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Trade Union Investment Schemes: a Blemish on the Social Movement Unionism Outlook of South African Unions?

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Trade Union Investment Schemes: a Blemish on the Social Movement Unionism Outlook of South African Unions? View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by South East Academic Libraries System (SEALS) TRADE UNION INVESTMENT SCHEMES: A BLEMISH ON THE SOCIAL MOVEMENT UNIONISM OUTLOOK OF SOUTH AFRICAN UNIONS? A thesis submitted to Rhodes University in fulfilment of the requirements for the degree of MASTER OF SOCIAL SCIENCE of RHODES UNIVERSITY by MELIKAYA RUBUSHE JULY 2009 ACKNOWLEDGEMENTS Acknowledgements and a deep sense of appreciation go to everyone who has made it possible for me to complete the project which I started in earnest in 2005. I am not in a position to mention everyone here so I’ll just focus on the following persons: Dr Gilton Klerck, my supervisor To you Gilton, for being patience personified, I say thank you very much. Your guidance was the difference between my completing this project and giving up. Your insight was the kind of stimulation one needed for a project like this. I am a better person as a result of my having had the honour of spending time with you. Mr Nyanisile Jack You planted the seed for my now undying desire to explore the field of knowledge more. Struggling through the dissertation I cursed taking your advice to study by research, but I have come to appreciate the reason you gave for the advice. Mr Gwede Mantashe Mqwathi, I will always treasure the 5 hours I spent with you at your home in your rural Cala. The contacts you gave me, the doors that opened at the mere mentioning of your name. I am very grateful. NUM and MIC Eddie Mojadibodu, Thenji Mlabatheki and Paul Nkuna, thank you very much. Dr Dale, T McKinley You honoured all your undertakings in relation to my many requests to you. Thank you very much. My family I always believe that my sisters, Nonkosi and Gcotyelwa, are proud of my every achievement and, together with my wife, Noloyiso, my kids, Mvuyisi, Zenande and Mlibo, were the wind beneath my wings as I sought to soar to greater heights through this project. ii Dedication My late father, Bhunga; my late mother, No-Manage Feziwe, and my late brother, Vusumzi Gladman. They say it takes a village to raise a child but I am sure that by the time the village began its work on me, you guys had already given me the desire to be a person of integrity and character. iii Abstract South African trade unions affiliated to Congress of South African Trade Unions (COSATU) have taken advantage of the arrival of democracy and newly found opportunities available through Black Economic Empowerment to venture into the world of business by setting up their own investment companies. The declared desire behind these ventures was to break the stranglehold of white capital on the economy and to extend participation in the economic activities of the country to previously disadvantaged communities. Using the National Union of Mineworkers and the Mineworkers’ Investment Company as case studies, this dissertation seeks to determine whether unions affiliated to the Congress of South African Trade Unions (COSATU) are advancing the struggle for socialism through their investment schemes. Secondly, the dissertation determines whether, in the activities of the schemes, internal democracy is preserved and strengthened. The theoretical framework of this dissertation emerges from arguments advanced by Lenin and Gramsci on the limitations of trade unions in terms of their role in the struggle against capitalism. In addition, the argument draws on the assertions by Michels regarding the proneness of trade union leadership to adopt oligarchic tendencies in their approach to leadership. Of interest is how, according to Gramsci, trade unions are prone to accepting concessions from the capitalist system that renders them ameliorative rather than transformative. Drawing from Michels’ ‘iron law of oligarchy’, the thesis examines whether there is space for ordinary members of the unions to express views on the working of the union investment companies. By looking at the extent to which the investment initiatives of the companies mirror the preferences of the ordinary members of the unions, one can determine the level of disjuncture between the two. The study relies on data collected through interviews and documentary material. Interviews provide first-hand knowledge of how respondents experience the impact of the investment schemes. This provides a balanced analysis given that documents reflect policy stances whereas interviews provide data on whether these have the stated impact. What the study shows is a clear absence of space for ordinary members to directly influence the workings of union investment companies. It is also established that, in their current form, the schemes operate more as a perpetuation of the capitalist logic than offering an alternative system. iv CONTENTS PAGE Acknowledgments ii Dedication iii Abstract iv Table of contents v - viii Acronyms xi – x List of tables xi Introduction 1 - 12 Introduction 1 - 3 Scope of the research 3 - 4 Context of the research 4 – 5 Goals of the research 5 – 8 Research methods 8 – 9 Summary of chapters 9 - 12 Chapter 1: Social-Movement Unionism and Trade Union Investment Schemes 13 1.1 Introduction 13 - 14 1.2 A brief look at the identities of different trade unions 14 - 20 1.3 COSATU and social-movement unionism 20 1.3.1 The expression of internal democracy 20 – 23 1.3.2 COSATU and working class politics 23 - 29 1.4 Trade union investment schemes 29 1.4.1 Context of investment schemes 29 – 31 v 1.4.2 Investment initiatives 31 – 35 1.5 Are union investment schemes compatible with social-movement unionism? 36 1.5.1 Can unions advance socialism through investment schemes? 37 – 42 1.5.2 Is internal democracy still alive? 43 1.6 The central arguments of the thesis 44 – 45 1.7 Conclusion 46 - 47 Chapter 2: Methodology and Research Design 48 2.1 Introduction 48 2.2 Problem statement 48 – 49 2.3 Aims of the study 50 2.4 Limitations of the study 50 – 51 2.5 The value of the study 51 2.6 Research design and methods 51 – 52 2.6.1 Interviews 52 – 55 2.6.2 Other documentary sources 55 2.6.3 Sampling 56 – 57 2.6.4 Profiles of the respondents 57 – 64 2.7 Data analysis 64 - 65 2.8 Ethical considerations 65 – 66 2.9 Challenges encountered during the research 66 – 68 2.10 Conclusion 68 Chapter 3: A Profile of the National Union of Mineworkers and the Mineworkers Investment Company 69 3.1 Introduction 69 3.2 Profile of the National Union of Mineworkers 70 3.2.1 History of the National Union of Mineworkers 70 - 79 3.2.2 NUM and South African politics 79 – 82 3.2.3 NUM and socialism 82 – 86 3.3 The Mineworkers Investment Company 87 vi 3.3.1 A brief history 87 – 89 3.3.2 Benefits profile 89 - 90 3.3.2.1 Mineworkers Development Agency 90 – 91 3.3.2.2 The JB Marks Education Trust Fund 91 – 95 3.3.2.3The Elijah Barayi Memorial Training Centre 95 3.4 Governance of the company 95 – 97 3.5 The MIC and seed capital, governance and enrichment 97 3.5.1 Seed capital 97 - 98 3.5.2 Enrichment of individuals 98 – 99 3.5.3 Governance of the company 99 –100 3.6 Challenges and plans for the future 100 - 101 3.7 Conclusion 101 - 102 Chapter 4: Trade Union Investment Schemes and the Struggle for Socialism 103 4.1 Introduction 103 – 104 4.2 Union investment schemes and the struggle for socialism 105 4.2.1 Defining socialism 105 – 108 4.2.2 Investment schemes and the creation of wealth 108 – 112 4.2.3 Investment schemes and the collectivisation of wealth 112 – 118 4.3 Worker control 118 – 127 4.4 Conclusion 127 - 130 Chapter 5: Union Investment Schemes and Internal Democracy 131 5.1 Introduction 131 – 133 5.2 MIC and local structures of NUM 133 – 138 5.3 Preferences of ordinary members 138 5.3.1 Soft landing for striking members 138 – 140 5.3.2 “Rather get us out of these shacks” 140 – 143 5.3.3 “Free our projects from the clutches of capitalist” 144 – 150 5.4 Conclusion 150 – 152 vii Chapter 6: Conclusions and Recommendations 153 6.1 Introduction 153 6.2 Central theoretical arguments 154 – 156 6.3 Finding and conclusions 156 6.3.1 Findings on commitment to socialism 156 – 161 6.3.2 Findings on internal democracy 162 – 166 6.4 Considerations for future research 166 – 168 6.5 Conclusion 168 – 169 References 170 - 181 viii ACRONYMS AMWU African Mineworkers’ Union ANC African National Congress APF Anti-Privatisation Forum AZASO Azanian Students Organisation BBBEE Broad-based Black Economic Empowerment BEE Black Economic Empowerment BP British Petroleum BPSA British Petroleum South Africa CEC Central Executive Committee CEO Chief Executive Officer CIWU Chemical Industrial Workers’ Union CIWUSA Chemical and Industrial Workers Union of South Africa COSAS Congress of South African Student CPSA Communist Party of South Africa COSATU Congress of South African Trade Unions CUSA Council of Unions of South Africa DBSA Development Bank of Southern Africa EBMTC Elijah Bharayi Memorial Training Centre Ecsecc Eastern Cape Socio-Economic Consultative Council FOSATU Federation of South African Trade Unions FSC Financial Sector Coalition GEAR Growth, Employment and Redistribution HCI Hosken Consolidated Investment ICEM International Federation of Chemical, Energy, Mine and General Workers Union JBMETF JB Marks Education Trust Front MAWU Metal and Allied Workers Union MDA Mineworkers Development Agency MIC Mineworkers’ Investment Company MIT Mineworkers’ Investment Trust MK UmKhonto we Sizwe MNP Marula Natural Products ix Naledi National Labour Education and Development Institute NEC National Executive Committee NEDLAC National Economic Development and Labour Council NEHAWU National Education,
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