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Johannesburg - Sidelined members of the SA Municipal Workers Union (Samwu) say that trade union federation Cosatu, to which it is affiliated, has done “absolutely nothing” to resolve the disputes over the union’s missing millions.
And the factional infighting in the union could worsen as Samwu’s national office bearers continue to dismiss, suspend or expel staff and leaders who ask questions about R136 million which is allegedly unaccounted for.
About 40 union leaders have already been dismissed, expelled or suspended.
“We are concerned about what is happening. Members are not happy,” said one provincial leader of the country’s biggest municipal workers union.
For this reason over 100 general meetings have been held across the country to “educate” members about the alleged corruption.
Samwu’s national office bearers have fought back against the allegations, by apparently holding shop steward elections to replace disobedient union leaders, in addition to “unconstitutionally” expelling others.
In the Cape Town metro region of Samwu, a leader said there had been 12 suspensions of shop stewards, because the metro region’s leadership supported the national office bearers.
In addition, Samwu’s Western Cape secretary was dismissed.
The Western Cape, Eastern Cape, Gauteng and North West have called for a forensic audit of the union’s finances, while in Mpumalanga the national leadership expelled provincial leaders and created parallel structures.
Among other expelled leaders are the provincial secretary, chairperson and deputy secretary of Gauteng, the provincial chair of the Western Cape, and the provincial secretary of North West.
The Joburg region’s chairperson was also expelled by Samwu, as well as its secretary and deputy chairperson, Western Cape Save Our Samwu (SOS) leader, Andre Adams said.
Contacted for comment, Samwu’s deputy general secretary Moses Miya, refused to answer questions, asking instead whether there was anything “new” to allegations of corruption.
But is the infighting in Samwu part of the larger factional fights taking place in trade union federation, Cosatu?
Given claims from Samwu’s national officials that those who have been expelled want to form a rival union – and are also behind plans to form a political party to contest the 2016 municipal elections – it could appear so.
At the forefront of plans to form a political party is its fellow Cosatu affiliate, the National Union of Metalworkers of SA which has declared its intentions to form a Movement for Socialism, which will contest the 2016 elections.
But SOS says there isn’t a “shred of evidence” to support this claim because it is a “complete fabrication”.
“The (national officials) are trying to divide and rule the membership to distract (attention) away from the financial questions they refuse to answer. But we the members are not fooled, and we will not be lied to any more.”
In the face of accusations and counter-accusations, in June members of Samwu called on Cosatu to use its constitutional powers to facilitate a speedy return to “effective representation and organisation” in the union.
“This would include oversight to ensure that provincial and national mandates are properly made, and that the Samwu constitution is respected and implemented,” a memorandum signed and received by Cosatu general secretary Zwelinzima Vavi says.
“(Samwu) belongs to us, the members, and must be protected not abused by our elected leaders. If the NOBs (national office bearers) continue to fail us, the members of Samwu will act to decisively protect Samwu.”
But SOS spokesman Sello Selepe said that despite receiving the memorandum, it appeared Cosatu leaders had done nothing.
“We are told (Cosatu) met the (Samwu) NOBs, but we don’t know the outcome of that meeting,” he said.
Responding to questions from Independent Newspapers, Vavi confirmed that the Cosatu NOBs met Samwu NOBs on July 31.
The discussion, Vavi said, centred on Samwu’s “current challenges including the memorandum” Cosatu received in June from disgruntled members of the union.
The photocopy contract
A key event resulting in the fracas over the union’s missing money appears to be the awarding of a contract totalling R6.4m to a service provider for photocopy and fax machines.
In December 2012, SOS says Samwu’s contract with Canon ended and the union then hired the company’s services on a month-to-month basis until it could conclude a contract with a new service provider.
The request for service providers was put out to tender, and seven companies responded, including three different Canon divisions competing with each other.
“Given the problems (Samwu was) experiencing with the existing Canon machines, Fincom discarded the three quotes from Canon,” SOS contends.
The three remaining quotes were as follows: a company called Pambili with a quote of R260 800; Pansolutions with a quote of R174 000 and Kyocera with a quote of R127 340.
The Fincom then shortlisted Pansolutions and Kyocera, leaving the final decision to the national office bearers (NOBs).
SOS says Pambili was discarded by Samwu’s finance committee (Fincom) as a provider because “they were a middleman and not a provider” and “more importantly” because they gave the most expensive quote.
Nevertheless, the NOBs signed a contract with Pambili – not with either of the two shortlisted companies, Pansolutions and Kyocera.
A subsequent meeting of the finance committee of April last year requested the NOBs explain why the contract was signed with the more expensive company, in spite of Fincom’s recommendations.
SOS says Samwu’s general secretary Walter Theledi subsequently said the officials believed Pambili was the company agreed to by Fincom, that Pambili offered the cheapest contract and that it charged what the previous service provider, Canon, charged in 2010.
A detailed report setting out the above was then requested but this has not yet been forthcoming, the sidelined Samwu leaders say.
The consequence of signing with Pambili, SOS says, is that Samwu will pay R6.4m more for the duration of the contract than what the union would have paid had it signed with Kyocera.
The Pambili contract is also R4.1m more than what Samwu would have paid had it signed with Pansolutions.
The call account is where Samwu’s reserve funds are held, comprising money for congresses, education, funerals, the strike fund and the members’ fund.
As at the end of December the call account amounted to R177.7m, comprising:
* R124m for the members fund.
* R35m for the strike fund.
* R6.7m for congresses.
* R6.6m for education.
* R4.4m for funerals.
However, at the beginning of January last year, the opening balance for the call account was only R96.9m – leading to questions of how R80.7m simply “vanished” between the end of December 2012 and the beginning of January.
According to documents seen by The Sunday Independent, the discrepancy can be explained by R28.4m which was transferred from the call account to pay administrative expenses including salaries, Cosatu affiliation fees and travel claims for the year.
However, SOS says these are line items that were already budgeted for.
Financial statements for last year allegedly show the union had an income of R129m and expenses of R122m that would have left it with a surplus of about R7m.
“If this is the case, why was R28.4m transferred to cover administrative expenses when the financial statements suggest that we had enough money,” SOS asks.
“It either means the financial statements are misleading and not a true reflection of the state of the union’s finances.
“If the R28m plus was used to subsidise the operating expenses then it means we owe the reserve/call account this amount.
“Alternatively it means, if we accept that the monies (were) used to subsidise the operating expenses, then the union’s viability as a running concern is seriously in question.
“If (the reserve account) continues to subsidise the operations of the organisation, what happens when the reserves are depleted…?”
SOS is now demanding to know what the true state of Samwu’s finances is.
But inconsistencies relating to the union’s finances can also be traced back to the period from January to December last year, when R53.5m was transferred out of Samwu’s reserve account.
While R51.6m of the above figure can be explained, an additional R1.9m is unaccounted for, SOS says.
Samwu’s Joburg headquarters
The spending on Samwu’s new Joburg offices has also been questioned for going over budget without approval from the union’s CEC and national executive committee.
The central executive and national executive committee approved expenditure of R13.6m for renovations to the Joburg building, but as of February of this year, renovations have instead cost R32.7m.
This means the budget has been exceeded by R19m – and members are demanding explanations for how and why this was authorised by the national office bearers.
The renovations have also resulted in penalties to the value of R3.9m – but SOS wants to know why the union was liable when the contractor should be liable for missing deadlines.
A further R2.4m was paid for variations – but SOS says it is unclear what these changes consisted of and who agreed to them.
And while about R670 000 was spent on waterproofing and kitchenettes for the building, SOS claims this job has had to be redone three times – at cost to the union – while the building still leaks when it rains.
“It would also expose the wastefulness of the NOBs in cancelled meetings, botched contracts, unexplained double bookings, unwarranted and ridiculously high car hire charges, inflated travel claims and a range of unauthorised expenditures. Those officials who have been covering up for the NOBs and doing their dirty work must also be ready to answer for their actions.”
Save our Samwu (SOS)says that Samwu’s financial statements indicate that the union has hired a consultant at an average cost of R400 000 a month.
This is in addition to the R2 million that has been listed as “consultant and facilitation fees” to an unnamed service provider as part of the additional and unauthorised R19m the union spent on renovating its Joburg offices.
SOS wants to know if this payment also went to Mpamba Solutions, the firm which Samuel Phaswane works for, which was appointed to be the project managers for a period of four months during the course of the renovations.
From January to December last year, Mpamba’s consulting fees averaged R400 000 a month.
However, SOS says union members have never been told what service was actually provided by the firm in return for the hefty fee.
For the period January 2013 until April this year, SOS estimates that Mpamba Solutions has cost Samwu about R6.2m – despite an order from the union’s central executive committee on August 13 last year that national office-bearers stop using consultants.
A central executive committee meeting in December again confirmed the August meeting’s decision to stop using consultants.
However, it is unclear whether Samwu’s national office-bearers heeded this instruction.