. Admittedly, sometimes workers also say “something is better than nothing”. When this is heard by ears deaf to the complexities of class, the sentiment is believed at face value.

Workers’ desperation is then paraded as validation for subjecting them to poverty wages, but this is not the full story. Time and again during meetings I held with Newcastle workers, they unambiguously said: “We are scared of losing our jobs. But we are not happy with our wages. We cannot live off them. We want more money.”

Can clothing workers receive better wages and keep their jobs? Employers and commentators will have us believe jobs can only be kept if wages are dropped. The SA Clothing and Textile Workers’ Union (Sactwu) believes they are wrong.

Our industry needs a sustainable solution. This exists in the form of the customised sector programme, designed and agreed by Sactwu, business and government. This strategy aims to move the industry away from competitiveness based only on price and towards improved productivity, work organisation, skill levels, machinery, quality and delivery times.

This will add value to goods and give manufacturers an opportunity to get products into local retailers while at the same time securing a higher wage for workers.

What some employers propose is impractical. We cannot compete in the race to the bottom. After all, the weekly wage of a clothing worker in Bangladesh is about R65. But we can win if we focus on industry development in the manner identified in the sector development strategy and by implementing this strategy’s programmes.

Chris Gina is Sactwu’s national organising secretary.

Reference: Business Report, 30 August 2011

South African textile workers fight poverty and exploitation

South African textile workers fight poverty and exploitation

A march of 3,000 clothing workers organised by the Southern African Clothing and Textile Workers’ Union (SACTWU) brought the town of Newcastle to a halt last Friday.

The workers, who were protesting against poverty wages and exploitation, handed memoranda to the Newcastle Chinese Chamber of Commerce and Industry and the National Bargaining Council for the Clothing Manufacturing Industry.

The memoranda called on

• All Newcastle clothing factories to become part of the phase-in programme of the bargaining council which is aimed at ensuring compliance with the legal minimum wage and will result in many workers’ wages increasing;

• Newcastle employers to stop claiming that workers are prepared to accept poverty wages and to stop pretending that workers support their non-compliance with the laws of South Africa;

• Newcastle employers to stop refusing to give workers weekly payslips as stipulated in South African law. Without payslips workers cannot produce evidence of a weekly income and so cannot buy goods on credit and cannot provide evidence of UIF contributions if they lose their job and want to claim unemployment benefits;

• The United Clothing and Textile Association (UCTA) to withdraw its case against the Minister of Labour for extending the wage agreement to vulnerable clothing workers across South Africa and

The bargaining council to ensure Newcastle employers pay the legal minimum wage, maternity leave and overtime. The workers are determined to intensify their fight for a living wage and job protection.

A regional Congress of South African Trade Unions statement said: ‘COSATU KZN (KwaZuluNatal) fully supports the march in Newcastle by SACTWU members in the Clothing and Textile Industry.

‘It is common knowledge that Newcastle is the seedbed of super-exploitation of workers in the Clothing and Textile Industry. ‘COSATU in KZN has always maintained that no labour laws will ever function properly if nothing is done about those employers in Newcastle.  ‘To them nothing is of importance except super-exploitation and the advancement of maximum profit accumulation. ‘Clearly they are capable of defying any and every labour law under the pretence that there is labour surplus in abundance.  ‘They continue to undermine bargaining council decisions and settlements and subject workers to the worst of conditions.

‘It is the same employers who broke the record by going on strike against government and the industry’s bargaining council.  ‘It is the same employers who locked in an employee who was highly pregnant and was forced to deliver at the workplace. ‘Clearly as long as there are employers like those in Newcastle the country will continue to lead the world in poverty, income inequalities and unemployment.

‘As COSATU KZN, we will be demanding full compliance with all decisions of the bargaining council, an end to labour brokers and better Occupational Health and Safety.’ COSATU has also pledged to fight right-wing attempts to weaken labour laws.

In a statetement last Thursday it said: ‘COSATU warmly welcomes today’s cabinet statement which confounds speculation that South Africa’s labour legislation might be relaxed.’ Spokesperson Jimmy Manyi said the government wants to place on record that the Labour Department is the lead department on all labour matters and that the only labour law amendments being considered at the moment are those being processed by Labour Minister Mildred Oliphant through the National Economic Development and Labour Council processes.

‘Cabinet,’ he said, ‘reiterates that South Africa’s labour laws are in compliance with the International Labour Organisation.’ COSATU noted: ‘This follows a worrying statement on August 15, in which Finance Minister Pravin Gordhan suggested South Africa might have to relax its labour laws in certain cases to ensure employment of young workers.

‘ “Laws might also have to be relaxed,” he says, “to allow young people to enter the workplace and gain skills and experience at lower wages, but not at the expense of people who already have jobs . . .Unless such changes are made, we will not be able to make the breakthrough we need to create jobs in South Africa”.

‘These comments come amidst a concerted right-wing campaign to blame “inflexible” labour laws for the high levels of unemployment and to try to use this to justify rolling back gains workers have achieved since the dawn of democracy.  ‘ “Job creation,” wrote Jonathan Yudelowitz, joint managing director of consulting firm YSA, on 2nd August 2011, “is stymied by well-meant but inflexible labour laws, illustrated by the fact that despite growing, the economy continues to shed jobs, never mind create permanent work that fits COSATU’s definition of decency”.

‘Then Pick-n-Pay Chairman Gareth Ackerman on 18th August 2011 said that the labour intensity of production for SA had fallen by 16% since 1994 and the solution to this decline was “labour flexibility”. “It is this, perhaps more than anything, which will create sustainable and decent jobs”.

‘These reactionary views, which have been widely published and repeated ad nauseum in the media, are based on statistics contained in the World Economic Forum’s 2010-2011 Global Competitiveness Report (GCR).  ‘This claimed that out of 139 countries, South Africa ranked: 97th in labour market efficiency; 135th for the country’s inflexible hiring and firing practices; 131st for a lack of flexibility in wage determination by companies; and 132nd for poor labour-employer relations.  ‘Yet labour law expert, Professor Paul Benjamin, has cast serious doubt on this “evidence”.’  COSATU insisted: ‘The only real way for the South African economy to create more decent jobs is to restructure the economy, which is still based on the fault lines inherited from colonialism.

‘Instead of joining the right-wing chorus against labour laws, the government should put in place appropriate macroeconomic policies to ensure speedy transformation of the economy.’ It added: ‘In COSATU’s view the biggest problem with our labour laws is that in reality millions of workers are not protected nearly enough. Their jobs have been casualised or outsourced to labour brokers and they suffer extreme exploitation, poverty pay, no benefits and no job security and the labour laws for them are irrelevant.  ‘This is why no amount of blackmail, based on phoney “surveys” about “inflexible” labour laws causing unemployment, will deter workers from fighting to defend their right to be treated with respect and to be protected from unfair dismissal, poverty pay and super-exploitation.

‘That is why among many campaigns COSATU adopted at its Central Committee (CC) in June 2011, was the living wage campaign, a decision grounded in the real problems workers face, not the perceptions of a few international business executives.  ‘While executives continue to laugh all the way to the bank, with massive remuneration packages, millions of workers continue to earn starvation wages, from which they are forced to support more family members due to high levels of unemployment, and have suffered massive casualisation, including through intensive usage of labour brokers as a clear strategy by companies to circumvent progressive labour laws.  ‘We will never let them get away with making these laws even more “flexible” to allow even higher levels of exploitation.’

Ref: http://www.wrp.org.uk/news/6686
Workers Revolutionary Party

Sactwu shuts down Newcastle

South Africa
The Southern African Clothing and Textile Workers' Union said that over 3000 people took part in the march on Friday(26 August 2011) against poverty wages.

According to Sactwu, the march brought Newcastle to a standstill.

"The workers have handed memoranda to the Newcastle Chinese Chamber of Commerce and Industry and the National Bargaining Council for the Clothing Manufacturing Industry," the union said in a statement.

The memoranda calls on:

• all Newcastle clothing factories to become part of the phase-in program of the bargaining council which is aimed at ensuring compliance with the legal minimum wage and will result in many workers' wages increasing;

• Newcastle employers to stop claiming that workers are prepared to accept poverty wages and to stop pretending that workers support their non-compliance with the laws of South Africa;

• Newcastle employers to stop refusing to give workers weekly payslips as stipulated in South African law. Without payslips workers cannot produce evidence of a weekly income and so cannot buy goods on credit and cannot provide evidence of UIF contributions if they lose their job and want to claim unemployment benefits;

• the United Clothing and Textile Association (UCTA) to withdraw its case against the Minister of Labour for extending the wage agreement to vulnerable clothing workers across South Africa and

• the bargaining council to ensure Newcastle employers pay the legal minimum wage, maternity leave and overtime.

"The workers are determined to intensify their fight for a living wage and job protection," Sactwu added

Clothing union marches in Newcastle

In this post:

- Clothing Union march - Newcastle 26 August 2011

- SA will not change labour law- cabinet

- SA  government officials linked to clothing workers' missing money

Sactwu action in Newcastle

The South African clothing union, Sactwu has decided to "march" in Newcastle to highlight the exploitation of workers taking place there.

Newcastle has become the epicentre of not only the wage debate in the clothing sector but has become representative of South Africa’s entire labour deliberation.

In a show of support, the KZN branch of Cosatu “fully supports the March in Newcastle”, that takes place today, as “Newcastle is the seedbed of super exploitation of workers in the Clothing and Textile Industry.”

Cosatu’s statement continues:

COSATU in KZN has always maintained that no labour laws will ever function properly if nothing is done about those employers in Newcastle. To them nothing is of importance except super-exploitation and the advancement of maximum profit accumulation.

Clearly they are capable of defying any and every labour law under the pretence that there is labour surplus in abundance. They continue to undermine bargaining council decisions and settlements and subject workers to the worst of conditions. It is the same employers who broke the record by going on strike against government and the industry’s bargaining council. It is the same employers who locked in an employee who was highly pregnant and was forced to deliver at the workplace.

Clearly as long as there are employers like those in Newcastle the country will continue to lead the world in poverty, income inequalities and unemployment. As COSATU KZN, we will be represented by the Provincial Secretary, Zet Luzipo at the march and will be demanding full compliance with all decision of the bargaining council, an end to labour brokers and better Occupational Health and Safety.

Cabinet: No, Pravin, we won't relax SA's labour laws

PRETORIA, SOUTH AFRICA Aug 25 2011 

Cabinet has moved to quash speculation that South Africa's rigid labour legislation might be eased in the interests of job creation following pronouncements on the matter from, among others, Finance Minister Pravin Gordhan and Minister in the Presidency Trevor Manuel.

Briefing the media on Thursday following Cabinet's regular Wednesday fortnightly meeting, government spokesperson Jimmy Manyi said Cabinet wanted to "place on record" that the labour department was the lead department on all labour matters.

As far as Cabinet was concerned, the only labour law amendments under consideration were those being processed by Labour Minister Mildred Oliphant through the National Economic Development and Labour Council processes. "Cabinet reiterates that South Africa's labour laws are in compliance with the International Labour Organisation," Manyi said.

That's not what Gordhan said

On August 15, Finance Minister Pravin Gordhan suggested South Africa might have to relax its labour laws in certain cases to grow jobs.

"We may have to change the way we see the labour dispensation in South Africa," he told an internal auditors' conference in Johannesburg.  For example, a balance needed to be found to retain the jobs of 10 000 people working at clothing factories in Newcastle, KwaZulu-Natal, while still allowing them to earn a reasonable wage and keeping the factories open.

Factories in the area had threatened to close down and relocate to Lesotho or Botswana if they were forced to pay minimum wages. Gordhan said laws might also have to be relaxed to allow young people to enter the workplace and gain skills and experience at lower wages, but not at the expense of people who already had jobs. Unless such changes were made, "we will not be able to make the breakthrough we need to create jobs in South Africa".  However, this would be done in the awareness of the struggle against apartheid for human rights, decent work, and decent wages, he said.

Manuel's labour

Two days later, former finance minister and now Minister in the Presidency Trevor Manuel appeared to endorse Gordhan's suggestion that labour laws might need to be relaxed to create more jobs.  In the National Assembly, opposition leader Athol Trollip asked Manuel whether he agreed with Gordhan's "assertion that we would have to look at restrictive labour legislation if we are to create more jobs in the economy".

Manuel replied that he had studied the text of Gordhan's speech, and this was but one snippet. However, he then said: "I think what he said is a position that I would endorse wholeheartedly. We must let nothing stand in the way of job creation in this country."  During the global financial crises, the economy lost one million jobs, and according to Statistics SA, the official unemployment rate currently stands at 25.7%.

Job creation plans

The New Growth Path envisages the creation of five million jobs by 2020, but the country needs to sustain growth at 7% a year for some time to alleviate unemployment. Later on Thursday, the Democratic Alliance said Cabinet's refusal to reconsider the current labour dispensation to create more jobs was a blow to all unemployed South Africans.  "Labour market rigidity is a major driver of our country's jobs crisis," DA spokesperson Ian Ollis said.

Job-creating growth and redress required a government that unequivocally committed to a pro-growth and pro-jobs agenda. "Some in this government agree. But they are being held hostage by the ANC's alliance partners who have shown that they are not serious about tackling the unemployment crisis. "It is time government developed the political will to put the interests of millions of unemployed South Africans first," Ollis said.

'Right-wing attempts to weaken labour laws' However, Cosatu spokesperson Patrick Craven said the federation would "fight right-wing attempts to weaken labour laws".

"While executives continue to laugh all the way to the bank, with massive remuneration packages, millions of workers continue to earn starvation wages, from which they are forced to support more family members due to high levels of unemployment, and have suffered massive casualisation, including through intensive usage of labour brokers as a clear strategy by companies to circumvent progressive labour laws. "We will never let them get away with making these laws even more 'flexible' to allow even higher levels of exploitation," he said. -- Sapa

Source: Mail & Guardian Online

Mystery govt officials figure in Pinnacle Point hearings 

GLYNNIS UNDERHILL

CAPE TOWN, SOUTH AFRICA - Aug 26 2011

A government ambassador and a deputy minister may soon have to explain at high court liquidation hearings how they became involved in two struggling companies in which R360-million of clothing workers' pension money was mysteriously invested. The chances of recovering a substantial portion of the retirement money belonging to workers of the South African Clothing and Textile Workers' Union (Sactwu) now looks slim following the provisional liquidation of six subsidiaries of luxury property developers Pinnacle Point in the Western Cape High Court last week.

About R260-million of Sactwu pension fund money was sunk into Pinnacle, making thousands of pensioners unwitting majority shareholders in this listed company. It emerged at the liquidation hearings that Pinnacle Point was chaired by George Johannes, South Africa's ambassador to Switzerland, while two other unnamed senior government figures and ANC leaders -- described merely as "Mr X" and "Mr Y" -- were also recommended for appointment to its board in a failed attempt to save the company.

The outcome for pensioners is worrying, as the courts placed three of Pinnacle's luxury property developments - Lagos Keys in Nigeria and the Chestnut Hill and GR-Equity properties in South Africa -- in a business rescue plan last month. The business rescue practitioner, Michael Lane, declined this week to discuss how the provisional liquidation of six of Pinnacle property assets last week would affect the company. "I'm not going to be speaking to the press," he said.

The second company under scrutiny is the provisionally liquidated Canyon Springs Investments 12, in which the family of the deputy minister of economic development, Enoch Godongwana, has a 50% stake. About R100-million of the pension fund money was handed as an unsecured loan to Canyon Springs. It is expected that Godongwana will be called to court, in an urgent liquidation hearing, to explain how some of the retirement money was spent.

An attempt to hold the hearing last month was halted due to a lack of funds, but the Mail & Guardian has learned it is to be rescheduled. Renewed concern about the involvement of high-flying government officials in the risky investment of the pension money was heightened last week after the court applications by Investec, which claims it is owed R115-million by Pinnacle Point. Other creditors are also lining up to be paid by the company.

Among the papers submitted to court was a settlement offer made to Investec on behalf of Pinnacle Point in February, which indicated that recommendations had been made for the appointment to its board of two ANC leaders and senior members of the South African government, "Mr X" and "Mr Y". This caught the attention of the presiding judge, Nathan Erasmus, who asked who these people were. No one in the courtroom could provide an answer.

The settlement offer further indicated that the "government and the ruling party have taken an interest in ensuring that this company prospers". "Among the shareholders are thousands of pensioners, who would benefit immensely if the company is allowed an opportunity to survive: the opposite is true if the company does not survive," it said.  The company was "now well led" by its chairman, Johannes, and its newly appointed chief executive, Sibusiso Gamede.

At the time the settlement offer was submitted, Gamede was chief land claims commissioner and adviser to Minister of Land Affairs Gugile Nkwinti. Gamede said this week that all posts at Pinnacle Point had been suspended under the business rescue plan. Wilfred Tshuma, who was responsible for writing the settlement offer sent to Investec after he joined Trilinear Investment Managers as its chief executive, said the idea had been to sell the concept of a black-owned listed property company that could have been "spectacular".

"Pinnacle was its primary investment and I wrote that settlement offer to Investec," Tshuma said. "There had been some informal discussions, but Mr X and Mr Y had not been formally approached, which is why I was guarded about them in the proposal."  Johannes had been a wonderful chairman at Pinnacle, despite being based in Switzerland, said Tshuma. "He was not distant at all. He would hold meetings and teleconferences," he said. "He rubbed shoulders with all the right people and he was critical to playing a positive role in the company."

Investec group risk manager Cairan Whelan said none of the promises made by Pinnacle Point to settle its debt had materialised.  The fact that pension money had been used to buy up shares in Pinnacle Point presented another "minefield", he said.

Source: Mail & Guardian Online

Fake rugby jerseys impounded

Maybe it is simply a coincidence that thousands of fake rugby jerseys were found by customs a day or so after Sactwu said more needs to be done to tackle illegal imports.

Fake rugby jerseys seized

2011-08-18

Johannesburg - Thousands of counterfeit rugby jerseys with an estimated street value of R43m have been seized in Johannesburg, the SA Revenue Service (Sars) said on Thursday.

Spokesperson Anton Fisher said 66 000 jerseys were found in a container in Cleveland by police and custom officials, earlier this week.

"The South African rugby jerseys were already tagged for a leading sports apparel outlet, and were priced at R599.95 per jersey," he said.

Fisher said the goods were falsely declared as mannequins. A man has been arrested and charged for making a false declaration.

He said with the Rugby World Cup coming up, Sars expected to see an increase in counterfeit goods like it happened in 2010, ahead of the Soccer World Cup.

- SAPA

News24.com

Treasury's wage subsidy proposal

Treasury's wage subsidy proposal: An evaluation

The ReDress Consultancy comments:

What benefit would such a proposal bring to the South African clothing and textile sector? Would it work? Would the industry embrace such an initiative?

It is vital that the clothing and textile sector and the clothing union engage in open and amicable debate about this proposal. These parties cannot keep quiet. Use the proposal as a platform to deliberate on ideas that would benefit the C&T sector and South Africa’s unemployment crisis.

Jobs for young people: Is a wage subsidy a good idea?

Executive Summary

 - click on the link above to read the full report.

To read the  full report click here.

Executive Summary

ALMOST three quarters (72 per cent) of South Africa's unemployed workers are younger than 34. The unemployment rate of people younger than 25 is almost twice the national average (49 per cent compared with 25 per cent). And the 50 per cent of South Africans aged 15 to 24 who want jobs and actually have them is significantly fewer than the 80 per cent which the OECD reports as the norm in other emerging market economies. We have a national crisis of youth unemployment.

The government has begun to acknowledge the seriousness of the situation, and has proposed a range of interventions to address it. Some of these are of doubtful merit or contradict other government policies or proposals. One initiative, proposed by the National Treasury, is to introduce a wage subsidy for young workers. The logic of this idea is that employers will be encouraged to employ more young and inexperienced workers if the costs of doing so are subsidised.

The Treasury has proposed that the wages of all workers between the ages of 18 and 29 earning less than R60 000 a year - the current tax threshold - should be subsidised for a period of two years. Registered employers would receive the subsidy via credits on their PAYE accounts.

In the first year, the subsidy would comprise 50 per cent of monthly wages up to R2 000 a month, reducing to nothing for wages of R5 000 a month or more. The value of the subsidy would decline by 50 per cent in the second year. Young people who are currently employed would be eligible only for one year and at the lower rate.

The Treasury estimates that the programme would subsidise 423 000 workers. Of these, 245 000 jobs would be created in any case, and the remaining 178 000 would be created in response to the subsidy.

The Treasury estimates that some 45 000 workers would drop out of the labour force after having benefited from the programme, so the net result would be 133 000 more people employed by 2015, when the programme would end. The programme would cost R5 billion over three years. Each job would have cost an average of R37 000, although the actual subsidies would be considerably less. 

South Africa's labour laws mean that any job that is fully compliant with the law is also, from an employer's point of view, a reasonably expensive job. This is especially true when compared with the costs of employment in other developing countries. Minimum wages in South Africa's clothing industry are two or three times higher than those for similar jobs in Swaziland and Lesotho, let alone India, Vietnam, Bangladesh and Pakistan.

To justify this, levels of productivity have to be high, resulting in employers' offering fewer jobs but for more skilled workers.

While South Africa has sought to ensure that jobs are well paid and well protected, dynamic emerging economies in Asia have sought to expand the absolute number of jobs as rapidly as possible. Many of these jobs do not pay high wages or offer very good conditions of employment, but they do pay better than almost any alternative form of employment for unskilled people. Critically, they exist in very large numbers.

Experience in Asia and elsewhere shows that once high levels of employment have been reached, productivity gains and progress up the industrial value chain lead to a rapid rise in workers' incomes and quality of life. It also leads to much higher rates of growth for the economy as a whole.

 
Reference: Politicsweb, 17 August 2011

Sactwu rejects Minister Gordhan’s comment while Lesotho clothing sector strikes.

South Africa

The ReDress Consultancy comments.

We are in total agreement with Sactwu’s statement that there is an urgent need for government to focus on illegal imports, under invoicing etc. We also fully agree that this crisis that is undermining the clothing and textile sector has not been adequately addressed. However, Sactwu, government and the industry have been trying to deal with the seriousness of these crimes for many years, why is nothing changing?

We believe it is time for all the role-players to stop putting the onus onto one another and come together in a unified manner to find a solution. Here, it is the industry itself that is to blame. Industry cannot lay the blame on the union. However, we do believe that the union could be more active in ensuring that the label regulations are applied. Raid shops in malls; be more visible within the public space. This is a crisis –we need active, tangible viable actions and results.

Questions need to be answered.

1. What happens to people who are caught? Are they just fined and then continue until they are caught again and then pay another fine?

2. Should they not be named and shamed?

3. Maybe we need to target the end of the value-chain. Where are these goods going, where are they being sold and deal with the end users?

4. Why can we not get a grip on this issue, what is preventing us from curbing such trade that is undermining the clothing and textile sector?

Lesotho:

Cosatu has rightly criticized the reaction and heavy handed response in the wake of the clothing strikes that are taking place in Lesotho. However, they only talk about the Chinese employers. We are all very aware that there are many South African clothing operations in Lesotho. Are these companies paying fair wages, are there no strikes at these operations? The fundamental question is why have so many clothing operations moved out of South Africa to Lesotho? How can we entice them to return and employ South Africans? Can the union provide us with statics in regard to how many SA clothing companies there are in Lesotho, who they are, how many people do they employ and what wages do they pay?

Gordhan: Labour policies need to change

South Africa may only create four million jobs by 2025 on its current growth trajectory unless it changes some labour policies, Finance Minister Pravin Gordhan said on Monday.  “This is not enough to make a significant dent in unemployment,” the minister told an internal auditors conference in Johannesburg.

According to Statistics SA, South Africa’s official unemployment rate currently stands at 25.7 percent.
Under the expanded definition of unemployment - which refers to people of working age without work and available to start work that week, but who had not looked for work in the four weeks before the Stats SA interview - 7,678,000 South Africans were unemployed.

The New Growth Path envisages the creation of five million jobs by 2010. Gordhan suggested that South Africa might have to relax its labour laws in certain cases to grow jobs. “We may have to change the way we see the labour dispensation in South Africa,” he said. For example, a balance needed to be found to retain the jobs of the 10,000 people working at clothing factories in Newcastle, KwaZulu-Natal, while still allowing them to earn a reasonable wage and keeping the factories open.

Factories in the area had threatened to close down and relocate to Lesotho or Botswana if they were forced to pay minimum wages. Gordhan said laws might also have to be relaxed to allow young people to enter the workplace and gain skills and experience at lower wages, but not at the expense of people who already had jobs.

Unless such changes were made, “we will not be able to make the breakthrough we need to create jobs in South Africa,” Gordhan said. However, this would be done in the awareness of the bitter struggle fought against apartheid for human rights, decent work and decent wages, he said. “... we are not going to lose what we have gained through hard struggles.”

Reference: Sapa, 15 August 2011
© 1999 - 2010 Independent Online. All rights strictly reserved.

SACTWU Responds
SACTWU OFFERS SOME ADVICE TO MINISTER GORDHAN

SACTWU rejects Minister Pravin Gordhan's pronouncements yesterday that we may have to change the South African labour dispensation. He reportedly used the current situation in Newcastle as an example, saying a balance needs to be found to retain jobs at clothing factories in Newcastle, while still allowing workers to earn a reasonable wage and keeping the factories open.

The Minister seems not to have taken into account the extensive wage and employment flexibility that already exists in the clothing sector. For instance, SACTWU has agreed to a flexible wage structure for the sector, where the minimum wage for some workers is significantly lower than that in other parts of the country. In fact, there are at least 13 different legally prescribed starting rates for machinists, based on geographic differences.

The lowest legally prescribed wage is in areas like Newcastle. There is no "one size fits all".  Further, although wage rates in the clothing industry are bitterly low, SACTWU has allowed a concession that employers can pay 70% of these rates as part of a phase-in programme towards full compliance.

The Minister also fails to take into account the already very low wages in the clothing sector - the legal minimum wage for a new machinist, who in all probability is single and has at least five dependents, is as low as R416.50 per week. The Minister seems to argue that this wage is too high.  In reality, some Newcastle bosses pay their workers much lower - as low as between R150 and R280 per week. They call this a living wage. Any arguments to lower wages that are already as low as these are just a justification for the exploitation of workers.

We would urge the Minister to focus rather on one of the main problems causing job losses in the clothing sector: customs fraud. The SA Revenue Services (SARS), which falls under the Minister's department, can do much, much more to combat under-invoicing, transhipment, smuggling and other types of fraud. For a few years now, SARS has tried to deal with this problem but we are yet to see the fruits of its labour. We urge Minister Gordhan to make decisive interventions to deal with this matter. If he does this, it would be one of the most useful interventions to stabilise and grow employment in the clothing sector.

Issued by Andre Kriel, SACTWU General Secretary. 16August 2011

LESOTHO: Cosatu reacts to clothing strikes

COSATU Free State Statement

On the arrest and harassment of textile workers in Lesotho

15 August 2011

COSATU Free State is shocked and disappointed in the manner the textile workers organised by one of the four federations in Lesotho are treated by employers in the textile industry in Lesotho. These workers who are mainly women and heads of their families are subjected to bad working conditions by their employers. We are informed that unions that are organising this sector, namely LECAWU, NUTEX, UNITE, LENTSOE LA SECHABA and FAWU in Lesotho have been engaging employers who are mainly Chinese with no success until workers decided to go on a strike and withdrew their labour.

These workers are subjected to a monthly take home package of between R300- R500 a month after transport and accommodation costs and are also not supplied with any protective clothing at the workplace by the employers. This means that workers are forced to live on between R10-R16 a day which is basically nothing but a shame and annoying. What else could these poor workers do under the circumstances?

As if exploitation of these workers by their employers was not enough, the state was also called to the scene of the strike by employers and resorted to harassing, assaulting and shooting workers who were peacefully demonstrating against their employers. 5 leaders of these unions were also arrested by the police and one person was reported to be in a critical condition in hospital. The key question that must be answered to the citizens and workers in Lesotho is where these workers and citizens should go to when they face difficulties? Is it not the responsibility of the government and the state to defend and protect its citizens against exploitation and unscrupulous employers?

We are therefore calling for the immediate release of our fellow workers in Lesotho because we believe that they have done nothing wrong but were fighting for their rights. Those workers are:

1. Samuel Mokhele -Factory Workers Union (FAWU),

2. Thapelo Bohloko - FAWU,

3. Tseole Ramaliehe -Lesotho clothing and allied workers (LECAWU),

4. Monare Potlokoane - National Union of Textile (NUTEX) and Rathakane

'Mei - NUTEX.

We also call on the government of Lesotho to desist from joining unscrupulous employers whose aim is to exploit workers and defend its citizens from these types of employers. To this end in line with our Central Committee decisions on international trade unionism, we have convened our relevant structure in the province to discuss solidarity action in support to these fellow workers and comrades.

Statement made by Sam Mashinini,

Provincial Secretary

Free State

082 563 6954



Sactwu’s Mail and Guardian Tirade

Sactwu’s Mail and Guardian Tirade

In response to a double spread on the clothing industry in the M & G, Sactwu had to respond and in turn, we had to respond to their response. Now, maybe, you can respond.

The first response from Sactwu was on the 5th August 2011

Thinly clad union bash

Your spread on Newcastle, the Southern African Clothing and Textile Workers' Union and the clothing industry in the Mail & Guardian of 22 July refers (to read the the spread click here.)

When we first read the articles in your spread on the clothing industry ("High wages unravel Newcastle's industry", July 22), they caused some concern. But it soon became abundantly clear that most of the articles were fraught with misrepresentation, inaccuracy and an ideological bias towards employers.


What is positioned as cutting-edge journalism appears to us to be nothing but a hatchet job on the union, where the position of business is presented as uncontested truth. In the end, as my colleagues and I continued to read the spread, we could not help but laugh at its obvious anti-trade union, anti-worker intent.

The articles contain many factual inaccuracies and false claims. For instance, to suggest the union has not played a role in job creation in the industry is wrong.

When 15 000 jobs in the country's biggest clothing and textile manufacturer, Seardel, were on the line, Sactwu stepped in with R200-million of its own money to save the company from collapsing when no capitalist was prepared to do so.

Moreover, Sactwu recently re-opened a clothing maker that had closed down in Hammarsdale, KwaZulu-Natal. In this factory we are providing decent work for 90 people in one of the poorest areas of the country.

There are many other such inaccuracies. But we have opted not to reply to each, because it is abundantly clear that the intention of the articles was to advance the anti-union, anti-bargaining council agenda of those who want to continue to exploit workers. -- Bonita Loubser, Sactwu

The ReDress Consultancy responds:

Bonita Loubser, comments in the,” Mail and Guardian, 5th August 2011, that cutting edge journalism presents inaccuracies and appears to be nothing but a “hatchet job on SACTWU” and that its intention is to advance anti-union and anti-bargaining council agendas cannot be left uncontested.


She mentions that no capitalist was prepared to invest R200Million to save Seardel and that the Southern African Clothing and Textile Workers’ Union’s investment in Seardel saved jobs.

The questions I pose to Bonita are the following:

1. Did Sactwu and its other Shareholder not close Frame with the loss of over 1500 jobs?

2. Are the same shareholders not going to make a “capitalistic profit” by re-developing the Frame industrial sites?

3. Is it not the same shareholders who closed Intimate Apparel in Cape Town with the loss of 800 Jobs, and transferred those jobs to a huge manufacturing unit that they own in Lesotho?

4. Does their factory in Lesotho pay more than the non-compliant factories in Newcastle and surrounds?

5. Does the writer reveal that the union’s current action in Newcastle and surrounds, together with their ally the bargaining council, put 6000 clothing workers’ jobs at risk if not more?

6. Furthermore, is the writer not aware that the above actions have revealed that large retailers are planning to position their sourcing requirements to neighbouring Madagascar and Mauritius whose labour rates are lower than Lesotho (in the case of Madagascar) and that the merchandise imported from Madagascar and Mauritius is duty free into SA?

7. The writer mentions that SACTWU re-opened a clothing factory in Hammarsdale and is providing decent work. Is she aware that they are in fact allegedly paying 10% below council wages?

8. Furthermore, no mention is made about the deplorable revelations that millions of workers’ pension money is missing, or the fact, that a union official made R8 million for his role in facilitating these dubious investments and that the deputy general secretary is now suspended.

9. My challenge is how many factual inaccuracies are there in the above questions and who are the capitalists / anti-union and exploiters of labour?

Sactwu’s General Secretary had to have his say.  On the 12^th August he branded the Chinese in Newcastle as “white knights.”

"Self-interest is spurring the 'white knights' of Newcastle"

To read his article and the response from The ReDress Consultancy and the 'white knights' of Newcastle click here.

Newcastle clothing employers are not white knights

The ReDress Consultancy comments:

August 13, 2011

Can the courageous and lonely stance by a few clothing owners in Newcastle be deemed as “self-interest,” as alluded by the General Secretary of Sactwu?

See article “Self-interest is spurring the ‘white knights’ of Newcastle.”

Kriel argues that the Newcastle owners are exploiting workers. However, as far as we know, have any clothing workers in Newcastle working in these exploitative factories recently raised up against the “white knights” of Newcastle? Furthermore, we have to ask: will the union find alternative employment for both their members and non-members who will join the mass of the unemployed if further factories are closed in Newcastle?

Kriel mentions the “concession” that Sactwu provided through the 70% phase-in programme. However, he omits  that the bargaining council recently declared that companies who had signed the memorandum are not meeting their obligations. Is this not an indication that the “concession” is not working.  “Another 252 companies are likely to meet the same fate (be given writs of execution). These factories signed a memorandum with the union and agreed to raise their wages in three steps until they are fully paid up and became compliant by April next year. But these 252 have already fallen behind the 70% due in April this year.” (The dirty truth about SA’s clothing bargaining council, Moneyweb, 13 July 2011).

There also seems to be confusion around wage levels. Kriel mentions machinist’s in Newcastle having a starting rate of R416.50 a week. However, in May, the deputy secretary of Sactwu stated, “In terms of the labour regulations, a minimum wage for qualified clothing machinery workers in rural areas should at least be R489 per week, and R740 for a machinery workers in an urban area.” (The New Age, 19 May 2011).

Self-interest is spurring the 'white knights' of Newcastle

Newcastle remains an area of contention in the local clothing industry and indeed in the national consciousness too ("High wages unravel Newcastle's industry, July 22).

The story of some Newcastle employers' continued non-compliance with a legally prescribed wage rates is being narrated as the actions of brave heroes in a last stand against a brutal trade union and a vicious bargaining council. These "white knights" are, reportedly, taking a noble stance to protect the factories and the jobs of their workers and positioning themselves as a vanguard in the fight for employment and against injustice.

This is an appealing tale for some, but in reality this story is an excuse for crude exploitation.

We at the Southern African Clothing and Textile Workers' Union (Sactwi) recognise the challenges faced by local clothing manufacturers. For this reason, we have repeatedly led, proposed and agreed to solutions to assist them.

For instance, we have agreed to a flexible wage structure for the sector, where the minimum wage for some workers is significantly lower than in other parts of the country. In fact, there are at least 13 different legally prescribed starting rates for machinists, based on geographic differences. The lowest prescribed rate is in an area such as Newcastle, where a machinist's starting rate is R416.50 a week. There is no "one size fits all".

Although wage rates in the clothing industry are bitterly low, Sactwu has allowed a concession that employers can pay 70% of these rates as part of a phase-in programme towards full compliance.

A few years ago we even agreed to a wage reduction of about 10% for general workers in non-metro areas such as Newcastle to help with job retention. Also we have agreed to wage measures to incentivise productivity and even led pilot projects to increase it. We have campaign to bring government assistance and incentives to the sector.

These efforts are paying off but, despite this, some Newcastle employers are insisting that workers should be paid a minimum rate of R280 a week. They call this a living wage. Many pay even less. A clothing industry bargaining council survey conducted early last year showed that 41out of 58 Newcastle clothing companies were paying machinists between R150 and R280 a week.

There are many companies in non-metro areas that comply with wage regulations. There are also many in metro areas, where wages are even higher. These manufacturers show that compliance is both possible and viable. In contrast, there were also many companies where we agreed to wage cuts but that subsequently closed down.

Some Newcastle employers expect us to decrease wages and compete in the world as a low-wage country. This is a short-term and impractical view. If we drop our wages, other countries will respond by dropping theirs further – a vicious downward spiral. Getting trapped in a race to the bottom is not a sustainable option.

The other option, which we support, does not focus only on wages but also includes a long-term, sustainable and human rights-based solution. It requires compliance with laws, decent work, a focus on improving productivity, modernising work organisations, upscaling workers, improving quality, diversifying product range and ensuring reliable delivery times. This is already under way but is undermined by the opposition of some Newcastle employers.

They must legally register their organisation and join the negotiating forum that determines which wage rates apply and what industry development measures should be pursued. It does not help to scream from the sidelines.

Andre Kriel (general secretary of Sactwu)

Reference: Mail and Guardian August 12-18, 2011

Alex Liu of the Newcastle Chinese Chamber of Commerce and Industry responds.

Although Mr. Kriel mentioned about 13 different prescribed wages to suit different areas, we have never been consulted with and seldom been properly informed.I attach one pamphlet which was circulated by SACTWU in Newcastle earlier this year to canvas workers joining SACTWU to stand together against brutal employers and SACTWU will lead them out of Alex’s Egypt to the ‘promised land’ (with higher wages). One can see  clearly the figure SACTWU advertised is R489 instead of R416-50 mentioned by Mr. Kriel. 

In fact, we welcome the clarification from Mr. Kreil, in the case of R416-50, the amount of 70% compliance is actually R291-55 not R342-30 as the compliance orders issued by NBC.

When Newcastle Chinese Chamber engaged with SACTWU in the meeting with NBC on the 16/08/2011, we indicated to SACTWU that our chamber does not advocate for any exploitation. We proposed a Disciplinary Committee to be formed in our chamber which monitors and oversees the wages paid by our members by an independent body, this committee was also meant to assist  the NBC inspector  in regard to the inspection of factories and also prevent any violence which was brought up by the sheriff who experienced revolts from workers when they tried to shut down a factory in Newcastle.

We informed SACTWU when this committee was elected and formed at our members meeting in October, but SACTWU told us to agree to a closed shop before they would listen to us. The focus of wages was diverted.

SACTWU then engaged with another group of factories separately and got them into signing the MOU agreeing to a closed shop and the 70% and phase-in period. It proved to be unsustainable to the business.

See letter from those factories to Sactwu.

We have repeatedly requested SACTWU to give us the names of the factories being accused of paying R150 to R280, so our Disciplinary Committee can deal with them if they are members of Newcastle Chinese Chamber, but we have never received any reply.

We have tried by all means to engage with parties to the NBC and government to address our issues. I have personally traveled to Pretoria, Cape Town and Durban on numerous occasions to meet with the parties of the NBC  but without any success.

We are now legally registered through our association with UCTA. 

.

The employers in Newcastle have no intentions to be heroes or ‘white knights’ against anybody. We are bringing our concerns and predicaments to the court room and public forums so they can be argued, debated and discussed in a healthy and constructive manner after the failure of engagements with parties to NBC.

Most importantly, we are appealing to the Government to find an amicable solution to save and strengthen the manufacturing sector of our country.

We hope sanity will prevail.

The dynamics of South Africa’s clothing sector is about to change

Breaking news from the ReDress Consultancy.

A fundamental change in the dynamics and hegemony that has for far too long dictated policy within South Africa’s clothing industry is about to change.  The United Clothing and Textile Association (UCTA) which was formed earlier in the year to provide a voice and representative space for non-compliant clothing companies has been officially recognized by the South African department of labour as a legal employer representative body.

The legal status of UCTA will no doubt cause great concern to the clothing union (Sactwu), the bargaining council and to compliant companies who up to now had total control over fundamental decisions affecting the clothing sector.  The compliant companies constituting a minority had the right in conjunction with the union and bargaining council to implement or negotiate within a framework that affected and effected non-compliant companies that constitute the majority within South Africa’s clothing landscape.

Sactwu, has dismissed UCTA , refusing to engage with the organization on an official status. In March this year the deputy secretary of Sactwu stated that the union was not concerned by UCTA’s position as it was not part of the bargaining council. 

In another statement, Sactwu said that they would without hesitation enter into negotiations with UCTA to explore how their concerns could be accommodated once UCTA was a legally registered employer association. Now it is. 

This means the trouble makers in Newcastle have a legal voice and can apply to be represented and take part in an official capacity at bargaining council meetings.  UCTA’s application to have an official seat on the bargaining council cannot be refused.

What has always been an old boys club is about to undergo a radical transformation that is going to ire many people who had taken it upon themselves to be the guardians of the clothing industry and to construct gate-keeping tactics to keep out irritating individuals and the smaller non-compliant companies who are seen as the scourge of the industry.

It is extremely important for UCTA to develop a coordinated policy to take advantage of this unprecedented change within South Africa’s clothing sector. They need to exercise prudence and formulate a crafted public relations policy as they enter a contested terrain. 

What impact UCTA’s recognition as an industry body will have on the pending legal case against the Minister of Labour and the bargaining council is anyone’s guess.  The irony of the department of labour’s decision to recognize UCTA cannot be over looked.

Other news:

 The ReDress Consultancy has been informed that a division within a clothing concern may be closing its doors or undergo some reconstructing soon. No reason as yet given. But do watch this space. 

Brazil and US take measures to protect clothing and textile sectors

August 2011

Maybe both government and our clothing union should take note.

American lawmakers have reintroduced the textile-specific bill that aims to close customs enforcement loopholes and crack down on illegal trafficking of yarn and duty evasion.

The Textile Enforcement and Security Act (TESA) has garnered support from the US textile industry. "Our industry and its workers have seen job losses due to customs fraud grow dramatically over the last decade as unscrupulous importers and producers have progressively discovered the loopholes in our enforcement rules and regulations," said Cass Johnson, president of the National Council of Textile Organizations (NCTO). "At the same time, US Customs has significantly reduced resources dedicated to fighting textile fraud. Fraud schemes include undervaluing goods, illegally claiming FTA preference, illegally trans-shipping goods, as well as front or ghost companies that pose as US manufacturers," he added.

The TESA legislation seeks to increase US Customs and Border Protection (CBP) enforcement activities and boost trade through improved targeting, increased resources, and enhanced authority. Among its provisions are measures to increase the number of trained import specialists in textile and apparel verifications at the 15 largest US ports; and a requirement that the government publish names of companies that violate the rules of trade agreements.

It also calls on the US government to establish an electronic verification program that tracks yarn and fabric inputs in free trade agreement countries; establish a textile and apparel new importer program and a non-resident importer program; and set up a textile and apparel manufacturing and supplier registry. CBP collects over $30bn in revenue each year, with 42% of all duties - more than $12bn - collected from textile imports.

The Brazilin government has announced specific measure to protect and strengthen its clothing, textile industries. The measures include 25 billion reals ($16 billion) in tax breaks for the clothing, footwear, software, furniture and other industries that have suffered with Brazil’s overvalued currency. 

These sectors will also be exempt from paying the mandatory 20 percent social security tax. Since 2008, the value of the Brazilian real has risen nearly 40 percent against the U.S. dollar. As a result, Brazilian exports have become more expensive and less competitive on the international market, while imports have become less expensive.

“This is a crusade in defense of Brazil’s industry, which is facing an international market where competition is frequently unfair and predatory,” President Dilma Rousseff said in announcing the measures. Finance Minister Guido Mantega said the measures will help the country’s industries improve their competitiveness in an environment he also described as “predatory.”

He said the country’s domestic market, which “is being flooded by imported goods, must be used by Brazil’s industrial sector and not by adventurers who come from abroad.”

The measures also include a refund of 0.5 percent of the tax paid by exporters of industrialized goods. This refund could eventually rise to 4 percent. The government will favor Brazilian goods over foreign products when making purchases by paying up to 25 percent more, if the products come from an industry that generates jobs, fosters development and technological innovation.

 2011 The Associated Press

SA clothing workers' funds the story continues

South Africa

Funds ‘used for property, travel and sushi’

They took textile workers’ retirement funds to run their own businesses, rented a building to the government, ate sushi and went on a pilgrimage to Mecca.

The Star has been shown bank statements for Canyon Springs Investments 12, dating from January 2007 before the loan payments started, through to March 2011.

The account started with an overdraft of R58, then swelled with the R87 million in textile workers’ money from investment company Trilinear. By the end of March this year, there was R127 000 in the account.

The only work Canyon Springs seems to have done was hand out money, pay phone bills and go travelling.

Its income was primarily the Trilinear handouts plus interest on this from fixed-deposit accounts.

The biggest chunk - R15m - went to Leading Prospect Trading 42 in May 2007. At the time Ace Magashule, now premier of the Free State, was a director of Leading Prospect; he has denied any involvement in the matter.

The statements show how money flowed into the Canyon Springs account and out again to Southern African Clothing and Textile Workers Union (Sactwu) consultant Richard Kawie and to Deputy Minister of Economic Development Enoch Godongwana, his wife Thandiwe and their business partner Mohan Patel.

Godongwana was chairman of Canyon Springs from November 2007 to May 2009, while his wife was a non-executive director since May 2009.

The bank statements reflect direct payments of about R600 000 to Godongwana, about R420 000 to his wife and nearly R1m to Patel.

The payments to Enoch Godongwana were made from November 2007 to September 2008, to Thandiwe from June 2009 to April 2010, and to Patel from March 2009 to March 2011.

Kawie both received and deposited money across the four years, mainly through three of his businesses. By the end he had benefited by R6.4m.

The bulk of the money went to businesses owned by the Godongwanas and Patel.

Pan African Benefit Services (PABS), involved in the retirement fund business, got more than R13.6m, moved in numerous transactions - often several times a month.

The Godongwanas and Patel were directors or shareholders in PABS at various times; Patel from January 2007, when the plans to move the Sactwu money to Canyon Springs were hatched.

The Iboma Call Centre, which sold services to various branches of the government, received at least R1.4m. Iboma got payments to its bank account, plus had its staff and phone bills paid directly by Canyon Springs.

Both Godongwanas and Patel were Iboma directors at various times. All three were also directors at various times of other Iboma businesses, and Kawie was also a director of at least two Iboma businesses.

Canyon Springs paid about R250 000 for at least five different Telkom accounts, including Iboma’s.

Patel got other payments too. More than R1m is listed as payments for Kismet Plaza, a building in Athlone, Cape Town, which Patel owns with a relative.

The Patels rent space in Kismet Plaza to the Western Cape regional office of the Government Communication and Information System.

Kismet Plaza, valued by the municipality at R14m, is just one of many Patel properties.

In one business with his relative he owns 88 properties, mostly adjoining plots of empty land, in the Athlone and Gatesville area, inherited from a relative who bought most of the property in the 1960s.

One of those 88 properties has apparently been rebuilt and now has a municipal valuation of R20m.

Another Athlone property has a municipal valuation of R8m and is used by a Toyota dealership.

One of Patel’s trusts bought two sectional title units, one in November 2007 for R1.1m with a huge bond, and the other in April 2008 for R47 000 cash.

The Canyon Springs accounts indicate that an astonishing amount was spent on travel. However, many of these travel transactions seemed to be an attempt to hide payments to an individual.

There are at least 15 payments from April 2007 to September 2008 logged as “M AirfairsM”, totalling about R1.3m.

Most of these payments are for the same amount - just over R83 000 - which looks like a monthly payment of R132 000 less tax to an individual.

Other payments indicate that in February 2008, someone travelled through Dubai.

The next month someone spent nearly R50 000 on a single set of air tickets, then three months later R47 000 on a hotel in Nigeria. In May 2009, someone paid R43 000 to a travel business that specialises in hajj tours to Mecca.

In June 2008, Canyon Springs spent R14 500 on a Cape Town sushi restaurant.

A firm of architects, based in one of Patel’s buildings, got more than R600 000.

The SA Revenue Service was paid about R1.5m, although this does not seem to be enough to cover tax deductions on all the payments.

The end of 2009 seems to have been a good year for spending, with the last of the Trilinear “loan” instalments being moved to Canyon Springs in November 2009.

Canyon Springs in turn handed over R50 000 each to Thandiwe Godongwana and Patel on Christmas Eve, and the R40 000 to each four days later. Kawie got R100 000 on Christmas Eve and R270 000 four days later.

The Iboma Call Centre got three payments that December, PABS got R1m, and even the building got a Christmas bonus, as Kismet Plaza got a double payment of R171 000.

By March this year, almost all the money in the Canyon Springs account was spent, leaving only 

Reference: Louise Flanagan, The Star, 1 August, 2011

More money missing from workers’ funds

THE LIQUIDATION inquiry into the company that took R87 million in textile workers’ retirement funds stalled last week because more money went missing.

Canyon Springs Investment 12 is under provisional liquidation, and a liquidation inquiry was supposed to have been held last week.

Cape Town lawyer Barnabas Xulu said there was supposed to be R10.7 million in the Trilinear Empowerment Fund account – some of which would have been used to fund the liquidation inquiry – but Trilinear had told him it was gone.

“It has disappeared,” he said.

Trilinear has repeatedly refused to comment to The Star on the missing money.

It’s not clear what will happen to the liquidation now.

This is how the money disappeared: the SA Clothing and Textile Workers Union (Sactwu) provident funds handed over hundreds of millions of rand to the Cape Town-based Trilinear group to invest on its behalf.

Trilinear lost some in bad investments, but also “lent” Canyon Springs about R87m. That loan, initially made on the basis of a verbal agreement, seems to have been illegal and wasn’t paid back; with interest it’s now worth at least R100m.

Deputy Minister of Economic Development and former unionist Enoch Godongwana has previously denied involvement in the R87m “loan” to Canyon Springs. His family own part of Canyon Springs and its subsidiaries.

However, The Star has seen financial documents which show that at least R15m of it poured into businesses which Godongwana and his wife own.

The Godongwanas’ business partner, Mohan Patel, seems to have used his takings to fund his Cape Town property empire, while the man hired by the textile workers’ union to invest its funds properly, Richard Kawie, took more than R6 million for himself.

The Godongwanas did not respond to requests for comment. They have previously acknowledged involvement in the businesses.

Patel, who could not be contacted, has previously ignored requests for comment.

Kawie has previously declined to comment through his lawyers, saying only that he denies all allegations.

Cosatu general secretary Zwelinzima Vavi said two senior Sactwu officials had been sus-pended over the funds’ disappearance, not necessarily for involvement but due to lack of oversight.

One of them is Sactwu deputy general secretary Wayne van der Rheede. He could not be reached for comment.

Unionists pushing the investigation have received death threats, according to Vavi.

He said political leaders should not involve themselves in both politics and business. “

Too many of our leaders are trying to serve the lion and the sheep in the same kraal,” Vavi said.

If anyone in government was found culpable in the money’s disappearance, Vavi said, Cosatu would demand their dismissal.

“We will hold marches.”

Reference: Louise Flanagan, The Star, 1 August, 2011