NATIONAL ECONOMIC DEVELOPMENT AND LABOUR COUNCIL (NEDLAC)

GROWTH AND DEVELOPMENT SUMMIT (GDS) IMPLEMENTATION REPORT

AS AT 14 DECEMBER 2004

BACKGROUND AND APPROACH

This report presents an overview of progress with the implementation of the Growth and Development Summit (GDS) Agreement from June 2003 to the end of 2004.

Progress on the GDS can be evaluated in two ways. First, we can ask if constituencies have in fact addressed areas identified in the GDS, such as support for small enterprise and sector strategies. Second, we can evaluate whether the commitment to partnership and the specific agreements in the GDS have been implemented. This second area is critical for taking forward the spirit of co-operation between, and buy-in by key stakeholders that the GDS established. We here attempt to evaluate our progress in both these areas.

The report is structured according to the four main themes of the GDS Agreement:

The report unpacks each theme into individual agreements, with a brief analysis of progress in each area, constraints or bottlenecks, and proposals for dealing with them. For ease of reference, the headings for each section correspond to those in the GDS.

2. MORE JOBS, BETTER JOBS, DECENT WORK FOR ALL

2.2 Public Investment Initiatives (PIIs)

Agreement: An expansion in Public Investment Initiatives (PIIs) to develop and maintain economic and social infrastructure by government, state-owned enterprises and developmental institutions, in order to facilitate growth, improve productivity, create jobs and promote urban and rural development.

Progress: Government - Overall, public sector capital expenditure is expected to grow at an average of 15,6% a year over the 2005 MTEF, up from 11,4% a year between 2001/02 and 2004/05.

The Current bulk Municipal Infrastructure Programme (CMIP) has an allocation of R2,2 billion for the 2003/4 financial year. Achievements to date include 837 projects implemented, of which 142 are in rural nodes and 41 in urban nodes, and 271 000 households serviced. The housing programme, with an annual budget of more than R4 billion, contributes significantly to public investment, with some 40% of its budget invested in infrastructure. In terms of the new Comprehensive Plan for Integrated Human Settlement Development, the Human Settlement Redevelopment Programme will fund basic social and economic amenities and some R100 million will be available for this purpose during 2005/06.

Government has increased infrastructure grants to municipalities and provinces by R1 billion over baseline allocations. The increase aims to eliminate backlogs and inequalities in social and municipal infrastructure at local and regional level and will also increase employment opportunities through labour-intensive construction methods. An additional R1,35 billion has been allocated for transport infrastructure and R859 million for water resources infrastructure over the Medium Term Expenditure Framework (MTEF) period.

Large infrastructure expenditure estimates include the hospital revitalisation programme projected to be R3,7 billion, the national electrification programme at R3,6 billion, national public works infrastructure expenditure at R2 billion, prison facilities construction at R3,2 billion, police infrastructure at R1,2 billion and court facilities at just over R900 million.

In addition, Transnet is expected to spend R28 billion on infrastructure, and investment in the electricity industry should exceed R49 billion over the MTEF period.

Constraints/Bottlenecks: The NEDLAC constituencies have not mandated a structure to support joint work to achieve the objectives of this agreement.

Interventions: A one-a-side task-team has been established to propose to the GDS Implementation Committee an appropriate structure to facilitate collaboration amongst social partners in both the Public Investment Initiatives and the Expanded Public Works Programmes (EPWP).

2.3 Expanded Public Works Programme (EPWP)

2.3.2 Projects to provide short-term jobs

Agreement: Launch projects in terms of an EPWP that provide short-term jobs in communities, with pay/wages in line with NEDLAC agreements.

Progress: Government Cabinet approved a conceptual framework for four sectors in November 2003. Plans have been developed for the social, environmental and infrastructure sectors, outlining focus areas and targets for the next five years, with enabling frameworks. The economic sector plan is being finalised.

The Department of Public Works has, together with the Construction Education and Training Authority initiated a Contractor Learnership Programme that aims to build capacity among emerging contractors to execute labour intensive projects in line with the EPWP Guidelines. 500 contractors and 1000 site supervisors will be trained as part of the programme and in the process will execute approximately R1 billion of EPWP projects. The Department of Science and Technology (DST) has launched 15 agro-processing projects, four chemical projects and two crafts projects as part of its poverty alleviation programme. The construction of infrastructure within housing projects will from 2005/6 onwards be pursued in terms of the approved EPWP guidelines. An appropriate framework for infrastructure delivery in housing projects in terms of these guidelines is currently being finalized. The Department of Trade and Industry (the Dti) and the Department of Minerals and Energy (DME) is also finalising discussions with ESKOM regarding an entrepreneurship programme for the supply of pre-paid electricity cards.

The Department of Public Works is monitoring the EPWP by collecting data from departments, provinces and municipalities and is producing quarterly progress reports which are posted on the EPWP website. Reports to date indicate that the EPWP is meeting its targets in terms of job creation, and that over 130 000 work opportunities will have been created by the end of the 2004-2005 financial year.

Training and Skills Development: Umsobomvu has committed to train 3000 unemployed young people as home-based care workers, with twelve-month work opportunities under existing service providers.

The Code of Good Practice for Special Public Works Programmes, gazetted by the Department of Labour after discussions at NEDLAC, provides a guide for setting pay for PWPs and allows for local flexibility. This is being used on EPWP projects.

Labour has worked on job-creating projects primarily through the Labour Job Creation Trust (LJCT), founded by COSATU, FEDUSA and NACTU at the Presidential Job Summit of 1998 and funded by the donation of a days pay by millions of union members. Currently the Trust has more than 700 projects in implementation phase, with a focus on community-based co-operatives and social entrepreneurship to improve social infrastructure, for instance building Multi-Purpose Community Centres (MPCCs), crèches and clinics and maintenance of public infrastructure. The estimated jobs created through this partnership on implemented projects stands at 10 588, of which about 80% are permanent. Labour is working with the local Departments of Labour, Government and Agriculture in these areas. The LJCT has committed about R 74 million (to date), of which R 45,7 million is being used to implement current projects, and has cumulatively disbursed R 23,8 million to October 2004.

Constraints/Bottlenecks: Government’s conceptual framework does not define a role for the NEDLAC constituencies, therefore they cannot participate actively. Some government departments are prejudiced against the use of labour-intensive construction methods, and the response of the social service departments has been slow. EPWP is still not factored into performance agreements hence the minimal commitment. No reports were provided by government on whether pay is in line with agreements. The training of people in the Project Management Units at the municipal level in applying the EPWP implementation guidelines is inadequate, but this is being addressed by the relevant SETA. Training is critical for home-based care and early childhood development projects, but capacity is inadequate.

Interventions: The one-a-side task-team described in section 2.2 will propose ways for NEDLAC constituencies to engage on the EPWP. Business is exploring ways of providing support to the economic theme in order to expedite finalisation of the economic sector plan. Provincial departments are currently identifying local service providers who need assistance to register as trainers, and necessary arrangements have been made with the SETAs to assist these service providers. Government to report to the task team on pay guidelines for EPWP. The Code of Good Practice for Special Public Works Programmes, gazetted by the Department of Labour after discussions at NEDLAC, provides a guide for setting pay for PWPs and allows for local flexibility. This is being used on EPWP projects. Government does not intend to put in place any additional guidelines beyond those provided in the Code of Good Practice.

2.3.5 Identifying and resourcing projects

Agreement: The constituencies will identify opportunities for projects and resources will be negotiated from both the public and private sectors to finance them and develop management approaches.

Progress: Government - The EPWP forms part of the Municipal Infrastructure Grant (MIG) Programme, which was formally launched in August 2004 with R18,5 billion over the three years to 2008. The Provincial Infrastructure Grant will also be used to fund appropriate EPWP projects. A number of institutional, monitoring, evaluation and communication arrangements have been put in place to underpin the programme. Business - The Business Trust has established a Facilitation Fund to fund the development of best practice EPWP programmes in government and in the private sector.

Constraints/bottlenecks: State Owned Enterprises are not yet participating in the EPWP to the full extent possible.

Interventions: Government will approach SOEs to obtain their increased participation.

2.3.7 Training

Agreement: Relevant and targeted training will be ensured through a range of training programmes and SETA support for training of participants in EPWPs. Participants in EPWPs should be given a record of their competencies and a reference to assist them in gaining employment after they leave the scheme.

The Provincial Offices of the DOL is involved in funding skills development of unemployed people to be used on extended public works programmes, which is funded from the National Skills Fund (NSF).

Progress: The construction SETA has put in place accredited unit standards for supervisors, small contractors, large contractors and engineers, to empower them to design, manage and supervise labour-intensive construction work. Training providers have been trained in eight provinces. In the social sector, engagements with the relevant SETAs are underway to put in place specific learnerships and skills programmes to expand the Early Childhood Development and Home Community Based Care sectors.

Government has developed a range of training and exit strategies, as well as learnerships and training programmes. Agreement has been reached that the DOL will fund and oversee the implementation of training for all workers employed through EPWPs. For 2004 the National Skills Fund of the DOL has allotted R28,0 million to skills development of unemployed persons to be placed on Working for Water Projects (EPWP) and R14, 0 million towards Life Skills Training (EPWP). To date R3 221 526 has been contracted for skills development of unemployed persons for Working for Water Projects of which R357 092 has been spent.

Constraints/Bottlenecks: No discussion on training issues has taken place between Government and other constituencies in NEDLAC.

Interventions: The one-a-side task-team described in section 2.2 will discuss training. NEDLAC will prepare a draft briefing document for SETAs on the need to incorporate EPWP skills development into their plans.

2.3.8 Labour Support for the EPWP

Agreement: Labour will encourage members and locals to sponsor, identify and/or initiate projects, and will set up partnerships with the Job Creation Trust.

Progress: Labour’s work on EPWP is mostly through the Job Creation Trust, as described above. In addition, unions have identified potential EPWP projects in the education and metals sectors. Unions are also including discussion of scope of EPWP in their preparations for the national Public Service Summit. COSATU has commissioned research on EPWP through the People’s Budget Campaign.

Constraints/Bottlenecks: Systems do not yet exist for unions to support or liaise with the EPWP. Preparations for the Public Service Summit have been delayed, since meetings have not been convened in recent months.

Interventions: The task team on EPWP should address the first problem. Meetings to prepare for the Public Service Summit should urgently be convened.

2.3.9 Community Support for EPWP

Agreement: The community constituency will assist in mobilising participants for EPWPs and in identifying potential projects at the local level.

Progress: The South African Youth Council (SAYC) launched a programme in August 2003 aimed at fencing national and regional roads, national parks and railway lines. The National Co-operatives Association of South Africa
(NCASA) launched the SA Housing Co-operatives Association (SAHCA) in May 2004 which will participate in EPWPs. The Women National Coalition (WNC) has launched 11 projects in brick making.

Constraints/Bottlenecks: There is a lack of capacity building at the local level for primary housing co-operatives to effectively participate in EPWPs. Care centres lack funding and trained staff. There are inconsistencies between projects in terms of wages, employment conditions, etc. There is a lack of a strong communication strategy to inform communities of programmes.

Interventions: The one-a-side EPWP task team is addressing these obstacles and problems.

2.3.10 Business Support for the EPWP

Agreement: Business has committed to mobilising and making available its skills and expertise to enhance proper project design and management, and to explore possible synergies with corporate social investments.

Progress: The Business Trust established a Facilitation Fund for the EPWP.

Constraints/Bottlenecks: Raising of adequate funds for the next five year programmes remains a challenge.

Interventions: The Business Trust has started to raise money for the next five-year programme. This programme was approved after consultation with Government. Business is also exploring ways of providing support to economic themes in order to increase the pace of delivery.

2.4 Sector Partnerships and Strategies

Agreement: The Constituencies agreed that joint development of sector strategies is required to restructure the economy toward equitable employment-creating growth.

Progress: Constituencies have been engaging on sector strategies through NEDLAC, and have commissioned research to support them through Fund for Research Into Development, Growth and Equity (FRIDGE). Sector summits have been held for mining, clothing and textiles, information and communication technologies (ICT) and finance, and are under way for chemicals, auto and the metals and engineering sectors.

Government has completed a Customised Sector Programme (CSP) for the chemicals sector which is currently being incorporated into the sector summit agreement and ten CSPs are in an advanced stage of development. The target date for completion of all CSPs is June 2005. The CSPs will be presented to the NEDLAC constituencies.

Constraints/Bottlenecks: The failure of government departments other than the Dti to participate in the chemicals sector process is causing serious delays. More generally, lack of capacity has led to delays in most sectors. It is not clear how governments CSPs relate to the GDS agreement that strategies should be developed jointly by stakeholders.

Interventions: The CSPs should be presented to NEDLAC Trade and Industry Chamber and processes developed to ensure buy-in by stakeholders in line with the GDS agreement.

2.4.4 Strategies to be Developed

Agreement: The parties will prioritise the development of strategies in the following labour-intensive sectors: clothing and textiles, agriculture and agro-processing, tourism, call centres and back-office processing, and cultural industries including craft, music, film, publishing and other media.

Progress: The NEDLAC constituencies have not undertaken collaborative work in these sectors, although individual constituencies have prepared proposals. Organised labour has submitted its proposals to the Dti in clothing and textiles but no tripartite process has commenced.

Constraints/Bottlenecks: There has been a lack of planning for the processes by the NEDLAC Trade and Industry Chamber combined with shortages of capacity and resources.

Interventions: Government to present status reports to the NEDLAC Trade and Industry Chamber (TIC) urgently so that a proposal on the way forward with regard to this agreement, can be developed.

2.4.5 Meeting of leaders of Government, Business and Labour

Agreement: Government agreed to convene a meeting twice a year of the leaders of business and labour in order to prioritise sectors and review progress.

Progress: An Industry Forum between Business and the Dti was established prior to the GDS. Quarterly meetings were convened with Export Councils, which comprises businesses from specific sectors, to discuss operational constraints.

Constraints/Bottlenecks: Labour has not been invited to participate in these forums, and the Dti has not convened dedicated meetings as agreed at the GDS.

Interventions: Issue to be discussed in the Trade and Industry Chamber (TIC) with a view to agreeing on an approach to implementation.

2.4.6 Business commitments

Agreement: Business has committed to establish a mechanism to facilitate secondment of experts to work with government and to release senior shop stewards.

Progress: A model has been developed with the Dti and various industry associations for seconding staff on request. The release of shop stewards has been incorporated into Sector Summit Guidelines.

2.4.7 Specific commitments

Agreement: A number of sectors made specific commitments as part of the GDS Summit:

AUTOMOTIVE: Commitments - Investment: R15 billion over five years and increase in local content. ProgressInvestment during 2004 - R3,6 billion.

CHEMICAL: Commitments - Development of new value chains; investment of R10 billion over five years; sector strategy agreed. ProgressStudies into potential value chains are in progress. Investment during 2004 was R8 billion. Investigations are on-going with regard to further beneficiation in the sugar industry and other sub-sectors.

METALS AND ENGINEERING: Commitments - Improved communication amongst stakeholders; development of sub-sectors; and sector strategy agreed. ProgressAn industry Policy Forum was established. Recommendations were made on a research study in respect of the five major metal and engineering industries sectors. The sector summit process is ongoing.

MINING: Commitments - Investment of R90 billion. ProgressThe mining sector contribution to fixed investment grew by 20% to R22,6 billion in 2003, giving mining the fastest growth rate of fixed investment in the economy in 2003. Mining’s share of Gross Fixed Capital Formation rose to 12%. Investment in the platinum-group metals, ferrous and non-ferrous metals propelled the investment drive. Unfortunately, infrastructural constraints, particularly in the ports and railways, have significantly limited investment in bulk commodity mining projects such as iron ore and coal. The strong rand exchange rate has also significantly reduced rand revenues in the sector despite higher commodity prices in US dollars. This placed pressure on many projects. The industry remains on track to reach its GDS investment commitments.

OIL: Commitments - Investment: of R6 billion in refinery upgrades to meet 2006 clean fuels requirements; R10 billion by 2010; and the development of a sectoral BEE charter. ProgressProgress has been made on the ownership target and the emphasis is now on human resources development and procurement from BEE suppliers.

TEXTILES: Commitments - Industry Council established. ProgressThe Textile Industry Development Council was established by business and is funded by the industry. Initiatives commenced include: a skills survey and an education institutional assessment, regular quarterly competitiveness surveys and international benchmarking. Labour proposals for a fully, integrated tripartite policy body await a response.

PHARMACEUTICALS: Commitments – International approval for domestic manufacturers of generics and active ingredients. Constraints - Progress in this sub sector has been slow due to capacity constraints on the part of government.

2.4.10 Other business commitments

Agreement: Business is committed to exploring the potential synergies amongst the sector approaches described above with a view to establish stronger value chains and to encourage other sectors to consider the potential benefits of collective action.

Progress: Incorporated into the sector summit guidelines.

2.5 Local Procurement

2.5.1 Intensified support for the Proudly South African Campaign

Agreement: All constituencies will intensify support for the Proudly SA campaign. Label of origin for clothing products.

Progress: TIC started discussions on the proposed BEE scorecard and the Preferential Procurement Policy, with a view to evaluating support for local procurement. Constituencies are including local procurement in engagement on sector strategies.

Labour promotes the Proudly South African campaign in internal publications and through posters and leaflets. These publications reach hundreds of thousands of workers. SACTWU and COSATU have undertaken a major campaign to encourage local procurement, including negotiations with retailers (now taking place under the auspices of NEDLAC due to a Section 77 dispute). The Cape Town Fashion Festival is an initiative of SACTWU, in partnership with the Dti, provincial and local government, SETAs and Proudly SA, that promotes local products through a range of events. It showcased 97 local designers and the products of many factories; hosted 12 fashion shows during 2004 including in townships, shopping malls and traditional fashion show venues, with a combined audience of well over 30 000; held a Fashion Imbizo to consider policy partnerships, promote export workshops and training; launched a Fashion Map; and held a Fashion Expo that attracted more than 10 000 people to 110 standholders that included many BEE companies and small businesses. SACTWU also played a central role in the development of label of origin regulations for its industry.

Community The South African Youth Council is finalising a partnership arrangement with Proudly SA for launching a consumer awareness campaign during 2004/5.

Government Label of origin legislation has been promulgated and will come into effect in May 2005 as a legal requirement.

Business – Membership of Proudly SA has risen and broadened, and linkages between the organisation and business have improved. Many clothing retail companies have already started implementing the use of country of origin labels notwithstanding the fact that the legislation is not yet in place. In some instances retail companies have also launched trial "programmes" in an attempt to make the public more aware of locally produced products. Should these prove to be successful the programmes will be expanded to the many other retail outlets.

Constraints/Bottlenecks: TIC discussions on preferential procurement are proceeding slowly. Procurement regulations do not explicitly or adequately support local production, with current proposals providing only 1% to 2% of total preference for local production.

Interventions: Negotiations on preferential procurement need to be concluded in a way that strongly supports local content in line with the GDS agreement.

2.6 Small Enterprise Promotion

2.6.1 Promotion of Small Enterprises to Create Jobs

Agreement: Small enterprises, especially the development of black-owned small enterprises, need to be promoted for job creation and equity.

Progress: NEDLAC held workshops on government programmes that support small enterprise development.

Business Chambers of Commerce of South Africa (CHAMSA) is structuring training programmes focused on enabling SMME development at all levels of the economy. SALGA office infrastructure support will enable the SMME network to be extended into all towns, cities, townships and villages. BUSA is currently planning for a national workshop on the promotion and development of SMME’s. This workshop is intended for May 2005 and is being planned in conjunction with international organisations. It is also intended to launch a small business toolkit at the conference. This toolkit will be customised to meet the local needs and is intended to assist the creation and sustainability of SMME’s. BUSA has established a permanent SMME task team that is focussing on initiatives that will assist its members in this arena.

Labour supports small enterprise directly through its work with the Job Creation Trust and co-ops (described in the sections on EPWP and co-ops). In the clothing and footwear industry, SACTWU has raised funding for small businesses, including sandal-makers, home boutique operators and tailors, to take part in export workshops and the Fashion Expo.

2.6.4. Improving SMME Promotion

Agreement: The Dti will consider constituencies’ proposals on improving SMME promotion. To improve SMMEs’ access to infrastructure, constituencies will establish support nodes.

Progress: Government Consultations within government and with individual stakeholders on the Integrated Small Business Strategy has been completed. The Strategy will be discussed at the January 2005 Cabinet Lekgotla and then tabled at NEDLAC. Consultations and legislation on the merger of Ntsika and Namac have been completed. A Chief Executive Officer has been appointed and the public announcement of the merger takes place on 13 December 2004. The Apex Fund will be launched on 10 December to provide start-up financial support to SMMEs. The relevant mechanisms will be considered in NEDLAC.

Labour inputs on the Small Enterprise Bill led to important improvements during the Parliamentary process.

Constraints/bottlenecks: The proposed nodes have not been developed.

Interventions: TIC to develop proposals on the nodes with specific reference to sector strategies.

2.6.4.c Land Reform

Agreement: Constituencies agreed to support acceleration of the land reform programme and to propose ways to ensure a substantial expansion in its scope.

Progress: Government An Agricultural Conference was held in April 2004 to work on a provincial strategy to enhance job creation, assist emerging farmers, and look for ways to improve the lives of farm workers. A process of initiating the same strategy in the fishing sector has commenced.

Labour - Through the Peoples Budget Coalition, COSATU commissioned research on land reform which indicated the need for a ten-fold increase in expenditure in order to reach government targets. FAWU has played an active role in both the agricultural and fishing strategies.

Constraints/Bottlenecks: A process is required to involve all parties in reaching the GDS target of a substantial expansion in land reform.

Interventions: Agree on a process in the NEDLAC Development Chamber.

2.6.5 Extend Business Trust Lifespan

Agreement: Business is to consider extending the Business Trust beyond its original five-year lifespan.

Progress: It has been agreed to extend the Business Trust for a further five years.

Constraints/Bottlenecks: Raising funds remains a challenge.

Interventions: Business Trust is raising funds.

2.6.6 Community and Labour Commitments

Agreement: To ensure greater procurement from small enterprises, especially black-owned businesses and co-operatives, the community constituency will promote training in government tender procedures. Labour will ensure that the interests of workers in small enterprises are represented in small enterprise forums.

Progress: Community – National Co-operatives Association of South Africa (NCASA) has launched over 400 primary co-operatives and each co-operative has sent delegates to attend a Member Education Forum (July 2004), which focused training on government tender procedures. NCASA is currently partnering the Dti in its Incentive Programme, which targets 100 co-operatives countrywide.

Labour has launched recruitment and living wage campaigns targeting small enterprises. COSATU will embark on a recruitment campaign during December 2004, and will include strategies to reach vulnerable workers, including those in smaller enterprises. COSATU leaders participated in the recent Nafcoc Congress, and labour is in the process of identifying other relevant forums. Trade unions take part in Bargaining Councils that regulate the interests of workers in small businesses.

Constraints/Bottlenecks: Rollout of capacity building for primary co-operatives at provincial levels.

Interventions: Funding needs to be provided to educate provincial tender boards and other institutions to understand co-operatives and give them space to participate in tender processes at provincial and local level. Consultants should take cognisance of the co-operative values, principles and practices.

2.7 Support for Co-operatives

2.7.2/4 Initiate and strengthen co-operatives and develop strategy

Agreement: Significant increases in employment through the development of co-operatives will require a supportive policy framework. Labour and community organisations will initiate and strengthen co-operatives at all levels. The NEDLAC co-operatives task-team will consider how the measures identified in the ILO recommendations will be included in the strategy.

Progress: The NEDLAC report on the National Co-operatives Bill and Policy has been finalised, and Cabinet and Parliament have approved the Policy and Bill. The co-operatives strategy is now under discussion.

Community – NCASA hosted a youth co-operative conference with the goal of launching a youth co-operative federation; launched the SA Funeral & Burial Societies’ Federation; and together with the Dora Tamana Cooperative Centre is finalising a strategy for the development and support for Agricultural Co-operatives.

Labour: With the International Labour Organisation (ILO), COSATU has initiated a substantial trade union-co-operative project known as UNICO-OP. NCASA, the Dti and the Department of Labour have actively participated in the design of the project. The project focuses on developing the co-op movement to support employment and provide services to workers. Currently, COSATU affiliates have developed savings co-operatives with about 20,000 members. NEHAWU has used the worker co-operative model in the take-over of outsourced services in University of Fort Hare and University of Zululand and has saved or created more than 900 sustainable jobs. The model will be replicated throughout the public-service restructuring process. (Music Union of South Africa) MUSA is working with members to establish co-operatives for recording services and the production and management of live events. SAAPAWU has a few established co-operatives projects, mainly in the Eastern Cape, including Magwa Tea Estates in the Lusikisiki area, with about 1000 permanent members plus 2500 seasonal jobs. NACTU runs a printing co-operative in the Western Cape, which was initiated by the workers.

Constraints/Bottlenecks: The NEDLAC co-operatives task team has not yet finalised a support programme aligned with the ILO recommendations, and therefore postponed the conference that was agreed in the GDS. Local economic development strategies must provide a space for co-operatives, including providing them with preferential treatment on tenders.

Interventions: The NEDLAC co-operatives task team should accelerate its work, which is overdue. In particular, it must align the proposed strategy with ILO guidelines. All parties are to work towards incorporating co-operatives in local procurement.

2.7.5/6 Co-operatives Focus Areas & Education & Training

Agreement: The constituencies will focus on HIV/AIDS support co-operatives, co-operative banks and consumer co-operatives. Education and training in co-operative principles and practices will be promoted.

Progress: The NEDLAC co-operatives task team is working together on educational material, and is beginning to engage with AIDS advocacy groups to determine appropriate support measures. The Financial Sector task team has begun discussions on the Co-op Banks Bill.

Community Financial Sector Campaign Coalition (FSCC) participated in the launching of the Dora Tamana Co-operatives Centre and is raising funds for the Sustainable Livelihoods Conference.

Labour: The UNICO-OP project includes substantial training around co-operatives.

Bottlenecks/constraints: Constituencies did not report on support for HIV/AIDS or consumer co-operatives.

Interventions: The co-ops task team should review the agreement to support HIV/AIDS and consumer co-operatives.

2.7.7 Government support for Co-operatives

Agreement: Government will support co-operatives through a range of mechanisms, and will sponsor a study tour on co-ops with NEDLAC constituencies.

Progress: A Co-operatives Directorate has been established in the Dti. The composition of the Co-operatives Advisory Board has been agreed with the social partners. A co-operatives strategy is being finalised and includes a communications plan to popularise the co-operatives policy. Road-shows to the provinces were undertaken and a short course on the Co-operative model was offered. A draft Co-operatives Bank Bill has been published inviting public comment.

A study tour was undertaken to four countries (Italy, Kenya, Japan and Spain) during September / October 2004 by representatives of Government, Labour, Community and Business as well as representatives from four of Governments key implementing partners supporting small enterprises, as part of Governments commitment in terms of the GDS to study international experience in this area.

2.7.8 NEDLAC co-operatives conference

Agreement: NEDLAC will convene a co-operatives conference to review progress and build a strong co-operative movement.

Progress: The NEDLAC task-team developed an agenda and initial budget for the conference. Government agreed to fund it.

Constraints/Bottlenecks: The conference was delayed because the bill and policy were not yet finalised.

Interventions: The Conference to be held as soon as possible.

2.8 Jobs Impact and Monitoring

Agreement: Constituencies have committed to avoid job losses and to promote decent work. Government departments, parastatals and publicly listed companies agreed to include information on total employment in their annual reports. The Constituencies agreed to engage with each other over a six-month period following the GDS to develop a set of practical methods for achieving the above.

Progress: The NEDLAC Jobs Impact and Monitoring Task Team developed proposals to improve reporting on employment. Constituencies are engaging on sectoral strategies to promote job creation and protection of existing jobs in the Metals and Engineering, Automotive and Chemical sectors.

Labour COSATU’s Central Executive receives regular reports on employment, most recently a detailed report on the impact of trade on employment. This report was circulated to the December NEDLAC Policy Session on trade. Labour is also working in provincial GDS and public-service summits to maximise job retention and creation, with varying degrees of success. SACTWU keeps a job loss database used to monitor closures, liquidations and retrenchments, and has initiated a survey with employers of casual and contract labour in its sectors. The database and research show 21 000 jobs lost during 2003, and is used as an input on policy options to reverse these job losses. Labour has also initiated a local-government sector summit to be held early next year, which will address job creation and retention. In all sector engagements, labour has undertaken substantial research on ways to promote employment creation. Unions are involved in a number of business rescue initiatives to save troubled operations, and have had successes in some cases, such as Tej and Novel Garments

Business - Various activities are being undertaken at enterprise and association level to develop practical skills and support employment creation in communities.

Constraints/Bottlenecks: The relevant NEDLAC task-team has not been convened regularly. The strong Rand has a negative impact on jobs in the export sectors.

Interventions: The relevant task team should be convened urgently to review progress and ensure urgent implementation of its agreements. The role of the value of the Rand on employment needs to be researched and debated in the NEDLAC Public Finance and Monetary Policy Chamber (PFMC).

3. ADDRESSING THE INVESTMENT CHALLENGE

3.1 Introduction

Agreement: The constituencies have agreed to encourage investors, including businesses, retirement funds, the life assurance industry, government, labour, and community organisations to work towards investing 5% of their investible income in appropriate financial instruments.

Progress: Progress: The Public Finance and Monetary Policy Chamber (PFMPC) has agreed on the need to identify the investments and institutions that are affected by this agreement:

  1. The agreement refers to the total assets of financial institutions engaged primarily in investment financing, especially pension funds, insurers and assurers.
  2. The qualifying investments include the directed investment specified in the Financial Sector Charter (that is, investment in low-income housing, transformatory infrastructure, black-owned agriculture and SMMEs), plus investment to expand productive capacity while creating sustainable jobs, preferably in greenfields projects. This means that projects that are relatively labour intensive will be favoured.
  3. The next step is to define qualifying instruments and monitoring mechanisms. The NEDLAC PFMPC has asked the Financial Sector Charter to develop proposals in this regard, in order to avoid duplication of work and ensure a single reporting stream.

This agreement has been referred to the Financial Sector Charter council to ensure both congruency and rigour in their development

Labour - Research shows that most union-controlled funds have up to 5% of their assets in socially responsible investments. Largely due to pressure from labour, the Metal Industries Benefit Funds Administrators is currently investing more than 5% in socially responsible areas. In 2004, labour held a series of national workshops and commissioned extensive research on ways to direct pension fund investments toward developmental aims. These processes aim in part at developing a model mandate on investment for pension trustees that will include mechanisms to improve productive investment. SACTWU has engaged with financial institutions to ensure greater support for local production and reached agreement on a joint declaration with them.

Interventions: PFMC to monitor work of the Financial Sector Charter Council on this issue and intervene as required.

3.1.8 Import parity and administered prices

Agreement: To review administered prices and import parity pricing.

Progress: The NEDLAC task-team is working toward Fund for Research into Development Growth and Equity (FRIDGE) studies on economic and household infrastructure prices and the parties have identified key areas of concern in this context. A review process for import pricing has commenced in sectors.

Government has conducted a study on administered pricing and has also initiated a review study on import parity pricing. The study on import parity pricing in the metal sector has been completed and a mechanism for addressing the matter is being developed. On administered pricing, recommendations of six studies conducted in 2003 were approved by Cabinet in October 2004. The findings will be used as input to the FRIDGE study on administered prices. A discussion document proposing a definition of administered prices and two alternatives for the introduction of an administered price index was put out for public comment in October. Statistics South Africa is compiling the comments and a decision regarding the definition and the preferred administered prices index will be announced in 2005.

Constraints/Bottlenecks: Delays in developing the terms of reference for the FRIDGE study on import parity pricing in the chemical sector. The commissioning of the FRIDGE study on administered prices has also been delayed due to dissatisfaction with tenders received.

Interventions: The terms of reference for the chemical study to be finalised urgently. The Industrial Development Corporation (IDC) will re-advertise the tender for the FRIDGE study on administered prices.

3.2 Pension and Provident Funds

Agreement: NEDLAC to host a conference of the trustees of pension and provident funds.

Progress: The trustees’ pension fund conference was held on 29-30 October 2004. Four themes (Regulation, Access and Benefits, Investment, Governance and Trustees Training) were discussed in various commissions, leading to reports on the broad agreements reached by constituencies. NEDLAC is still to issue a consolidated document outlining these agreements.

Government has completed drafting a policy document on pension funds, which will be published for comment and used as a basis is drafting the new pension fund legislation. The Minister of Finance hosted a roundtable of industry stakeholders, on November 27, 2004 where government proposals for the principles to underpin the reform process were outlined.

Labour ensured strong trustee participation in the Pensions Fund Conference, held a number of workshops to prepare for it and drafted the declaration. In addition, COSATU has commissioned a series of research reports on pension funds, focusing on management and investment, through Naledi. Labour awaits negotiations in NEDLAC on policy and legislation on retirement funds.

Business ensured participation of trustees and experts at the Nedlac conference and BUSA has since established a task team that is analysing the outcomes of the said conference with a view to adding value on key issues in the upcoming debates in the pension fund arena.

Interventions: NEDLAC to finalise the conference document as soon as possible.

3.3 Housing

Agreement: Constituencies will investigate ways to improve access to land and the approach to funding for housing. The share of low-income housing financed by private sector mortgages must be increased.

Progress: The Financial Sector Charter provides for a substantial increase in low-income mortgage bonds.

Government: As part of the new Comprehensive Plan for Human Settlement Development, the Department of Housing has developed a mechanism to improve access to both private and public land. Government has further allocated an additional R1,5 billion for housing over the MTEF period. The Department has also amended the subsidy qualification criteria to include household beneficiaries who earn between R3500 and R7000 per month. This will enhance the potential of beneficiaries accessing mortgage financing, as envisaged in the financial sector charter.

Bottlenecks/constraints: The new housing plan has not been discussed by NEDLAC, so constituencies are unable to provide consistent inputs and/or support.

Interventions: Arrangements are underway to present the Comprehensive Plan for Human Settlement Development to the NEDLAC Development Chamber.

3.4 Financial Sector Summit

Agreement: Constituencies have recommitted to the implementation of agreements reached at the Financial Sector Summit.

Progress: The Financial Sector Charter arose out of the Financial Sector Summit. On October 14, its Council was inaugurated, which should lead to the implementation of the Charter agreements. The Council’s 21 members represent business, black professionals in the industry, labour, community and government. The inaugural meeting discussed guiding principles and procedures for developing a constitution. A working group was established to draft a constitution within the next month. The Council agreed to interim arrangements that will guide the operations and urgent business of the body. It also agreed to an inclusive process to finalise the Financial Sector Charter targets with urgency.

The Council also considered the linkages between the Charter targets and those agreed at the GDS. It endorsed the development and launch of Mzansi (previously known as the national bank account) on October 25. The work on developing the product further will be managed through the Council.

At the NEDLAC Financial Sector task-team, the community constituency has been requested to develop a plan to deal with training programmes for all South Africans to popularise financial cooperatives. A co-operatives bank bill has also been developed and is currently under consultation with NEDLAC parties. The task team is continuing to work on other elements of the Summit agreements. The PFMC is discussing a regulatory framework for a credit bureaux.

Business – The business signatories to the financial sector charter have already made encouraging progress in many areas agreed upon in the financial services sector charter. This includes recently announced black economic empowerment agreements and the appointment of new members to boards of directors.

Bottlenecks: The promulgation of credit bureaux regulations has been delayed.

Interventions: The Dti to promulgate credit bureaux regulations urgently.

4. ADVANCING EQUITY, DEVELOPING SKILLS, CREATING ECONOMIC OPPORTUNITIES FOR ALL AND EXTENDING SERVICES

4.2 Black Economic Empowerment (BEE)

Agreement: Constituencies have undertaken to advance equity in general and broad-based black economic empowerment in particular. Labour and community will support co-operatives in this context.

Progress: The BEE Score Card and Codes of Good Practice are being developed. Charters are being implemented or drafted in a number of sectors. Sector Charters have been completed in Finance, Mining, ICT and Petroleum.

Business - CHAMSA has established a technology platform to facilitate transparent allocation of opportunities to BEE SMMEs. Business is playing a proactive role in many industries in promoting the implementation of charters. Notwithstanding the charters that are already in place many other charters are currently under consideration. This includes inter alia the building and construction industries, the health sector and the property sector. BUSA has established a standing committee on transformation and they have identified a number of specific projects in the field of BEE. Task teams have already been put into place in order to ensure that these projects are effectively implemented. BUSA is focussing on the further empowerment of black business organisations and specific interventions have already been identified for implementation in 2005.

Labour is engaging on sector strategies through the sector summit processes as well as on BEE sector charters. Its work on co-ops and sector strategies is described above. COSATU CEC discussed broad-based BEE at its June and November meetings, and developed guidelines for engagement by affiliates.

Community - NCASA in the North West Province together with the Dept. of Economic Development and Finance, have piloted three co-operatives to benefit in a BEE venture.

Government Extensive consultations on the BEE Scorecards and Codes of Good Practice occurred. The Codes were released on 8 December 2004. The National Empowerment Fund has been relaunched and new financial support measures have been introduced. The President will announce the Advisory Council soon.

Constraints/Bottlenecks: There is disagreement on the role of NEDLAC Constituencies other than business in the Charter process, which leads to conflict at the sectoral level. Delays in establishment of an Advisory Council are delaying the finalisation of Codes of Good Practice. Conclusion of a NEDLAC report on the issues is proceeding slowly.

Interventions: The Broad Based Black Economic Empowerment (BBBEE) task-team has to urgently define good practice for stakeholder engagement in sector charters. The task-team should meet as soon as possible in 2005 and set a timetable for finalising its work.

4.3 Employment Equity

Agreement: Government undertook to co-ordinate a joint campaign to enhance public awareness of the provisions of the Employment Equity Act to increase reporting levels and focus on the need to employ people with disabilities; business agreed to contribute resources to the campaign; labour would mobilise and educate its members on employment equity.

Progress: The Employment Equity task team has been established at NEDLAC and encourages employers to report on their employment equity progress. National and provincial road shows were undertaken during 2004, with strong support from Business and Labour, and enjoyed wide electronic media coverage.

Labour is mobilising and educating its members on employment equity. Government reports that reporting by employers increased by more than 3000 for the 2004 period. Preliminary reports show an increase of employment of people with disabilities.

Business has, through BUSA established a permanent task team, SOCPOL that has as one of its primary focus areas employment equity. Through Social Policy (SOCPOL) members are continually encouraged to comply with the current employment equity legislation. BUSA has also strengthened its communications systems in order to improve its communication to its members. This includes the recently introduced website and the introduction of a newsletter. These tools are being used to promote both employment equity and BEE in the broader sense. BUSA is also embarking on a skills transfer initiative within the BUSA office with the specific aim of making business more representative at the macro debates.

Constraints/Bottlenecks: Labour is concerned that progress towards achieving employment equity is not satisfactory.

Interventions: Labour has requested that the Labour Market Chamber conduct a review of the implementation of employment equity and develop proposals for improvement.

4.4 Promoting Literacy

Agreement: Constituencies have agreed to work through SETAs for the achievement of the first objective of the National Skills Development Strategy (i.e. by March 2005 at least 70 per cent of workers have basic literacy and numeracy skills). Government undertook to continue to broaden access to literacy programmes through its Adult Learning Centres and other providers. Labour, Community and Business will augment their own initiatives in this area.

Progress: The National Skills Fund has awarded a R20 million grant to the Department of Education for literacy programmes. Currently 433 000 workers from a baseline of 905 000 workers have level one qualification on the NQF and a further 491 000 workers have completed NQF level one qualification.

Government, through the Department of Education, has set a target of 45 000 learners in informal basic literacy programmes for 2005/6. This will lead to the employment of at least 2600 persons as educators in the literacy programme. These educators will be trained and equipped with support materials at no cost to themselves. Clear targets for the expansion for the next five years have been agreed with provinces in both literacy and formal ABET programmes.

Business has undertaken a number of initiatives for promoting literacy. In this regard most corporate companies have specific literacy programmes particularly those with labour intensive operations. Many of these programmes teach life skills that go beyond the employment scope and which often allow for needed entrepreneurial skills in the micro business arena, e.g. sewing and building skills.

Labour: Most of the 16 000 ABET educators belong to SADTU, which supports them in recruiting for ABET classes. SACTWU supported a R7-million ABET programme to be implemented this year funded by the Clothing, Textiles, Footwear and Leather SETA. The health sector unions have ensured that the Health and Welfare SETA provides ABET. NUM ran an ABET literacy campaign ending in November 2004. Its shopstewards and organisers form part of its strategy to encourage union members to attend part and full time ABET classes, and it ensures that all the SETAs in which it participates prioritise ABET. In the automobile sector, labour reached agreement with employers to support ABET classes to address literacy among workers.

Constraints/Bottlenecks: Labour has raised concerns regarding literacy training. Business and Community have not reported in detail on their efforts to promote literacy.

Interventions: Government needs to increase funding for ABET to make a larger number of educators available. NEDLAC will request reports from Government, Business and Communities on outstanding issues. Labour proposed that the LMC considers interventions to address the constraints/bottlenecks identified and develop standard reporting guidelines for parties on this topic.

4.5 Learnerships

Agreement: Constituencies agree that there needs to be a dramatic increase in the recruitment of young unemployed people into learnerships. Learnerships should not displace workers, be used as a source of cheap labour, replace workers during industrial action or lead to a lowering of employment standards. The NEDLAC LMC undertook to develop mechanisms to monitor this problem. Business and Government undertook to register at least 72,000 unemployed learners in learnerships by May 2004. Business undertook to encourage enterprises to provide lists of learnership opportunities to be recruited from the local Labour Centres or the Employment and Skills Development Agencies. SETAs were to confirm NSDS equity targets.

Progress: NEDLAC LMC has finalised terms of reference for developing mechanisms to monitor the extent of abuses of learnerships and various joint marketing campaigns have been supported. There has been collaboration on the design and implementation of a strategy to support learners exiting from learnerships.

Business and Government have registered 85 753 learners with SETAs in structured learnership (64 787) and apprenticeship (20 966) programmes. Of this total, 29% were black, 27% women and 2% were people with disabilities. The Department of Labour centres have stepped up a campaign to register learnership applicants at local levels and have more learners than could be placed. Business Unity South Africa has encouraged its members to provide lists of learnership opportunities to local Labour Centres or Employment and Skills Development Agencies.

Labour has engaged extensively with SETAs to ensure they provide learnership opportunities. In the health sector, an advert for learnerships for unemployed youth was placed in the newspapers, and over 50 000 applications were received. A large number were placed in one-year nursing learnerships. In the clothing and textile sector, 477 learners graduated in a formal ceremony in November 2004. FEDUSA announced its learnership programme on 24 February 2004, which kicked off in June 2004, with its affiliates employing more than 30 learners. COSATU has obtained a grant from the Department of Labour to develop learnerships for union officials and shopstewards.

Community has undertaken a number of initiatives to inform young people of learnership opportunities and to register with Labour Centres and Employment and Skills Development Agencies. For example, SAYC has registered 1000 youth since the beginning of 2003.

SETAs - The National Skills Development Strategy (NSDS) equity targets are being met where DOL provides NSF funding, but not in the formal sectors where SETAs provide funding. The Public Service was allocated R106 million under the NSF to train an additional 4000 learners. All SETAs have committed most of their unclaimed funds and an additional R444 million from the NSF towards exceeding their learnership targets for March 2005.

Constraints/Bottlenecks: No progress has been made on the design and implementation of a strategy to support learners exiting from learnerships.

Interventions: The LMC task team should urgently agree on terms of reference for development of a strategy to support learners exiting from learnerships, and submit them to the Implementation task-team.

4.6 Strengthening of SETAs

Agreement: Constituencies undertook to address problems associated with the performance of SETAs and accelerate delivery. The NEDLAC Executive Council will develop key performance indicators and on an annual basis monitor, review, evaluate and discuss SETAs’ performance and support acceleration of delivery against targets. Governance and accountability of SETAs will be strengthened through ensuring senior representation on SETAs and through regular reporting. Training and capacity building for SETA representatives will be prioritised. Consideration will be given to the inclusions of community representatives on SETA Boards. Labour will ensure that its national office bearers represent unions on SETA boards and will undertake capacity building for them.

Progress: NEDLAC has conducted workshops on the roles and responsibilities of SETA board members, and skills development laws and related laws. SETAs have made provision in their administrative budget to fund capacity building initiatives for SETA Boards.

Government The DOL has developed a comprehensive tender proposal to contract an external education institution provider, to develop and implement a SETA capacity building project. The programme is likely to be set at NQF Level 5/6 and graduates will receive a formal certificate. The tender is due to be released in January 2005 and it is envisaged that the inception of the programme will be in April 2005. The service provider will amongst others, be tasked to evaluate the competency levels of a sample of individuals as well as Boards. The programme will be targeted at existing and new Board members and the curriculum will amongst others cover the following areas: The NSDS and its implication to SETA Service Level Agreements, Corporate Governance and King II Report, Financial Accounting, PFMA and Treasury Requirements, GAAP/GRAP/IPSAS; Managerial decision, information management, performance management and risk management.

Business - BUSA members have been requested to nominate senior representatives to the SETA Boards. BUSA has established a permanent task team on training and education and has analysed the strengths and weaknesses of the current SETA’s. These findings are now being channelled into the current macro debate on the functioning of SETA’s . Representatives of the BUSA task team have met with the Minister of Education to discuss among others the role that business can play in the education arena. Business is also developing a Code of Best Practices for SETAs.

Labour has communicated the requirement for upgrading of representatives on SETA boards to its affiliates and has undertaken capacity building of its SETA board members. Affiliates have now generally delegated national or regional office bearers to SETA boards. COSATU has appointed a Skills Development Co-ordinator and held regional and national workshops in August 2004 to discuss participation in skills development processes, including SETAs.

Constraints/Bottlenecks: Industry associations are not permitted to nominate SETA board members directly. There is no agreed NEDLAC process to develop Codes and performance indicators for SETAs. The inclusion of Community representatives on SETA Boards has not been discussed by the LMC. The NEDLAC Skills Development task-team has met only once.

Interventions: The LMC must urgently establish a process, with timelines, to develop Codes and performance indicators for SETAs. The Department of Labour should table the new Skills Development Strategy at NEDLAC. Consideration needs be given for industry associations to nominate representatives to SETA boards. The LMC will discuss the inclusion of community representatives on SETA Boards.

4.7 Education

Agreement: All schools should have access to basic services. Recommendations will be finalised for achieving affordable access to education for learners. New norms and standards for school funding will be prepared for financially disadvantaged learners. School fee monitoring mechanisms will be enhanced by linking them to household income. The capital investment plan will be updated. Constituencies undertook to ensure that households know their rights and responsibilities with respect to schooling. Labour, Business and Community will encourage their local structures to support orphans and very poor children.

Progress: Government – In the State of the Nation address in May, the President stated that all schools with learners under trees, schools without water and sanitation must be eradicated by March 2005. Business plans were developed in all provinces to achieve this target, and partnerships with Department of Water Affairs (DWAF), Department of Minerals and Energy (DME) and Department of Public Works (DPW) have been formed to assist in delivery. New norms and standards have been prepared and published for public comment for school funding for financially disadvantaged learners. A draft Education Laws Amendment Bill has been published which would abolish school fees in poor schools and to strengthen the rights of parents in practices related to school fees and exemptions. School fee exemptions processes are being monitored more closely with a view to assist poor parents in applying for exemptions. The "Rights and Responsibilities of Parents" pamphlet was developed and distributed.

Business - BUSA has communicated with its members, encouraging them to provide the required support for orphans and very poor children. The Business Trust has, and continues to support various educational initiatives.

Labour has commissioned a detailed study on ways to improve access to education through the Peoples Budget Campaign. The teachers’ unions hold regular campaigns and use their internal media to improve educational work and inform learners and their families of their rights and responsibilities. SACTWU, NUM and POPCRU directly support learners in a variety of ways, including through funding for primary school programmes, winter schools for matriculants and bursaries and scholarships for university students.

Constraints/Bottlenecks: There are financial and capacity constraints with regard to meeting the Presidents targets for March 2005. Government has not reported on mechanisms to monitor school fees, and it did not table the Education Laws Amendment Bill for discussion at NEDLAC.

Interventions: The Department of Education needs to finalise recommendations on resourcing, financing and cost of education in public schools and table them at NEDLAC. It should report on monitoring mechanisms for school fees. The National Student Financial Aid Scheme (NSFAS) funding framework also needs to be tabled for review at NEDLAC.

4.8 Access to Basic Services

Agreement: Constituencies undertook to assist with access to basic services, to encourage the extension of services through the PIIs, EPWPs, co-operatives and small enterprises, review of the housing programme, increased uptake of social grants, and extension of the social protection framework. Government is to finalise its policy on a comprehensive framework for social protection.

Progress: Government - National and Provincial task-teams have been established to accelerate the roll out of Free Basic Services (FBS). A draft Indigent Policy Framework has been developed for submission to Cabinet. A programme of support on FBS has been developed in line with Project Consolidate.

Numbers of municipalities that have implemented the Free Basic Water and Electricity in provinces are as follows:

Province

Water

Electricity

Kwazulu- Natal

55

30

Limpopo

26

21

Gauteng

12

12

Western Cape

25

24

Northern Cape

27

27

Eastern Cape

39

27

Mpumalanga

14

13

North West

16

11

The Housing Programme has been reviewed and the Comprehensive Plan for Human Settlement Development approved by Cabinet. Elements of this Plan include measures to promote job creation through EPWP, densification and integration through suitable purchase of land, the establishment of a social housing sector and the provision of rental housing. The Comprehensive Plan will be presented to the NEDLAC Development Chamber. Government is finalising its social protection framework and policy.

Labour and Business are undertaking various initiatives to assist with access to basic services. Several of the Labour Job Creation Trust projects aim to construct and/or maintain social infrastructure. For labour, the People’s Budget provides an on-going evaluation of basic services, with proposals for improvements.

Bottlenecks: The Department of Housing has not presented its new plans to NEDLAC. Discussion of the Comprehensive Social Security System (CSSS) has been delayed.

Interventions: The Development Chamber process on CSSS needs to include a review of access to social security and develop proposals to improve the situation. The Department of Housing should urgently table its new housing plans with NEDLAC.

5. LOCAL ACTION AND IMPLEMENTATION FOR DEVELOPMENT

5.1 Local Level Planning

Agreement: Constituencies agreed to work together to accelerate local action and implementation for development. Business and Government will engage on the development and implementation of integrated development plans (IDPs) at local level. Government will establish a framework to strengthen participation and broaden ownership in the IDP process.

Progress: Labour is working toward a local government summit to discuss these issues.

Business, through its Chambers of Commerce, is working closely with local government on a range of issues.

Government has developed and is implementing a framework to strengthen the participation of constituencies and broaden ownership by communities in IDPs, and has also developed a business plan for harmonising IDPs, provincial GDS and the national spatial development plan (NSDP). Integrated and strengthened the Urban Renewal Programme and Integrated Strategy on Rural Development (ISRD)Programme into all development initiatives across the 3 spheres of government.

The Departmnet of Social Development will be undertaking a comprehensive study of the 21 rural and urban nodes under the ISRD and UR programmes, as well as monitor and evaluate the progress of local projects implemented in the nodes. Research methods that will be used are people-centred and will contribute towards broadening ownership by communities of the outcomes of the study that will be linked to IDPs and provincial GDS.

Constraints/Bottlenecks: The National Spatial Development Plan (NSDP) has not been tabled in NEDLAC. No interaction framework has been established to allow business organisations to participate in Integrated Development Plans (IDPs).

Interventions: Government needs to table NSDP in NEDLAC. Community has requested that both the review of the Intergovernmental Relations Bill (IGR) and the review of the Integrated Development Plans (IDPs) be tabled for discussion in the NEDLAC Development Chamber. Local government needs to develop a framework to allow business organisations to participate in IDPs.

5.2 Local Economic Development

Agreement: Constituencies agreed to establish mechanisms to make it easier for SMMEs and cooperatives to tender for local government work, and that local government should support Proudly SA; streamline permits and other approvals; and link Local Economic Development sub-sector strategies with sector strategies. MPCCs should ultimately be operational in all municipalities and should support the development of SMMEs and co-operatives. Labour undertook to support qualifying small-scale projects that contribute to employment and skills development. Business undertook to mobilise the capacity of business entities at local level to work with the Dti to provide services to businesses, using the MPCCs as focal points.

Progress: Government - A draft national strategy for Local Economic Development is being discussed in the Economic and Employment Cluster. An implementation plan aimed at co-ordinating the various existing initiatives of Government for greater local impact is under development. A national strategy and implementation framework for LED was drafted and will be submitted to Cabinet shortly.

MPCCs have increased from 37 to 65 and a strategy for the next phase which will see an MPCC in every municipality by 2014 has been finalised for submission to Cabinet. A mass communication campaign on economic opportunities created by government programmes, and how to access them, was initiated by the Economic and Employment Cluster, using a publication in popular format and all languages.

Business - The Afrikaanse Handelsinstituut (AHI) has signed an agreement with the Minister of Provincial and Local Government to promote local economic development and infrastructure investment at district municipality level and various activities have been initiated to implement this initiative.

Constraints/Bottlenecks: Coordination of funding across Government and parastatals is a challenge. Provincial GDS Agreements are very uneven, and do not always focus adequately on the GDS aims. Participation in the AHI initiative is dependant on the voluntary involvement of members.

Interventions: NEDLAC should prepare a report for the implementation task-team on the provincial GDSs and how they articulate with the national GDS. Constituencies will explore ways to incorporate local economic developments into sectoral strategies.

5.4 Service Delivery Mechanisms

Agreement: Government undertook to provide for increased service delivery through the improvement of municipal infrastructure, increase investment in basic municipal infrastructure throughout the country, commit to capacity building programmes for emerging contractors, and local authorities will try and solve the backlogs in planning approvals. Labour will support the direction of financial resources to low-income housing programmes. Business will launch initiatives to facilitate service delivery at local government level.

Progress: Government has launched the Municipal Infrastructure Grant (MIG) programme, which aims to provide all South Africans with at least a basic level of service by the year 2013 through the provision of grant finance aimed at covering the capital cost of basic infrastructure for the poor. The MIG’s funding is described in section 2.2. The Housing Programme makes a considerable contribution to this programme through the delivery of housing to the poor. Some 180,000 houses are delivered per annum through this programme, providing access to shelter and services to some 700,000 persons. 49 Programme Management Units have been established at a local level to assist municipalities with the management of their infrastructure programmes. The Municipal Infrastructure Investment Framework is currently under review to reflect the current infrastructure backlogs (informed by the infrastructure backlog study). The development of guidelines is at an advanced stage and may be published in the next three months for municipalities to use as they deal with different partnership arrangements. Training of Municipal Service Partnerships has been done in seven provinces and 415 councillors and officials have been trained to handle partnership arrangements in municipalities.

Business has launched a toolkit which aims to provide a simple guide or checklist to public servants involved in delivery about what to do at each phase of the process and to show clearly which acts and regulations have to be complied with at each stage. The South African Association of Consulting Engineers (SAICE) has implemented a programme for councillors entitled "Sustainable Infrastructure for African Towns and Cities."

Constraints/Bottlenecks: The MIG programme planning processes must be aligned with the IDP process, and an integrated monitoring system must ensure more efficient monitoring and compliance to MIG conditions. Services backlog data has not been updated, verified and validated. Most municipalities do not have project management capacity to implement the MIG. The IDPs are not indicative of the infrastructure backlogs that are prevalent in municipalities. Statistics SA uses census data of 2001, which is outdated and thus population growth and migration patterns are skewed.

Interventions: Government needs to develop and implement mechanisms to address the constraints listed above, for instance by establishing a macro audit function to determine whether municipalities have complied with the MIG conditions and that funds have been used for the intended purpose. More up-to-date population growth and migration patterns data needs to be used. The Trade and Industry Chamber (TIC) should commission a FRIDGE study to evaluate IDPs and the impact of the MIG. Government needs to review current cost recovery mechanisms with respect to basic services.

6. CONCLUSIONS

Table 1 below summarises progress against the objectives set out in the GDS Agreement. It is clear that implementation of the agreements has been initiated in most areas, but that progress is often slow. It is a concern that progress has been strongest where parties work individually, rather than building the partnerships that lay at the heart of the GDS. In particular, a more collaborative approach to the development of sector strategies is imperative to ensure they enjoy support from all stakeholders, which is critical for their success. Similarly, successful public employment programmes require broad community support and mobilisation, not just funds and managerial skills. In general, government departments have not seemed to treat implementation of GDS agreements as a priority.

One of the primary objectives of the GDS was to harness the energy of social partners in addressing the challenge of unemployment. Successful achievement of this objective requires the establishment of structures to facilitate the necessary interaction. NEDLAC must play a more active role in this regard.

In addition, significant challenges remain in exploiting synergies amongst different elements of the GDS agreement so that the whole becomes greater than the sum of the parts. A number of examples can be highlighted, for instance the interrelationship between skills development, public employment projects and sector strategies.

A consolidated report like this should help constituencies to identify synergies amongst initiatives that can be exploited to lead to more effective and efficient achievement of objectives. For example, the chemical sector summit process has developed a project pipeline that includes the identification of possibilities for extending beneficiation in existing and potential value chains. One of the potential value chains is essential oils. There was no link between this activity led by the Dti and the Department of Science and Technology (DST) poverty reduction project in the same value chain. This report has allowed the two separate initiatives to be identified and to highlight the need for a collaborative approach, which will be initiated under the chemical sector summit process in January 2005.

TABLE 1: PROGRESS AGAINST THE OBJECTIVE/TARGETS SET OUT IN THE GDS AGREEMENT

Since the GDS agreements often required considerable work on development of specific policies and measures, many of the tasks are still in the initial stages, although considerable work has been undertaken. This table uses the following headings: No progress: No work has yet been done on this issue. Task initiated: work has been started and development of policy framework may have progressed quite far, but implementation has not yet begun. Significant progress: Implementation has begun. Task completed: Agreement has been fulfilled.

AGREEMENTS

No Progress

Task Initiated

Significant Progress

Task Completed

2. MORE JOBS, BETTER JOBS, DECENT WORK FOR ALL

       

2.2 Public Investment Initiatives (PIIs)

       

2.2.1 Expansion in public investment initiatives (PIIs)

   

X*

 

2.2.3 Address bottlenecks, design, implementation, management and maintenance, labour-based construction methods, projects and programmes & mandate an appropriate structure,

 

X

   

2.2.4 Mobilise and make available constituencies’ skills and expertise

X

     

2.3 Expanded Public Works Programmes

       

2.3.2 Launch projects in terms of an EPWP that provide short-term jobs

   

X*

 

2.3.5 Identify opportunities for projects and initiate these & develop management approaches to the programme

 

X

   

2.3.7 Relevant and targeted training is ensured

   

X

 

2.3.8 Labour commits

   

X*

 

2.3.9 Community will assist

   

X*

 

2.3.10 Business commits to mobilise and make available its skills and expertise

   

X*

 

2.4 Sector Partnerships and Strategies

       

2.4.2 Pay attention to sectors with strong impact on overall employment creation & implement approaches

 

X

   

2.4.3 Strategy development in progress

   

X

 

2.4.4 Strategies to be developed in identified sectors

   

X

 

2.4.5 Government to convene a meeting twice a year of leaders of business & labour in prioritised sectors

X

     

2.4.6 Business commits mechanism to facilitate secondment of experts & release of shop stewards

 

x

   

2.4.9 Specific commitments made by the specific sectors

   

X

 

Business commits to exploring the potential synergies amongst the sector approaches

   

X

 

2.5 Local Procurement

       

2.5.4 Commit to intensify support for the campaign and its objectives

   

X

 

2.5.5 A label of origin requirement will be introduced in the clothing sector

     

X

2.5.6 Support a strong campaign aimed at raising consumer awareness over Christmas 2003

     

X

2.5.7 Use procurement policy to achieve various objectives

   

X

 

2.6 Small Enterprise Promotion

       

2.6.1 Small enterprise promotion, especially the development of black-owned small enterprises

   

X

 

2.6.4 As part of its ongoing review of support for small, medium and micro enterprise, the Dti will consider proposals from constituencies on how to improve small enterprise promotion

(NO PROPOSALS WERE RECEIVED FROM BOTH LABOUR AND BUSINESS)

There is on-going work and good progress made in promoting and developing small enterprises

 

X

   

2.6.5 Business will consider extending the Business Trust beyond its original five-year lifespan

     

X

2.6.6 Greater procurement from small enterprises, especially black-owned businesses & co-operatives (unless there is a figure that indicates overall government procurement from SMMEs and black-owned enterprises it is difficult to ‘rank’ this activity.

 

X

   

2.7 Support for Co-operatives

       

2.7.2 Supportive policy framework & initiate and strengthen co-operatives

     

X

2.7.4 Special measures identified in the ILO recommendation to be included in the strategy

     

X

2.7.5 Creation and the strengthening of an appropriate regulatory system, implementing the BBBEE and co-operatives development strategy, establishing a fully-fledged unit, establishing a co-operatives advisory board, study tour to examine best practice, education campaign and appropriate offerings to provide institutional and financial support

     

X

2.7.8 Convene a national co-operatives conference in 2004. (Moved to 2005 to include reports from study tour)

   

X

 

2.8 Job Impact and Monitoring

       

2.8.1 Avoid job losses and to promote decent work

 

X

   

2.8.2 Government departments, parastatals and publicly listed companies to include information on total employment in their annual reports

 

X

   

2.8.3 Constituencies to engage with each other to develop practical methods for achieving the above

   

X

 

Constituencies recommit themselves to active labour market policies

 

X

   

Total

3

8

14

7

         

3. ADDRESSING THE INVESTMENT CHALLENGE

       

3.1 Introduction

       

3.1.4 Encourage investors to investing 5% of their investible income in appropriate financial instruments

 

X

   

3.1.5 Use or to create appropriate financial instruments and mechanisms

 

X

   

3.1.7 Pursue strategies and measures that will contribute to raising the level of investment

   

X

 

3.1.8 Review administered prices

 

X

   

3.2 Pension and Provident Funds

       

3.2.2 Conference of the trustees of pension and provident funds before the end of 2004

     

X

3.3 Housing

       

3.3.1 Investigate ways to improve access to land and the approach to funding

 

X

   

3.3.2 Share of low-income housing financed by private sector mortgages must increase

 

X

   

3.4 Financial Sector Summit

       

3.4 Constituencies recommit to implementation of agreements reached at Financial Sector Summit

   

X

 

Total

0

5

2

1

 

AGREEMENTS

No Progress

Task Initiated

Significant Progress

Task Completed

4. ADVANCING EQUITY, DEVELOPING SKILLS, CREATING ECONOMIC OPPORTUNITIES FOR ALL AND EXTENDING SERVICES

       

4.2 Black Economic Empowerment

       

4.2.1 Advance equity in general and broad-based black economic empowerment in particular

   

X

 

4.2.2 Business commits to a proactive strategy

   

X

 

4.2.3 Labour will support the development of co-operatives

   

X

 

4.2.4 Community will mobilise communities to participate in BEE initiatives

   

X

 

4.2.5 Constituencies undertake to support the implementation of governments procurement policy

 

X

   

4.3 Employment Equity

       

4.3.1 Government to co-ordinate a joint campaign to enhance public awareness of provisions of EEA

     

X

4.3.2 Business contribute resources to the joint Employment Equity Campaign

     

X

4.3.3 Labour will mobilise & educate members on EE and actively participate in campaign

     

X

4.4 Promoting Literacy

       

4.4.1 By March 2005 at least 70 per cent of workers have at least basic literacy and numeracy skills according to level one of the National Qualifications Framework

   

X

 

4.4.2 Government to continue to broaden access to literacy programmes & Business, Labour and Community to augment their own initiatives in this area

   

X

 

4.4.3 Constituencies commit to working through SETAs to achieve at least that 70 per cent of workers have basic literacy and numeracy skills according to Level 1 on the NQF

 

X

   

4.4.4 Work at local level to encourage/support adults to take advantage of literacy promotion opportunities

   

X

 

4.5 Learnerships

       

4.5.2 Create opportunities to improve skills of unemployed in areas that will enhance their employability

   

X

 

4.5.3 Business to encourage enterprises to provide lists of those learnership opportunities

   

X

 

4.5.4 Constituencies to work with DOL on a joint marketing campaign on learnerships

 

X

   

 

AGREEMENTS

No Progress

Task Initiated

Significant Progress

Task Completed

4.5.5 Constituencies to collaborate on design and implementation of a strategy to support learners exiting from learnerships

 

X

   

4.5.6 SETAs should be encouraged to provide support for projects for SMMEs

   

X

 

4.6 Strengthening of SETAs

       

4.6.2 Address problems of performance of SETAs and accelerate delivery by these institutions and develop KPIs

X

4.6.3 Consider inclusions of community representatives on SETA Boards

   

X

 

4.6.4 Labour to assist with the improvement of the performance of SETAs

 

X

   

4.5.4 Communities to assist with the improvement of the performance of SETAs

   

X

 

4.7 Education

       

4.7.3 All schools should have access to basic services

 

X

   

4.7.6 Government will finalise recommendations to achieve aim of affordable access for learners and engage at NEDLAC

   

X

 

4.7.7 Government will enhance its school fee monitoring mechanisms

 

X

   

4.7.8 Constituencies to ensure that household know their rights and responsibilities re schooling

 

X

   

4.7.9 Labour, business and community will encourage local structures to support orphans and very poor

   

X

 

4.7.10 Government will update its capital investment plan and engage with the NEDLAC Constituencies thereon and encourage proposals to support infrastructure in schools

 

X

   

4.8 Access to Basic Services

       

4.8.2 Work through local structures to assist eligible poor households to access these services

   

X

 

4.8.4 Commit to using structures and available resources to raising awareness of child grants, pensions and other special grants and addressing current obstacles for beneficiaries to take up these grants

 

X

   

4.8.5 Government to finalise policy on a comprehensive framework for social protection

 

X

   

Total

2

13

14

3

 

AGREEMENTS

No Progress

Task Initiated

Significant Progress

Task Completed

5. LOCAL ACTION AND IMPLEMENTATION FOR DEVELOPMENT

       

5.1 Local Level Planning

       

5.1.2 Accelerate the pace and implementation of integrated service delivery and development

 

X

   

5.1.5 Local government capacity to develop IDPs should be strengthened and supported, Stakeholders’ participation and capacity should be nurtured and developed, Social dialogue at the local level should be strengthened, The participation of NEDLAC constituencies in structures and mechanisms that seek to deepen community participation should be strengthened and The role of constituencies in the implementation of the Integrated Sustainable Rural Development Programme (ISRDP) and the Urban Renewal Programme (URP) should be enhanced

 

X

   

5.1.6 Government will establish a framework that will strengthen the participation of constituencies and broaden ownership by communities in the IDP process within the context of NSDP

 

X

   

5.2 Local Economic Development

       

5.2.2 Mechanisms should be explored to make it easier for SMEs and co-operatives to tender for local government work; Local government procurement: should support the Proudly South African campaign, procurement strategies should endeavour to promote local economic development and simpler, standardised tender procedures; seek to streamline applications for operating permits and other approvals; Mechanisms should be developed to link Local Economic Development sub-sector strategies with sector strategies; Multi-Purpose Community Centres (MPCCs) should ultimately be operational in all 284 municipalities; MPCCs should be used to support the development of SMEs and co-operatives; Mechanisms to facilitate access, including through local government to national economic incentive schemes for local enterprises must be explored

   

X

 

 

 

AGREEMENTS

No Progress

Task Initiated

Significant Progress

Task Completed

5.4 Service Delivery Mechanisms

       

5.4.1 Employment opportunities for poor, vulnerable & marginalised groups should be facilitated & created

 

X

   

5.4.2 Government will provide for increased service delivery through improved of municipal infrastructure

   

X

 

5.4.2 Business will launch a number of initiatives to promote service delivery

   

X

 

Total

0

4

3

0

* Significant progress has been made by government but in the absence of a mechanism to involve social partners, the partnership approach envisaged in the agreement and recently confirmed by Government cannot be realised.