Newcastle Chinese Chamber of Commerce and Industry responds to raids

Press Statement

From: Newcastle Chinese Chamber of Commerce and Industry

Reference to the raids on Newcastle Clothing Companies

Date: 30 September 2011

South Africa

The Newcastle Chinese Chamber regrets the raid yesterday. Such intimidating actions do not help to address the issues raised by SACTWU nor will it help the national job creation campaign. The Newcastle Chinese Chamber met with SACTWU last week to set up a meeting with the Disciplinary Committee of the chamber together with SACTWU to discuss the matters contained in their memorandum . Yet despite this agreement SACTWU decided to ask the department of labour and home affairs to raid our factories.

We are concerned about the way the inspections were conducted because the joint teams were either lead by SACTWU officials or NBC inspectors. All inspections took more than 5 hours and longer and the actions were more like police raids on criminals. The raids resulted in loss of production to those factories and some factories cannot open today as their workers were frightened by the actions of yesterday.

Factories haven’t received the report from DoL about the findings, we will comment on the reports only when we receive them. Some so called illegal immigrants were arrested and detained on allegations of violation of the act. We have submitted proof and documents to the DoH and hopefully they can be released as soon as possible.

In one incident, 2 Chinese were arrested with valid permits with company A but found allegedly working in company B. In fact, they were assigned by their company A to supervise and check the orders placed to company B. The 2 companies are situated within 2km from each other. Both owners approached the chamber for assistance. The others had expired work permits but already applied for extension before expired date.

We are also curious as to why such raids only take place in Newcastle and in Chinese factories. The Minister seemed to hear the voice only from the trade unions but not from the workers and employers. The question can be rightfully asked if this is not bullying tactics because of the impending court case against the bargaining council and other stakeholders

All the 12 factories provided the officials in the task teams with full co-operation yesterday as we respect the laws of this land. We are however under the impression that government departments are supposed to assist the manufacturing sector as was recently announced by our President Zuma in Port Elizabeth and we would have imagined that the government departments would have engaged us as stakeholders in the SA economy and not like criminals.

Alex Liu

To read article:
Foreign textile workers arrested in Newcastle factory raids

At least 46 foreign workers without legal work permits were arrested in a surprise swoop by the Department of Labour at what it called “12 of the worst clothing factories” in Newcastle, officials said yesterday. Click here

Newcastle clothing factories raided

Foreign textile workers arrested in Newcastle factory raids

At least 46 foreign workers without legal work permits were arrested in a surprise swoop by the Department of Labour at what it called “12 of the worst clothing factories” in Newcastle, officials said yesterday.

The raid is one of the initiatives the department has encouraged provinces to undertake in a bid to stamp out non-compliance in the textile industry. This is in addition to the nationwide blitz campaign that focuses on high-risk and problematic sectors.

The inspection, to ensure compliance with labour laws, was conducted in collaboration with the Department of Home Affairs, the SAPS and the bargaining council for the clothing and textile sector.

“This is a way in which a holistic and consolidated approach is used to root out employers who flout the law. Follow-up inspections will be conducted and if it is found that the employers concerned are still disregarding the law, then inspectors will not hesitate to recommend prosecution in such instances,” said Abey Rasepae, the provincial control inspector of the Department of Labour in KwaZulu-Natal.

Although the nationalities of those arrested could not be confirmed yesterday, Rasepae said there was concern over textile companies hiring foreign labourers who did not have the correct documentation and permits. Nine workers were arrested two weeks ago in a similar operation.

The antagonism between government agencies and textile factory owners has been exacerbated by the latter’s reluctance to pay agreed minimum wages, despite a process through which government has tried to enforce compliance.

Rasepae said yesterday’s raid had uncovered various anomalies. Production at one factory was ordered to stop as the sewing machines had no safety guards and this posed a danger to workers.

“Some of the contraventions included emergency exits not being demarcated, no electrical certificates available for electrical installations and no soap or toilet paper being placed in toilets.

“In one instance, it was found that only one toilet was shared by almost 60 male and female employees,” he said.

He said some factories had no fire-fighting equipment or qualified first aid personnel, and some first aid boxes were not adequately supplied

“Employers were also found to be on the wrong side of the law when it came to making declarations and paying contributions to the Unemployment Insurance Fund (UIF). The lack of registering with the Compensation Fund was also prevalent,” Rasepae said.

The Southern African Clothing & Textile Workers Union (Sactwu) had laid complaints against the employers, accusing them of exploiting workers and not providing decent working conditions.

Rasepae said such initiatives would be continued to ensure that the enforcement of labour laws gained momentum at all levels, particularly where there was gross violation.

Inspectors have issued contravention notices giving employers 60 days to comply.

Reference: Ayanda Mdluli, Business Report, 30 September 2011 

Sactwu to participate in legal case-missing funds

SACTWU secures legal standing in Canyon Springs 417/418 enquiries


The Southern African Clothing and Textile Workers’ union (SACTWU) has secured the legal right to participate in a section 417/418 Companies’ Act enquiry, in the Canyon Springs liquidation proceedings. It will be the first ever such enquiry in South Africa in which a trade union participates, by way of interrogating witnesses who have been subpoenaed to attend the enquiry, and will usher in a new era in industrial relations in our country, where bosses and related persons of suspect insolvent companies are called to account for their actions in a legally sanctioned investigation enquiry. In this instance, SACTWU is pursuing the Section 417/418 enquiry in order to establish what has happened to about R100m of its members’ retirement funds, loaned to Canyon Springs by the Trilinear Empowerment Trust (TET), to recover as much as possible of the missing monies and to ensure that if any guilt is proven by anyone, steps are taken to bring the guilty to book.

The new Companies’ Act, which provides for this type of enquiry, came into effect in May this year. SACTWU has purchased the debtors’ rights of Dart Stationers CC to secure the legal standing to pursue the enquiry (this debtors’ purchase was done for a minimal amount of just over R900, being the amount that Canyon Springs owes Dart Stationers for stationary purchases). The agreement with the union states that Darts Stationers CC cedes its Canyon Springs debtor’s rights to SACTWU. A second similar agreement was entered into with Mel Solving IT CC, for just over R400. Prior to these two agreements, SACTWU had no legal standing in the matter, as the union itself was never party to the investment decisions of the retirement funds or in any of the decisions by the Trilinear Empowerment Trust Fund to lend retirement fund monies to Canyon Springs. These agreements now provide the union with the legal right to pursue a section 417/418 enquiry against anyone involved in the alleged misappropriation of about R100 million of SACTWU members’ retirement funds originally loaned to Canyon Springs.

The union has arranged for the Section 417/418 enquiry to commence at the end of September this year and it is expected to run for about 10 non-consecutive days, with completion expected by mid-October 2011. There-after, the Enquiry Commissioner is required by law to prepare and issue a report, including to pronounce on alleged criminal and/or negligent conduct by persons who have been subpoenaed to appear. The Cape High Court has now already appointed senior attorney Jan Reitz as the Enquiry Commissioner.

In terms of the new Companies Act, a subpoenaed person is required to answer all questions at the 417/418 enquiry and to produce such documents as may be required, failing which the person could be jailed.

We are determined to execute my take steps to of recover every single cent which may be missing and to ensure that if any wrongdoing is proven, the guilty must go to jail for a long time.

SACTWU has instructed that a number of high profile people involved in the matter to be subpoenaed and the Enquiry Commissioner has now formally issued such subpoenas. Persons who have been summoned to date are as follows (more persons WILL be summonsed later):

• Mohan Patel. He is one of the key directors of Canyon Springs and is effectively one of the senior shareholders of Canyon Springs. He has acted as the equivalent of Canyon Springs CEO for many years.

• Enoch Godongwana. He was a director of Canyon Springs. When he became a Deputy Minister, he resigned as a director and his wife, Thandiwe Godongwana, then became a director of Canyon Springs. Furthermore, him and his wife are, through their company, effectively senior shareholders in Canyon Springs.

• Thandiwe Godongwana. As stated above, she is a director of Canyon Springs and through the relevant company effectively a senior shareholder of Canyon Springs.

• Erwin Da Gama. Is a director of Leading Prospects (Pty) Limited (“Leading Prospects”), which company was allegedly granted an unsecured loan of at least R15 million by Canyon Springs.

• Sam Buthelezi. He is effectively the Chairman of and the person in control of all of the Trilinear companies, which were effectively the financial services provider and investment advisers for the Trilinear Empowerment Trust (“TET”).

• Graig Philander. He was one of the initial trustees of TET. He was apparently paid a substantial consultancy fee, as a consultant for TET.

• Richard Kawie. He claims that he was the National Benefits Co-ordinator of SACTWU and it is alleged that he has received substantial service fee payments from Canyon Springs, up to approximately R8m. In meetings with the trade union, he has consistently denied any wrongdoing.

• Hyman Bruk of Bruk Munkes & Co, the auditors of Canyon Springs.

• Bonita Davids. She was the bookkeeper for Canyon Springs.
• PKF, the auditors of TET. PKF recently withdrew the audited financial statements of TET for several years, because they alleged there have been misrepresentations made to them, after the union had queried certain aspects of their reports

• Shahid Sulaiman. He is a partner at Bowman Gilfillan, one of the top legal firms in South Africa, the attorneys that acted for the Trilinear companies and TET. It is alleged that he made material written misrepresentations relating to the financial position of TET/Trilinear, allegedly also having given written assurances that the monies are secure in safety deposits.

• Silumko Nondwangu, a former General Secretary of the National Union of Metal Workers of South Africa (NUMSA), who is alleged to have received payments from Canyons Springs for services which he claims to have legitimately rendered to the company

• Spencer Witten: Richard Kawie’s PA

• Siphamandla Jama. He was originally employed with the Trilinear companies, as well as TET, and signed the founding affidavit in support of TET’s application for the liquidation of Canyon Springs.

• Darawees Gasant: he acted as a Transaction Adviser to Canyon Springs

The following persons will appear first during the commencing session this week, and in this order, when the Enquiry starts on 29 September 2011:
• Enoch Godongwana.
• Thandiwe Godongwana.
• Siphamandla Jama
• Mohan Patel.

Issued by
Andre Kriel
SACTWU
General Secretary

SA Apparel Association say future for clothing and textiles is good

A South African apparel association says that the future looks very good for the clothing and textile industry.
The ReDress Consultancy invites comments from the industry. Are they being too simplistic in their views. And what of the labour breakthrough? How will this affect the compliance issue, wage pahse-in and bargaining council's actions or mandate?

Patching things up

Things are looking up for the clothing sector. It is on the verge of a breakthrough with labour on a new wage dispensation for the industry, as well as in securing a 22% duty rebate on imported fabric.

Things are looking up for the clothing sector. It is on the verge of a breakthrough with labour on a new wage dispensation for the industry, as well as in securing a 22% duty rebate on imported fabric.

For years clothing manufacturers have been pleading with government to remove the 22% duty on fabric since the sector imports 80% of its fabric needs. Local fabric, it argues, is either not available in commercial quantities or is not price competitive with Asian imports. (Fabric makes up about half the manufacturing cost of the average garment, more than twice labour costs.)

“We’re close to getting sign-off for a comprehensive duty rebate on all imported fabrics, whether locally available or not,” says Johann Baard, executive director of Apparel Manufacturers of SA .

The last hurdle is for the textile sector to secure a commitment from both the public and private sectors to source more fabric locally in exchange for the textile industry giving up the protection offered by the 22% duty.

The Textile Federation’s Brian Brink says previously government would have given the tariff relief without having considered the upstream impact, but to do this would be akin to “turning the lights off” on SA’s textile industry.

“It’s taken a world recession and a decade of savage attack from China for them to find a cleverer way of doing things,” he says, predicting that agreement is only months away.

In a separate development, the industry, after months of facilitation by the Commission for Conciliation, Mediation & Arbitration , has concluded a proposed wage settlement agreement at leadership level with the SA Clothing & Textile Workers’ Union . If the union’s members accept the proposal, which Baard says contains “unprecedented, innovative elements and wage model adjustments”, employers will consider it a breakthrough.

In addition, two key industrial support measures, the Competitiveness Programme and the Production Incentive Scheme, have assisted in stabilising the sector. The department of trade & industry estimates that 171 companies have benefited from these two programmes and that this has supported or saved at least 40591 jobs while 1111 new jobs have been created.

Another positive development is that a dedicated SA Revenue Service forum has been established for the sector. It will be supported by a secretariat and ensure customs compliance, among other things. “We’re encouraged because the single most important thing that could have a massive impact on the sustainability of the industry is to deal with illegal imports and under- invoicing,” says Baard.

Manufacturers are confident that if all these measures fall into place, the industry will be able to win back lost market share from the East. “Over the next 12-18 months we expect this to translate into significant job creation ,” says Baard.

Reference: FM, 23 September 2011

Clare Bisseker

Swaziland – union action – jobs – investments – clothing industry

Swaziland – union action – jobs – investments – clothing industry

Following the cosatu xenophobia article which you published in the Swazi Observer it is clear that COSATU does not have the interests of Swazi workers, let alone the Swazi Nation. COSATU has sent its members to literally invade Swaziland in order to stop investors from crossing into Swaziland from South Africa. COSATU is here to protect the jobs of their membership. They are not here to promote democracy. The ANC is very much aware of the schemmings of their alliance partner. Indeed, COSATU is acting in bad faith and unfortunately Swazi workers have fallen for it.

It is an open secret, thanks to the loud mouthed Swaziland Investment Promotion Authority (SIPA} that some Taiwanese textile companies have been thinking of leaving Kwazulu-Natal to set shop in Swaziland. These companies are said to be running away from the minimum wages recently set by COSATU for textile workers. COSATU realises that if these Chinese textile companies leave South Africa for Swaziland, thousands of their workers will lose jobs.

The ANC also realises that such an occurance will go against the party’s pledge for the provision of millions of jobs in the near future. Indeed, this puts our friend President Jacob Zuma in a dilemma because the Kwazulu-Natal job loses would mean a serious minus in his votes from his strongest base.

COSATU has ably demonstrated to the Chinese investors that COSATU runs the show even in broke Swaziland. They cannot therefore, running away from the high textile workers’ wages. Come on Swazi workers i COSATU inishaya ngemfe iphindziwe. Bashishise indlu yabo sebatsi nani shisani yenu indlu so that the Chinese textile companies will be scared away from Swaziland. Swazi workers are smarter than this. I have no doubt that Jan Sithole would have done better than this.

‘Wake up Swazi workers’

Swazi workers must wake up.

The hunt for investors and jobs is a very serious business. South Africa has so much to offer to investors as they boast of excellent communication infrastructure including ict, road, sea and air transport. Our best commodity has all along been our peace and the trainable and affordable skilled labour.

COSATU has invaded Swaziland to take away that very special offer which has been attracting investors into our country. A democratic Swaziland without jobs will be a curse to future generations who will be forced to cross the border to RSA, where they will be subjected to xenophobia.

XENOPHOBIA HAS NO CLEAR EYES

Let me warn Swazi workers and all citizens about xenophobia.

This is sickness that is closely related to madness born out anger. Lunatics always lack proper judgement and this is even recognised by the courts of law that will not convict a mad murderer. Once xenophobia has set into motion against the children of the Swazi leadership, I bet you my head and skull it will not distinguish between the Swazi worker’s child and the princess’ child. I guess perhaps Swazi workers will give red T-shirts to their children to wear everyday and every night to escape xenophobia. Unleashing xenophobia on innocent Swazi children who happen to be studying in RSA will have untold misery on all Swazis since Swazis are all the same as we have never branded our children who are always given equal treatment. Under xenophobia MP Trusty Gina’s son is same as SFTU’s Mduduzi Gina’s son. No Swazi should be excited or accept the branding of Swazi children who are studying in RSA. Soon it will be Swazi traders and Swazi workers in RSA. Let us reject this evil from the onset. We trust that the South African institutions of higher learning will not stoop that low to allow the disclosure of particulars of their Swazi students to be exposed to xenophobia.

COSATU HAS NO RESPECT FOR SWAZI WORKERS

COSATU has shown total disregard and disrespect for Swazi workers under the pretext of solidarity.

Cosatu is telling the world exactly what Malema said about the Batswana that they are weak and unable to organise themselves.

The proud and able Jan Sithole often crossed swords with COSATU because he was a strong leader and would not be dictated to by COSATU. There is nothing wrong with Cosatu expressing solidarity for the Swazi cause, but for them to take the forefront and invade Swaziland smacks of some big brother syndrome. Yes Swaziland is broke but we must still protect our pride. We must never allow ourselves to play second fiddle if we still want the respect of our children whether we are workers or rulers.

The invasion of Swaziland by COSATU has brought some exoneration on the conservatives who have always alleged that the call for democracy in Swaziland is foreign motivated. Otherwise the Swazis are neither interested nor capable of fighting for democracy. This is wrong. COSATU must just stay out of our struggle. They can support us from within RSA. Except, of cause if they want to pursue their agenda of driving away investors from Swaziland.

Come to think of it. What support did COSATU give to Swazi workers when Swazi Paper Mills relocated to Kwazulu-Natal. I know for a fact that COSATU ululated and enticed the company to leave its Swazi workers stranded and poorer. What solidarity did COSATU demonstrate when SAPPI moved all its mill production from Swaziland to Ngodwane? COSATU definitely enticed SAPPI to do just that because it meant more South Africans would get jobs as the Swazis lose theirs.

Come on Swazi workers just wake up and be smart. Vuka Ngwane and know at all times that there is no free lunch in this cruel world we live in. In order to survive as a winner you must make sure that your stake is securely protected in every partnership or solidarity you enter into or accept.

NB: The author of the article asked to remain anonymous as he is a member of the security forces despite that we don’t encourage people to use pseudo names we felt the points he raises will stimulate the necessary debate.

ANC WILL NOT DISCIPLINE COSATU

To prove this point you just have to listen the deafening silence from the ANC regarding the invasion of Swaziland by COSATU.

The ANC is currently disciplining Julius Malema and the ANC Youth League for threatening to invade Botswana. Now COSATU has invaded Swaziland and the ANC is quiet. Is the ANC playing double standards just because Swaziland is broke and has had to borrow money from RSA? Malema can smile his way in and out of his next disciplinary hearing session because precedence has been set by the ANC’s failure or sheer refusal to discipline COSATU for invading a sovereign state which happens to be also a member of SADC just like Botswana. I guess minister Lutfo Dlamini has already written a strong diplomatic note to Minister Mashabane protesting this invasion. We learnt that the minister for foreign affairs in Botswana did exactly that. No, I don’t think that RSA government will ignore such a protest, note just because they have promised to loan us R2.4 billion.

Reference: The Swazi Observer, 17 September 2011

By Mojozi Madonsela

Links:

"South Africa’s neighbours eye SA clothing companies." Click here to read article.

"SOUTH Africa’s second largest clothing manufacturer, Kingsgate Clothing Group which is based in Durban wants to open a factory in Swaziland."  Click here to read article

Newcastle clothing industry responds to Sactwu

Newcastle clothing companies still wait for a response from Sactwu. 

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 . 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.

September 1989, South African mega clothing union formed.

September 1989, South African mega clothing union formed.

Researched by The ReDress Consultancy

In September 1989, Sactwu was formed and one of its priorities was the formation of a bargaining council which only happened in 2002. In 2005 the department of labour initially said that the bargaining council was not representative of the industry and therefore agreements could not be automatically extended to non-parties. For some reason this was over thrown and judgment was made that the bargaining council was representative.

In September 1989, the Southern African Clothing and Textile Workers’ Union (Sactwu) was officially formed. Formed from “Cosatu’s Amalgamated Clothing and Textile Workers Union (Actwusa) and the Garment and Allied Workers Union (Gwau),”  it created with its 185000 members the third largest union in South Africa. Absorbed into the new union was the National Union of Clothing Workers. The first elected general secretary was Lionel October, with John Copelyn being elected as his “assistant.”  The union said one of the first issues on its agenda was the demand for centralized bargaining, “which employers are said to be resisting.” [1

The new union said it consist[ed] of about “70 percent of the labour force in the clothing and textile industry [and will be] incorporating the leather industry.”  Newspaper reports at the time said that the union’s links with the Mass Democratic Movement will have a “major influence in extra-parliamentary resistance.”[2]

Further media reports stated the emergence of Sactwu brought a new level of non-racial unity to the labour movement. “A new spirit of non-racism will be brought into Costatu,” said one report, “When Cosatu’s Amalgamated Clothing and Textile Workers Union of SA and the Garment and Allied Workers Union merge.“ Actwu’s membership of 72408 consisted mainly Africans while Gawu’s 105 500 members were made up of Indian and Coloured laobur. Cosatu said the merger meant that “over 80 percent of the clothing and textile sector [would now be organised by Cosatu].” It was reaffirmed that the “struggle for a single national industrial council to make sure that all it members in all regions have the same wages and working condition,” was a priority.[3

However, the “struggle” for a centralized bargaining council for the clothing sector took many years, as the “historic deal to establish a national bargaining council for all clothing manufacturers was only signed on the 14 May 2002.  The deal between Sactwu and seven regional clothing employer associations,” paved the way to regulate 120 000 workers in the sector. The announcement of the bargaining council stated that equal number of trade unions and employer delegates would be represented and it would have the power to “negotiate agreements for the entire industry.”  However, the announcement was met with some resistance from CMT operators who said such a bargaining system would put “small firms out of business.” [4]

The bargaining council’s first major legal judgment against a clothing employer in April 2005 was against a Newcastle company, Nova Clothing. Leon Deetlefs, the national compliance manager, said “several employers in the Newcastle area would face the same fate in the weeks ahead.” The owner of Nova Clothing was sentenced to 15 days in prison or a fine of R10 000, suspended for two years on condition that the company compl[ied] with the arbitration award handed down in 2004;[5]

Reports in July 2005, stated that the future of the “clothing industry’s national bargaining council [hanged] in the balance,” due to questions about its representativeness within the industry. Apparently, the director-general of the department of labour wrote a letter to the bargaining council saying, “this office does not see its way clear to recommend to the registrar that he issues the council with a certificate of representativeness.”  According to the LRA, the council must be representativeness for agreements to be extended to non-parties.  According to the then CMT Employers’ Organisation, the bargaining council only represented 34 percent of employers in the industry and not 44 percent the department had calculated. [6;

Clearly political pressure was  placed on the  department of labour, or calculation of “representativeness” was re calibrated, for in September  2005, the registrar of labour declared the national bargaining council for the clothing industry had the right to be representative of employees in the industry, this cleared the way for the labour minister, Membathisi Mdadlana to automatically extend bargaining council agreements to companies whose employer “ organisations are not registered with council.” 7]

Eleven years later a new clothing employer organisation and a number of companies have served legal papers against the minister of labour and the bargaining council claiming that the automatic extension to non-parties is unconstitutional.

1 “Super-union will make impact on industry,” The Star, 19 September 1989

[2 “Textile unions merge to form powerful trade union,” Weekly Mail, 22 September 1989

[3  “Non-racial unity in new merger,” New Nation, 21 September 1989

4 “Textile sector weaves bargaining council,” The Star, 15 May 2002

[5; “Bargaining council  to spread legal net,” The Star, 20 April 2004

[6; “Clothing council hangs in the balance,” Sunday Tribune, 24 July 2005

;[7; “Ruling on clothing council clears way for Mdladlana,” The Star, 28 September 2005