NEDLAC

1
NEDLAC GDS AGREEMENTS - PROGRESS REPORTS BRIEFING
TO THE PORTFOLIO COMMITTEE ON LABOUR
29 AUGUST 2006
2
STRUCTURE OF THE REPORT

• INTRODUCTION
• CONTEXT
• INTRODUCTION
• THEMES AND KEY INTERVENTIONS
• PROGRESS REPORT PER THEME
• COMPLETED TASKS
• TASKS INITIATED
• KEY HIGHLIGHTS
• OUTSTANDING TASKS
• IMPACT
• CONCLUSION

3
INTRODUCTION

• The GDS agreements were finalised on 7June 2003
  at the Growth and Development Summit convened by
  the President of the Republic of South Africa.
• The GDS is a set of targeted interventions by
  Nedlac social partners to address key challenges
  facing the country.
• The first 6 months were spent in translating the
  commitments into various action plans.
• 2004 was dedicated to implementing the agreed
  action plans and seeking agreements on those
  areas that remained unresolved.
• 2005 focused on addressing bottlenecks and
  soliciting buy-in from strategic institutions
  that were identified as critical for purposes of
  implementation.
• Since the GDS does not exist in isolation, the
  implementation processes are often impacted on by
  various macro-economic factors. The
  unpredictable swings in the exchange rate, the
  trade environment, the commodity markets, etc. at
  times pose a huge challenge for the GDS
  implementation.

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CONTEXT

• The constituencies of Nedlac - government,
  business, labour and the community - reaffirmed
  their commitment to social dialogue and working
  together to address the pressing social and
  economic challenges our country faces.
• 2. The constituencies committed themselves to a
  common vision for promoting rising levels of
  growth, investment, job creation and
  people-centred development. The vision is aimed
  at making South Africa
• The leading emerging market and destination of
  first choice for investors whilst retaining and
  expanding social equity and fair labour
  standards.
• A productive economy with high levels of service,
  a skilled workforce and modern systems of work
  organisation and management.
• A society in which there are economic
  opportunities for all, poverty is eradicated,
  income inequalities are reduced and basic
  services are available to all.
• A society in which our people, our most precious
  resource, are given the opportunity and support
  to develop to their fullest potential.
• A society that promotes the values of social
  equity, fairness and human dignity in the global
  economy.
• 3. The GDS is the war plan agreed to by all
  social partners as one, among various
  interventions, to achieve these objectives.

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OVERACHING OBJECTIVES OF THE GDS

• Through the GDS, the constituencies aim to make a
  contribution towards halving
• unemployment by 2014 and eradicating poverty. The
  GDS agreements are therefore
• part of our collective efforts to achieve this
  objective through
• a) Building an enduring partnership Promoting a
  shared vision of South Africas growth and
  development strategy to frame sector and
  developmental agreements and lay the basis for
  constituency partnerships in action.
• b) Addressing urgent challenges Selecting from
  many possible interventions those which hold the
  promise of the greatest possible impact in the
  shortest possible time for accelerated
  investment, job creation, improved efficiency and
  productivity, greater social equity, and a fairer
  distribution of economic opportunities and
  rewards, while undertaking serious social
  dialogue on broad policy frameworks.
• c) Lending a hand Securing the commitment and
  active participation of all constituencies in
  those areas identified for prioritised action in
  ways that build on lessons learnt from
  development programmes.

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GDS GUIDING PRINCIPLES

• The GDS is not about doing everything, but it is
  about doing what is do-able.
• The GDS is about targeting carefully selected
  areas which are capable of delivering on a
  greater scale.
• The GDS is not a panacea for all the social and
  economic development ills in South Africa, but an
  important intervention towards addressing some of
  the challenges on these fronts.
• The implementation of the GDS agreements is not
  an event, but a set of multiple processes aimed
  at defining concrete steps and interventions at
  various levels.
• The bulk of the GDS interventions are medium to
  long term in nature - therefore the impact of
  most of these efforts tend to be medium to long
  term.
• It is also becoming evident that, as time passes,
  certain agreements reached at the GDS become
  absorbed into the normal decision making of the
  public and private sectors without there
  necessarily being specific acknowledgement of the
  GDS origins.

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Key Interventions Per Theme

• More Jobs, Better Jobs and Decent Work for All
• Public Investment Initiatives
• Expanded Public Works Programme
• Sector Partnerships Strategy
• Local Procurement
• Small Enterprise Promotion
• Support for Cooperatives
• Jobs Impact and Monitoring

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Progress Report under each Theme
Are we doing what we planned?
Key Highlights
Tasks Completed Tasks Initiated

• Govt has allocated over R370bn
• to infrastructure Development.
• State owned enterprises are
• championing the infrastructure
• development projects.
• 348 900 cumulative total work opportunities
  created since inception.
• A Co-operatives Directorate
• has been established in the Dti.

• Public Investment Initiative
• Expanded Public Works Programme
• Local Procurement
• Small Enterprise Promotion

• The Nedlac report on the National
• Co-operatives Bill and Policy finalised.
• A study tour undertaken to four
• countries (Italy, Kenya, Japan
• Spain.)
• Chemical Sector Partnership
• Strategy and CSP finalised
• Sector summits held in Metals and Engineering,
  Chemical, Construction, Auto, ICT

• Support for Cooperatives
• Sector Partnership Strategy
• Jobs Impact and Monitoring

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Key Interventions Per Theme

• Addressing the Investment Challenge
• 5 Investible Income
• Administered Prices and Import Parity
• Contractual Savings - Pensions and Provident
  Funds
• Housing
• Financial Sector Charter
• Financial Sector Summit Agreements

10
Progress Report under each Theme
Are we doing what we planned?
Key Highlights
A Conference of the Retirements Funds Trustees
held in 2004. Financial Sector agreements are
being implemented - Umzansi Account, Financial
Sector Charter Council completed
Tasks Completed Tasks Initiated

• Pensions and Provident Fund
• Trustees Conference
• Finance Sector Charter

• Retirement funds reforms
• Investigations on
• Administered Prices and
• Import parity Pricing
• 5 Investible Income
• Housing

The first Ministerial draft policy framework has
been discussed and a revised draft still
outstanding. A draft agreement has been
produced and it waits further inputs from the
social partners
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Key Interventions Per Theme

• Advancing Equity, Developing Skills, creating
  economic opportunities for all and extending
  services
• Black Economic Empowerment
• Employment Equity
• Promoting Literacy
• Learnerships
• Strengthening SETAs
• Education
• Access to basic needs

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Progress Report under each Theme
Are we doing what we planned?
Key Highlights
Tasks Completed Tasks Initiated

• Review Barriers to entry
• level jobs
• BBBEE Codes
• EE Road Shows
• Strengthening SETA Boards
• Learnership - Targets
• MPCCs - Exceeded targets

Ministerial Round table discussions on Labour
Market Policy Review in 2006. BBBEE Codes
finalised. Over 155 460 learners registered with
SETAs in structured learnership and
apprenticeship programmes. 82 black, 43 women
and 2 people with disabilities
The Minister of Education briefed Nedlac on the
key tenets of the National Education Policy and
strategy. Ministerial Round table discussions on
Labour Market Policy Review. The FET legislative
is being reviewed esp. in the light of Asgi-SA
and JIPSA

• Promotion of Literacy
• Community Representation
• on the Seta Boards

13
Key Interventions Per Theme

• Local Action Implementation
• Local Level Planning
• Local Economic Development
• Provision of the Infrastructure and access to
  basic needs
• Service Delivery Mechanisms

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Progress Report under each Theme
Are we doing what we planned?
Key Highlights

MPCCs have increased from 37 to 86 and a
strategy for the next phase which will see an
MPCC in every municipality by 2014 has been
finalised for submission to Cabinet. Government
is implementing the Municipal Infrastructure
Grant (MIG) programme
Tasks Completed Tasks Initiated

The Business Trust established a 5 year
Facilitation Fund of R100 million for the EPWP.
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.
Local Economic Development Local Level
Planning Provision of the Infrastructure and
Access to basic needs Service Delivery Mechanisms
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SUMMARY OF COMPLETED TASKS

• Retirement Funds Trustees Conference
• Public Investment Initiatives Infrastructure
  Investment Pool
• Pre-Nedlac Conference on Co-operatives
• Cooperatives Policy
• Cooperatives Legislative Framework
• Study Tour on Cooperatives
• Implementation of Finance Sector Summit
  Agreements
• Municipal Infrastructure Grant Programme
• Framework for the Expanded Public Works Programme
  Projects

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SUMMARY OF COMPLETED TASKS

• Broad Based Black Economic Empowerment Codes
• Technological Platform to facilitate
  opportunities for BEE SMMEs
• Road shows on the Employment Equity resulting in
  significant improvement in reporting
• National Skills Development Strategy
• Strengthening of SETAs Senior Trade Union
  officials/Office Bearers serve on SETA Boards
• Business Trust life-span Extended
• Exceeded the target on Multi-Purpose Community
  Centres (MPCCs)
• 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.

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Jobs creation and Sector performances
IMPACT
Industry Relative size in Q3 2005 Seasonally adjusted annualized change from previous quarter (Percentages) Seasonally adjusted annualized change from previous quarter (Percentages) Seasonally adjusted annualized change from previous quarter (Percentages) Seasonally adjusted annualized change from previous quarter (Percentages) Seasonally adjusted annualized change from previous quarter (Percentages) Seasonally adjusted annualized change from previous quarter (Percentages) Seasonally adjusted annualized change from previous quarter (Percentages) Seasonally adjusted annualized change from previous quarter (Percentages) Seasonally adjusted annualized change from previous quarter (Percentages) Seasonally adjusted annualized change from previous quarter (Percentages) Seasonally adjusted annualized change from previous quarter (Percentages)
  2003 2003 2003 2003 2004 2004 2004 2004 2005 2005 2005
    Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Agriculture, forestry, fishing 2.6 -2.9 -7.7 -17.2 -5.6 2.4 3.4 7.1 3.4 6.4 2.9 10.2
Mining quarrying 6.4 3.1 6.0 6.5 2.0 1.0 1.3 7.6 -2.8 9.6 3.9 -0.7
Manufacturing 16.4 -3.4 -4.7 -3.8 -2.1 9.0 11.3 11.0 3.0 -2.3 7.9 5.6
Electricity, gas and water 2.2 -1.6 -0.8 -0.4 0.8 3.6 3.2 4.8 3.7 0.3 0.3 -1.7
Construction 2.7 7.2 6.5 7.9 6.0 15.6 15.6 9.0 4.5 11.2 12.7 9.5
Wholesale and retail trade, hotels restaurants 13.7 5.8 8.2 9.3 9.0 2.8 4.0 4.5 6.4 5.8 6.9 6.3
Transport, storage and communication 9.8 6.4 4.2 4.1 5.3 4.0 4.1 5.5 5.6 5.1 6.3 6.1
Finance, real estate, and business services 19.5 4.0 2.8 4.8 4.3 8.7 11.2 9.1 8.9 10.6 4.2 4.5
General government services 12.5 1.2 0.8 0.9 0.8 1.1 1.2 1.1 1.7 1.9 1.2 0.9
Personal services 5.3 4.6 4.9 2.2 -0.6 0.8 0.7 3.8 2.1 2.2 2.6 3.1
                         
Total value added 91.1 2.3 2.0 2.4 2.6 5.0 6.2 6.6 4.4 4.7 5.1 4.3
                         
Tax less subsidies on products 8.9 3.6 2.8 1.9 2.8 4.8 9.1 6.9 2.6 3.3 9.1 3.3
                         
GDP at market prices 100 2.5 2.1 2.3 2.6 5.0 6.5 6.6 4.2 4.6 5.4 4.2
Source Stats SA, Statistical Release, November
2005
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Labour Market
IMPACT
Labour market indicators September 2001 -2005
  2005 2004 2003 2002 2001
           
Employed 12301 11643 11424 11296 11181
Unemployed 4487 4135 4434 4936 4655
Labour Force 16788 15778 15858 16232 15836
Not economically active 12909 13527 13080 12295 12281
Population of working age 29697 29305 28938 28527 28117
Discouraged workers 3312 3948 3773 3194 2994
           
Unemployment rate 26.7 26.2 28.0 30.4 29.4
Labour participation rate 56.5 53.8 54.8 56.9 56.3
Labour absorption rate 41.4 39.7 39.5 39.6 39.8
Source Statistics SA, Labour Force Survey
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Employment by Industry
IMPACT
Source Statistics SA, Labour Force Survey
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Employment by Industry
IMPACT
  2001 2002 2003 2004 2005
           
Agriculture 1178 1420 1212 1063 925
Mining 554 559 552 405 411
Manufacturing 1620 1633 1550 1714 1706
Utilities 94 84 91 99 100
Construction 634 605 664 824 935
Trade 2454 2194 2429 2542 3024
Transport 546 574 537 563 616
Finance 1035 1084 1098 1147 1296
Community services 1989 2043 2180 2185 2192
Private Households 1034 1029 1075 1075 1067
Unspecified 42 72 34 26 29
           
Total 11181 11296 11424 11643 12301
Source Statistics SA, Labour Force Survey,
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OUTSTANDING TASKS- WORK IN PROGRESS

• Finalising the agreement on 5 INVESTIBLE INCOME
• Finalising Retirement funds reforms
• Finalising Co-operatives Strategy
• Education
• Cooperatives Conference
• Participation of Community Constituency on the
  SETA boards
• Building social dialogue at local level
• Finalising Comprehensive Social Security
  framework
• Land reforms

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CONCLUSION

• ?Real gross domestic growth registered
  twenty-three quarters of uninterrupted increase
  and
• rose at an average of 3,5 over this recovery,
  signifying an appreciable increase in real
• production per capita.
• ?The performance of the South African economy has
  been positive for some years now. The
• SARB reports that the upward phase in the
  business cycle, since September 1999 or 71
• consecutive months, is the longest upswing in
  recorded history.
• ?The main drivers of the 4,2 increase in the
  real GDP are the following three sectors the
• manufacturing industry, wholesale and retail
  trade, hotels and restaurants, and the finance,
  
• real estate and business services. Each of
  these three sectors contributed 0,9 growth over
• the previous quarter to the real GDP. The
  transport, storage and communication sector
• contributed 0,6 and the construction industry
  contributed 0,3.
• ?The total number of people employed in South
  Africa in September 2005 amounted to 12,3
• million. This is an increase of 658 000 people
  or 5,7 compared with September 2004. In
• nominal terms employment has been growing
  slowly between 2001 and 2004.