THE DEMISE OF THE CORPORATIST
EXPERIMENT IN SOUTH AFRICA
by
Siobian Patricia Smith
B. A., University o f Victoria, 1998

THESIS SUBMITTED IN PARTIAL FULFILLMENT OF
THE REQUIREMENTS FOR THE DEGREE OF
MASTER OF ARTS
in
INTERNATIONAL STUDIES

© Siobian Patricia Smith, 2001

THE UNIVERSITY OF NORTHERN BRITISH COLUMBIA

December 2001

All rights reserved. This work may not be
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or other means, without the permission o f the author.

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APPROVAL
Name:

Siobian Patricia Smith

Degree:

Master of Arts

Thesis Title:

THE DEMISE OF THE CORPORATIST EXPERIMENT IN
SOUTH AFRICA

Examining Committee:

Chair: Dr. Deborah PoVf
Vice-President (Academic) & Provost
Acting Dean of Graduate Studies
UNBC

Supervisor: Dr. Paul Bowles
Professor & Chair, Economics Program
UNBC

Committee Member: Dr. Fiona MacPhail
Assistant Professor, Economics Program

Committee Member: Dr. Don Munton
Professor, International Studies Program
UNBC

External Examiner: Dr. Kwong-leung Tang
Professor & Chair, Social Work Program
UNBC

Date Approved:

University o f Northern British Columbia
Abstract
The Demise o f the Corporatist Experiment in South Africa
By Siobian Patricia Smith
This is a study o f the attempt by the South African state to institute a corporatist model of
industrial relations in the post-apartheid period. The African National Congress (ANC), led
by Nelson Mandela, was elected in 1994 with promises of sweeping political economic and
social reforms that would rid the country o f its historical legacy o f racial segregation and
extreme socio-economic inequality. Operating in a formal alliance with the South African
Communist Party and the Congress of South African Trade Unions, the governing ANC
undertook institutional implementation o f a tripartite system for labour negotiations and
policy-making and took steps to strengthen the role of labour in governance. By the end of
1998, however it was clear that the government’s attempt to establish a corporatist
industrial relations system had not succeeded. This thesis examines the reasons why.

11

TABLE OF CONTENTS
Abstract
List o f Figures and Tables
List o f Acronyms
Acknowledgement

ii
v
vi
vii

Chapter 1
1.1 Background Information

Introduction

Chapter 2
2.1 Introduction
2.2 Information Gathering Techniques
2.3 Research Challenges and Limitations
2.4 Research Bias and Approach

Research Approach

Chapter 3

Overview of the
Industrial Relations
System

1

5
5
8
9

3.1 Introduction
3.2 The Industrial Relations System
3.3 Type o f Systems
3.4 A Closer Look at Corporatism
3.5 The South African Experiment
Chapter 4

12
13
25
30
34
The Roots of the
Corporatist Experiment

4.1 Introduction
4.2 Examining Apartheid
4.3 The Decade o f Struggle 1980-90
4.4 The Collapse o f Apartheid
4.5 Building on Past Success: Strategic
Choices for the labour Movement
4.6 Ready to Govern? ANC Strategies for
Governance
4.7 Launching the Corporatist Experiment
4.8 A new Industrial Relations System?
Chapter 5
5.1 Introduction
5.2 The First Two Years
5.3 The System Unravels
5.4 State o f Capital and Labour
5.5 The Neo-Corporatist Experiment

36
37
42
46
49
54
60
63
The 1RS 1994-1998
66
66
69
80
84

111

C hapter 6

Industrial Relations at the
Crossroads

6.1 Introduction
6.2 Why Corporatism?
6.3 The Neo-Corporatist Model
6.4 The Reality o f Corporatism in South
Africa
6.5 The Demise o f Corporatism
6.6 Where are we now?

90
91
92
94
96
100

Bibliography
Annex

108
113

IV

LIST OF FIGURES AND TABLES

Figure

Page

Figure 3.1

Dunlop’s Industrial Relations System................................. 16

Figure 3.2

Spectrum o f Industrial Relations Systems. .......................25

Figure 3.3

Relationship between Ideology and 1RS............................. 29

Figure 4.1

Average GDP Growth for South Africa1961-1990............ 40

Figure 4.2

Population Growth 1970-1995............................................. 40

Table 4.3

Growth o f Unionized Workers 1979-1988..........................45

Table 4.4

Levels o f Industrial Action 1990-1994................................50

Annex 1

Income Inequality (Sectoral) 1985.......................................112

Annex 2

Income Inequality 1980........................................................ 112

Annex 3

HD Indicators on Government Spending1990-1998.......... 113

Annex 4

Labour Relations Act 1995...................................................113

Annex 5

Unionization Levels 1994-1998...........................................114

Annex 6

Comparative Social Indicators 1994-1999..........................114

Annex 7

Human Development in South Africa................................. 115

LIST OF ACRONYMS

ANC
AZAPO
BSA
CCMA
CODESA
COSATU
GDP
GEAR
GNU
IFP
IMF
IR
1RS
ERA
LRAA
MERG
MK
NACTU
NAFCOC
NEDLAC
NGO
NMC
PAC
RDP
SACCOLA
SACP
SAF
SAMWU
SMEs
TURP
UDF
WTO

African National Congress
Azanian Peoples Organization
Business South Africa
Council for Conciliation, Mediation and Arbitration
Conference for a Democratic South Africa
Congress o f South African Trade Unions
Gross Domestic Product
Growth, Employment, and Redistribution
Government o f National Unity
Inkatha Freedom Party
International Monetary Fund
Industrial Relations
Industrial Relations System
Labour Relations Act
Labour Relations Amendment Act
Macroeconomic Research Group
Umkhonto we Sizwe
National Council o f Trade Unions
National African Federated Chambers o f Commerce
National Economic Development and Labour Council
Non-Governmental Organization
Department o f Manpower
Pan Africanist Congress
Reconstruction and Development Program
South African Consultative Committee on Labour Affairs
South African Communist Party
South African Foundation
South African Municipal Workers Union
Small and Medium Enterprises
Trade Union Research Project (University o f Natal-Durban)
United Democratic Front
World Trade Organization

VI

ACKNOWLEDGMENT

I want to thank all those who supported me during the completion of this work; mainly my
family, friends, and professors. Special thanks to my parents who tolerated frantic drafting
and re-drafting, Lindsay for the support in PG and beyond, Kevin for all the advice, Paul,
Don and Fiona for their patience, and Tea for her editing skills. Additionally, I wouldn’t
have been able to conduct overseas research without the financial support of the Prince
George and District Labour Council. And for the final stages of con^leting my thesis in
Kosovo-1 wouldn’t have stayed motivated if it wasn’t for my international cohorts and their
ceaseless entertainment!

This work was inspired by the struggle of the majority o f South Africans for a more
equitable and just existence. My motivation in trying to imderstand the means through
which a state can truly be representative o f the will of the people was continually
reinvigorated through meeting South Africans struggling for a better fife. Unfortunately,
for the majority o f South Africans, the horrors of living in extreme poverty will not be
escaped in the foreseeable future.

Vll

CHAPTER 1
Introduction
1.1

Background Information
South Africa is a nation plagued by a history of institutional racism and structural

inequality which relegated approximately 80 percent of its population to live under the
inhumane laws of apartheid. In 1994 South Africans at long last triumphed over one of the
most archaic and cruel political regimes of the twentieth century.

The first democratic

elections brought to power Nelson Mandela and the African National Congress (ANC),
ushering in a new era of hope for equality and social justice for people of all racial
backgrounds.
Over forty years of extreme oppression and inhumanity took its toll on both the
people and land of the country, leaving concentrated pockets of urban wealth as enclaves
amidst overpopulated, squalid townships and vast, poverty-stricken rural areas. The post­
apartheid challenges facing the Government of National Unity (GNU) under the leadership of
Nelson Mandela were immense.

To tackle the multitude of formidable tasks facing the

nation the ANC struggled to compose a comprehensive policy framework that would address
both economic and social inequalities, increase national economic growth and, most
importantly, dismantle the embedded vestiges of racial segregation.
The focus of this study is the means through which the GNU sought to address issues
of industrial relations.

With its roots deeply intertwined with the labour movement and

socialist ideologies, the ruling ANC consistently promised not only to introduce a labour1

friendly regime but also to seek out labour’s active influence in decision-making and
economic policy creation. With a majority population of unskilled labour and strong and
vocal trade unions, combined with the need to generate economic wealth for the nation, the
GNU decided to promote a corporatist system of industrial relations.^
Based on the state of labour relations in South Africa at the end of 1998 I argue that
the corporatist experiment has not been successful. In fact, based on the actions and policies
advocated by the GNU, I would argue that the state reneged on its promises to promote a
labour-friendly regime, and beginning in 1996 actively subverted the fledgling corporatist
system that existed in the country. Rather than fulfill its promises to promote social justice,
redistribute wealth, and place the interests of workers ahead of those of business, it seems
clear that the government has done the opposite in the 1996-1998 period. This thesis sets out
the evidence, examines the potential reasons for the failure of the system and briefly looks at
the consequences.
Although this study examines a short period of time, and conclusions are drawn based
on activities occurring in a five-year period, I would argue that the actions of the government
have obviously been in contrast to its promises and claims to promote a corporatist system.
The volatile society and deteriorating living conditions in South Africa today are what makes
this government backtracking so exceptionally important.
With its high-rise, well-developed cities and extensive infrastructure built throughout
the country. South Africa is often not considered “developing” or “African” enough in
comparison to other countries in the region. A closer examination though reveals the stark

' Breytenbach, Willie. Democracy in South Africa: What Kind and is it Consolidating?
(http://www.fnb.co.za/economics/br000921.aspl September 2000, 2.

inequalities and overwhelming poverty that is a daily reality for most South Africans. With
an affluent white minority and an underprivileged majority, South Africa provides a
microcosm of the world within its borders.
The decades o f enforced segregation remain clearly visible in South African society
today. Not only do towns manifest geographical racial divisions but also the ownership of
the means of production remains primarily in the hands of white businessmen. The situation
with respect to housing remains virtually unchanged since apartheid.

The majority of

Africans reside in appallingly derelict townships, providing a cheap pool of labour outside of
every town, regardless of its size, throughout the country. Since 1994, South Africa has
experienced an unabated increase in extreme poverty and unemployment, serving only to
exacerbate existing racial divisions.^ Indicators on access to basic and social services show
stark regional disparities and there is an alarming and persistent increase in the rate of
HIV/AIDS infection throughout the country. Exceedingly high levels o f crime and violence,
corruption and police inaction all serve to erode any sense of community or societal
camaraderie in towns across the nation.
Adding to these woes is a volatility that persists just below the surface of society that
threatens to erupt into widespread chaos and violence if unleashed. Rising unemployment
and an increasing intolerance for the government’s failure to deliver on its promises provide
a constant threat to peace in the country.

This underpinning of violence and anger,

exacerbated by deteriorating living conditions for millions of South Africans, is what makes

^ Harvey, Ebrahim, “It’s time for the SACP to step out o f the AN C ’s shadow,” Mail and Guardian. (8-14
October 1999) 26.

a further deterioration of labour relations a possible catalyst for violent protest, and therefore
justifies serious consideration of the issue of labour relations in South Africa today.
This study will examine the concept of an industrial relations system, investigate the
beginnings of the corporatist experiment in South Africa, and conclude with a look at where
the system of industrial relations stands today. Chapter two of this work will present the
research methods used to substantiate the hypothesis followed by an introduction into the
work of John Dunlop and industrial relations systems in Chapter three. Chapters four and
five describe a brief history of South Africa during the 1980-1990s with a closer focus on the
state of industrial relations. Chapter six concludes the study with an examination of the state
of industrial relations at the end of 1998 and the implications for the future of South Africa.

CHAPTER 2
Research Approach

2.1

Introduction
In order to gain a more comprehensive understanding of the social and political

processes at work in South Africa, a field visit was conducted to supplement secondary
research materials. Despite the challenges documented in this Chapter and the limitations of
my overall work, the main outcome of the in-country work was a much more realistic
grounding of the reality of the South African context.

This section reviews information

gathering techniques, challenges and limitations of this research, and potential research
biases and approach.

2.2

Information Gathering Techniques
In this study both primary and secondary data were utilized, and both quantitative and

qualitative data were gathered. Although some primary research was conducted to enhance
the literature reviewed the majority of the information was derived from secondary sources
and all of the quantitative data were extracted from various published studies.
Before departing for overseas research, background information was gathered from
numerous academic sources. Utilizing the resources of most university libraries in British
Columbia, 1 reviewed a large number of written works documenting political, social and
economic processes in South Africa during the period 1970-1998.

This work was

supplemented by previous research done during my study period at the University of
5

Northern British Columbia on the more general topics of development economics,
international relations, trade unions and poverty.
Guiding all of my research was a desire to explore critical works on the social,
economic and political development of South Africa.

Rather than focusing solely on

documents and texts which examined industrial relations, I tried to expand the research to
look at linkages between politics and economics, and the impact of the transition to
democracy on society. The main texts used primarily focused on the activities of trade
unions over the previous thirty years, the activities and policies of various political parties
during the 1980-1990s, and on the actions taken by the government between 1994 and 1999.
A wide variety of authors was selected, many of them South African nationals, and widely
recognized as experts in their field. Over a period of one year I also participated in a labour
forum email list that discussed and debated various topics related to labour relations, and
economic and political developments in South Africa. Additionally, I reviewed the major
weekly newspaper (Mail and Guardian) on-line prior to my travels for one year and then, for
a period of nine months while in Southern Africa, I maintained a large collection of
newspaper clippings from four Southern African newspapers.

The Internet provided a

substantial amount of information, allowing me to access information from trade union,
political party and government websites. With this large volume of data available, I was able
to gain a historical perspective o f activities from a variety of opposing sources in addition to
keeping abreast of recent developments. Through email I also made various contacts with
well-known researchers of labour relations who provided me with further sources of
information, documents and personal contacts in South Africa.

My primary research strategy was threefold: 1) To gain a sound base of knowledge on
South Africa and the on the sphere of industrial relations, 2) To enhance this knowledge base
with concrete experience through an extensive field visit, and 3) To compile and review the
data to produce a comprehensive thesis. Once I arrived in the country, obtaining primary
data became a daunting task. The challenges and obstacles are documented in section 2.3 of
this Chapter, and therefore it is unnecessary to list them here. While in South Africa I had
many informal conversations with imiversity professors and graduate students at the
University of Natal-Durban on my subject matter, and I also spoke with a representative from
the Trade Union Research Project (TURP). Furthermore, I spent a considerable amount of
time at the Durban offices o f the Council for Conciliation, Mediation and Arbitration
(CCMA), utilizing their advice, texts and documents on issues related to labour relations. I
also spoke to some individuals involved at various levels in trade unions in an informal
manner, basically gathering a sense of the nature of labour relations and the trade unions’
current issues with the government and business.
The qualitative data were gathered from both primary and secondary sources. While
gathering the primary qualitative data I was more concerned with experiencing the reality of
South Africa - its geography, people, and daily life to generate an understanding of the
environment in which labour relations and politics operate. Obtaining a glimpse into this
reality was vital to understanding the dynamics and atmosphere within the country itself.
The undercurrent of social tension and insecurity was extremely pervasive and the highly
visible levels of abject poverty were appalling. The day-to-day experience gained while in
the country utilizing secondary resources was invaluable and has conditioned this study
substantially.

7

The quantitative data are primarily utilized in this study to substantiate the qualitative
research through the use of national and international statistical information found primarily
in annual government publications located online. Most of the quantitative data is illustrated
in graphs, statistical charts and other forms in the annexed information.

Notes on the

reliability of this information follow in section 2.4. None of this information was gathered
directly by myself, for example through surveys, due to time and other practical constraints.
Instead data were selected from widely cited national and international sources.

2.3

Research Challenges and Limitations
As in any piece of academic work, this study is limited and restricted in its scope and

was constrained by many factors. My optimistic notions of conducting field research were
severely challenged once I was in the country.
The anticipated primary research to be conducted while in South Africa was largely
constrained by practical issues confronted during my stay. Approval by the ethics committee
at the University of Northern BC for my planned interviews was granted in May of 1999,
based on questions I was hoping to ask once in the country.

My attempts to pre-plan

appointments while I was still in Canada were rebuffed and I was encouraged to seek out
people once I was actually in South Africa. Following this advice, I contacted many of my
potential interviewees in my first weeks after arrival. I was still often unable to make contact
or individuals were unwilling to meet with me.

For personal security reasons, it was

extremely difficult for me to venture from my residence to trade union offices in Durban, and
this was a continuous impediment to my work in the country. Many individuals whom I had
hoped to meet with were located in Johannesburg, the capital city in South Africa. Once I

8

arrived in this city it became apparent to me again that due to security concerns, and
additionally impeded by financial constraints, I would be unable to conduct any interviews.
Furthermore, the individuals whom I did meet with were unwilling to participate in a formal
interview, and would only speak with me “off the record”.

My time in South Africa

nevertheless did provide me with invaluable experiential knowledge and I obtained a
substantial quantity of information previously unavailable. The main types of material made
available to me were locally published articles, newspaper clippings, and Southern African
academic journals.
Academically, this study was conducted and written over a period of sixteen months.
Although this is the most extensive piece of work I have undertaken, this study is not an
exhaustive discussion on the broad subject-area which I chose to examine. Because I was
unable to interview many of the policy-makers, union leaders and others who are the key
actors in this study, my observations, impressions and understanding of the reality of labour
relations in South Africa have developed from the information provided to me through
others. Thus, I have developed this analysis through a public reality and interpretation that
may be simplified and quite different from the private reality and inner workings of the
system itself. I recognize this; nonetheless, I still believe that this study has a valid and
justified conclusion.

2.4

Research bias and approach
This study was motivated by a desire to understand how the nature of labour relations

has changed since the end of apartheid, and to examine if these changes have had a beneficial
impact on the majority population of poor, black labourers. In order to assess this 1 had to

9

examine the different types of industrial relations systems, the government’s intentions and
aetions in the period studied, and analyze the outcome of these actions.
A critical perspective guided this research as I focused on conflict in a society and
attempted to see if changes in state-guided policies have worked in conjunction with the
policies of organized labour to produce a more equitable and just society.

Recognizing

industrial relations as a sub-system of greater society, with the key players being the state,
organized labour and capital, I sought to understand if promises to change this system, from
the new government in South Africa, had actually materialized.

Appreciating the

transformation that resulted from demolishing the apartheid system, it was promised that the
system o f industrial relations would also be greatly transformed to reflect the desire of the
new state to develop a more harmonious, unified and egalitarian society. Recognizing this
goal of the state, and understanding the labour movement to be largely representative of the
historically deprived majority, I utilized John Dunlop’s work on the concept of an Industrial
Relations System (1RS) to assess how the entire system has changed up to the end of 1998.
My justification for utilizing Dunlop’s work was largely pragmatic.

When

researching the topic of industrial relations, it became evident that the majority of scholarly
work in this area has focused on the labour-management relationship and thus the application
of this theoretical work is limited. Dunlop’s model was used to understand the complexity of
factors influencing the operation of industrial relations and how this system is affected by
other societal factors and actions.
It must also be noted that data utilized in this study were gathered from a variety of
sources. During the apartheid years, the government carried out only selective studies on the
population which usually excluded the black majority from such data gathering exercises.

10

Thus, any assessments of the population size, standards of living or daily activities of the
black population before 1994 are likely to be fairly problematic as they were not based on
reliable information or data-gathering techniques. Often data that I sought for comparative
purposes was not available, including most data on the labour movement and the African
population in general, prior to 1994. I attempted to gather data from a variety of sources,
including the Government of South Africa, World Bank, United Nations Development
Programme, and various independent labour relations consultants and so-called “thinktanks”. These sources corroborated each other and much of the data was extremely similar.
Even taking a cautious approach to interpreting the data by not relying on it to reach
conclusions, the information does provide some indication of the effect of social, political
and economic developments on the population.
Before moving into the actual case study it is necessary to understand the eoncept of
an 1RS and how an 1RS is linked into the greater political and economic structure of society.
Following this I will provide an examination of the 1RS in South Africa both during the
apartheid era and following the democratic elections in 1994.

11

CHAPTER 3

Overview of the Industrial Relations System

3.1

Introduction
Industrial relations (IR) as a concentrated field of study has relatively recent roots
with most research occurring in the post-World War II period. The central focus of industrial
relations has traditionally been the relations between the employer and workers (or unions)
for a firm (or industry). Its aim was to address and correct problems in the employment
relationship. However, a more comprehensive analysis of the system of industrial relations,
incorporating the state as an actor, the political and economic context of activities, and a host
of other factors, provides us with a clearer understanding of how and why the nature and
operation of industrial relations may change over time.

Indeed, conceiving of industrial

relations as a comprehensive sub-system of wider society permits an examination of how
political and economic decisions impact industrial relations and allows for greater analysis of
these interrelationships within and across states.
1RS differ under different types of political regimes, such as democratic or
authoritarian rule, with specific models of 1RS more common to each of these types of
governance.

In addition, the ruling authority plays a key role in determining relations

between the state and society more generally, dependent upon dominant political beliefs.
This political perspective of the ruling authority conditions state organization and

12

responsibilities, the implementation of a specific economic system, and the operation of an
1RS.
In order to have a greater understanding of how an 1RS operates and to provide a
framework for understanding the demise of the corporatist experiment in South Africa, this
Chapter will examine the key components of an 1RS, the three model types of systems, and a
more in-depth investigation of the corporatist model.

3.2

The industrial relations system
The prevention and minimization of conflict in industrial society has been the focus
of numerous studies, drawing from and integrating knowledge of many disciplines including
law, economics, politics, psychology and human resources management.^ Subsequently, the
conventional focus of this field has been to “solve current, pressing problems by drawing on
more basic work in the traditional social sciences” instead of attempting to generate a broad,
more encompassing theory o f industrial relations."^ Finnemore and van der Merwe note that
specifically in the realm of industrial relations “the development of theory has progressed
slowly and with little consensus as to even its essential nature”.^ Consequently, the focus of
industrial relations has remained concerned with two key actors, employee and employer,
and both scholars and practioners alike often overlook the factors influencing the nature of
industrial relations within a greater system of society. Noting this, 1 adopt the perspective
that industrial relations should be considered as “a complex system of individual and

^Adams, Roy J. ed, Comparative Industrial Relations: Contemporary Research and Theory, (UK: Harper
Collins Academic, 1991)6.
'' Adams 2.
^ Finnemore, M. and R. van der Merwe, Introduction to Industrial relations in South Africa, 2nd ed
(Johannesburg: Lexicon Publishers, 1989) 3.

13

collective actions as well as formai and informai relationships existing between the state,
employers, employees, and related institutions, concerning all aspects of the employment
relationship”.^ Yet with the fragmented state of industrial relations theory and a noted
concentration of Western industrial relations scholars and studies, research has tended to be
narrowly focused on the industry or enterprise level and on the Euro-American experience.
No comprehensive industrial relations theory has yet to emerge to explain why industrial
relations in different countries, industries and enterprises change over time, why certain
actors choose various strategies and methods of operation, and what has influenced the
governance of these systems in the long-term. However, John Dunlop, a well-known scholar
in the field of industrial relations, developed a framework of an industrial relations system
that could be utilized to obtain a greater understanding of how components of industrial
society operate and change in relation to other aspects of domestic and global society.
Dunlop’s Industrial Relations Systems, first printed in 1958, was the first
comprehensive analysis of industrial relations that depicted an encompassing system of
factors and relationships influencing the development of industrial society. Dunlop proposed
that every 1RS was country specific, dynamic, and existed as “a separate and distinctive
subsystem of the society, on the same plane as an economic system”.^ He stated that this
framework for a system could be investigated at the national, industry, or enterprise level. In
addition, multiple systems could exist within a sector or a larger national framework and the
dominance of a particular industry would colour the 1RS considerably.

Noting these

qualifications, he also mentioned that a specific system would best be studied in its historical

^Nel, P.S, South African Industrial relations: Theory and Practice. 3'^ ed, (Pretoria: J.L. van Schaik
Publishers, 1997) 5.
’ Dunlop, John T, Industrial Relations Systems. Rev. ed., (USA: Harvard Business School Press, 1993) 46.

14

context where changes in the system are examined through time. The concept of an 1RS
could prove useful in conducting detailed studies of systems in different countries.

The

framework generated by Dunlop raises three analytical problems to be investigated: 1) the
relation of the 1RS to the society as a whole, 2) the relation of the 1RS to the economic
system and 3) the inner structure and characteristics of the industrial relations system itself.*
The following section discusses three ideal types of 1RS that exist on a spectrum
comparable to a range of political beliefs with more extreme types at either end. However,
Dunlop’s framework can be utilized for analysis of every 1RS as each system contains three
generalized groups of actors functioning tmder environmental constraints and governed by a
body of established rules. I have constructed a model of how Dunlop’s system might appear
in Figure 3.1.

■Dunlop 46.

15

FIGURE 3.1: Model of Dunlop’s Industrial Relations System
Source: Author’s model o f Dunlop’s 1RS.
“An industrial relations system at any one time in its development is regarded as composed o f
certain actors, certain contexts, an ideology that binds the industrial relations system together, and a
body o f rules created to govern the actors at the work place and work community "(Dunlop 47).
ACTORS

ENVIRONM ENT

Hierarchy o f managers and their representatives in
supervision

Technological characteristics o f workplace and
work community

Hierarchy o f workers and/or agents

The product and factor markets or budgetary
constraints that impinge on the actors

Specialized government agencies (and private
agencies) concerned with workers, enterprises and
their relationships

The locus and distribution o f power in the larger
society

RULES
IDEOLOGY

Historical period

Sequence o f social
changes

Decisions o f
industrializing elite

Process o f economic
growth

FACTORS IM PACTING DEVELOPM ENT OF NATIONAL IR SYSTEM

The model illustrates the various components of an 1RS and draws attention to actors
and to the key factors that effect the development of a national 1RS. Although Dunlop
provides a framework for identifying key relationships and actors in the system he does not
provide a theory or analysis. He merely draws attention to the critical components of the
system to study and emphasizes the common factors which strongly influence the
development of an 1RS. To understand how the system operates requires elaboration about
the composition of the actors, specific aspects influencing the context or environment they
function in and the overarching rules which govern the functioning of the system itself.

16

Within an 1RS, the three main actors identified are workers, managers, and
government agencies.

These exist in every system albeit with varying degrees of

formalization. Dunlop points out that the “hierarchy of workers” does not imply formal
organization (e.g. unions, councils) nor does the “hierarchy of managers” necessarily have a
relationship to the ownership of the capital assets of the workplace. The capital assets may
be owned by an individual not present in the workplace which subsequently influences the
workplace dynamics. An important factor is whether or not capital interests are domestic or
increasingly foreign-owned as this ownership effects the enforcement of rules and
participation in the system.

As well, specialized government agencies may have broad,

overarching functions which over-ride workers and managers, or the agencies may be
extremely restricted or virtually non-existent.
The environment in which the actors operate is critical in shaping the rules
established by the actors in a given system. Again, it must be reiterated that the context
within which the actors operate can vary greatly not only within a country and industry but
also over time. Changes in political dominance and exogenous factors related to the global
economy will effect the rules or public policies that provide the overarching framework of an
1RS. Dunlop distinguishes three components of the environmental context which influence
the operation of the 1RS: technological characteristics, budgetary constraints, and power
relations.
The technological context of the work place is a vital component of the environment
and particularly influences the substantive rules determined for the work place.
Technological developments in industry and increased capital can influence both the nature
of work and the scope of employment. The market context within which the actors operate is

17

also a significant determinant in creating a network of rules. Dunlop notes that the "productmarket or budgetary constraints and labour-market characteristics of a work place”
significantly define the scope of an 1RS and are integral to “the long-term identification or
attachment of the particular work place or enterprise to a system”.^ The distribution of power
in society is the third feature o f the environment within which the actors operate. The locus
of power is specifically influential with respect to the roles of the actors and the formal
interrelations between them. This feature tends to differ across countries and is heavily
determined by public policy.

The power context is particularly important for national

industrial relations systems and determining (on a countrywide basis) the formal relations
between employers and employees, the role of the state, and procedures for settling disputes.
This third aspect of the environmental context is the most important for the later examination
of the 1RS in South Africa.
As mentioned earlier, the main thrust of industrial relations has been focused on the
“web of rules” or policies which govern the operation of industrial society and thus regulates
the behaviour and actions o f the actors.

This “web” includes public policy, legislation, and

institutional mechanisms or rules for establishing and governing relations within the 1RS.
Over time these rules and procedures are expected to change as the context and status of the
actors shift, as environmental factors change, and as political authority undergoes transition.
There exists a wide range of possible procedures for the establishment of these rules. In
different systems the state or the employer may retain the dominant role and lead the process
or they may all work together cooperatively. Some rules are more closely related to the

’ Dunlop 106.
Dunlop 51.

18

technical or market constraints and some are directly related to the distribution of power in
the wider society, notably the relations between the actors. Dunlop states that
“The rules of the system may be expressed in a variety of forms: the
regulations and policies of the management hierarchy; the laws of any
worker hierarchy; the regulations, decrees, decisions, awards or orders of
governmental agencies; the rules and decisions of specialized agencies
created by the management and worker hierarchies; collective-bargaining
agreements, and the customs and traditions of the work place and work
community”.'*

These rules are largely determined by a dominant ideology which influences the essential
character o f the 1RS.
Dunlop’s notion of a greater ideology binding the entire system together has been
particularly contentious. Critics remark that the incorporation of ideology into the model
assumes a balance between labour and management through this shared ideology.
However, Dunlop notes that the system is dynamic and that this ideology changes over time.
Yet, at a stage where a particular type of 1RS is studied, there must exist at some level “a
body of common ideas that defines the role and place of each actor and the ideas that each
actor holds toward the place and functions of the others in the system”.'^ The ideology
influencing an 1RS at a specific point in time is expected to be relatively compatible with that
of society as are the ideologies of the actors in the system, pending industrial unrest or other
forms of protest for change.

Without some level of compatibility a society will likely

experience continuous uprisings from labour and will essentially have a non-functioning
system. Dunlop is careful to note, however, that the term ideology may convey a “more

" Dunlop 53.
Meltz, Noah M, “Dunlop’s Industrial Relations Systems After Three Decades,” Comparative Industrial
Relations: Contemporary Research and Theory, ed. Roy J. Adams, (UK: Harper Collins Academic, 1991) 13.
Dunlop 53.

19

rationalized and formalized body of ideas than is intended”.'"^ However, this set of governing
principles is what binds the system together to exist as an entity, and is what distinguishes the
concept of an 1RS from merely being an assessment of the relations between employee and
employer.
Dunlop clearly states that the major characteristics of a national 1RS are typically
determined at an early stage of industrial development and tend to be relatively constant over
time unless a substantial revolution occurs at the national l e v e l . T h e r e are four critical
factors which greatly impact the development of this system and are integral to investigate
how a system changes over time and why certain systems with similar characteristics and
development may operate quite distinctively. In a stable system these factors are likely to
influence the political authority and will then be reflected in the rules and public policy that
the state implements. He notes that these four factors are crucial to a greater understanding
of a specific national 1RS. They are: the historical context, the social changes within a
country, the economic growth and development of a nation, and the decisions made by the
industrializing elite.
The period of history within which an industrializing country begins to develop a
formal 1RS is particularly important in influencing the development of rules and the role of
government in the system. For example, in the Soviet era (post-1917) the rise of communist
organizations shaped the way in which governments in capitalist societies viewed the
relationship between labour organizations and political parties.

As well, systems that

primarily have developed in the past two decades bear the imprint of the International Labour

Dunlop 54.
20

Code, incorporating normative standards of labour legislation.

The increased role of

government as an employer in the post-war period and until the 1970s, particularly of
industrial labour, and the rise o f professional management in the last half of this century (in
contrast to family management) have both influenced the development of systems and have
often contributed to the rise of orderly dispute processes and solidified the formal relations
between actors.'^
The second critical factor is the progression of structural social changes that a country
experiences.

The timing of national, political and industrial revolutions in a country in

relation to the rise of the labour movement is decisive in determining the relationships
between the actors and the role of labour organizations in particular. In countries where the
labour movement played a prominent role in securing national independence there tends to
be strong relationship between the ruling party and labour. Dunlop also notes, “when labour
organizations have to fight for political and social status, the industrial relations system may
be expected to reflect a greater degree of formal political organization and to be more
strongly involved in influencing public policy”.

As well, when labour organizations have

been retarded in their growth and then they suddenly emerge, a greater degree of
centralization is to be expected, with less autonomy for individual bodies.'^
The third and possibly most important factor influencing the development of a
national 1RS is the process of economic development. During the industrializing process all
actors in the system undergo changes that effect their roles and relationships.

In more

industrialized (developed) countries, there tends to be a more stable, highly skilled workforce

Dunlop 227.
Dunlop 229.
Dunlop 232.

21

functioning in a more formal set of procedures eompared to those in less-industrialized
countries. Countries considered to be industrializing (developing) not only have to contend
with a typically low-skilled workforce but also with the challenges of industrializing in a
highly competitive global economy. Additionally, the challenges facing countries which
have an agricultural economic base compared to those which are based on industry or
services are quite different. States which are currently ‘developing’ typically have a large
workforce, often with skills focused in agriculture, and the national economy is very often
dominated by the interests of foreign capital. Thus, states currently considered ‘developing
countries’ commonly have an 1RS reflecting the challenges of addressing these shared
characteristics in their economic development.
The three previous aspects relating to the development of the national 1RS have a
critical impact on and are influenced by the decisions made by the industrializing elite. This
fourth factor highlights the decisions made with respect to the strategy that the emerging
system will be based upon. The institutional arrangements of a system necessitate some
unity and are determined by the decisions the industrializing elite make regarding key
questions concerning the relations between capital and labour, the mechanisms to contend
with industrial conflict and how industrial society will be organized. Different groups of
elite can exist within the same country, functioning in different sectors, but importantly the
relationship between the elite and the political authority and whether these two are the same
is critical.*^ The main choices confronting the architects of the 1RS are not only influenced in

Dunlop 231.
In a given country the political elite may not be the same individuals who are considered the industrial elite.
In coimtries where this group o f elite individuals is considered to be one and the same, the control o f the
development o f the 1RS remains in the hands o f the political elite and can more tightly obstruct change or
reform o f the 1RS.

22

turn by the previous three factors (social context, economic development and the historical
setting) but also by the ideological perspective which dominates the elite. This ideological
perspective, based on a fundamental set of beliefs regarding the nature of conflict between
capital and labour, is usually reflected in government policy and therefore conditions the
rules of an 1RS.
The focus of Western industrial relations has conventionally been concerned with the
relationship between capital and labour and, in particular, labour peace and conflict.^® In
recent years, industrial relations research has expanded to study the broader links of the
labour movement, examining the social, political and economic realm of trade unions in
newly industrializing countries.^^ Dunlop’s conception of an 1RS illustrates his attempt to
shift the discipline’s perspective from collective bargaining to the ftill spectrum of industrial
relations. His articulation of a system which exists in every industrial society highlights the
interdependence o f the actors and other components of the system which are woven together
and interrelated.

Ultimately, the changes in different elements of the system are to be

examined to understand how they influence the rules governing the relationships between the
actors and procedures or rules that govern the system. Dunlop’s framework allows us to
study changes in the system over time and to examine how changes in behaviour or
circumstances at one level produce changes in another, and how these can best be explained.
As Blanplain argued, there needs to be a move beyond the descriptive nature of this field of
research and to concentrate on explanation “in order to identify the role, importance and

^ De Silva, S.R. Elements o f a Sound Industrial Relations System.
(httD://www.ilo.org/public/english/dialogue/actem p/paDers/1998/srseleme.htm ). Bangkok 1998, 10.

De S ilv a n .

23

interaction o f the different factors shaping and influencing industrial relations... in a variety
of national contexts”.^^
Dunlop’s framework allows us to examine why countries with similar social and
economic development patterns may emerge with differing procedures and institutions in
place to manage industrial society. More important, however, is Dunlop’s promotion of the
idea that the realm of industrial relations functions as a sub-system of the greater society, as
complex and intrieate as an economic system. If Dunlop’s framework is utilized, it may help
us to explain why eertain aspects of a national system that function effectively at one level do
not have the same desired effect at another level. As well, labour institutions and procedures
in the work place which operate successfully in the Western experience may be ineffective
and possibly detrimental applied outside of the North American or Western European
context.
What Dunlop’s framework helps us to understand is that certain national experiences
may colour the operations of industrial relations to a much greater extent than previously
eonsidered. In the South African experience, the eountry’s turbulent history, unique social
relations, unstable economic history and recent national revolution all play a substantial role
in understanding the operation of the 1RS over the past fifteen years.

The ANC’s

introduction of policies eonsistent with a corporatist style of management of the 1RS has
ultimately proved to be unsueeessftil, as relations between actors in the 1RS have become
increasingly antagonistic and the established institutional mechanisms are now essentially
token structures. Trying to understand if the system has been unsuccessful and how the

Blanplain, Roger. “Industrial Relations in Developing Countries” in Bean, R, Comparative Industrial
Relations: An Introduction to Cross- National Perspectives. (New York: St. Martin’s Press, 1985) 229.

24

system has evolved in line with the four major factors influencing the development of an
1RS, as identified by Dunlop, is the focus of the following Chapters.

3.3

Types of systems
As mentioned in the previous section, there is a spectrum of industrial relations

systems closely linked to the ideological perspective dominant in the system. This spectrum,
illustrated in figure 3.2, depicts three types of an 1RS described in their ideal form and merely
provides us with a tool to visualize the range of types similar to a spectrum depicting political
beliefs from “left” to “right”. It must be noted that these are ideal models and that countries
are not likely to have an 1RS which is clearly one ideal form; instead the system will likely
display certain characteristics inherent in one type or possibly exhibit traits of more than one
form. The lines are distinctly blurred on this spectrum. Any 1RS examined at a specific
point in time is likely to embody a variety of traits just as a political system is unlikely to be
found in an ideal or extreme form in countries around the world. All types of systems stem
from an ideological perspective which is focused on the dynamics of state-society relations.
In this figure, interest groups represent civil society and, for the purposes of this study, will
be understood and examined as organized labour.
Figure 3.2: Spectrum of Industrial Relations Systems
Source: Adapted from Dunlop, drawn by author.

Nature o f State
Nature o f Interest
Groups

Liberal-Pluralist
Weak state
Strong, independent interest
groups

Corporatist
Directing state
Structured, limited interest
groups

Conflictual
Total State
Weak, totally controlled
interest groups

25

The relationship between capital and labour was studied in the 19'*’ century by
classical economists who conceptualized labour as another commodity subject to the laws of
supply and demand.^^ A variety of theorists critical of this liberal orthodoxy, such as Marx,
and the Webbs and the Commons, soon challenged these “natural laws” and developed
alternative theories rethinking the conflictual relationship between workers and employers,
citing different reasons for conflict and alternate means of resolution.^"* From the ideas of
these early pioneers in industrial relations, three main ideologies regarding the nature of the
capital/labour relationship have dominated the field: pluralist, unitarist and authoritarian.
Each of these perspectives forms an ideological base for one of the 1RS models depicted in
Figure 3.2 and will be examined below. Within an 1RS it is important to consider that the
state is included as a key actor with capital and labour, and additional factors are
incorporated into the environmental context within which industrial relations function to
comprise a system.
The pluralist frame o f reference is based on the acknowledgement of individual
interests in society and “sees the enterprise as a coalition of individuals and groups with their
own interests, agendas and power bases”.^^ With these divergent interests in society and
particularly in industrial relations, conflict is endemic and therefore unions are seen as
legitimate bodies with collective bargaining the ultimate method for resolution of conflict.
From this recognition of competing interests, the ideal means of managing these interests is
to permit all interest groups to be free and unfettered in their actions and to encourage their

^ Finnemore 2.
Finnemore 3.
Plowman, D.H, “Management and Industrial Relations,” Comparative Industrial Relations: Contemporary
Research and Theory, ed. Roy J. Adams, (UK: Harper Collins Academic, 1991) 64.

26

vigorous activity. This is a popular political ideology in the world today as it is advocated as
best serving the interests of democracy by forcing interest groups to compete and
compromise with little to no direct interference from the state, except for the setting of the
legal framework. An 1RS rooted in this perspective is often termed a liberal-pluralist system.
Translating this ideology into practice means that the interests of capital and labour are
relatively free and independent of state control and the means by which they resolve disputes
are determined at a sector or enterprise level. Economically, this system is claimed to be
most beneficial for encouraging rapid economic growth, as the interests of capital, with more
resources and often more power, often prevail over those of labour. Thus, the interests of
capital will dominate economic and industrial policy, likely spurring investment in a
business-friendly environment.
The second perspective is termed authoritarian. In this analysis, class conflict forms
the base of industrial society with intrinsic conflict persisting between those who own the
means of production and those who do not. Unions exist to challenge the capitalist system
itself and are the vehicles through which workers can attempt to change the system.^^ From
this perspective, the authoritarian model of an 1RS would see a strong, controlling state
which subordinates interest group activity.^^ In this model, termed a conflictual 1RS, the
state would make decisions regarding industrial society with no grass-roots participation
from labour. With respect to the economy, state-controlled interest groups would often be
created to subdue challenges to the state and enforce a stable industrial relations
environment. The state would typically nationalize industry and services and increase social

^ Finnemore 8.
Wiarda, Howard, Corporatism and Comparative Politics: The Other Great “Ism”. (New York, London: M.E.
Sharpe, 1997)6.

27

27

spending. Foreign investment would be limited as the state would seek to control activity
and enforce strict “red-tape” measures.
In contrast to the other two perspectives, the unitarist perspective places emphasis on
possible workplace harmony due to the common interests and objectives of capital and
labour.^* From this “unitarist or loyal team” perspective, conflict is unnatural and usually the
result of a lack of information, with unions unnecessary and usually obstructive. However,
upholding the belief that common interests exist between capital and labour, an 1RS formed
under this perspective will typically attempt to promote and ensure harmony through state
guided activity. Thus, collective representation of capital and labour would be recognized by
the state and incorporated into the decision-making processes on public policy. An 1RS that
emerges based on this perspective would be termed corporatist, as the state would guide
interest group activity to ensure equal representation and prevent conflict from growing
between capital and labour. Corporatism usually takes hold in an industrialized economy
where social welfare is a main concern of the state. By mediating the interests of capital and
labour the state seeks to level the playing field between the two parties and generally
promote a more labour-friendly regime. This type of system may promote investment
through ensuring a stable, industrial peace or it may deter investment through its required
submission to a central authority, normally a state-created forum for negotiation, and
adherence to agreements.
As mentioned previously, no one state can plausibly implement an “ideal” system but
instead pursues a strategy of state management consistent with its ideological roots and
which will inevitably exhibit characteristics consistent with one type of model. The figure

Burchill, Frank, Labour Relations. 2nd ed., (Hampshire: Macmillan Business, 1997) 3.
28

below illustrates the connection between the dominant ideological perspective regarding the
nature of state-society relations, focusing on the perceived nature of conflict between capital
and labour and the role of the state, and the subsequent 1RS which is likely to emerge.
Although Dunlop discusses the types of 1RS which can exist he only touches on the types of
ideology which would typically guide the development o f a particular 1RS. The creation of
the figure below is simply an expansion of the ideas that Dunlop mentions briefly within his
own text.
Figure 3.3: Relationship between Ideology and an 1RS
Source: Drawn by author.
Dominant Ideology

PLURALIST

UNITARIST

AUTHORITARIAN

Nature of Conflict
Capital and labour have divergent interests
and thus conflict is endemic. Groups are
free and unfettered to compete.
Although conflict exists, there are common
interests. State tries to moderate capital and
labour equally in system.
Class conflict is base and thus intrinsic in
system. State tries to subordinate labour in
system.

1RS Most Likely
to Develop
Liberal-Pluralist

Corporatist

Conflictual

The South African state, which emerged under democratic rule in 1994, attempted to
pursue a system of corporatist management in harmony with the ideological roots of the
ANC, the ruling political party.

Not only do many of the works mentioned in the

bibliography study the establishment of a corporatist system in South Africa in detail, but
also the public pronouncements by the government and the type of system which was in fact
initially established, all provide evidence to support this. Policy documents put forth by the
ANC during this time also document this strategic decision well, but further discussion on

29

this will follow in the next Chapter. To understand the actions of the state and why there was
an attempt to establish a corporatist 1RS a closer examination of the corporatist model is
required.

3.4

A closer look at corporatism
Although wide variations of the corporatist model exist, there are some key

distinguishing characteristics of this particular system:
■
■
■

Strong, directing state
Restrictions on interest group freedom and activity
Incorporation of interest groups into the state system^^

If a society is not organized on an individual basis and the state seeks to control and
incorporate interest group activity into the state system, then it is likely that the system would
be termed corporatist. Utilizing the work of Wiarda who presents an in-depth study of
corporatism and its various forms, we can look at four main types of corporatism: historical,
ideological, manifest and neo-corporatist.
Historical corporatism is typically identified with “premodem societies, especially
those founded on traditions that emphasize solidarity, group identity, and community”.
This form of “natural” corporatism is associated with solidarist conceptions of society and
arises from institutions such as the family, church, aristocracy and military orders. These
innate corporatist groups often continue to exist after the emergence of the nation-state in a

Wiarda 8.
“ Wiarda 16.

30

“mutually satisfactory and legally defined relationship to the central state”.^'
The second form, termed ideological corporatism, emerged with an emphasis on
individual rights which was popular in the 18**’ century. Not content with the atomistic
conception of the individual in society, groups pushed for the return to a focus on an
organized society based on collectivity.

This ‘new’ ideology was formally termed

corporatism and advocated that society’s component groups would assist in the creation of
economic and social policy in collaboration with the state. This form of corporatism took
hold mainly in Europe and Latin America during the first half of the 20* century.
The third corporatist form, termed manifest, emerged in the post-WWIl period at a
time when corporatism was associated with horrific and authoritarian regimes used to
suppress and control all aspects of citizen activity. From the 1960s onwards many states in
Latin America and Asia encountered difficulties in state development including labour
unrest, a lack o f economic coordination and a booming pluralist society which was causing
societal unrest.^^ The need for some form of state management to ensure interest group
harmony in society motivated leaders to seek out forms of corporatist organization. But
because of the negative connotations in the immediate post-war period surrounding
corporatism, states claimed merely to implement forms of “guided democracy” or
“communitarianism” based on a unitarist ideology, which literally replicated the corporatist
model.^"*

Wiarda 17.
Wiarda 18.
” Wiarda 21.
This form o f corporatism is similar to a conflictual 1RS, yet the key difference remains that the state merely
seeks to moderate between the actors, and not to control their activities.

31

The fourth and final form is neo-corporatism.

This variant is typically found in

advanced, industrialized countries which want to incorporate economic and social bodies into
the process of formulating social, industrial and economic policy concerned with social
welfare. The formal representation extended to those bodies in state decision-making is
premised on the belief that through compromise, peaceful negotiation and concessions from
capital, labour and government that mutual benefits will amass.

Neo-corporatism is

consistent with a parliamentary democracy and a pluralist society and is sometimes termed
societal, soft or open corporatism.^^
Within each form of corporatism a system of industrial relations will still appear
distinct to some extent. Corporatist arrangements will vary country to country and across
different periods of history and in relation to different economic strategies.

In Western

Europe, neo-corporatist arrangements have typically emerged in societies with a high degree
of social cohesion, an advanced industrialized economy, and under the direction of social
democratic political parties.^^ These conditions have resulted in long-term trust relationships
evolving between the parties involved and highly centralized, representative bodies which
can effectively enforce the agreements across their constituencies. Unger and Chan note that
in China a more authoritarian, state-controlled, manifest form of corporatism has emerged in
the 1990s.^^ They also note that at the national level peak organizations represent an elite in
corporatist structures and deals are reached and then forced, top-down, on the constituencies

Wiarda 22.
Henley, Andrew and Euclid Tsakalotos, Corporatism and Economic Performance. (England: Edward Elgar
Publishing Ltd, 1993) 165.
Unger, Jonathan and Anita Chan, “Corporatism in China: A Developmental State in East Asian Context,”
China After Socialism: in the Footsteps o f Eastern Europe o f East Asia? Eds. Barrett L. McCormick and
Jonathan Unger, (USA: M. E. Sharpe, 1996) 95.

32

with no semblance of democracy. Thus, the different forms of corporatism which can often
emerge resemble the “ideal” types very little. Dependent on a myriad of factors, including
political and economic doctrines upheld by the state, corporatism can range from being a
highly beneficial system of industrial relations which levels the playing field between capital
and labour to a means of controlling the activities of the population by restricting interest
group activity.
All forms of corporatism involve some form of interest group organization and
involvement by the state. In some cases, the reasoning behind involvement would be to
contain and control citizen activity and to reduce any political threats to the state. In other
cases, corporatism may be used to provide a more formal and secure forum for interest
groups to negotiate with some level of state mediation to enforce agreements.

Thus, a

successful measure for a corporatist system may be the complete subordination of
independent citizen activity, or it may be the advancement of the working class. Judging the
success of a corporatist arrangement is therefore dependent on the objectives behind
implementing such a system.
In the South African case, the government attempted to implement a type of 1RS
which was consistent with the neo-corporatist form. The objective was to promote social
harmony and to implement a system of state management in complete contrast to the racially
oppressive and authoritarian policies of apartheid. Thus, the ANC envisaged a corporatist
system operating in a democratic and participatory state promoting a system of social justice
and the national development of the “new” South Africa.

This system would allow

organized labour, capital, and interest groups in society to participate in formal multipartite
discussions which would then inform policy-making. When examining whether or not the

33

South African experiment was a success, the goals for implementing such a system must be
assessed. It is clear that the government desired the creation of a multipartite forum to
address five key goals:^*
(1)
(2)
(3)
(4)
(5)

reduce social unrest (including industrial action)
promote a labour-friendly regime
negotiate with strong interest groups
advance the interests of the underprivileged
deepen the processes of democracy

Of course, all of these key goals would have spin-off effects such as ensuring a stable
investment climate for business. These goals were presumably important to the government
yet not as critical to promote to the majority population as they were more concerned with
broad issues of social justice. Therefore, as mentioned previously, to assess the success of
corporatism one must examine the reasons behind the government’s attempt to establish such
an 1RS. In assessing the success of corporatism in South Africa the following questions must
be asked; Has social and industrial peace been achieved? Is a labour friendly regime in
place? Is there successful negotiation with the interest groups? Have the interests of the
underprivileged been addressed and advanced?

And finally, has democracy been

strengthened?

3.5

The South African experiment
The challenges facing the new government in pursuing its corporatist vision were
immense. An effective corporatist system requires strong, representative bodies to undertake
institutionally orchestrated negotiation and second, the neo-corporatist form is not typically

ANC Election Manifesto. “Together, fighting for Change”
(http://www.anc.org.za/elections/news/mar/en032900.html') 1992.

34

found in transition societies.^^ Third, participating bodies must believe that the system is
effective and fair and be committed to corporatist goals as substantial concessions are
required from all parties. Fourth, the government must remain neutral and strong in order to
maintain the required political and economic controls and to ensure democratic participation
in the system.
These factors all play a large role in the success of a corporatist system. Although the
ANC would face a formidable task in attempting to implement a neo-corporatist model the
desire and commitment seemed steadfast. A corporatist system would not only help the
ANC to achieve their social and economic goals but would provide a means through which
organized labour would assist in the transformation of society to redress historic inequity and
oppression.
The following Chapter provides a brief history of the coimtry focused on the role of
the labour movement through the ending of apartheid as well as the first four years of
democratic rule, essentially 1980-1998. In Chapter five I examine the government’s attempt
to implement a neo-corporatist model and review the events leading to its quick demise.
Finally I conclude in Chapter six with an analysis of the state of industrial relations today and
the move towards a more liberal-pluralist model.

” Wiarda 25.

35

CHAPTER 4

The Roots of the Corporatist Experiment

4.1

Introduction
In order to understand the importance of the demise of the corporatist experiment in
South Africa and the repercussions for labour, a brief review of the history of apartheid and
the role of labour in demolishing the racist regime is necessary. Drawing upon Dunlop’s
framework this Chapter examines, in brief, the historical context and the social and economic
changes in South Africa, specifically the historically intertwined relationship between the
ANC and COSATU in view of the state’s attempt to pursue a corporatist system. Chapter
five will examine the decisions of the elites during this transition to democracy during which
time the new system was developed. With a greater knowledge of the historical context of
both the ANC and the labour movement, we can understand the challenges of governance
and the strategic choices facing both of these players in 1994. Thus, this Chapter looks at the
struggle against and the collapse of the apartheid system, the state of both the ANC and
COSATU prior to the 1994 election and the choices facing both the government and
organized labour for the post-apartheid period.

36

4.2

Examining apartheid
Soon after the formal establishment of apartheid in 1948 the National Party
government passed legislation strictly limiting freedom of movement, occupational choice
and educational services to non-whites along with the expulsion of Africans to ethnic
‘homelands’. ( T h e use of the term “African” refers to peoples of African descent as visibly
determined by colour and passbook identification at the time, excluding Asians and people of
“light” coloring.) This rigid system of racial domination not only required all Africans to
carry a passbook revealing their identity, employment and legal history at all times but also
stripped non-whites of South Afiican citizenship. The Population Registration Act of 1950
classified people on the basis of their “community acceptability” and formed the basis of
legislation for societal segregation. A multitude of laws were enacted during the first five
years of apartheid, including the Group Areas Act, the Prohibition of Mixed Marriages Act,
the Reservation of Separate Amenities Act and the Bantu Education Act, which extended
racial domination to all facets of life. Thus, all peoples of colour or of non-European descent
were excluded from living in urban areas, from accessing govemment-ftmded education, and
from accessing most forms of employment outside of hard labour.'** Under the Native Laws
Amendment Act of 1952 neither men nor women could remain in an urban area for more
than 72 hours without a special permit included in their passbook.

The Suppression of

Communism Act o f 1950 declared the Communist Party and its ideology illegal, and broadly
defined communism as any scheme aimed at “bringing about any political, industrial, social

Lundahl, Mats, “The Post-Apartheid Economy, and After?” Post-Apartheid Southern Africa: Economic
Challenges and Policies for the Future. Ed. Lennart Petersson, (London; Routledge, 1998) 22.
Library o f Congress Federal Research Division, South Africa Country Study. (USA, 1996) 39.

37

or economic change within the Union by the promotion of disturbance or disorder”."*^ By
limiting non-white mobility and anti-state activity the government sought to prevent the
possibility of threats to political authority and to allow white domination to reign peacefully.
Up until the 1970s severe state repression quelled most civil disobedience and
opposition to the state was fundamentally limited. However, during the 1970s labour activity
became more militant with workers protesting student murders and police brutality and
demanding the release o f political prisoners. In response to labour unrest and the resulting
economic impact, the government embarked on a series of labour reforms in the late 1970s,
which extended rights to Africans to join and form registered unions, bargain collectively,
and strike.'*^ The extension of workers’ rights was primarily motivated by economic fears, as
the apartheid regime was dependent on economic growth and stability for ensuring its
survival.'^'’
The apartheid system required that the government play a large role in the economy
to ensure that whites maintained their privileged status. The South African economy has
historically been dominated by exports of manufacturing, mining and agriculture.
International competitors were kept at bay through high tariffs and strong state protection for
domestic industry. Manufacturing exports typically accounted for one third of GNP whilst
gold, the most important export commodity in this century for South Africa, comprised
approximately one quarter of all exports. Machinery remained the key import between 1960-

South African Government Legislation, Suppression o f Communism Act, No. 44, 1950.
Harcourt, Mark and Geoffrey Wood, “The Rise o f South African Trade Unions,” Labor Studies Journal
(Spring 1998) 82.
COSATU Shopsteward. “Campaigns” (http://www.cosatu.org.za/shop/ss0406-l 1.html) (SA Labour Bulletin,
vol 16, no 3, January 1992).

38

70 as well as other capital goods for domestic industry, transport equipment and chemicals/^
The economic strategy pursued by the apartheid regime from the 1970s onward was one of
“inward looking import substituting industrialization” although imports have remained at
around one quarter o f GDP and have been essential to maintain the level of economic
activity."^^ During the 1970s, the South African economy entered a period of stagnation
which was further exacerbated by international economic sanctions which began during the
period of 1985-1986."^’ The productivity of new investment continually fell during the 1980s
as the government increased spending on national and international military objectives and
its focus on the maintenance of an immense police state to enforce apartheid.'** Essentially,
the political doctrine of apartheid translated into an inefficient economic system structured to
benefit the white minority, creating gross inequalities of income and a blatant misallocation
of resources, eventually causing a slowdown of national GDP growth for most of its final
years. Figure 4.1 below shows the rates of GDP growth, over the period 1961-1990 while
Figure 4.2 following this shows population growth. These figures show the rate of economic
growth whilst also considering the rate of population growth, illustrating South Africa’s lack
of economic growth during the 1980’s. Without a substantial drop in the population growth
rate this would indicate an economic slowdown, particularly when considering the economic
growth occurring in other regions of the world.

FIGURE 4.1; Average GDP Growth for South Africa 1961-1990
Source: Adapted from World Bank Group Website, 2001.

Marais, Hein, South Africa: Limits to Change, the Political Economy o f Transition. (London: Zed Books,
1998) 11.

Marais 11.
Marais 11.

39

8

7.01

7

5.48

6

A AC

Annual grow th 5
(averaged per 4
cent)
3

2.75

2

...

1

0
1961-65

1966-70

1971-75

1976-80

1981-85

1986-90

Y ears

FIGURE 4.2: Average Population Growth South Africa 1970-1995
Source: Adapted from United Nations Environment Programme Website 2001.

3i
2.5
A nnual
A v erag e
G row th (p e r
c e n t)

2
I .S f

□ P o p u la tio n
G ro w th R a te

1

0.5
0
1970 1975 1980 1985 1990 1995

Although there were many likely factors leading to the economic decline of the
1980s, including the policy of apartheid, civil unrest, and international sanctions, the
country’s inward-oriented industrialization path was also a likely contributing factor. The
high levels o f protection required to sustain local markets for inefficient domestic producers

Deegan, Heather, South Africa Reborn: Building a New Democracy. (USA: UCL Press, 1999) 130.

40

had proven too costly. The tariff regime had become extremely complicated with different
levies being applied to small variances amongst virtually identical products."*^ Along with
limited domestic demand, by the 1980s the government was also under pressure from the
international community to reform its economic strategies.

In 1989 the government

implemented a structural adjustment program to completely undo industry’s inward
orientation and to encourage export a c t i v i t y . I n addition, the government took steps to
liberalize its trade regime and to phase out state supply-side measures.
Socially, the African population was devastated by apartheid, existing in conditions
of extreme overcrowding with scarce provision of water, energy and other basic facilities. In
1980 the per capita income of Africans was one-twelfth that of whites and malnutrition and
mortality levels were appallingly high.

These were all factors contributing to Gini

coefficient^* levels of 0.66 to 0.71 between 1970-1993.^^ During apartheid the vast majority
of Africans never received education beyond primary levels in low quality schools; this
deprivation is probably the most disastrous legacy of the racist system.^^

Freedom of

movement was severely constrained for individuals as blacks could not move about without a
valid passbook and some amount of money. Citizen participation was not only restricted by

Altman M, An Industrial Strategy for the Clothing Sector. (Cape Town: University o f Cape Town Press,
1994) 16.
Lundahl 24.
Gini index measures the extent to which the distribution o f income (or, in some cases, consumption
expenditures) among individuals or households within an economy deviates from a perfectly equal distribution.
A Lorenz curve plots the cumulative percentages o f total income received against the cumulative number o f
recipients, starting with the poorest individual or household. The Gini index measures the area between the
Lorenz curve and a hypothetical line o f absolute equality, expressed as a percentage o f the maximum area under
the line. Thus a Gini index o f zero represents perfect equality while an index o f 1 implies perfect inequality.
Wilson, F. and Ramphele, M, Uprooting Povertv: The South African Challenge. (New York: WW Norton
and Co., 1989) 104.
” Marais 13.

41

law but also by gender, as men had the opportunity to join unions through work and often
participated in covert political planning/'*
Nelson Mandela’s banned political party, the ANC, was the main political party
supported by Africans and industrial membership in unions essentially translated into
political membership in the ANC. In spite of their meager standards-of-living, black
membership in unions and civic councils continued to grow and opposition activities against
the state continued unabated as the struggle for democracy surged ahead.^^

4.3

The decade of struggle: 1980-1990
During the 1980s rising popular activism and state repression reached historically
high levels. Violence in the townships was commonplace and activities of the MK
(Umkhonto we Sizwe, the armed wing of the ANC) gathered strength and increased levels of
disorder.^^

With townships under heavy police oppression and civilian militancy

intensifying, the political parties’ task of mobilizing citizens outside of the workplace
became virtually impossible.

Political parties other than the ANC covertly competed to

increase their membership wherever possible, including the United Democratic Front (UDF),
Azanian Peoples Organization (AZAPO), Pan Africanist Congress (PAC), Inkatha Freedom
Party (IFP), and the South African Communist Party (SACP). Reformers outside of the
townships, including many white South Africans, worked to strengthen NGO capacity and
develop alternatives to the apartheid system, garnering financial and moral support from

ANC historical documents. “Anti-Pass Campaigns 1912-1960”
(http://www.anc.org.za/ancdocs/historv/camDaigns/passes.htmn October 1999.
ANC historical documents. “The crisis o f apartheid and negotiations leading to democratic elections. 19861994”. (http://www.anc.org.za/ancdocs/historv/transition/') 1994.
^ A N C 1994a.

42

some members of the international community. With opposition political parties officially
banned and freedom fighters exiled, unions became the key vehicles to mobilize the
necessary political will and to increase public pressure on the National Party government.
Trade unions flourished during a period of rapid industrial development in the 1960s
but were severely repressed by legislation and were largely underground movements until
they reemerged in the 1970s with a series of wildcat s t r i k e s . T h e wildcat strikes in Durban
began with a strike of 2000 workers in January 1973 and within weeks thousands of textile
workers, followed by municipal workers and others, took to the streets.

The first three

months of 1973 saw 61,000 workers on strike, more than the total for the previous eight
years.
Black unions were officially legalized and granted basic rights in 1979 although
banned from participating in any political activity. The early 1980s saw tremendous growth
in union membership and strength.

By this time over 80 per cent of shares traded on the

Johannesburg Stock Exchange were controlled by four conglomerates and business hoped
that the official recognition of black unions would provide a more stable workforce during
the 1980s with whom they could negotiate worker demands and avoid costly and disruptive
strikes.^^ Small changes were also made in housing, employment and schooling in order to
improve the economy in the longer-term, as firms needed more skilled black workers to fill
positions.^® The unions allowed black workers to discuss concerns and provided an integral

Benner, Chris, Trade Unions and Labour Struggles in the New South Africa, (USA: Institute o f Industrial
relations, University o f California Berkley, 1995) 1.
DeFronzo, James, Revolutions and Revolutionary Movements. (USA: Westview Press, 1996) 323.
Marx, Anthony W, Lessons o f Struggle: South African Internal Opposition. 1960-1990. (New York: Oxford
UP, 1992) 193.

“ DeFronzo 312.!.

43

space for opposition movements to become more mass based and inclusive.

Previous

opposition movements to the apartheid state had excluded the increasingly radicalized white
intellectuals who had been banned from participating in the Black Consciousness movement
to liberate blacks and demolish the system of apartheid. The segregated society of apartheid
did not permit space where different races could meet together to discuss and organize
opposition to the state and thus union activity finally permitted whites to participate in
promoting the transition to democracy.
During the mid-to-late 1980s the older, historically more conservative union base
virtually imploded and many fragmented; smaller unions amalgamated to become part of
COSATU as it emerged in 1985 and became the central organizing body for the labour
movement in South A f r i c a . T h e strength and capacity of the labour movement quickly
became clear as union membership swelled and Africans empowered themselves through
united defiance. Table 4.4 below illustrates numbers of unionized workers. These levels are
conservative approximations based on available data from central union congresses during
the period specified while excluding many small, independent unions. By 1985 South Africa
had been declared a high-risk country by numerous foreign banks and faced an economic
crisis as insurrections in most sectors of the economy became frequent.^^ Business was
necessarily forced to the negotiating table and in 1985 a business delegation led by AngloAmerican CEO, Gavin Reilly, met with the exiled ANC leaders in Zambia for discussions
regarding the formation of the post-apartheid e c o n o m y . T h i s was extremely important as

** Baskin, Jeremy, “The Social Partnership Challenge,” Against the Current. Ed. Jeremy Baskin,
(Johannesburg: Ravan Press, 1996) 22
62
“ Harcourt 80.
63
Harcourt 81.

44

Anglo-American was, and still is, the most important mining house in South Africa. This
was the first true signal o f success in the struggle to end apartheid and marked the begiiming
o f formal discussions regarding the post-apartheid era.

TABLE 4.3: Number of Unionized Workers 1979-1988
Source: Adaptedfrom Baskin 1996, 23.

W o rk ers

X1000

□ 1979 11981 0 1 9 8 3 0 1 9 8 4 ■ 1 9 8 5 0 1 9 8 6
■ 1987 0 1988

In 1986 the government declared a state of emergency and increased state repression
in an attempt to crack down on civil disobedience and mounting state opposition. Witnessing
the ever-increasing levels o f union activity and blatant political alliance with the harmed
ANC, the government implemented the Labour Relations Amendment Act (LRAA) in 1988
which repealed many o f the rights granted to tmions in 1979 and restricted labour activity.®^
Public outcry was not quelled however, and in 1989 70 per cent of African workers
participated in a nationwide strike as part of the National Campaign of Defiance against the
1989 elections.^^ With escalating international pressure, an economy enduring the weight of

^ COSATU Shopsteward. “The chronology o f the launching o f COSATU”.
(http://www.cosatu.org.za/shop/ss0406-26.html) 1995.
65

DeFronzo 306.

45

sanctions and a population made ungovernable, the government had little choice except to
begin negotiations for the inevitable end of apartheid.

4.4

The collapse of apartheid
In 1990 the National Party government, led by F.W. de Klerk, repealed the banning of

the ANC and other political parties and released most political prisoners including Nelson
Mandela and his comrades. However the transition to democracy was far from complete.
Business at this point was far more eager to talk and negotiate with the black majority than
the government, as they wanted to act quickly and encourage the international community to
lift sanctions in order to minimize their growing economic losses.^^ The government clearly
desired an end to civil unrest but did not embrace power sharing with the black majority.
The ANC faced an intense struggle at this point to consolidate political support and
distinguish itself from COSATU. The executive members of COSATU reclaimed their roles
in the reinstated ANC and union members quickly developed formal political membership in
local committees.

The party battled to reconstitute its local, regional and national

representation and to develop effective organizational structures as well as to contend with
other opposition parties, such as the IFP and the SACP, who showed considerable support
amongst the population.^^
Immediately after their “un-banning” the ANC called for the return of all exiled
political leaders and presented a set of demands to the government as pre-conditions for

“ Mandela, Nelson. Statement to the Party Parliament Group on South Africa.
http://www.anc.org.za/ancdocs/historv/mandela/1990/sp900703.html. London: July 1990.
®’ Marx 196.

46

negotiation.^* Despite serious contradictions in policy and procedures the ANC joined forces
with the Pan Africanist Congress in 1991 and many other smaller parties quickly threw their
weight behind the ANC. During this period the government and the ANC continually found
themselves deadlocked and both threatened to end negotiations while civilian militancy
increased and nation-wide violent outbreaks resulted in thousands of people injured and
killed.

The government did however, establish a central forum, the Conference for a

Democratic South Africa (CODESA), indicating the government’s recognition of the need to
negotiate an interim constitution and prepare for the formal transition to democratic rule.
While the ANC was negotiating the political transformation of South Africa,
COSATU entered discussions on increasing workers’ rights and formalizing the role of
labour in the post-apartheid economy. Late in 1990 a historic accord, the “Laboria Minute”,
was signed by the employers’ South African Consultative Committee on Labour Affairs
(SACCOLA), the Department of Manpower (NMC), COSATU and the National Council of
Trade Unions (NACTU).

This accord rescinded the 1988 LRAA and had the effect of

extending collective bargaining rights to previously excluded workers and allowing the union
federations to negotiate labour legislation before its enactment in Parliament.

In the same

vein of cooperation and negotiation, COSATU established the National Economic Forum in
1991 for discussing industrial policy vsdth business groups and government. In addition,
COSATU agreed to participate in discussions with the NMC, furthering labour’s formal role
in consultative forums focused primarily on workers’ rights to be consolidated after the first
democratic elections in 1994.^®

^ A N C 1994b.
^ Harcourt 81.
Benner 2.

47

As the major union federations, business and the government were embarking on
tripartite negotiations, national stay-aways and protests were still occurring across the
country. Many South Africans had expected an imminent transfer of power after the release
of Mandela in 1990. Deteriorating economic conditions contributed to the terrible situation
of extreme poverty for millions of South Africans.

COSATU’s focus shifted from an

anticipated focus solely on workers rights in the post-apartheid economy to the greater battle
of restructuring an entire economic system characterized by gross inequality. Annexes 1 and
2 provide comparative information broken down by racial grouping to provide a picture of
income inequality in South Africa.

The union federations extended the scope of their

activities and worked further with the ANC to ensure that all policy documents emphasized
the need for economic reforms and extensive social programs^ \

When the National Party

government periodically walked out of negotiations with the ANC and other political parties,
COSATU organized mass stay-aways that essentially shut the economy down nation-wide
and forced the government back to the negotiating table.^^

Jerome Barrett, a former

bureaucrat in the Department of Labour notes the accomplishments made by organized
labour during this period:
“the trade unions were involved in numerous political activities
such as: getting the government to free political prisoners,
developing a mechanism to create a new constitution, drafting the
new constitution, educating South Africans about government
processes and voting procedures, conducting public debate about
democratic institutions, aiding in plans for the 1994 election,
persuading the United States and other countries to lift the
international trade ban, convincing foreign private investors to
increase their investments in South Africa and encouraging

71

Harcourt 81.
Benner 2.

48

companies within South Africa to invest more in private
development companies.

Compromise and peaceful negotiation did not always characterize the means by
which COSATU and other labour organizations achieved such actions but it is critical to note
that the majority of their actions provided an influential example of cooperation amongst
opposition groups, specifically between the state and labour and between capital and labour.
Emerging from a period of intense repression and covert activities, COSATU faced major
internal challenges as the federation struggled to organize administrative structures, increase
communication systems, consolidate mass support and become self-sufficient without foreign
sources to rely on.

Nonetheless, the labour movement remained relatively united and kept

the population informed and mobilized until the April 1994 elections.^"^

4.5

Building on past success: strategic choices for the labour movement
The exploitation of cheap black labour was at the heart of the apartheid regime.

Spending on healthcare, education and all other social services was discriminatory and
Africans could expect to live on average a decade shorter than their white counterparts.’^
The system o f apartheid was also economically inefficient which increased levels of poverty
due to a slowing national growth rate. Unions attempted to improve this unequal system by
reforming the system of worker exploitation through improved wages, working conditions
and increasing access to professions previously restricted to whites only.’^ From the late
1960s onward the role of unions was broad and encompassed community objectives as well

Barrett, Jerome, “Trade Unions in South Africa,” (Monthly Labour Review. May 1996) 4.
Harcourt 81.
Barrett 15.
Baskin 24.

49

as providing various forms of community support.

Unions briefly worked together with

firms in the 1980s to provide some financial support for primary education and sports
scholarships in black communities that were cut-off during the apartheid r e g i m e . T h i s
extended role into spheres outside of the workplace allowed unions to develop a mass base of
support across the entire country.
Instead o f taking a narrow economic focus during the 1980s “the unions embraced a
philosophy o f political unionism, emphasizing the common interests of workers and
community groups and the advantages of coordinated mass action”.^* Thus, it was virtually
impossible to distinguish labour activity from political activity during this time. Although
strikes and stay-away campaigns resulted in no pay for workers, figures show that the
majority o f African workers were willing to sacrifiée their much-needed pay-cheques in the
interests o f the broader struggle for democracy.

Table 4.7 below shows the levels of

industrial action in South Africa in the four years prior to the 1994 elections. Information
prior to the 1980s is virtually impossible to locate and would be highly unreliable even if
cited due to the government’s exclusion o f the African population from official statistics.

TABLE 4.4; Levels of Industrial Action 1990-1994
Source: Baskin 1998.
4200
4100
4000

□ DAYS LOST
(thousands)

3900
3800
3700
3600
3500
1990

78

I

1992

1994

DeFronzo 333.
Harcourt 79.

50

After the election of the ANC government, unions worked together with government
and business to create policy and influence decisions regarding public policy and legislation.
As a result of this collaboration public expenditures on social services such as education,
health and sanitation were increased. Not only did spending increase but access to social
services was expanded and improved so that those who lived in extreme poverty were better
able to utilize public services. Annex 3 shows levels of increased government spending
throughout the 1990s. With a key goal of protecting exploited workers, tmions have also
focused on improving wages, ensuring job security and providing safe housing for workers
and their families.^^ In addition, unions have attempted to reduce racial inequality by
standardizing wages in industry and increasing wages of blacks relative to their white
counterparts.*^
These approaches utilized by the labour movement to take apart the apartheid system
were consolidated and enhanced by the inherent strengths of the union movement. The high
levels of unionization in South Africa during the decade of struggle granted the unions
considerable organizational leverage by involving most sectors of the economy in strike and
protest action.*’

In addition, the external support unions received from other labour

organizations, states and NGOs provided much needed financial resources and practical
advice for the movement’s activities. As a civil organization working in opposition to the
state, the movement was strengthened by the absence of a formal relationship with the state.
This strategic position allowed the movement to operate autonomously and free from fears of

Barrett 2.
Baskin 25.
Harcourt 85.

51

co-optation or government muzzling prior to 1994. In addition, the negotiating strategies
employed by the union federations were usually conciliatory and good-natured which
provided a key example for other bodies involved in the process of change. This atmosphere
of compromise and negotiation was of vital importance in trying to promote a smooth
transition to democracy and attempting to promote an accommodating relationship between
unions, capital and government.
Of prime importance for the opposition movement however, was the resolute internal
solidarity of the movement itself. By banning political parties during the apartheid period the
government forced political ideology imderground and into the union movement and “the
result was a politically engaged union movement combining socio-political and ‘bread-andbutter’ demands”.

This broad class-consciousness that infused the labour movement

motivated the unions to act on behalf of all citizens to push for societal reforms. By moving
beyond a narrow focus on business unionism and sacrificing opportunities to improve the
conditions and terms of employment for workers, the labour movement put the needs of
greater society ahead of its membership.

O f course this objective could not have been

pursued without the active support and participation of the millions of workers who made up
the labour movement and devoted years of their lives to the struggle.

The collectivist

concept of “ubuntu”, the belief that people are people through other people, was likely a
driving force behind the liberation movement.
Following the formal end of end of apartheid in 1994 the challenge for unions would
be to maintain this internal solidarity in order to maximize labour’s influence in the “new”

Baskin 28.
Lundahl 22.

52

State. By reforming the focus of unions from overthrowing the state to transforming society,
labour could maintain its broad struggle for societal reform in conjunction with workers’
rights. Labour’s goals seem fairly explicit as outlined in COSATU organization and policy
documents during the early 1990s, with the key focus remaining on the battle to improve
standards of living for the non-white population.
Although the various representative bodies of organized labour were essentially
unified with respect to the goals of labour activity, the means by which labour would seek to
achieve these goals were subject to debate. A majority camp under COSATU’s umbrella
promoted the idea of a peaceful, conciliatory method of negotiating labour’s demands with
the ANC-dominated state.*"*

A minority contingent, however, advocated more militant

strategies such as the protests, strikes and boycotts employed to resist apartheid policies in
the previous period. This minority group feared the government’s accommodation of the
demands of the business community. With COSATU compromised in a formal alliance with
the ANC, blatant, effective opposition to the state could be extremely difficult to undertake.
These two perspectives were clearly extolled by different factions within the collectivity of
organized labour yet no formal documentation indicates that this issue was officially
debated.*^ The two sides advocating contrasting strategies for labour activity in the new,
democratic state, still have contesting opinions on the topic as is evident in media coverage
of debates and divides within COSATU.
It also remains unclear in documentation during this period whether or not COSATU
clearly understood the inherent limitations of advocating a conciliatory approach of entering

'"ANC 1992b.
Sourced from interviews.

53

into negotiations with the state and capital through an institutionalized process. Presumably
COSATU would have little fear of being cast aside in the post-apartheid period as the
socialist, labour-friendly ANC was virtually guaranteed political victory in the 1994 election.
From the united, fraternal history shared by the ANC and COSATU it was unthinkable that
anything other than a labour-friendly regime would emerge after the election. The stronger
contingent in COSATU, favouring a post-apartheid strategy consistent with a corporatist
model of industrial relations and well supported by the ANC, emerged as dominant leading
into the election period.*^

4.6

Ready to govern? ANC strategies for governance
As the labour movement debated various strategies and tactics to employ in the post­

apartheid period, the ANC faced similar challenges.

During the four years between its

“unbanning” and the 1994 elections, the ANC struggled to consolidate its ideology and
proposed socio-economic reforms into a comprehensive policy document.

While the

political body faced major organizational challenges it was also forced to develop a plan of
action for leading the country. The Freedom Charter, drafted 35 years prior, had provided
the foundation for ANC policy throughout its history. The policy document portrayed a
vision of a mixed economy but critics viewed the charter to be more a statement of aspiration
than a coherent view of how an economy should run.*^ The ANC not only faced challenges
regarding policy creation but also of governance.

Once in power the party would be

challenged to reverse a culture of disobedience and opposition to the state that it had helped

^ Bond, Patrick. “Neoliberalism Comes to South Africa”, Multinational Monitor, (vol. 17 no. 5, May 1996), 3.
Lundahl 23.

54

to create. In this vein, the ANC would be forced to plea with residents to pay for their
services such as rent and utility rates, and thus was foreed to create the Masakhane program
to appeal for cooperation and complianee.*^
The ANC constitution, delineating the party’s rules and political visions, generally
stated the goals of governance and implied a strong, interventionist role for the state in the
redistribution of wealth in South Africa. Primarily the ANC would “fight for social justice
and eliminate the vast inequalities created by apartheid” whilst “promoting economic
development for the benefit of all”.*^

Fundamentally reconstructing the state and the

economy would be the key objectives while simultaneously embarking on a national
challenge to rid society of entrenched racial domination and revitalize the diverse African
cultures represented in South Africa.

The Macroeconomic Research Group (MERG), a

group of ANC-sympathetic academics formed in 1992, produced a research report leading to
the creation of a unified policy document entitled the Reconstruction and Development
Program, (RDP), a five year plan for governance.^®
The RDP was founded on six driving principles which together constituted the
political and economic objectives underlying the whole program for change:®'
1.
2.
3.
4.
5.
6.

An integrated and sustainable programme.
A people-driven process.
Peace and security for all.
Nation-building.
Link reconstruction and development.
Democratization of South Africa.

" Koelble, Thomas, The Global Economy and Democracy in South Africa. (London: Rutgers UP, 1998) 104.
African National Congress, Party Constitution. (1994).
” Lundahl 31.
African National Congress, Reconstruction and Development Program. (1994).

55

These six principles grounded the four major priorities outlined in the RDP: the provision of
basic services, the development of human resources, the democratization of state and society,
and the improvement of the economy. Nelson Mandela’s commitment to “create a peoplecentered society of liberty” required that the RDP doctrine be the central focus of his
government for “without fundamental reforms, social stability and economic prosperity
would remain elusive dreams for South Africans”.^^
With respect to socio-economic policy the RDP detailed the provision of extensive
basic services for the population, financed through high rates of economic growth.

The

program included plans to liberalize imports, increase competition, and to increase support
for small and medium-sized enterprises. In addition, technological development to enhance
competitiveness would be bolstered by an improved stock of human capital, achieved mainly
through increased public education.®^

Public investment in affordable housing and

infrastructure in dilapidated areas was also envisaged as necessary for improving health and
stimulating economic growth, as well as providing basic water and sanitation services,
preventative health care and a compulsory ten years of education for everyone.^"^
Nationalization lingered on the RDP agenda, as did the substantial redistribution of land to
the landless.^^
To achieve this economic growth and development a partnership was required and
would soon find expression in statutory arrangements involving all the major players in the
e c o n o my. I mp l e me n t i ng a corporatist model in which unions, employers and the state

Koelble 106.
Lundahl 29.
Lundahl 29.
Deegan 130.
^ Mandela, Nelson. Speech to COSATU, (South Africa 1994).

56

would work co-operatively and consensually towards the achievement of (what are assumed
to be) mutual social and economic goals, would be a large task for the government to take on.
This approach to managing state/society relations would entail a high degree of involvement
by selected representative agencies in relevant decision-making processes. The promotion of
a corporatist arrangement was not met with unanimity from the parties involved but was
viewed by the government as the only viable means to realize the goals of the RDP whilst
managing a strong labour movement and the dire need for economic growth.^^
Moving away from South Africa’s repressive past, the ANC faced challenges for
governance in the post-apartheid period. In keeping with its ideal of a democratic, egalitarian
society the ANC did not envision direct control of interest groups in society nor did it seek to
remove the state from involvement in industrial relations. The ANC could have advocated a
pluralist form of management, yet would have to have been willing to bear the economic
scars of allowing labour and capital to battle out their differences devoid of state interference.
With strong, concentrated capital interests and a mobilized, assertive labour movement, a
corporatist system, and in particular a neo-corporatist model, could potentially offer a
peaceful middle ground; a position of compromise for all of the parties involved. Under neocorporatist arrangements Wiarda notes that organized labour would be required to confine its
debate to hammering out details of economic and social policy while sacrificing its goal of a
broader transformation of society by addressing injustices inherent in the capitalist system.
Capital would have to accede to some of labour’s demands, agree to consultation on
industrial policy, and submit to collective representation in the appropriate tripartite
structures. The state would have a challenging task in remaining neutral and uncompromised

^ ANC 1994b.

57

in this type of system. In addition, the state would simultaneously have to play a strong role
in this model in both the political and economic realms. Nonetheless the neo-corporatist
framework, offering the potential for a stable investment climate while granting labour an
equal voice on policy-making, was likely perceived of as the most viable option by the

ANC/"
Although the neo-corporatist model would require certain trade-offs from all parties
the benefits probably seemed worthwhile to the parties involved. For the state, the added
incorporation of key organizations of civil society into the now “multipartite” structure
provided a mechanism through which citizens could voice their concerns and contribute to
policymaking.

In multipartite forums civil society representatives were permitted to

participate in discussions regarding policy development but often were mainly present to
voice their concerns rather than to substantively participate in policy formulation.

This

inclusive model would provide a welcome change from the oppressive, exclusive system of
apartheid.

By providing an official forum whereby the key players in society were

incorporated into the machinery o f the state the government could effectively reduce
opposition and threats to its authority. In contrast to imposing a rigid set of government
controlled interest groups on its electorate or promoting a hands-off, free-for-all approach to
state/society relations, the neo-corporatist model seemed to provide the balanced approach
that the ANC was seeking.
With their formal tripartite alliance including COSATU, the ANC proposed serious
legislative reforms regarding labour rights and exalted the integral role that unions would
play in the policy-making arena in the “new” state.

Drawing from their historically

ANC 1994b.

58

intertwined roles, the ANC repeatedly called for heavy union involvement in economic
policy making, even suggesting that labour and the state would together supervise foreign
investment and accept investment only if specific conditions were met.®^ Many unions
presented a suspicious attitude towards this co-determination at the national level as many in
the labour movement still believed that “militant, defensive unionism is required” in order to
ensure that workers’ demands were not compromised to the needs of the business
community.
The government believed however, that the establishment of formal social
partnerships that facilitated cooperation would minimize conflict and decrease political risk
during this period of change.^®* Bringing government, capital and unions to the same table in
order to work out differences and compromises was likely the most favourable way to ensure
a smooth transition in the ‘new’ South Africa. The first democratically elected Minister of
Labour, Tito Mboweni, noted that “a co-operative partnership between capital and labour is
a crucial determinant of stability and international competitiveness”.

The ANC, with

many of its elected members former prominent union leaders, strongly advocated a position
of power and influence for organized labour in this new strategy. Defending the rationale of
the corporatist model Mandela stated that business must come to accept labour as a partner in
production rather than simply a cost to be minimized.*®^ The neo-corporatist framework
would seek to balance the power of both capital and labour in a democratic state in order to
ensure mutual gains.

’^Koelble 104.
'“ Baskin 34.
"" ANC 1994b.
Mboweni, Tito, Online posting, newsgroup, COSATU, (South African Labour Bulletin, 1995) 26.
'“ Koelble 110.

59

In light of this enthusiasm for compromise and cooperation, legislation and structures
emerged to support election promises made by the government. Supported by the ILO, the
government created the National Economic Development & Labour Council (NEDLAC) in
1994 giving official life to the evolving cooperation in the country.'®'* The NEDLAC Act of
1994 was to “provide for the establishment of a national economic, development and labour
coimcil; to repeal certain provisions of the Labour Relations Act, 1959; and to provide for
matters connected therewith.”'®^

Thus began the institutionalization of the corporatist

process and the execution of the initial stages of the RDP’s transformative goals.

4.7

Launching the corporatist experiment
Although the political transition to democracy went quite smoothly the ANC’s

implementation of its goals as manifest in the RDP was not met with widespread enthusiasm.
Critics quickly pounced on the RDP as no clear statement was made on how the program was
to be implemented or financed. Koelble points out that
“the initial White Paper failed to produce any clear strategy on how the
RDP was to proceed, which organization or governmental body was to
plan its activities, or how the various consultative bodies were to
cooperate and design policy”.'®®

Confusion reigned between the RDP office in government and various ministries as to
responsibilities for funding which led to “a trend of double-dipping” whereby projects
unlawfully received funds from both the RDP office and the relevant ministry.'®^ More

Baskin 31.
South African Government Legislation, NEDLAC Act No. 35 o f 1994.
Koelble 107.
Deegan 126.

60

importantly however, was the realization that investment would never meet the funding
needs of the RDP.

Meeting the five-year targets became an impossible goal, as public

investment in infrastructure would have to grow by 21 per cent per annum to meet
requirements and initial investment was approximately 6 per cent lower than this, continuing
to decline between 1995-1998.*®*
There was also a contradictory element in the RDP which combined “a commitment
to meeting the population’s ‘basic needs’, thereby potentially implying a strong state
intervention and radical redistribution of wealth, and an acceptance of the mechanisms of the
market”.*®® This dual conception of the role of the state in reconstruction and development is
reflected continually in ANC documents released over the period 1990-1995. The demise of
the Soviet Union and the dysfunctionality of command economies seemed to influence the
ANC’s position on the pace and direction of social and economic change.**® The ANC was
also forced to contend with the remaining members of the apartheid government permitted to
retain their posts under the “grandfather clause” concluded in transitional negotiations. This
clause allowed for members of the NP to remain in the GNU and work under the interim
constitution to govern during the transition period while developing the final constitution for
South Africa.
The ANC seemed more concerned during this time with its social goals than with
developing a comprehensive economic policy package that would support its lofty goals.***
For South Africa, the path of economic liberalization would continue and was further

Lundahl 30.
‘"^Deegan 128.
Deegan 128.
“ ’ Lundahl 28.

61

strengthened by the country’s entrance into the World Trade Organization (WTO) in 1994.
One can only guess that the ANC envisaged strong enough levels of economic growth in the
post-apartheid period which would sustain the RDP’s lofty spending goals.

In order to

achieve these high levels of growth South Africa would have to comply with the ground rules
of the international financial institutions and thus had few options for post-apartheid
economic policy.

For the ANC to achieve its social goals of redistributing wealth and

increasing rights for organized labour whilst simultaneously encouraging foreign investment
would have been a miraculous feat. Some of the priority goals of the ANC as mentioned in
Chapter 3 included advancing the interests of the underprivileged, promoting a labourfriendly regime and reducing social unrest. The most likely way to achieve this delicate
equilibrium between meeting both economic and social priorities would be through a socially
balanced, co-operative, and democratic system of corporatist management as described by
Wiarda. Emerging fi-om workerist roots and dwelling in a formal alliance with labour, the
new government seemingly had little choice in managing industrial relations. The ANC
would be expected to accommodate the strong voice of organized labour and advocate for the
advancement of workers rights through legislation.

Leaving organized labour to

independently battle for progressive labour reforms with capital’s interests was likely
conceived o f as untenable. A neo-corporatist model of managing these tensions seemed the
most obvious path for ensuring the country’s stable future.
Regardless of the difficulties in implementing the RDP and of establishing a
comprehensive system o f neo-corporatist arrangements the ANC was committed to the
transformation process. The commitment to “deepen democracy and ensure grassroots

"^Lundahl 34.

62

participation in the organs of government” by providing mechanisms through which the
labour movement and civil society organizations eould influence the processes of
government was confirmed time and time again in public speeches by government
m i n i s t e r s . M a n y people doubted the ANC’s willingness to share power with either the old
enemy, “big business”, or to bend to the staunch demands of the union movement.
Understandably, making certain that the players upheld their agreements to actively
participate in corporatist arrangements would provide a great challenge for the state.
Nonetheless, the potential for South Africa to reform and progress beyond the horrific
legacies of apartheid remained great. The commitment of the state and key organs of civil
society towards reconstructing the “new” South Africa seemed resolute. In the words of
Nelson Mandela:
“History will judge us extremely harshly if we fail to turn the
opportunity, which it now presents us with, into common good. The
risk of further pain and affliction arising from violence, homelessness,
unemployment or gutter education, are immense. No coimtry or people
can afford the extension of this anguish, even for a day.”

4.8

A new industrial relations system?
The transition to democracy in 1994 held the promise of not only a new society
developing based on principles of equality but also of a reformed industrial relations system
operating in a conciliatory atmosphere of trust and co-operation. Dunlop’s notion of an 1RS
suggests that the ideology of a national 1RS is expected to be compatible with that of the

African National Congress, Ready to Govern. 1992.

63

larger s o c i e t y . T h u s , under the system of governance adopted by the ANC and majority
rule we would expect to see the emergence of a corporatist 1RS.
Dunlop’s presentation of the dynamics of an 1RS over time leads us to ask what
factors would contribute to change the system of industrial relations under apartheid to a
corporatist 1RS under a new, democratic state. Dunlop identifies four key factors which
would likely contribute to changes in the 1RS: 1) the historical period, 2) the sequence of
social changes, 3) the decisions of the industrializing elite, and 4) the process of economic
growth.

With respect to the historical period, the obvious and monumental changes of

ending apartheid and making the transition to majority rule are major factors to consider. In
addition, the implementation of a neo-corporatist model would be consistent with the
implementation of parliamentary democracy and was actively supported by the ILO. The
integral role of labour organizations in ending apartheid would afford organized labour,
under Dunlop’s analysis, a more formal role in political organization, again consistent with
the corporatist m o d e l . T h e political, economic and social “elite” at a general level all
seemed to advocate or at least consent to the corporatist experiment in light of South Africa’s
unique challenges and needs. Finally, the processes of economic development and historical
exclusion from the international community had left the state to contend with strong,
centralized capital interests and an active, though primarily low-skilled, labour force. These
conditions also seemed conducive to the implementation of a corporatist system.
However, Dunlop explicitly notes that an 1RS tends to remain stable over time unless
a major revolution occurs in the greater society. Whether or not South Africa’s negotiated

Dunlop 54.
"^Dunlop 232.

64

transition to democracy would be “comprehensive” enough to reform the 1RS and allow a
corporatist model to flourish remained to be seen.

65

CHAPTER 5

The 1RS 1994-1999

5.1

Introduction
This Chapter sets out to explore the reality of the neo-corporatist experiment in South
Africa. By examining what steps the government took within its first two years in office and
then the apparent shift in policy direction and decision-making, we will have greater insight
into the demise of corporatism in the country. This discussion is followed by a look at the
state of both capital and labour in South Africa, as key parties in the neo-corporatist
experiment, assessing the capacity of both of these parties to contribute effectively in such a
model. In closing, I return to Dunlop’s analysis of important factors to consider for the
reform of an 1RS and identify some determinant factors which have likely contributed to its
demise.

5.2

The first two years
The GNU, formed in 1994, faced many crucial choices in its early days of operation
as the emergent state recognized the imperative not to alienate a previously powerful elite or
a historically deprived majority. The challenge was to rebuild society and avoid social imrest
whilst simultaneously encouraging investment and growth and paying a considerable “debt

66

of gratitude” to the black labour movement.**^ Thus the ANC’s objectives as outlined in the
RDP and the pursuit of a model of neo-corporatism were viewed by the GNU as the
appropriate means to redress the problems of the past. Looking back to Chapter 3, Wiarda
notes that the main elements required for a neo-corporatist model to be successful are 1)
strong, representative bodies able to negotiate, 2) a belief by all parties that the system is fair,
3) a commitment by all parties to the corporatist process, and 4) a strong and neutral role of
the state.
Following quickly on the heels of the ANC’s 1994 election promises for ‘social
partnerships’ was the formal institutionalization of a neo-corporatist arrangement in
NEDLAC. It seemed clear that a pattern of cooperation was emerging, not just with respect
to industrial relations, but throughout South African society as provincial and local bodies
developed forums for negotiation on social issues. As stated by Jay Naidoo, a key ANC
Minister, “the NEDLAC process deepens democracy by bringing the social partners, on an
ongoing basis, into the policy-making process” and this “process offers South Africa a
different path”."^
The creation of NEDLAC was a monumental development as it displayed the
commitment of the GNU to multipartite processes and the incorporation of input from labour,
business and civil society on economic, industrial and social policy. The NEDLAC Act
allowed for representatives from labour, business and five groups representing the concerns
of civil society, including women, youth, civic, rural, and disabled peoples, to negotiate
agreements on policy issues which would then be implemented by the government.

Donnelly, Eddy, “Democratic Corporatism in the New South Africa: Advance or Retreat?,” The State and
Globalization. Ed. Martin Upchurch, (England: Mansell, 1999) 195.
Naidoo, Jay, “Labour rights ‘a must’” Business Day (29 Jan. 1996) 2.

67

Government reasoned that power and control over economic resources in South Africa was
“clearly distributed among these key constituencies” and consensus on policy issues was
viewed as necessary for ensuring smooth relations between the key stakeholders.” * In
addition, creating the perception of a stable labour market was essential for guaranteeing
much needed investment in the country and preventing further capital flight This attempt to
make a clean break from a turbulent past in the transition from authoritarianism to democracy
was also made to ensure that the fragile and relative industrial peace was maintained.
The first ‘success story’ of this approach was the drafting of the new Labour
Relations Act (LRA). The partial text of this Act is included as Aimex 4. This was the first
real example o f a multipartite approach to labour legislation illustrating “the use of
negotiation, mediation, cooperation and peaceful resolution for the sake of public
interests”.” ^ The new LRA was welcomed by COSATU as “a quantum leap forward”,
hailed as one o f the world’s most progressive pieces of labour legislation in terms of its
protections for striking workers, organizational rights granted to unions, and the promotion of
centralized bargaining.’^® The legislation also further promoted codetermination through the
establishment of mandatory workplace forums which met with some controversy.

Some

workers perceived these forums as expanding democracy in the workplace while others
viewed them as largely non-influential with respect to important issues, such as wages.
Industrial relations legislation undeniably bore the imprint of the labour movement’s

Barrett 37.
limes, Duncan, Power and Profit: Politics. Labour and Business in South Africa. (Cape Town: Oxford UP,
1992) 186.
120
Harcourt 8.

121

Harcourt 8.

68

influence however, and the drafting of the LRA was a welcome first step in the
implementation of the ANC’s goals.
Along with widespread acclaim for these advances in establishing and utilizing a
corporatist process was a simultaneous undercurrent of doubt as to the feasibility and
effectiveness of such a system. If agreements could not be achieved in NEDLAC after a
reasonable amount of time was spent on debate, each party was free to do as it saw fit in its
own in te r e s ts .B u s in e s s representatives were comforted by the non-binding nature of
participation in NEDLAC, and although business as a whole was not unified in its response
to the GNU’s approach to codetermination, there appeared a pervasive fear that policy would
become “susceptible to undue pressure from organized labour”.

Employers also worried

that since the top echelon of union leaders had moved off into politics and government there
was a real danger that the unions would lack the capacity and credibility to sell NEDLAC
deals to their members. On the other hand government was concerned that “ a negative
attitude” from the unions indicated a lack of trust in arrangements with respect to
enforcement or policing of agreements.'^'* In its first year of operation NEDLAC hosted
vigorous debates on privatization, social welfare programs, and wage moderation. Late in
1995 a presidential commission on labour market policy met and repeated recommendations
to continue the multipartite processes and develop a formal social accord where employers,
unions and government were involved and committed as equal partners.
5.3

The system unravels

Deegan, Heather, South Africa Reborn: Building a New Democracy. (USA: UCL Press, 1999) 133.
Donnelly 209.
Hawkins, Tony, “The New Apartheid,” Financial Times (South Africa: 1995) 5.
Lundahl 37.

69

Two years after the launching of the RDP much negativity surrounded its lack of
progress. The Ministry of Health had achieved notable success in building hundreds of semiurban health clinics and providing of free health care to pregnant women and children under
six.

The expansion of access to water, electricity, and telephone connections for many

households was also a great achievement of the RDP, although a large proportion of families
could not afford to make utility payments.
The government however, fell drastically short of its target goal of building 300,000
new homes by 1996, with only 30,000 homes completed in the two-year period. In addition,
the R200 million promised to NGOs dropped to R50 million as funds became constrained,
resulting in the collapse of many NGOs whose funding in the post-election period was
primarily sourced through the government.

The slow delivery of funds, hampered

amongst other things by old apartheid-era bureaucratic structures, resulted in a lack of
spending capacity at the local level, and therefore provinces often carried over funds to the
next fiscal year.*^* Fundamentally the RDP resulted in some positive steps in the provision
of basic services but its key targets were not realistic in terms of anticipated investment
levels required to fund the program.

The South African economy did not experience

continued high levels of growth after 1994, and thus government spending and promises
were forcibly scaled back.

Thus, delivering on RDP priorities - the provision o f basic

services, development of human resources, democratization of the state and society, and
increased economic opportunities - was not done as quickly or as comprehensively as the
population anticipated.

Koelble 112.
Koelble 109.
Lundahl 29.

70

Immediately following the 1994 elections the South African economy experienced a
brief “Mandela bonus” as stocks soared, investment increased and exchange rates remained
relatively s t a b l e T h i s period of growth was short-lived however, and the country entered
into an economic crisis by early 1996. Adding serious strains to tripartism, the sharp drop in
the international exchange rate of the rand, capital flight and the declining price of gold soon
became a drag on the econom y.M ega-conglom erates began to unravel their elaborate and
complex bureaucratic structures in mid-1996 in order to encourage outside investment and
the government hurried to reassure both its population and investors that the economy was
under control.'^* The crisis continued to worsen as investment rates dropped. The main
reasons cited as to why investors lacked confidence to invest in South Africa included a
bloated state apparatus, the ANC’s lack of commitment to a viable privatization policy for
state owned enterprises, high levels of crime, government vacillation on economic and fiscal
policy, and low productivity rates.
Within government itself, accusations of corruption became common with ministers
finger pointing and laying blame on provincial mismanagement of fimds and inadequate
accounting methods. Within two short years of taking office the national government made a
decisive public statement announcing that its goals of delivering basic services and
embarking upon redistribution as outlined in RDP would not succeed.

Instead the

government would now focus primarily on encouraging economic growth above all else.'^^

Koelble 114.
Standing, Guy, John Sender, and John Weeks, Restructuring the South African Labour Market: The South
African Challenge. (Geneva: ILO, 1996)136.
"'D eegan 131.
Koelble 114.
Library o f Congress Federal Research Division 15.

71

With that declaration, the RDP office was closed in March 1996 and Thabo Mbeki, DeputyPresident and an avowed critie of RDP goals and strategies, took over the economic policy
reigns in the Department o f Finance. The short-lived RDP was stated to have become “a
victim of international monetary flows, domestic constraints, bureaucratic obstacles, and an
overestimation of the resources available to the South African state and economy.”’^'*
Mbeki was well prepared for his new responsibilities, taking decisive action
immediately upon his appointment.

Hand in hand with the dismantling of the RDP’s

operational structure was the emergence of the government’s new economic strategy.
Growth, Employment, and Redistribution, commonly referred to as GEAR.*^^ In response to
concerns over stagnant economic growth, two separate national budgets had been proposed
in early 1996, one by the South African Foundation (SAF) representing fifty of the largest
business groups in the country and another by COSATU on behalf of the labour
movement.

Growth fo r All, the SAF budget, was based on a neo-liberal framework and its

major policy recommendations were to liberalize the trade and investment regime, deregulate
the labour market, privatize, and drastically reduce the role of the state in the economy. In
contrast. Social Equity and Job Creation, the document presented by COSATU, called for
the introduction of a capital gains tax and a super tax for luxury goods, the redirection of
spending towards social services, encouragement of production for the domestic market and
public/private investment in training p r o g r a m s . T h e government’s response, GEAR, was
presented soon after these budgets and its policies closely resembled those put forward by the

Koelble 116.
South African Government website. “Growth, Employment and Redistribution” ('www.gov.za/GEAR~l 1996.
Lundahl, 30.
Adelzadeh, Ashgar, “Growth and Development,” Against the Current: Labour and Economic Policv in
South Africa. Ed. Jeremy Baskin, (Johannesburg: Ravan Press, 1996) 44.

72

SAF. The key policies outlined in GEAR were supply-side oriented with the central goal of
economic growth. The economic strategy aimed to:
■
■
■
■
■
■

Double annual real GDP growth to around 6 per cent by 2000
Reduce the role of government in the economy
Create a more flexible employment environment
Control inflation
Restructure public assets
Provide tax incentives for small and medium enterprises*^*

After the unveiling of GEAR COSATU stated that it was strongly opposed to the new
government policies.

Unions claimed that they would “put our country, its workers and its

citizens first rather than attempt to copy the failed policies of the IMF and the World
Bank”.'^“
The ANC issued a press release soon after the RDP office was closed flatly rejecting
claims that cabinet changes and the RDP office closure were part of any individual’s exercise
of personal power, particularly referring to the Department of Finance and the new role of
Mbeki in this department. The ANC vehemently stated that Mandela himself had made the
changes acting in the nation’s best interests.*'**

Jay Naidoo, the Minister in charge of

implementing the RDP, faced an onslaught of criticism and doubt regarding the policies
outlined in GEAR and its apparent divergence from the more redistributive policies of the
RDP. Commenting to the press he noted that
“a common economic vision is not based on abstract philosophical
notions...it has to be grounded in fairly concrete programs which
directly and meaningfully impact on the realities experienced by South
Africans...this will only be achieved if each constituency is bold
enough to work towards longer-term targets...and prepared to consider
"^Lundahl 30.
Shilowa, Mbhazima. “Employment Creation” Speech at the COSATU Policy Conference, May 1997.
Congress o f South African Trade Unions, “Protect Our Jobs,” COSATU Press Release. (July 1999)
African National Congress, “Slump spawns labour unrest,” Mail and Guardian. (19 April 1995) 6.

73

where necessary, the need for specific shorter-term trade-offs to achieve
this vision”.

With reference to the global economy, the ANC stated that a proper understanding of a
“given balance of forces is critical in defining the tactics that the liberation movement should
adopt at each stage of transformation” and that this balance of forces is dynamic, influenced
by changing endogenous and exogenous f a c t o r s . T h e party urged critics of GEAR not to
fall victim to a “revolutionary militancy” as the end goals for the transformation of South
Africa remained the same under GEAR as under the RDP. In fact, the GNU argued that the
RDP would remain as a guiding document for redistribution and societal transformation
whilst GEAR would solely direct economic policy. Remaining vocally committed to its
goals to promote societal democracy and encourage equality in all facets of life from
education to basic service provision, the government faced a crucial decision-making point in
early 1996. If GEAR was so controversial, then the question must be asked: why would the
ANC hoist the policy package on the country without debate?
Economic demands and constraints compounded by sluggish growth rates during its
first two years in office likely left some in the government questioning the economic strategy
explicit in the RDP. Noting the high growth rates that were required to sustain government
expenditures under the RDP the focus on concentrated economic growth as outlined in
GEAR seemed a logical route to some government ministers.

Rather than aiming to

redistribute resources and address the vast inequities rampant in South African society,
GEAR would focus on growth which would then likely be followed by a more thorough

Naidoo 2.
African National Congress, Executive Speech, “Strategy and Tactics,” (50* National Conference: December
1997).

74

process of redistribution. As reflected in ANC documents at the time, the ANC did not seem
to perceive this decision to alter economic strategies to become inconsistent with ANC ideals
or election promises.

For government, this decision was a pragmatic, short-term shift in

government priorities that would ensure the economic survival of the country and allow for
ANC goals to eventually be realized. Although many ANC politicians had little to no formal
education, implicit faith was placed in the few colleagues who did have official training in
economics, essentially Deputy-President Thabo Mbeki and Finance Minister Trevor Manuel.
These vocal critics of the RDP publicly stated in numerous press releases in 1996 that
implementing GEAR would finally put South Africa on the “right path” to achieve economic
success. No matter was made of the controversy surrounding the neo-liberal policies of
GEAR and the government did not invite debate on the issue to explore what other economic
alternatives were available.
Admittedly, in choosing a new economic strategy which would encourage greater
economic growth the government was in a bind. In an era of “globalization” where neo­
liberal economic policies are often a necessity for entrance to organizations such as the WTO
and to attract much-needed foreign investment. South Africa’s economic pundits saw little
choice. Thus the promotion of trade and financial liberalization, deregulation, privatization,
and fiscal austerity would be required under a new strategy to encourage foreign investors
and further integrate South Africa’s small, open economy into the international trade and
financial regime.’'*^

ANC Press Statement. Statement on Growth and Development Strategy,
(http://www.anc.org.za/ancdocs/pr/1996/~). 1996.
Lundahl 34.

75

Labour was vocally quite critical of the government’s new “pragmatic adjustments”,
doubtful as to the long-term benefits of the plan and extremely wary of the potential short­
term impact on workers and the poorest segments of the population.

A COSATU

representative stated that “GEAR is not an appropriate economic policy for meeting the
needs of our people” and unions angrily berated the government for backtracking on its
promises to support workers’ rights and labour s t a n d a r d s . L a b o u r argued that the GNU’s
adoption of GEAR was an example of ensuring the primacy of capital’s interests over those
of labour and that the ANC was forgoing the very support of those who put it in power.
The consequences of adopting GEAR as a new economic strategy were not limited to
receiving praise from the business community or invoking the hostility of organized labour.
Ashgar Adelzadeh, a senior economist at the National Institute for Economic Policy, argued
that inherent weaknesses in GEAR’S policies would prove ineffective in meaningfully
transforming the legacies of apartheid and noted that some of the problems were that,
“...it fails to incorporate monetary policy into the overall growth
strategy, (GEAR) adopts fiscal austerity which doesn’t take into account
high unemployment and the failure of the private sector to create
jobs”.'"^^

Hein Marais, another well-known political analyst in South Africa, argued that GEAR’S
anticipated ineffectiveness lay in the fact that poverty is separated from overall economic
policy and treated as an illness rather than an integral part o f South Africa’s version of capital
accumulation.*'*^

Harvey, Ebrahim, “Alliance still going strong,” (Sowetan. 7 October 1999) 9.
Adelzadeh 52.
Koelble 114.

76

Adding to the contentious critiques of the GEAR policies there were also profound
long-term implications from the government’s altered policies.

With respect to

reconstructing society and seeking to reform entrenched inequity, the ANC’s commitment to
redistribution had plainly changed from “growth through redistribution” to “redistribution
through growth”. The adherence to a more conventional, fiscally conservative economic
approach called for a restriction of state interference in the economy and “unleashing the
supposedly (self-) corrective powers of unfettered market processes”.'"*®

This neoliberal

conception of the relationship between the state and the economy favoured an economic
policy which reduced the role of the state in the economy in opposition to the more expansive
RDP which called for active state involvement in redistribution. In addition, the changed
budgetary priorities as outlined in GEAR redirected state resources away from programs of
social welfare and employment creation and towards subsidies for business and increased
spending on national defense. GEAR’S call for the deregulation of the labour market and
liberalization of trade were also based upon the neoliberal framework of economic policy.
The consequences were most severe for labour as sudden exposure to international
competition has resulted in thousands of lost jobs and the promotion of increased labour
flexibility has translated into lower wages and more informal employment.'^®
The adoption of GEAR considerably strained relations between COSATU and the
ANC. Some observers in the labour camp perceived the “series of ‘policy retreats’ as a
fundamental betrayal of the socialist project forged through years of opposition to

Marais 115.
Altman M, An Industrial Strategy for the Clothing Sector. (Cape Town; University o f Cape Town Press,
1994) 18.

77

apartheid”.'^' GEAR inherently weakened labour’s bargaining power and promoted a policy
of wage restraint which had always been an issue of extreme importance for COSATU and
its labour affiliates.

A prime example of the growing discord was the ANC’s threat to

dissolve the formal political alliance (after COSATU staged a one-day anti-privatization
strike) if organized labour failed to accept privatization. Soon after this COSATU largely
abandoned its calls for nationalization and grudgingly signed the National Framework
Agreement providing guidelines for privatization.*^^ Changed spending priorities for the
government were also not supported by COSATU or the SACP and added to the growing
divide between GEAR and anti-GEAR supporters.
Many IR specialists in South Africa anticipated the early dissolution of corporatist
relationships that had been in place only a short while through a close monitoring of the
changes in the political, economic and social spheres.

COSATU repeatedly denounced the

government’s adoption o f GEAR, predicting it would cause irreparable damage and noting
that GEAR had been forced on the country by specific personalities and was ineonsistent
with ANC ideals.*^"* Throughout 1997 NEDLAC reached deadlocks in negotiations over
labour legislation with COSATU emphasizing its opposition to government policy and to the
continuing endorsement of the rights of employers over those of workers.

By 1998

COSATU was refusing to take part in negotiations on the South African budget, the most
central of economic debates. The Deputy General Secretary for COSATU stated that the

D onnelly 218.

Deegan 136.
Pretorius, Louwrens, “Relations Between the State, Capital and Labour in South Africa: Towards
Corporatism?” South Africa: Designing New Political Institutions. Eds. Murray Faure and Jan-Erik Lane,
(London: Sage Publications, 1996) 212.
COSATU. “Preliminary Response to the Government Macro Economic Strategy,” COSATU Press Release.
(14 June 1996)
COSATU. Policy Conference Declaration and Resolutions, 1997.

78

exclusive character of GEAR’S “anti-developmental nature...renders meaningless both
contributions by civil society and the deliberations of the elected people’s representatives”.'^^
Observing the fallout between the ANC and COSATU from GEAR, a prominent journalist
astutely noted, “alliances are not bom in perpetuity and cannot be forcibly held together by
bureaucratic measures”.
The breakdown in relations between the ANC and COSATU was also affected by the
contrast between ANC party doctrines and government policies.

Confusion appeared to

reign within the party as ANC party leaders professed a strong commitment to redistributive
measures through heavy state involvement whilst government officials simultaneously
reassured international financial institutions and business leaders of their support for a
capitalist, ffee-market driven e c o n o m y . T h e support for the interests of capital seemed
concentrated in a core group of government ministers led by Mbeki and Manuel while a more
socialist ideological perspective continued to influence many ANC representatives.'^^ This
internal dissent within the ANC has fuelled much of the controversy which has plagued the
party since its election victory in 1994. Claiming that short-term, pragmatic adjustments
were required to ensure economic preservation of the country remained the justification for
such ideological clashes, while the party still remained committed to the longer-term goals of
the redistribution of wealth, increasing social spending and advocating a greater reform of
capitalist society.'^" This internal conflict within the ANC is made more disturbing given the

COSATU, “COSATU will not participate in 1998 Budget Hearings,” COSATU Press Release. (9 March
1998)
Harvey, Ebrahim, “It’s time for the SACP to step out o f the ANC’s shadow,” Mail and Guardian. (8-14
October 1999) 26.
Library o f Congress 9.
Koelble 166.
'“ Donnelly 196.

79

recent end of apartheid.

The historically stalwart solidarity of the party, epitomized in

Nelson Mandela’s unwavering linkage between his freedom and that of the oppressed
African population, has slowly dwindled.

These policy differences have created various

hostile factions amongst those who were previously united. The internal fragmentation of the
well-populated ANC may have been inevitable but it is doubtful that anyone predicted the
swiftness and hostility that has characterized the process.

5.4

State of capital and labour
In the years since the first democratic elections the major players in the industrial
relations system have undergone changes in their organizational structures, relationships and
publicly stated goals.

Sections previous to this have illustrated the different government

actions and substantive policy changes during the ANC’s first term in office.

What is

essential to an examination o f the success o f the neo-corporatist approach attempted by the
government in its initial years is an understanding of how changes in the capacity of both the
labour movement and capital have altered their respective abilities to both contribute and
function within the system. Thus, a brief examination of both capital and labour in the pre
and post-apartheid period is germane.
Only when apartheid labour practices proved to be inefficient and damaging to
profits did South African business create pressure on the government to institute labour
reforms resulting in meager improvements for those repressed under apartheid.

Capital

formation has always been concentrated in South Africa, with, as an example, six major
conglomerates controlling three-quarters of the market capital quoted on the Johannesburg

80

Stock Exchange in 1995.'^* The historical strength of employers in South Africa renders this
body particularly crucial in determining the success or failure of corporatist arrangements.
And although employers held a strong, concentrated position in South Africa the formal
alliance between the ANC, SACP and COSATU played on the fears of business regarding
labour’s influence on economic policy in the post-apartheid period.

With corporatist

arrangements operating on a voluntary basis the main concern for employers became
ensuring that the policy prescriptions outlined in Growth fo r All were reflected in the
government’s macro-economic strategy.

The evidence o f business’ success in influencing

government policy became clear with the unveiling of GEAR, a testament to the powerful
economic voice of employers.
However, business in South Africa has continued to face challenges even after the
adoption of GEAR.

During the years of apartheid business was largely shielded from

international competition and consequently developed highly complex and convoluted
internal structures.

Under GEAR conglomerates have been forced to dismantle these

complex structures in light o f fierce competition and with the desire to attract foreign
investment.

Also, under apartheid, union militancy and high levels of industrial action

spurred business to act collectively to press for labour reforms in order to protect profits.
This raises the most significant issue with respect to the current state of capital. The current
competitive and uncooperative nature of business in South Africa makes acting or organizing
as a collective body at the national level quite difficult, as illustrated below. Many divisions
have resulted in battles occurring at NEDLAC between business representatives without a

Donnelly 209.
Benner 5.

81

unified position emerging. Rifts now characterize the business community.

The plurality

of voices has resulted in prominent divisions between small-and-medium enterprises (SMEs)
and major conglomerates; between mining and agriculture sectors; and between Afrikaans
and British enterprises.*^

In addition, there is little incentive for business to relinquish

autonomy to a collective, representative organization regardless of the necessity for ensuring
progress in NEDLAC.

Business South Africa (BSA) is the most authoritative central

employer body and claims to represent 80 per cent of all employers and 90 per cent of private
sector formal employment.

Noting its vast membership, the withdrawal of the National

African Federated Chambers of Commerce (NAFCOC), which has been widely recognized
as the “most credible grouping to speak up for black business and its small-scale employers”,
has left BSA open to criticism of existing solely as a voice for whites and big business.
Thus, the business community is marked by fragmentation.

With the fear of labour’s

influence on the ANC diminishing so dissolves an important motivation for cooperation.
Although typically portrayed as highly unified, divisive issues have plagued the
labour movement since 1994.

From the original “brain drain” of union leaders to

government postings in 1994, the labour movement has been said to lack critical aspects of
capacity including leadership, influence and v i s i o n . A l t h o u g h unions have desperately
been trying to prevent South Africa from becoming a depository for cheap Third World
labour amidst persistent unemployment and declining growth, unionization rates have
stagnated. Annex 5 shows that unionization levels relative to the growth of the workforce

163

Sourced from interview data.
Standing 166.
'“ Donnelly 212.
'“ Donnelly 212.
Baskin 31.

82

have remained relatively constant since 1994.'^* Appearing prominently at NEDLAC and at
other national levels, unions appear thinly organized, have few experienced trained
negotiators, and function with a poorly developed infrastructure/^^

Critics observe that

union objectives remain outdated, representatives are often absent and they are rarely
adequately prepared for meetings at NEDLAC. Consequently labour’s response to policy
proposals is often reactive which does not put forth a programmatic vision.

A growing

divide has also emerged between the rank-and-file and labour leadership.

Many

representatives note that there exists remarkably little contact between union officials and
workers in plants.*’® To illustrate, a survey conducted in 1998 amongst COSATU members
revealed that 67 per cent of members did not know what GEAR was and 63 per cent of
workers interviewed knew nothing of NEDLAC.*’ *
Confusion seems to reign in the labour movement with respect to policies and
strategies for codetermination.

Although COSATU policy documents reveal a staunch

commitment to policies supporting “an active, developmental state with the capacity to
intervene effectively in the economy”, national labour representatives have also supported
ANC policies to ‘roll back the state’.*”

In addition, COSATU’s quick acceptance of

privatization was met with outrage by many in the labour movement who perceived
COSATU labour leadership as bending too easily to government requests. In addition to
disagreements over policy many in the labour movement are opposed to the model of
codetermination in operation though NEDLAC.

The South African Municipal Workers

168 Benner 3.
'B a s k in 31.
Sourced from interview data.
Grawitzky, Renee, “Workers do not know what GEAR is,” Business Day. (29 March 1999) 3.
COSATU Executive Committee Statement 1999.
83

Union (SAMWU) voices concern on behalf of many when it advocates “militant, defensive
unionism” rather than cooperation and negotiation with business and g o v e r n m e n t . T h i s
persistent vacillation towards co-determination at the national level is a significant issue and
adds to pressure on NEDLAC labour representatives attempting to enforce agreements
achieved in this forum.

The success of the neo-corporatist model lies with all parties

maintaining trust and a belief that deals reached will be uniformly implemented and
enforced. Thus, growing labour militancy does not bode well for successful negotiation and
compromise.

5.5

The neo-corporatist experiment
As the beginning of this Chapter details. South Africa began to institutionalize a neo-

corporatist model immediately after the first democratic elections in 1994. According to
Dunlop, implementing a changed system of industrial relations would entail a remarkable
revolution in the greater society. As he noted, an 1RS tends to remain stable over time and
requires quite a dramatic shift in ideology and rules to be reformed. The four major factors
mentioned which influence the changing of an 1RS over time are the historical period, the
sequence of social changes, the economic development and growth, and the decisions made
by the industrializing elite. As noted in the preceding Chapter many conditions in South
Africa in 1994 seemed conducive for a corporatist system to take hold. However as this
study has attempted to make evident the neo-corporatist experiment was not successful.
There has been a clear shift in economic policy goals and decision-making processes since
1996. Although the introduction of GEAR was a dramatic turning point for South Africa,

’^Baskin 1996 31.

84

this shift in economic policy cannot solely be blamed for the demise of the corporatist
experiment. Returning again to Dunlop, a further examination of the conditions and factors
surrounding the potential reform of the 1RS provides some insight as to why the corporatist
experiment was not successful. Drawing on the work of Dunlop, what needs to be examined
is whether or not the conditions truly were conducive for transforming the 1RS.
Simultaneously I draw on Wiarda’s work to examine whether or not the conditions were
conducive to the adoption of a neo-corporatist framework
The historical period (the 1990s) in which the “new South Africa” has emerged has
witnessed increased challenges for states with a neo-corporatist m o d e l . T h e growing
economic integration of the world through the processes of globalization has placed
increased pressure on neo-corporatist states to develop macroeconomic policies which are
consistent with the liberal-pluralist policies dominant elsewhere in the w o r l d . T h u s the
pressure to move towards a more pluralist system of industrial relations with a less
interventionist role for the state in directly managing competing interest groups has likely
been a major factor in encouraging the state to abandon its attempt to implement a neocorporatist model. The historical period has therefore likely fostered a process of change of
the 1RS, but not towards the development of a corporatist system.
The sequence of social changes in the 1990s in South Africa can be considered as
supportive for reforming the 1RS and moving towards a new 1RS with a strong role for
labour. Emerging triumphant in the struggle to end apartheid and formally aligned with the
governing ANC, the inclusion of labour in the new 1RS would be central and an important

Kusnet, David and Robert Taylor. “Economic Growth and Social Justice in the Global Economy; Political
Challenges, Policy Choices”. http://www.ipDC.org.uk/download/ippc3.Ddf. IPPC 1998.
Henley 170.

85

part of policy and decision-making in government. However, following the elections in 1994
both COSATU and the ANC were not the same cohesive, unified and strong parties that they
had been in the past years. The eroded unity of these parties seems a consequence of the
leadership vacuum following the elections. Progressively throughout the first term in office
these strong relations between organized labour and the governing political authority only
seemed to deteriorate further, as documented earlier in Chapter 5.
The economic decisions made in the immediate post-apartheid period were largely in
favour of supporting the neo-corporatist system as a means of ensuring much needed
economic success for greater societal transformation.

However, as the country did not

experience the economic growth necessary to fund its social programs there emerged some
concern over the economic priorities of the new government. The high level of concessions
required for a neo-corporatist system to be successful was increasingly hard to meet as the
level of international capital in South Africa increased.
The pressure began to mount against the RDP and business interests encouraged the
government to consider implementing more business-friendly economic policies. Adding to
this pressure was the increased presence of international capital as the country opened its
doors to foreign investors. This increased presence means that participation in a national
system becomes difficult to ensure as international capital has less incentive to submit to a
system which may seem as a hindrance to conducting business. Coercing national actors is a
much simpler task, as international capital can easily pick up shop and move elsewhere rather
than submit to lengthy processes of negotiation within a system of codetermination.
Additionally, the internationalization of production has meant that foreign investors in South

Lundahl 54.

86

Africa could easily shift investment elsewhere if policies in the country were not favourable
for increasing their profits, and thus further pressure has mounted against a neo-corporatist
system.
Lastly, the decisions of the elite, both political and economic, although vocally
supportive of reforming the entire political, economic and social systems in place in South
Africa in the 1990s, have not yet come to fimition. The true commitment behind the decision
to reform the 1RS was seemingly not strong enough in either the political will to implement
the sweeping changes required nor in the genuine commitment to leveling the playing field
between capital and labour to allow for more equity in participating in the formal system of
the 1RS.
Using these four considerations for evaluating the lack of success in transforming the
1RS to a neo-corporatist model provides mixed results. Although some conditions seemed
relatively conducive to supporting the transformation of the 1RS, some conditions were made
to promote a subtler change, but not necessarily the transformative changes required to move
to a corporatist system of relations. Thus, although the conditions for change may have been
present in the South African case, whether or not these would support the implementation of
a neo-corporatist setup must be examined.
During the years of apartheid capital in South Africa had become highly concentrated
in the hands of domestic investors and thus it would have been much easier to implement a
centralized, uniform corporatist framework under these conditions.

As illustrated in this

Chapter, the internal fragmentation of both labour and capital within South Africa following
1994 created conditions which were not conducive to the success of corporatism.

Both

parties had factions which were unconvinced of the long-term benefits of participating in a

87

corporatist framework and this seriously undermined the very nature of corporatist
arrangements.
When the democratic government came to power in 1994 there was widespread
support for overhauling society and ridding the country of all vestiges of apartheid. With
respect to industrial relations, the government seemed wholly committed to implementing a
neo-corporatist model. However, the two key parties involved were not as eonvineed of the
benefits of such an arrangement and much of the tension, distrust and animosity between
“white” capital and “African” labour remained. Thus the “revolution” that Dunlop stated
was required to overhaul an 1RS seems not to have occurred in South Africa.

Instead, many

of the historieal characteristics - fragmentation, inequality and divisiveness - that had marked
South African society under apartheid remained in place following the transition to
democraey. Notably, the GNU did not attempt to implement a new process of economic
development with the dramatic change in political rule to democracy. The revolutionary
transition of legally and politically recognizing equality of the races did not seem to translate
into a fundamental transformation of South African society, that which Dunlop claims would
be required to reform an 1RS. And in response to South Africa's economic woes in 1996, the
government took steps to weaken the corporatist framework that was only tenuously in
operation.

I would argue that these conditions and decisions have undermined the neo-

corporatist model to the extent that it cannot be claimed to realistically be effectively in
operation any more.

The government still claims to be pursuing a corporatist model

however, and prediets the further extension of formal corporatist processes to provincial

88

l e v e l s . A further examination of the recent state of industrial relations however, will
reveal that the neo-corporatist experiment in South Africa has not succeeded.

ANC 1997.

89

CHAPTER 6

Industrial Relations at the Crossroads

6.1

Introduction
The preceding Chapters have provided an examination of the history of the labour

movement in South Africa, a review of the collapse of the apartheid system and a study of
the attempt to pursue a form of corporatism in managing industrial relations in the post­
apartheid period.

Chapter 5 provided a brief summary in its conclusion of some of the

conditions which may have prevented the reform of the 1RS which the ANC had envisioned.
This concluding Chapter reviews why the South African state decided in 1994 to pursue a
system of state management consistent with a neo-corporatist framework, followed by a
summary of the essential components for this type of an 1RS.

Assessing the state of

industrial relations since 1996 will show that the key criteria for success of a neo-corporatist
model, according to Wiarda, have not been met in the South African case. Applying both
Dunlop’s work, which provides criteria for reforming an 1RS, and Wiarda’s work, which
provides criteria for measuring the success of a corporatist system, I argue that the corporatist
experiment has not been successful.

90

6.2

Why corporatism?
The negotiated and relatively peaceful transition to democracy in South Africa was

celebrated as representative o f the new and harmonious means by which the country would
be governed in the post-apartheid period. However, the price for this peaceful settlement was
the extension and rationalization of the capitalist system rather than the overthrowing of the
socio-economic system to replace it with a more socialist oriented regime.'^* For the ANC
the best way of managing capitalism, in light of the need to accommodate strong interest
groups in society, was to develop institutions and to follow an ideological path adhering to a
framework of neo-corporatism.
With the moral imperative to make a clean break from its despotic past, address
redistributive justice and promote productivity and stability, the goal of encouraging social
partnerships was foreseen by the state as the surest way to achieve these goals and
simultaneously strengthen the fabric of democracy.

A corporatist system would seek to

balance power between capital and labour, both of which had considerable strength in 1994.
In addition, the ANC recognized the need to create some level of social harmony and to
prevent the risk of an economic crisis facing the newly emergent state. Commenting on the
African continent as a whole. Hutchful notes that
“state incapacitation, the high level of economic and cultural
fragmentation in African countries and the consequent need for
devolution of power, for consultation, and for social cooperation, would
seem to recommend neo-corporatist frameworks’’.’^^

Donnelly 196.
™ Hutchful, Eboe, “The Limits o f Corporatism as a Concept and Model,” Corporatism in Africa: Comparative
Analysis and Practice. Eds. Julius Nyang’oro and Timothy Shaw, (USA: Westview Press, 1989) 20.

91

It would seem that the ANC pursued a neo-corporatist model for managing state/society
relations out of functional necessity.
It has been implied by some academics however, that the same core group of
government ministers who developed GEAR also initially advocated the institutionalization
of a corporatist model as a means of controlling left-wing labour and limiting debates on
economic policy to mere details.

Because the objective of corporatism is “the stable

reproduction of a determinant structure” the possibility of raising fundamental issues and of
transformative politics could essentially be excluded.**® Adopting a cynical perspective, the
promotion of an institutionalized multipartite forum v/ith organized labour, formally aligned
with the ruling party, could be perceived as a simple means of reducing any threat to political
authority.

6.3

The neo-corporatist model
According to scholars, corporatist ideology is founded on the principle of integration

rather than separation o f the political, social and economic aspects of life and the
involvement of capital and labour in the process of government.’*' The ANC pursued a form
of neo-corporatism whereby the system has relatively free interest groups and non­
authoritarian or limited state activity. As mentioned in Chapter 3, South Africa pursued a
form of corporatism which is typically found in social-welfare oriented countries with
economically based interest groups directly brought into the decision-making machinery of
government. This formal incorporation of interest groups into the processes of government.

Hutchful 24.
Salamon, Michael, Industrial Relations: Theory and Practice. 3’^'*ed. (Europe: Prentice Hall Europe, 1998)

50.

92

characterized by compromise and peaceful negotiation, is the key characteristic of neo­
corporatism in contrast to a more non-interventionist, disengaged approach that is more
characteristic of a liberal-pluralist system/
Key characteristics, noted by Wiarda, of a corporatist model are a strong, directing
state, restrictions on interest group freedom and activity, and the incorporation of interest
groups into the state s y s t e m / T h e four major functions for interest groups in this system
are representation, deliberation, regulation, and implementation/®"* For the neo-corporatist
model to be successful and effective certain settlements and actions are required from the
three major players: capital, labour and the s t a t e / I m p o r t a n t concessions from the major
players are as follows:*®^
Capital
Accession to key economic demands of labour
Consultation on industrial policy
Representation on responsible bodies
Labour
Acceptance of basic political and economic institutions of capitalist society
Limitation of its political perspectives to reformism
State
Enhancement o f its supervisory, regulatory and extractive functions
Ideological claim to arbitrative neutrality

Any o f these players has the ability to undermine the efficacy of this model through not
fulfilling their specified role within the system.

Wiarda 22.
Wiarda 8.
Adams 20.
Hutchful 24.
Pretorius 204.

93

6.4

The reality of corporatism in South Africa
It has been noted that many of the socio-economic conditions conducive to success

were missing in the South African experiment, although Baskin noted, “it is a path-breaking
attempt to apply tripartite and co-determinationist institutions to a developing country, a
route unprecedented”.**’ These conditions were noted previously in Chapter 3. Although on
a surface level many of these conditions appeared to be present, it seems that the operational
reality was quite different, and that the conditions mentioned by Wiarda for measuring the
success of corporatism, were not achieved. Some have argued that a key weakness in the
South African case was that the social contract was not extended to include seats on health,
education and other social boards and that the model merely focused on industrial and
economic forums.*** As well, some have claimed that there was an absence of any real
unifying cultural homogeneity within the system citing ethnic and historical factors. These
variances in culture, ethnic, and socio-economic background also encompassed the wide
range of ideological perspectives formally present in society at the 1994 elections. What is
said to often emerge when corporatism arises from such non-hegemonic foundations “is
ideological monism, a grandiose, exclusive, official ideology whose neo-corporatist rhetoric
is frequently at variance with its actual practice”.**^ This claim may well be substantiated by
the South African case whereby the state advocated strongly for the establishment of a
corporatist system yet did not take the extensive steps required to ensure the success of the
system.

Baskin 38.
Wiarda 120.
Hutchful 28.

94

Additionally,

Wiarda’s other important factors which

concern the

actual

commitment, composition and capacity of the main actors in the system were not optimal for
the successful implementation of a neo-corporatist model. Marais noted that the key players
in the system all voiced divergent interests and expectations of what the system was geared
towards or capable of accompl i shi ng. Capi t al , for the most part, favored participation in a
social contract as it was perceived that only moderate costs would accompany involvement
and that industrial stability would be ensured as the scope for economic debate was
inherently limited within such a model. Capital also lacked a strong collective coalition for
representation at NEDLAC and largely deserved accusations leveled against it as being
dominated by white big business. Labour, on the other hand, was extremely hesitant towards
the model of codetermination; some unions favoured more militant, oppositional unionism
while others preferred the cooperative, peaceful instruments of negotiation offered in a
corporatist setup.

With a large proportion of union leaders moved off into government

positions and substantial restructuring of the state underway, labour also had to contend with
challenges of capacity and representation.
Not only were labour and capital dealing with issues of unity and capability necessary
in a neo-corporatist model, but also the “new” South African state was undergoing
substantial internal restructuring and organization. The unwarranted optimism of many ANC
government ministers sharply contrasted with the brutal reality of the challenges facing the
country coupled with a lack of state resources and widespread bureaucratic inexperience.
More importantly is that the ruling party had to contend with the formidable task of
transforming a culture of resistance, amongst ANC officers, to a culture of governance.

Marais 230.

95

These arduous responsibilities left the state relatively incapacitated to take on the
interventionist role required of it under neo-corporatist model.
The questionable capacity of all three key parties in this model was exacerbated by
the ambivalence of the bodies towards codetermination.

Without all parties wholly

committed to the system, the concessions required for the process to be successful were
unlikely to ever be realized. Implementing a corporatist 1RS requires more from the state
than establishing an institutional forum for negotiation; what is needed is a thorough
commitment to achieving a balance of power between capital and labour in society along
with greater economic democracy. In South Africa today little more than NEDLAC remains
evident that a neo-corporatist system was pursued.

6.5

The demise of corporatism
I argue that South Africa’s attempt to pursue a neo-corporatist system of managing

state/society relations has not been successful. Noting that numerous conditions typically
present in a neo-corporatist system are absent in the South African case, governmental
decisions have also played a large role in its demise.
The weakened capacity of organized labour in the post-1994 period has left labour
largely unable to exploit the opportunity of corporatism. Internal disorganization, scarce
resources, and confusion over policy perspectives have left COSATU and other labour
affiliates unable to articulate comprehensive strategy and policy alternatives at NEDLAC. In
addition to this, it seems clear that frequent absenteeism, a lack of preparedness and a
tendency to make use of dogmatic rhetoric has continually weakened labour’s already

Donnelly 208.

96

dwindling clout at the bargaining t a b l e A d d i n g to this, the strategic alliance between the
ANC, the SACP and COSATU has inherently limited the ability of organized labour to argue
in open opposition to government policy.

This alliance has left COSATU open to

accusations of government co-optation or muzzling from other labour organizations and
various ‘left’ bodies. Regardless of these potential accusations, COSATU’s well-vocalized
belief that “the ANC is the only organization in the country that is strategically best placed to
deliver a better life for all our people” seems to be largely representative of the majority
opinion within the populous.*^^ This overwhelming loyalty to the ANC remains strong as the
belief prevails that the liberationist ANC will eventually deliver on its unwavering promises
to free the population from the legacies of apartheid.
Another negative impact on the success of the neo-corporatist model is the accusation
that the operation of NEDLAC entrenches a labour aristocracy which is non-representative of
the largely rural, female and formally unemployed population. This lack of full support for
the multipartite forum only serves to undermine its legitimacy. How the economically under­
privileged and rural poor fare is a powerful consideration in the South African case, as
Dunlop notes that measuring the achievement of a corporatist system must be measured
against the reasons for its i mp l e me n t a t i o n . Ad d i n g to this, although NEDLAC functions
as a multipartite body, the disintegration of the NGO sector has left the diverse organs of
civil society struggling to participate effectively in the neo-corporatist framework.
If having internal capacity issues and widespread disorganization were not enough to
negate any positive role labour had in the neo-corporatist model then the government’s

Barrett 10.
COSATU, “Millennium Message,” COSATU Press Release. (22 December 1999).
Donnelly 220.

97

adoption of a neo-liberal framework would do the trick. It seems that the architects of GEAR
misled supporters of the ANC by promoting an economic strategy that would fundamentally
be unable to address the issues and goals outlined in the RDP. This change of policy, to
embrace economic growth ahead of social justice and redistribution, stands in stark contrast
to the historically strong socialist-oriented policies of the ANC. This transition is even more
alarming considering that Mbeki himself has admitted to being a ‘Thatcherite’ and that to this
day there exists “no international example where neo-liberal adjustments of the sort
championed by GEAR have produced a socially progressive outcome”.
Regardless of whether or not GEAR was ever intended to address the rampant
injustice in South African society, government’s changed perception of labour under a neo­
liberal strategy is key to this discussion. Under neo-liberalism, trade unions are generally
seen as barriers to the achievement of government objectives and thus need to be curtailed
through legislation.

It is well recognized in the literature on industrial relations that in

order for a neo-corporatist system to operate effectively, economic actors must be bound by
social duties and the state needs to play a lead role in the regulation of the economy.
Therefore, Wiarda concludes, “clearly the triumph of neo-liberalism and its free market
ideology runs counter to the system of controls, both political and economic, associated with
corporatism”.*^’
In addition to the controversy over GEAR’S economic tenets, the process by which it
was implemented seemed clearly to subvert the fundamental goals of the neo-corporatist
model.

Mandela himself admitted that the ANC never consulted any relevant bodies

Marais 117.
Salamon 51.
Wiarda 172.

98

regarding GEAR and in fact only consulted NEDLAC after the decision and public
announcements had been made/^^ This ‘slipping in’ of substantial, controversial economic
policy without submission to NEDLAC for debate has become a thorn in the side of the
ANC. The government has also entered into many bilateral agreements with business (and
some with labour) and has thus retreated from the pretence of being a neutral adjudicator of
conflicts between capital and l a b o u r . I t seems that the government has met a majority of
demands made by business, with small concessions permitted to subdue opposition from
labour and other minority groups.^®®
Another justification for the claim that corporatism has not been successful in South
Africa is the current polarized and antagonistic positions occupied by organized labour and a
faction of the ANC contingent on one hand and the government and capital on the other.
Negotiations on social and economic policy are now characterized by distrust and labour’s
perception of the ideological betrayal by the governing faction of the ANC has left
discussions rife with accusations and hostility. COSATU’s leaflets now describe job losses
as “a blood bath and massacre of workers by greedy bosses bent on throwing more workers
into the streets to face poverty”, which only serves to encourage rank-and-file militancy and
allegations of industry-wide promotion of apartheid economics.^®* The general levels of
shop-floor dissent are not only in protest to state policy and inaction but also aimed at
COSATU leadership which is often characterized as being too friendly with government
officials, extremely acquiescent to their demands, and out of touch with working conditions

Marais 160.
Donnelly 219.
200
Donnelly 221.
^“‘Congress o f South African Trade Unions, “Protect Our Jobs,” COSATU Press Release. (July 1999)

99

of the average employee. All of these factors combined with sluggish economic growth have
resulted in a dramatic upturn in industrial action which has only aggravated the possibilities
for labour to bargain efficiently. The atmosphere of compromise and negotiation, which is
required for corporatism to function effectively, is undermined by continuous widespread
strike action.
Lastly, and most importantly, is the condition of the South African people as a whole.
A lack of substantial improvement in alleviating poverty, particularly the inequality of
poverty and well being, is illustrated in Annex 6 and 7. Although the data presented in these
two tables may not present an immediate picture of extreme poverty, the high levels of
inequality that persist in South Africa are not conveyed in these simplified indicators.
Researchers note a widening gap in racial groupings in relation to economic prosperity, with
Africans still representing the most impoverished racial grouping.^®^ Although indicators
may show small improvements in levels of literacy and reduced infant mortality along with a
substantial increase in GDP per capita, the majority of South Africans have not experienced
these improvements in their lives. What is important to be considered is that the overall
living conditions in South Africa have not improved substantially for the majority since the
end of apartheid, and I do not think that the current policies put forth by the government will
improve this situation. Critically, the economy is still very much in the hands of a rich
minority and “this legacy (apartheid) continues to further constrain the choices and efforts of
I 203
the ANC to economically liberate its people from all forms of social ills”.^

6.6

Where are we now?

^ United Nations Development Programme, South Africa Human Development Report, 2000.
^“^Mahlangu, Brian and Sandile Gwexe, “Unlocking our wealth,” Sowetan. (7 October 1999) 8.

100

As the discussion in this Chapter has illustrated, the attempt to pursue a neocorporatist system in South Africa can only be classified as unsuccessful. As organized
labour has struggled in the post-apartheid era to reconstruct its collective representation to
contend with the new challenges in a democratic system, its internal strength, capacity and
bargaining power have all weakened. Unable to contend with its articulate, well-resourced
and highly experienced counterparts in the business community, labour has been unable to
participate in and contribute to policy-making debates with any substantial impact. Rather
than having a situation whereby the parties are both active and equally strong the role of
labour in the South African experiment seems to be one of merely observing the process of
change.
Indeed, with the increased dissent between the rank-and-file and union leadership,
periods of dramatic industrial action, and frequent public episodes of in-fighting within
unions themselves, it would seem that the fragmentation of organized labour would be a
challenging issue even if the rest of the system was intact and working under ideal
conditions.

Adding this to the atmosphere of distrust and antagonism characterizing

industrial relations and labour’s belief that the government has acceded to the demands of the
business community only serves to clarify the reality that corporatism is not functioning in
South Africa.
In addition to this inoperable state of the corporatist experiment, the momentum to
improve or reform the system of neo-corporatist relations seems to be non-existent insofar as
the government is concerned. Government statements and actions indicate there is no
recognition that major problems exist except for the increasingly ‘intolerable’ actions of
labour. Government has responded with little sympathy to strike action and perceives that

101

criticisms emanating from labour are a result of the unions’ non-acceptance that “ideal
reforms” reflected in ANC policy had to be pragmatically adjusted to the reality of certain
economic factors?®"^ And the pervasive perception that the emerging black bourgeoisie
represents a growing middle class supports the belief that the system is actually working. As
an article in the magazine World Trade and Investment stated, “we must remember that black
economic empowerment succeeded because it was just”, highlighting the conviction that this
noble goal has de facto been achieved.^^^ With the new economic elites advocating stronger
cracking down on union action, critics speculate that the government may resort to more
conservative and possibly authoritarian measures in order to curb protest.^*^^ With another
term in government secure and no reasonable threat to the political dominance of the ANC,
reform of the neo-corporatist model is not likely to occur and what is more likely is its
dissolution.
What now exists in South Africa points to the likely adoption of a more liberalpluralist model of industrial relations. If the alliance between the ANC, SACP and COSATU
dissolves, which is where things seem to be headed, this scenario becomes even more likely.
Allowing interest groups to battle independently outside of state machinery will create a
system of industrial relations in South Africa which looks similar to Western states. This
model of industrial relations would be ideologically consistent with Mbeki’s recent calls for a
more “democratic” society, where no specific interest group has preferred status. As the
power of international capital increases, the ability of labour to secure labour-friendly
legislation or to lobby for greater social spending will diminish. And if the government does

^“^Donnelly 191.

Sceales, Ted, “From Black to African Empowerment.” World Trade and Investment. (Vol. 3. June 1998)

22.

102

not opt for increased social spending and instead continues on its path of fiscal conservatism
and increased military expenditures, as was evident in the 1998 national budget, levels of
poverty are likely to increase.
Would things in South Africa be better now if a neo-corporatist system had in fact
been successful? The neo-corporatist experiment in South Africa would have ideally offered
a balanced approach to policy making, meeting the needs of both capital and labour, in
pursuing the equitable transformation of society. As previous sections have stated however,
many of the conditions necessary for the success of this model were not present. What needs
to be considered though is whether the success of a neo-corporatist system in South Africa
would have offered the possibility of a greater transformation of society than has happened
since 1994.
The inherent scope of a neo-corporatist framework limits debates on the economy and
social policy to mere details of the greater system which essentially precludes the possibility
of transforming the system. Entering into this system only offered labour in South Africa the
ability to formally negotiate industrial policy without discussing the greater transformation of
society. With the socialist-oriented ANC in power however, this was not considered a cause
for concern until the introduction of GEAR. Once tied into a co-determinationist structure
and locked into legislated agreements, organized labour was essentially forced to swallow
GEAR and negotiate within its narrow, pro-capital scope. The formal alliance with the ANC
has provided an added burden as direct opposition to and condemnation of government
policy would be perceived by all of as labour talking out of two sides of the same mouth.

^ Marais 233.

103

Other limitations of the corporatist model include the exclusivity of corporatism as
only specific interest groups are invited to participate in the framework, at the governments’
invitation. Thus, only certain representation is afforded to civil society and the system is
therefore often claimed to only be representative of a minority of the population. The neocorporatist framework, although multipartite, allows for tripartite domination in relevant
areas of political competition and does not allow for other parties to be included in the
decision-making process.^®’

The consequences of this arrangement can be very severe,

especially when implemented in a ‘developing’ country with a large proportion of the
population unorganized or unemployed and thus underrepresented at the bargaining table.
This type of arrangement would be more functional if organized labour was merely pursuing
an agenda of workers’ interests or ‘populist unionism’, as is more typically found in
Scandinavian countries.

However, African unions operate in countries with serious

economic and social imbalances and they “cannot secure rights, wages, or conditions of
employment while the majority of working people of these countries have not been
unionized, are unemployed and living in desperate poverty”.^^^*
With the government pursuing a neo-liberal agenda, more concerned with economic
growth rather than social or civil rights, the battle for social justice and an equitable
redistribution of wealth lies with the organs of civil society.^®^ In a corporatist framework
then, with unions being the organs of civil society with a seat at the decision-making table,
unions are forced to choose between “developmental unionism” concerned with the interests

Pretorius 202.
^ Keet, Dot, “Labour Issues in Southern Africa: Critical Choices for Trade Unions,” Prospects for Progress:
Critical Choices for Southern Africa. Ed. Minnie Venter. (Cape Town: Maskew Miller Longman Ltd., 1994)
128.

104

of greater society or a more “sectional unionism” concerned with the rights of organized
l a b o u r . ^ I f labour adopts a narrower sectionalism within a neo-corporatist regime the
responsibility for pursuing societal transformation falls to NGOs and other bodies who also
face severe capacity and funding issues.

In such a short time we see the priority of

addressing the legacies of apartheid once overwhelmingly embraced by the ruling party now
reduced to the priority of struggling NGOs.
But why is it the case that corporatism did not take hold in South Africa despite the
ANC’s praising of its utility and potential for transforming society? According to Dunlop,
“the major characteristics of a national industrial relations system appear to be established at
a relatively early stage in the development of a country...(and) appear to retain these
characteristics despite subsequent evolution.”^’^ Thus, barring a violent revolution in the
greater society, an 1RS is unlikely to be reformed in its fundamental nature. Although South
Africa experienced a tremendous transformation in overthrowing the apartheid regime, it
would seem that many aspects of the old regime remained in place. The political changes
that occurred in 1994 were primarily a transfer of political authority to majority rule. The
locus of power, in the hands of white corporate interests, has not experienced a substantial
transformation and has in fact been reinforced as a result of the government’s economic
policies. Although South African society underwent a pivotal and substantial revolution in
demolishing social apartheid, the economic and industrial relations systems have not
experienced similarly critical changes. Drawing from Dunlop’s work then, it can be said that

^ Mamdani, Mahmood, “Democratic Theory and Democratic Struggles,” Démocratisation Processes in
Africa: Problems and Prospects. Eds. Eshetu, Chloe and Jibrin Ibrahim, (Senegal: CODESA, 1995) 43.
Jeremy Baskin coins these terms in his work cited in the Bibliography.
Dunlop 227.

105

a greater reformation of society and the sub-systems within it would have been required to
fundamentally alter the historical 1RS in South Africa and to successfully implement a neocorporatist model. In hindsight, the ANC would had to have struggled against the advice of
the international community to undertake sweeping reforms and to make substantial changes
to implement the changes detailed in core ANC policy documents, remaining committed to
reforming society along corporatist lines. On reflection, a more ‘revolutionary’ revolution
was required.
The possibilities for reforming the neo-corporatist system and refocusing the state’s
agenda to again place the goals of equality and justice ahead of economic growth exist.
However the government would need to be committed to redistribution, resist deregulation of
the labour market and regain credibility with both capital and labour through a more neutral
and less-compromised stance. Employers would need to submit to a more collective body
and include black business to deal with fragmentation and would need to address the
political, moral and economic imperatives to redress the historical inequity in South African
society. Union leadership must become more organized, strengthen leadership capabilities,
retain union membership levels and seek to influence the state through becoming more
independent of its political affiliation with the ANC and SACP.^'^
The corporatist experiment was short-lived and new arrangements are emerging,
rooted in a more pluralist perspective, which is inconsistent with neo-corporatist ideals.
However the neo-corporatist framework exemplified by NEDLAC with the expansion of this
at provincial levels, still exists. The current system places labour in a dangerous position.
Not only is organized labour tied into an alliance with the ruling political party but it is also

Donnelly 220.

106

bound to the neo-corporatist framework through participation in NEDLAC. With the ANC
pursuing a political agenda at odds with both the developmental and workerist visions of
COSATU, and with the SACP essentially defunct, labour faces dim prospects for advancing
its agenda within this tripartite political alliance.

And again, with the majority of the

populous remaining loyal to the ANC and stagnating union membership, little hope exists for
organized labour to operate successfully on its own outside of this political alliance.
Continuing to operate within a defunct neo-corporatist model also severely restricts the gains
that labour will be able to achieve on behalf of its membership and greater society.
Negotiating with a pro-business government and a competitive business community leaves
labour to discuss minute details within NEDLAC, unable to contribute to discussions on
broader economic policy. This risky situation for labour in South Africa, struggling to act
within a weak neo-corporatist framework and to challenge state rhetoric, is of grave concern
if labour hopes to retain its historic role of fighting on behalf of the oppressed majority.

107

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112

ANNEX OF FIGURES AND TABLES

ANNEX I: Income Inequality bv Sector, South Africa 1985
Source: Wilson and Ramphele 56.
AVERAGE EARNINGS (current Rands per month)
White
African
1432
Banking
655
1307+
Central Government
480
1833
Universities
472
1848
Manufacturing
468
1600
421
SA Transport Services
1807
384
Construction
1675
327
Mining and Quarrying

ANNEX 2: Income Inequality, 1980
Source: Wilson and Ramphele 20.

In co m e by c o lo u r c a s te , 1980

P o p u la tio n by c o lo u r c a s te , 1980
15%

3%

3%

24.3%.

64.9

□ Asian
■ African
□ Colored
□ White

□ Asian
■ African
□ Colored
□ White

7.2%

73%

ANNEX 3: Human Development Indicators and Government Spending on
Social Services, 1990-1998
Source: United Nations Development Reports 1992-2000.

Education expenditure (as % of GDP)
Health expenditure (as % of GDP)
Life expectancy at birth (years)
Adult literacy (%)

1990
4.6
0.6
61
70

1994
6.0
3.2
62.2
—

1998
6.8
—

64.1
81.8

113

ANNEX 4: Labour Relations Act, 1995
Source: South African Government Gazette
OFFICE OF THE PRESIDENT

No. 1877. 13 December 1995

NO. 66 OF 1995: LABOUR RELATIONS ACT, 1995.
It is hereby notified that the President has assented to the following Act which is hereby
published for general information:No. 66 of 1995: Labour Relations Act, 1995.
ACT
To change the law governing labour relations and, for that purposeto give effect to section 27 of the Constitution;
to regulate the organizational rights of trade unions;
to promote and facilitate collective bargaining at the workplace and at sectoral level;
to regulate the right to strike and the recourse to lockout in conformity with the
Constitution;
to promote employee participation in decision-making through the establishment of
workplace forums;
to provide simple procedures for the resolution of labour disputes through statutory
conciliation, mediation and arbitration (for which purpose the Commission for Conciliation,
Mediation and Arbitration is established), and through independent alternative dispute
resolution services accredited for that purpose;
to establish the Labour Court and Labour Appeal Court as superior courts, with exclusive
jurisdiction to decide matters arising from the Act;
to provide for a simplified procedure for the registration of trade unions and employers'
organisations, and to provide for their regulation to ensure dem ocratic practices and proper

financial control;
to give effect to the public international law obligations of the Republic relating to labour
relations;

114

to amend and repeal certain laws relating to labour relations; and
to provide for incidental matters.
(English text signed by the President. Assented to 29 November 1995.)
BE IT ENACTED by the Parliament of the Republic of South Africa.

ANNEX 5: Unionization Levels, 1994-1998
Source: Baskin 1996, 12.
7000000
6000000
5000000
4000000
3000000

2000000
1000000

m

I■ ■ ■ ■

J

M

«

□ Total Union
Membership
■Workforce
Numbers

ep

ANNEX 6; Comparative Social Indicators, 1994-1999
Source: United Nations Development Program; Human Development Reports.
INDICATOR
HDl rank
Real GDP per capita
(PPP/USD)
Life expectancy at birth
Adult literacy
Infant mortality per 1000
Access to safe water (%)
Population living below $2
/day (USD: Int. Poverty
Line)

1994 REPORT
(1992 Data)
93
3885
62.2
80%
53
70%
**

1999 REPORT
(1997 Data)
100
7380
male: 10,216
54.7
84%
50
59%
50.2%

female: 4637

115

ANNEX 7: Human Development in South Africa
Source: UNDP, SA-HDR 2000.

Human Development in South Africa: A B rief Glimpse
. .although South Africa is an upper-middle-income country in per capita terms, most
households experience either outright poverty or vulnerability to poverty. It was found that:
■ 18 million people live in poor households which earn below R352.53 per month, per
adult;
■ 10 million people live in ultra-poor households earning less than R193.77 per month,
per adult;
■ 45% of the population is rural, but 72% of poor people live in rural areas;
■ 71% of people in rural areas fall below the poverty line
■ 3 in 5 children live in poor households
■ 61% of Africans are poor compared with 1% of whites”
“...the growing inequality between rich and poor in the provinces is blurred in the aggregate
indicators ...South Africa is laesins in poverty alleviation... inequality in South Africa is among
the highest in the world... ”
“Comparisons o f inequality between races in South Africa reveal that, measured by the Gmzcoefficient. the say between white and African is increasins. ”
“Remarkable though South Africa’s road to transformation has been, all the indicators reveal
the need for an acceleration o f the pace o f development for the poorest i f the gains achieved
through political and institutional transformation are to transcend the legacy o f apartheid. ”

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