Fedusa’s Dennis Georg. Photo: Simphiwe Mbokazi/African News Agency (ANA)
JOHANNESBURG -Could meaningful trade union participation within the framework of co-determination at Eskom be the key to again transforming it into the top energy utility in the world?

In the mid-1980s, Eskom was renovated by a revolution which transformed it to become one of the top electricity utilities in the world.

I visited former executive director Dr George Lindeque at his home to learn how then-trade unionists such as Gwede Mantashe and Frans Baleni and executive directors Dr John Maree and Dr Ian McRae used the Eskom Unfolding Vision (EUV) to change the utility into a company with high autonomy that surpassed generating demands during peak times to double the international norm of 15percent.

The momentum of EUV continued in the 2000s when Thulani Gcabashe replaced Allen Morgan as chief executive.

In 2001, Eskom was named Power Company of the Year at the Financial Times Global Energy awards in New York. During those days, all 78 of its production units were considered to be in good working condition.

EUV was introduced as a result of the “Save the Eskom Campaign” under leadership trade unions, who petitioned McRae that the Eskom management board and electricity council should abandon the new “Eskom strategic repositioning (ESP)” as the cost reductions and restructuring entailed further retrenchments.

The ESP intervention was a very expensive lesson for Eskom, meaning that the board and the council could not just do as they pleased, argued Lindeque.

Lindeque said after many hours of deliberations and consultations with Eskom executive directors, consultants, academics, politicians, unions and international experts, an agreement emerged that the focus of EUV would be to establish a process whereby trade unions could meaningfully influence decision-making at Eskom.

In other words, it was the establishment of a process of co-determination between management and unions. The process of co-determination was further strengthened through the development of implementation frameworks and communication processes.

However, Lindeque argued that the process was difficult and tiresome, and it had its fair share of diversions, bumps, potholes, boycotts and walkouts at the beginning.

It was also difficult to establish buy-in and acceptance, and why you would trust your arch-rivals in the workplace to co-determine your work future. Despite the difficulties, Eskom and its union did a magnificent job maintaining the momentum.

The definition of co-determination relates to co-operation between management and workers in decision-making, especially by the representation in management boards.

Co-determination in Germany is a concept that involves the right of workers to participate in management of the companies they work for. It applies to public and private companies with more than 2 000 employees.

Co-determination in Sweden is legislated since 2008 in corporate governance (also co-partnership or worker participation), and it involves the practice of workers of an enterprise having the right to vote for representatives on the board of directors in a company.

In Sweden, France and Netherlands, co-determination legislation makes provision for single-tier boards of directors in their corporates.

The EUV process in Eskom started with a plenary consisting of more than 300 managers, trade union leaders and shop stewards. The small groups of managers, trade union leaders and shop stewards discussed the big picture issues relating to what activities Eskom should stop doing, what strategic activities should be maintained and what new activities should be initiated.

After moderating all the outputs, these small groups generated 150 different matters to be debated and considered. Lindeque said the 150 matters were strategically packaged into six baskets, namely governance, equal opportunities, training and development, housing, information sharing, and process and structural matters.

Thereafter, the six task groups produced actionable implementation plans and monitoring mechanisms concluded Lindeque, which resulted in comprehensive structures and supporting processes that were jointly designed by business and labour.

Three trade union representatives were appointed to the electricity council, the governing body of Eskom; a new forum was established to deliberate future strategic matters and direction; a negotiations forum for wages, salaries and conditions of services was established; local fora at different sites were established to deal with day-to-day matters; and an ad hoc fora was established to discuss McRae’s successor.

The EUV process was not a quick-fix process, it took time and was difficult, requiring extensive information sharing and consultation. It also required a fundamental shift from management, consensus-seeking and constrained management prerogative. Unions developed a greater understanding of Eskom's business.

Eskom moved out of the political spotlight with many restructuring agreements concluded. A greater understanding of the management of surplus staff resulted and participative structures, procedures and processes were developed to implement and settle local disputes.

It must be remembered that the EUV process was not easy because it was seen as “giving away the family silver”, and an additional concern was the importance of balancing rights and responsibility, which was not fully resolved.

The main reason why Eskom was named Energy Company Of The Year by the Financial Times has to be attributed to the implementation of EUV.

The seven main critical success factors that made Eskom the top energy provider were bold, insightful and disciplined management and the trade unions' continued and extensive administrative support. Workers and company shared vision and confronted challenges with open minds, consulting before taking action and keeping to agreements. EUV was managed at all levels of the energy utility, change was introduced with patience, energy and will and, finally, rights had responsibilities and obligations.

Despite the success, in 2007 former president Thabo Mbeki made a public apology that the government did not accept Eskom's timeous recommendation to build more generating plant to match the country's growth rate.

This year, President Cyril Ramaphosa announced a new board for Eskom without the involvement of unions. A few months later, the board announced a zero-percent salary increase and said 10 000 jobs would be slashed.

However, by August Eskom had capitulated, signing a three-year wage agreement with the National Union of Mineworkers, National Union of Metalworkers of South Africa and Solidarity to adjust wages 7.5 percent for the 2018/19 financial year, 7 percent for 2019/20 and 7 percent for 2020/21.

When Ramaphosa announced the restructuring of Eskom into three divisions, it became clear that the financial crisis had become too much, with the government having to issue R23billion a year in bailouts to support the balance sheet.

The National Treasury also announced the first step in the separation process that would see the transfer of a portion of Eskom's assets to the new transmission company. The new company would invite the participation of strategic equity partners that would provide capital for the business and strengthen oversight.

All these measures cannot change Eskom if the unions are excluded from meaningful participation at all levels of the company.

EUV clearly produced evidence that what happened in 1985, where trade union leaders played a meaningful participatory role and influenced processes in Eskom, could be introduced again.

Dennis George is the General Secretary of Fedusa. He writes in his personal capacity.