Eskom a hostage to moribund ideology - The Witness

21 February 2019 - The Eskom crisis has brought South Africa face to face with an inescapable reality: the romantic idea on the Left that Eskom is a strategic asset that only the government should run is nonsense.

Sara Gon

The Eskom crisis has brought South Africa face to face with an inescapable reality: the romantic idea on the Left that Eskom is a strategic asset that only the government should run is nonsense.

Yet, as the country confronts an unprecedented existential crisis, the governing ANC’s Alliance partner, Cosatu, is objecting to the idea of bringing in outside experts to help resolve the problem.

There is only one question to ask: will external experts/internal experts/privatisation help to solve Eskom’s problems? The answer is whatever will help is what needs to be done.

Cosatu’s resistance to change that is so obviously urgent highlights the problem of a governing party including a union federation as its partner in running the country. And the fact is that Eskom is too critical to our economy to be held hostage by a reactive, unimaginative union movement.

When the government has to make some hard decisions to restructure an entity like Eskom, it becomes hidebound by unions who neither accept their responsibilities nor acknowledge that the very labour laws they demanded also apply to them.

Our labour law is at one with the recommendations of the International Labour Organisation. It is accepted internationally that if a company is making losses or needs to restructure to become more efficient, one of the possible cost-cutting measures is retrenchment. This should be considered as a last resort, because the effect on employees can be devastating. But if it has to be done, it has to be done.

In Eskom’s case, the first priority has to be efficient, affordable electricity production and distribution.

In such conditions, protecting members’ jobs is not the only protection unions need to offer. When retrenchment is unavoidable, as it will be at Eskom, the unions need to try to negotiate the best deal possible for their members by negotiating, among other things, possible retraining, retrenchment packages, the continuation of benefits, and so on.

By going out on strike, irony of ironies, Cosatu will most likely confirm to management that many employees are indeed redundant. When a union embarks on a strike, its timing must be to the best possible benefit of the membership and the employer should feel as much pressure as possible.

One of the most dispiriting reminders provided by the Eskom crisis is that so many players in the political space, the African National Congress (ANC), SA Communist Party, the Economic Freedom Fighters, the South African Federation of Trade Unions and others cling so tenaciously to redundant socialist/Marxist economic philosophies that they would see the country economically destroyed before they will accede to involvement of the private sector or the use of foreign experts to resolve the electricity crisis 

It’s not just that every socialist economy has disintegrated, including those currently imploding – Zimbabwe and Venezuela – it’s the failure to realise that the survival, never mind the growth, of South Africa cannot happen under leadership operating as if we are still stuck in the first industrial revolution from the late 18th century to the mid-nineteenth century.

Over three centuries later we are faced with adapting to the Fourth Industrial Revolution, to the world of rapidly advancing information technology and artificial intelligence. Yet the Left has left its supporters unprotected as a consequence of its adherence to this failed ideology.

Contrary to union rhetoric, the private sector does not exploit workers. If they do, then labour law and trade unions come into play.

Workers do not owe their fealty first and foremost to trade unions; they are employees first and trade union members second. Without their employment by a company, they cannot be union members. It is the very fact of their employment by companies that provides trade unions their membership.

Marxist trade unions either still understand little of what it is like to start, run and grow a business or they don’t care. Much of their rhetoric conveys the impression that South African workers suffer uniquely. The bad news is that South Africans hold down exactly the same sort of jobs, on the same conditions, that exist everywhere else in the world.

Moreover, we are just one of 195 countries in the world and just one of the many developing countries with whom we are competing for investment.

Running a country relies on an understanding of economics, on hard work and common sense. We don’t have the clout to dictate the terms of investment either to America, Britain, the European Union, China or Russia. They are way too powerful and if we persist in being arrogant, we will get nothing. Their investment will just go elsewhere.

The truth is that while Cosatu and similarly ideological unions and federations have threatened to bring South Africa to its knees if there are any retrenchments at Eskom, the country is already on its knees, and such threats are tantamount to treason.

There is no debate – success in the 21st century will depend on us joining the global economy, not retreating into a moribund ideology.

Experts have been warning the government for 20 years that our electricity provision is in trouble. Yet the ANC and its partners were either too arrogant or corrupt to do anything about it. When the tripartite alliance feels shame over its culpability, then we may make some progress.

Sara Gon is a Policy Fellow at the Institute of Race Relations (IRR), a think tank that promotes political and economic freedom. Readers are invited to take a stand with the IRR by sending an SMS to 32823 (SMSes cost R1, Ts and Cs apply).