Struggle for memory also a struggle for power

394 31/10/2014 Numsa General secretary Irvin Jim talks to the Sunday Independent. Picture:Nokuthula Mbatha

394 31/10/2014 Numsa General secretary Irvin Jim talks to the Sunday Independent. Picture:Nokuthula Mbatha

Published Sep 14, 2015

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The crisis in the steel industry is arguably the biggest challenge facing the South African working-class movement for years. Unless a solution is found very soon, at least 50 000 workers directly employed by steelmaking companies will be retrenched within six months.

When you add contract workers, truck drivers and cleaners, the number rises to 190 000, more than 10 times the estimated job losses expected in the mining sector where retrenchments are also looming.

There will be a massive knock-on effect on workers’ families, on small businesses and informal traders around the steel plants and on the local economies. About 75 percent of the residents in the Vaal Triangle are dependent on the ArcelorMittal plant. In Saldanha 25 percent of residents are dependent on another ArcelorMittal plant. Evraz Highveld Steel in Mpumalanga and Scaw Metals intend to retrench thousands of workers.

These closures would also be a catastrophic blow to the future of the manufacturing industry in South Africa, at a time when the economy is already bleeding jobs and when unemployment has reached record high levels, almost 35 percent by the more realistic expanded figure.

This would compound the already existing crisis of mass poverty as those lucky enough to have a job face the burden of looking after unemployed dependants who are ravaged by squalor and poverty in poor and working class communities. And South Africa is, as we must know, the most unequal society in the world.

The National Union of Metalworkers of South Africa (Numsa), together with Solidarity, Uasa, the Metal and Electrical Workers Unions of South Africa have met with employers and the government to seek solutions to the crisis in the steel industry.

The aim has been to get a firm commitment from the government to reintroduce tariffs on imported steel, anti-dumping regulations, a ban on the export of scrap metal and a commitment that state-owned enterprises (SOEs) will procure local steel. South Africa is the only steel exporter out of 64 countries in the world that does not impose import tariffs.

Numsa, however, while appreciating the joint commitments by industry executives and employer bodies to these short-term measures, will not hesitate to use a two-pronged strategy to defend members’ jobs – by organising mass pickets and demonstrations to highlight the grim plight they face, in line with labour’s traditional approaches: “What has not been won in the boardroom shall be won on the streets.”

Workers must not accept empty severance and retrenchment packages. We have noted the arrogance of the steel bosses on retrenchments. We will fight the steel industry for every job we have got. This we promise our members.

Tariffs on imports

Numsa, we must pat ourselves on our backs for securing the 10 percent tariffs on imports of steel. We fully support the measures the government wants in place in exchange for the tariffs.

While determined to do everything possible, as urgently as possible, to save their members’ jobs and win the above short-term demands, Numsa also understands that this crisis in the steel industry is inseparable from the deeper crisis of monopoly capitalism in South Africa and around the world, which is experiencing the kind of capitalist crisis of overproduction and immiseration of the workers identified by Karl Marx and Friedrich Engels more than 167 years ago!

We have further correctly argued and stated that the steel value-chain is the single most important value-chain for industrial development and therefore ownership and control of this value chain by the post apartheid state is vital to any socio-economic transformation agenda.

The South African state has no option but to seize controlling stakes in the strategic segments of the steel value-chain from raw mineral extraction, processing and alloying or fabrication.

We have consistently maintained that everything that relates to economic transformation post-1994 is dependent on state power: the power to allocate resources and to therefore determine their use. State power, however, arises primarily from ownership and control of the means of production. This is the only way South Africa can guarantee the optimum use of its minerals and to effectively direct the process of industrial development equitably for all the people of South Africa.

It has been always very clear to us that the South African state has to boldly intervene to determine how the South African economy relates to the rest of the world economy because currently the manner in which the economy operates is wholly determined by foreign-owned, global monopolies and is thus subjected to imperialist exploitation.

Besides the need to control the steel value chain, Iscor – like Eskom, Sasol, Armscor and other SOEs – was established by the apartheid regime as an ATM machine for corrupt, racist leaders to enrich themselves. These state entities were also used to try to defeat international sanctions against apartheid.

The regime even forced pension funds to invest up to 50 percent of their assets in government bonds and other prescribed stock such as Iscor, Sasol and homeland development corporations.

After it was privatised the Indian-owned ArcelorMittal turned a corrupt public monopoly into an even more corrupt private monopoly. It retained all the worst features of its predecessor but added new policies to make it even more dominant in the economy and with even more disastrous results for the workers and the economy.

Worst of these policies was import parity pricing (IPP), under which consumers were forced to buy steel at the equivalent of what it would cost them to import steel and have it transported to their factory, even when the steel had actually been sourced from and manufactured in South Africa.

Competitor companies were powerless to compete with ArcelorMittal because of their virtual monopoly.

Unbelievable profits

The company amassed unbelievable profits from this extortion from their customers. From 2000 to 2008, the value of its shares rose 7 000 percent! But the effect on the economy was disastrous. At the very time that the national priority was to develop the manufacturing industry, it was being grossly over-charged for steel, one of the indispensable components of almost all manufacturing processes.

Even if it is not illegal, IPP is surely a form of corruption – an exploitation of a monopoly to extort money from customers who had no alternative source of steel, the costs of which then had to be passed on to their customers: the people of South Africa. When we march against corruption on September 23, we should never forget that corruption is not confined to the public service!

But as well as being immoral, IPP was inevitably unsustainable in the longer run. ArcelorMittal had a near-monopoly of steel in South Africa, but not in the world. When China, which had for years been a huge importer of steel, began to face a slow down in its economy over the last two years, it stepped up its steel exports.

And China’s IPPs are well below ArcelorMittal’s, allegedly through heavily subsidised energy, finance and labour costs. This has led to the dumping of tons of cheap steel in South Africa and many other steel-producing countries. If that was not bad enough, imported Thai steel is being used at the Medupi coal power plant, and Denel, which produces armoured vehicles for export, imports aluminium from Sweden.

The irony is, as Ann Crotty and Lucky Biyase point out in Business Times (August 23) “ArcelorMittal… is demanding protection from a pricing strategy it forced on local steel users for the past decade”.

Numsa’s 2013 Special National Congress was absolutely clear on the way to resolve what already then was a looming crisis. It established a Section 77 Task Team, led by the general secretary, to co--ordinate rolling socio-economic strikes around demands including: Nationalisation and beneficiation of all strategic minerals, a ban on the export of scrap metals and rebuilding of foundries, IPP and an export tax on all strategic minerals.

An increase in import tariffs on certain goods to the maximum allowed by the World Trade Organisation and de-commercialisation of state owned enterprises and the re-nationalisation of Sasol and ArcelorMittal.

But underlying all these issues is the need for a fundamental change in the balance of power in the world economy. As Numsa declared at its Special National Congress: “At play in post 1994 South Africa is the battle to the death between forces of capitalist reaction and forces of socialism, as the only solution to the crisis of humanity and development in South Africa and the world.”

Numsa believes, in the medium- to- long term, there is no alternative to nationalising the steel industry and strategic elements of its value chains.

To this end, we are mobilising the working class into the United Front and working tirelessly to reignite the struggle for a Socialist South Africa.

* Irvin Jim is the General Secretary of Numsa.

** The views expressed here are not necessarily those of Independent Media.

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