Strengthening the Partnership Between Government, Business and Labour In Richards Bay
Sanibonani. Good morning.
Let me begin by thanking the Zululand Chamber of Commerce and Industry for the invitation to address this gathering and for the warm welcome to Richards Bay. I bring with me the greetings of the Minister of Employment and Labour, Ms Nomakhosazana Meth, who has asked me to convey her deep appreciation for the work this Chamber does in keeping the arteries of conversation open between government, business and the communities of the King Cetshwayo District.
The Significance of This Gathering
Let me say something about the kind of meeting this is because it matters profoundly. It is not every day that government, industry, organised labour and community representatives choose to sit in the same room and speak frankly about the things that trouble them. That choice, to talk to one another rather than past one another is precisely the habit our country needs more of. The challenges I have come to address this morning will not be solved by any one of us alone.
Government cannot legislate prosperity into existence. We cannot decree jobs into being from the comfort of our offices.
Business cannot create lasting jobs in an economy nobody trusts. Capital is shy and it flees uncertainty.
Labour cannot protect workers in companies that do not survive. There is no dignity in defending a job that no longer exists.
We are, whether we always admit it or not, in the same boat. And if that boat is to reach calmer waters, we will have to row together, in rhythm, in the same direction and with the same urgency.
Richards Bay is, in many ways, the right place to have this conversation. This city carries an outsized share of South Africa's industrial weight on its shoulders. The minerals, the aluminium, the coal, the timber, the heavy machinery and the cargo that move through this port and these plants are not abstractions on a national balance sheet. They are the daily labour of people who live in eMpangeni, in Esikhawini, in Nseleni and in the settlements that ring these operations. When this region does well, the country feels it. When it struggles, the country feels that too.
So let us speak honestly about where we stand.
The Weight of Unemployment and What It Costs Us
I do not believe this audience is served by euphemism. You are the captains of industry. You deal in facts. So let me give you the picture as Statistics South Africa has given it to us.
In the first quarter of this year, the official unemployment rate climbed to
32.7 percent, up from 31.4 percent in the final quarter of last year. In the space of three months, the economy shed roughly 345,000 jobs and the number of people counted as unemployed rose by about 301,000 to more than 8.1 million South Africans.
When we use the broader, expanded definition, which counts those who have given up actively searching, the figure rises beyond 43 percent. That means close to one in every two economically active people in this country is either without work or has stopped looking for it.
Let that sink in. Nearly half our potential workforce is locked out of the economy.
It is among our young people that the wound runs deepest. Unemployment for those between fifteen and thirty-four now sits at around
45.8 percent, and for the youngest band, those between fifteen and twenty-four, it is close to 61 percent. More than four in ten young South Africans between fifteen and thirty-four are not in employment, not in education and not in any form of training. They are, in the cold language of the survey, simply outside everything.
I ask you to resist the temptation to hear these as numbers. Behind every percentage point is a human being.
When we speak of unemployment in this country, we are not managing a statistic. We are managing the patience of a generation. And I want to be plain with you: that patience is not unlimited.
And there is a hard truth buried in the data that we cannot keep ignoring. More than three-quarters of the unemployed in South Africa have now been out of work for a year or longer. Long-term unemployment of that kind does not simply pause a person's life. It erodes their skills, their confidence and their connection to the world of work. The longer it lasts, the harder it becomes to reverse.
This is why every month matters. This is why none of us can afford to treat job creation as something that can wait for better conditions. The conditions will not improve on their own. They will improve because we make them improve.
There is, I should add, one small piece of regional good news worth noting. KwaZulu-Natal was among the few provinces to record a decline in its unemployment rate over the past year, even as several others moved in the wrong direction. That is not a victory, and I will not pretend it is. But it tells us that this province has something to build on and that the work done here, in places like Richards Bay, can move the national needle when it is done well.
Reading the World, We Are Trading In
No honest account of our business environment can stop at our borders, because the winds that buffet a manufacturer in Richards Bay are increasingly blowing in from far away.
The World Bank, in its most recent global outlook, expects world growth to slow to around 2.5 percent this year, with the sharpest drag coming from renewed conflict in the Middle East and the energy price shocks that have followed it. For an economy like ours, which both exports commodities and imports a great deal of what it consumes, that turbulence is felt directly at the till and at the fuel pump.
The Bank's newer work on what it calls business readiness carries a warning that should concern every person in this room. It finds that the economies facing the greatest need to create jobs, the young, fast-growing economies of Sub-Saharan Africa, among them are too often the very economies whose business environments are least ready to absorb the wave of new workers heading their way.
In other words: the places with the most-young people looking for work frequently have the most regulatory friction, the weakest public services and the heaviest operating burdens standing between those young people and a pay cheque. That is a gap we have to close deliberately, because demography will not wait for us.
Closer to home, the World Bank expects South Africa to grow by something in the region of one and a half percent this year. That is an improvement, and I do not dismiss it. More reliable electricity, a better agricultural season and slow progress on our ports and rail have all helped.
But let us be clear-eyed: growth of one and a half percent does not begin to dent unemployment of this scale. A country growing this slowly is not proof that we cannot afford to transform our economy. It is proof that we have not yet built an economy that grows fast enough to carry all of its people.
The task is not to choose between growth and inclusion. The task is to achieve both, because neither will survive long without the other.
If I were sitting where many of you are sitting this morning, running a plant or a logistics operation or a manufacturing business in this district, I would want government to show that it understands the pressures you carry. So let me name them, because I believe naming a problem honestly is the first step to solving it together.
From outside our borders, you are contending with:
Manufacturers in particular have told the country's economists, quarter after quarter, that higher input costs flowing from tensions abroad are squeezing their margins even when local demand holds up. These are not pressures any single firm, or any single government department, can wish away. But they are pressures we can help one another absorb by being predictable where we are able to be predictable, and by removing the obstacles that lie within our own control.
From inside our borders, the obstacles are painfully familiar to everyone here:
All of these raise the cost of doing business and chip away at the confidence to invest.
I will not stand here and pretend these are someone else's problems. Many of them sit squarely with the State, and government has accepted that it must fix what it has broken. The reforms underway in energy and logistics are real, and they are beginning to show but I know that for a business waiting on a delayed shipment, the pace of reform always feels too slow.
I raise these candidly because I want you to understand that when government asks business to invest, to hire and to transform, it does so knowing full well the conditions under which you operate. We are not asking from a position of comfort. We are asking from a position of shared difficulty and we are committing, in return, to keep doing our part to make this a country in which it is easier, not harder, to build something that lasts.
There is reason for cautious optimism, and I want to acknowledge it honestly.
Business confidence, as measured by the respected RMB and Bureau for Economic Research index, has been climbing. It reached 47 points early this year, its strongest level, outside the brief post-pandemic bounce, since 2015. That recovery has been driven by:
But I would be doing you a disservice if I left it there, because the same analysts who report the improvement also warn that it is uneven and fragile. Manufacturing and building confidence have slipped again more recently, weighed down by global uncertainty, higher input costs and persistent frustration with our ports.
Confidence, as every business leader in this room knows, is not built by speeches. It is built by delivery. By policy that does not lurch from one direction to another. By a sense that the rules of the game will still be the rules next year.
Protecting and deepening that confidence is a shared responsibility:
This brings me to a theme that sits at the very heart of my Department's work, and at the heart of why this engagement matters.
For too long, in too many workplaces, the relationship between employers and workers has been framed as a contest, a zero-sum game in which one side's gain must be the other side's loss. I want to challenge that framing this morning, respectfully but firmly.
The truth, borne out in every successful economy on earth, is that employers and workers succeed together or they fail together.
The interests of the two are not opposed. They are intertwined.
When an employer invests in the safety, the skills and the well-being of workers, that employer is investing in productivity, in loyalty and in the long-term survival of the enterprise. When workers and their unions engage constructively with an eye on the health of the business and not only on this month's demand, they are protecting the very jobs they hold.
This is why social dialogue matters so much, and why South Africa's institutions for it, from the bargaining councils to the Commission for Conciliation, Mediation and Arbitration, to NEDLAC at the national level, are not bureaucratic luxuries. They are the machinery through which conflict is turned into agreement before it turns into stoppages, into lost production and into lost jobs.
I appeal to the captains of industry here today to treat your relationship with organised labour not as a problem to be managed, but as a partnership to be built. And I appeal equally to labour to bring to that partnership a genuine commitment to the survival and growth of the businesses that sustain this region. The communities around these industrial operations are watching and what they want is not conflict. What they want is work.
Let me turn to a matter on which my Department cannot and will not compromise: respect for the labour laws of this country.
South Africa's labour legislations, the Labour Relations Act, the Basic Conditions of Employment Act, the Occupational Health and Safety Act, the National Minimum Wage, the Employment Equity Act and the laws governing unemployment insurance and compensation were not written to frustrate business. It was written to ensure that the pursuit of profit does not come at the cost of human dignity.
These are the floor beneath which no employer may go, not the ceiling above which none may rise.
I am aware that in industrial hubs like this one, where major operations sit alongside long chains of contractors and subcontractors, compliance can become blurred and the most vulnerable workers are often those furthest down that chain. I want to be direct:
My Department's inspectorate is being strengthened precisely so that the responsible majority, those of you who do the right thing, are not undercut by the irresponsible few who cut corners and treat workers as disposable.
But I would rather not lead with the stick, because I do not believe most employers in this room need it. Compliance, properly understood, is good business.
A workforce that is safe, fairly paid and fairly treated is a workforce that stays, that learns, that takes pride in its work and that builds the reputation on which your enterprises depend. Respecting the law is not a cost imposed on success. It is part of what success is made of.
The Minister has spoken recently, and powerfully, about the transformation of our economy, and I want to carry that message into this room because it belongs here as much as anywhere.
The amendments to the Employment Equity Act, which came into full effect at the start of last year, represent the most significant reform of this law in nearly three decades. They empower the Minister to set sector-specific numerical targets across key sectors of the economy, and they make the compliance certificate a genuine prerequisite for doing business with the State.
I say to the employers here what the Minister has said elsewhere: these are now your obligations not proposals for your consideration.
Let me also be clear about what these measures are not. They are not designed to punish business or to push aside the skilled people already working in your operations. They are designed to unlock talent that has been overlooked, to broaden the base of opportunity, and to ensure that the leadership of South Africa's companies comes, in time, to reflect the country those companies operate in.
The evidence from around the world is on our side. Nations that aligned their growth with the make-up of their populations, rather than against it, have generally grown faster than we have, not slower. Transformation done properly is not a drag on the economy. It is a source of its dynamism.
But transformation of ownership and of leadership will ring hollow if we do not also fix the deeper problem: that too many of our people are being prepared for an economy that no longer exists, while the sectors that are actually growing cannot find the skills they need.
We often call this the skills gap. I prefer the Minister's framing: it is an opportunity gap. Our young people are not, in the main, short of effort or ambition. They are short of a bridge between where they are and where the economy needs them to be.
This is where this district can lead, and where I make a direct request of the captains of industry before me.
The industries of Richards Bay, the smelters, the terminals, the forestry and manufacturing operations, the catalytic projects taking shape in the Industrial Development Zone know better than any government official what skills they will need over the next five and ten years. Use that knowledge.
A skills plan built jointly by industry and government, around the actual pipeline of investment in this zone, would be one of the most valuable things to come out of an engagement like this one.
The Chamber's invitation spoke honestly about the concerns raised by communities living alongside these industrial operations, particularly on the enforcement of localisation. I want to address that directly, because it goes to the heart of the social compact that keeps an industrial region stable.
Communities that host major industries are entitled to share in the opportunities those industries create.
When local people watch trucks roll in and out, watch ships load and unload, and watch profits leave the district while they remain without work, resentment builds. And that resentment eventually finds its way to the factory gate.
The answer is not to lower our standards or to abandon the search for the best skills. The answer is to build genuine, lasting pathways for local people into local jobs, into local supply chains and into local enterprise development.
I encourage the industries of this district to look hard at how much of their discretionary procurement reaches small and medium enterprises owned by people from these communities and especially by women and young people. Procurement remains one of the fastest and most scalable tools we have to spread the benefits of industrial activity and a rand spent with a local supplier tends to circulate again and again within the local economy.
This is also where the localisation conversation must be handled with care and with honesty on all sides. Localisation policies work best when they are predictable, when they are enforced fairly and consistently, and when business is brought into their design rather than having them imposed without dialogue. Government commits to that consistency. In return, we ask industry to embrace the spirit and not merely the letter of these
policies and to see the surrounding community not as a risk to be managed but as a partner whose prosperity is bound up with your own.
Let me turn to what practical partnership between the provincial government and business in this region might look like, because I do not want to leave this platform with fine words and no proposals.
First, let us put the existing public machinery to work. My Department has built Employment Services South Africa the largest database of work-seekers in the country, carrying millions of verified profiles ready to be matched to opportunities. It can be reached at www.labour.gov.za .
I make the same appeal here that the Minister has made elsewhere: it cannot be business as usual for employers to say they cannot find suitable people while a platform built precisely to solve that problem sits underused. Register your vacancies. Draw on this resource. Let us match the work-seekers of King Cetshwayo to the jobs of King Cetshwayo.
Second, let us protect the jobs we already have. Through Productivity South Africa and the Unemployment Insurance Fund, my Department runs a Business Turnaround and Recovery Programme backed by significant funding aimed precisely at helping companies in distress avoid retrenchments. If there are operations in this district under strain, do not wait until the retrenchment notices are drawn up. Come to us early, while
there is still something to save. Saving an existing job is almost always cheaper and always kinder than creating a new one from nothing.
Third, let us align the provincial and local development plans with the real investment pipeline in the Industrial Development Zone. A special economic zone with a pipeline of this scale anchored by energy and other catalytic projects is exactly the kind of opportunity around which a province can organise a coherent jobs and skills strategy.
That requires the provincial government, the district and local municipalities, the Chamber, the anchor industries and organised labour to plan together so that the housing, the bulk infrastructure, the training and the small-enterprise support are ready when the investment lands and not scrambled together afterwards.
Fourth, let us make this engagement the beginning of something structured rather than a single event. I would welcome the establishment, here in this district, of a standing forum that brings together government at all three spheres, the anchor industries, organised labour, the Chamber and community representatives, meeting regularly, with clear targets, to monitor progress on jobs, on skills, on localisation and on compliance. The value of a meeting like today's is measured not by the warmth of the conversation, but by what we are still doing together a year from now.
Ladies and gentlemen, I have tried this morning to be honest with you because I believe this audience can handle honesty and is tired of anything less.
The picture is hard. More than eight million of our people are without work. Our young people are bearing a burden no generation should have to bear. The global environment is uncertain, our own operating conditions remain difficult, and confidence, though improving, is still fragile.
But I am not a pessimist and I refuse to address you as one.
We have a province that is moving in the right direction on jobs, while others slip back. We have, in Richards Bay, one of the great industrial engines of this country and a pipeline of investment that most regions can only dream of. We have a business community organised enough and serious enough to convene a gathering like this one. And we have, I believe, in this room, the people who can actually do something about all of it.
None of what I have asked of you this morning is charity, and I do not present it as such. It is enlightened self-interest.
An economy with eight million people locked out of earning is an economy with eight million people locked out of spending, of saving and of buying what your businesses produce. Closing that gap is not only the right thing to do. It is the condition on which the future of every enterprise in this district depends.
So let me end where I began.
We are in the same boat.
We owe them a bridge to a working future and we owe it to them not in some distant year but starting now.
Let this engagement be remembered not for the conversation we had, but for the commitments we made and kept.
I thank the Chamber once again for convening us and I look forward to the work that must follow.
Ngiyabonga. I thank you.
© 2019 - The South African Department of Employment & Labour
