NEDLAC GDS AGREEMENTS - PROGRESS REPORTS BRIEFING TO THE PORTFOLIO COMMITTEE ON LABOUR

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.

4. 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.

5. OVERACHING OBJECTIVES OF THE GDS • Through theGDS, 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 Africa’s 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.

6. 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.

7. 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

8. 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

9. 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 Tasks Completed Tasks Initiated • A Conference of the Retirements Funds Trustees held in 2004. • Financial Sector agreements are being implemented - Umzansi Account, Financial Sector Charter Council completed • 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

11. 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

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

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

14. 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. • Governmentis implementingthe Municipal Infrastructure Grant (MIG) programme Tasks Completed Tasks Initiated • Local Economic Development • Local Level Planning • Provision of the Infrastructure and Access to basic needs • Service Delivery Mechanisms • 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.

15. 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 • Chemical Sector Partnership Agreement and Govt-led Customised Sector Programme for the • Chemical sector

16. 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.

17. IMPACT Jobs creation and Sector performances Source: Stats SA, Statistical Release, November 2005

18. Labour Market IMPACT Labour market indicators September 2001 -2005 Source: Statistics SA, Labour Force Survey

19. IMPACT Employment by Industry Source: Statistics SA, Labour Force Survey

20. Employment by Industry IMPACT Source: Statistics SA, Labour Force Survey,

21. 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 • Cooperatives Banks Bill • Sector Strategies in Metals and Engineering, Construction, Agriculture

22. 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. The GDS interventions are indeed bearing results in some areas.