TRC Final Report

Volume 4

Chapter 2

Subsection 8

Other (white) business

81 The relationship between apartheid and business in other sectors was complex and at times contradictory. Many businesses benefited from the tariff protection, subsidies, cheap loans and preferential contracts provided by the state. Those industries competing against the import market benefited particularly. Those with a significant proportion of African workers benefited from restrictions on black trade union bargaining power – particularly until the early 1970s.

82 Industry was, however, divided over black trade union rights and wage determination. While many recognised that a higher level of African wages would boost consumer demand, no individual firm had any direct incentive to pay substantially more than the going wage for relatively unskilled (or skilled labour). To the extent that apartheid policies exercised downward pressure on African wages, all firms benefited, at least insofar as minimising costs was concerned. Some paid meagre wages in order to stay in business, as paying higher wages than the competition could threaten their existence. For others, depressed African wages simply boosted profits to very high levels.

83 Many foreign-owned companies probably fell into the latter category. The fact that they were able to improve wages and working conditions appreciably after being embarrassed by international campaigns to adopt the Sullivan Code (see the submission by the Anti-Apartheid Movement) suggests that they had previously enjoyed substantially high profits at the expense of poorly-paid African labour.

84 Some businesses went beyond accepting the benefits of being able to pay low African wages. Indeed, their use of the repressive machinery of the state to suppress striking workers puts them in another category altogether. Firms that informed on trade union officials to the security police and called in the police to disperse striking workers clearly have a great deal to answer for. Those which took advantage of apartheid norms and practices to humiliate their workers with racism (see the submission by the BMF) and to engage in unfair labour practices also need to recognise that they were part of the problem of apartheid - and not simply subject to its laws. While some submissions from business (such as that of Tongaat-Hulett) acknowledged this role, most did not.

85 Several businesses argued, on the other hand, that apartheid policies also imposed substantial costs on firms. Chief amongst these were:

a job reservation for white workers (which was a particular problem for the building industry)¹⁴;

b the Physical Planning Act (which restricted the employment of African workers in certain areas);

c the Reservation of Separate Amenities Act;

d the Bantu Education Act;

e the Group Areas Act.¹⁵

86 Firms that required greater inputs of skilled labour were harmed by the politically enhanced power of white trade unions and by limitations on the skills-development and occupational mobility of African workers.

87 Business organisations argued that they made representations and protested to government about the impact of apartheid on business (see submissions by SEIFSA, SACOB and the Johannesburg Chamber of Commerce and Industry). These protests tended, however, to relate to specific policies (such as the colour bar, Bantu education and the Physical Planning Act) rather than broader political concerns. In other words, they protested against aspects that disadvantaged business. Before the 1980s, most criticisms were voiced at times of skilled labour shortages. Major business organisations also protested during incidents of social and political unrest, most notably after the Sharpville massacre (1960), the Durban strikes (1973) and the Soweto uprising (1976).

88 But, as the submission from SAB points out, the responses of business were not without their contradictions:

KQUOTE> Although business chambers called for reform after Sharpville, faced with a withdrawal of foreign investment in the aftermath of Sharpville, many businesses used their financial muscle to stabilise domestic markets by buying up the shares that were being offered for sale on the stock exchange. Similarly, while some businesses called for black workers to be given trade union rights after the 1973 strikes, others resisted efforts by their employees to secure these rights, refusing to recognise black unions and, in certain cases, using the security forces to assist them in their endeavour. Furthermore, following the Soweto uprising, some businesses openly backed the government’s endeavour to restore order to the country through the security and military machine. KQUOTE>

89 Some sectors of the business community supported social and political apartheid but objected to some of the economic policies. In its frank submission to the Commission, the AHI described its growing realisation of the costs of apartheid:

KQUOTE> As the costs for business escalated from the 1970s onwards, the AHI gradually added its voice to the (predominantly English) business organisations which had been protesting against apartheid education and labour policies for some time.¹⁶ By the end of the long post-war boom, most sections of urban business were united in their calls for an urbanised African labour force with better access to skills and jobs. KQUOTE>KQUOTE> Opposition by organised business to labour controls, although inspired by the desire for a more stable, settled and productive workforce was profoundly political in that it challenged one of the pillars of apartheid - i.e. the idea that black workers were merely temporary sojourners in white cities. Frustrated by the lack of government action, Harry Oppenheimer and Anton Rupert (representing English and Afrikaner capital respectively) established the Urban Foundation in 1976 to push for reform in the areas of influx control, housing, black land ownership etc. This initiative was supported by a wide range of corporations and business organisations. The achievements of the Urban Foundation are documented in various business submissions.¹⁷ KQUOTE>KQUOTE> Pressure from business to re-examine its policies towards black labour and urbanisation almost certainly contributed to the subsequent reforms. As a result of the Wiehahn Commission, black trade unions were incorporated into the system of collective bargaining. This unleashed the power of black trade unions (which had been growing since the mid-1970s) and contributed significantly to the subsequent economic and political transformation. Reforms stemming from the Riekert Commission loosened some of the restrictions on labour allocation. This started a process which culminated in the lifting of influx control. KQUOTE>

90 The BMF, on the other hand, argued that business “failed to challenge” the white unions and the government in their efforts to prevent black people from entering the trades. Racist corporate culture, it said, is still the main impediment to the success of affirmative action. Business encouraged and benefited from the homelands policy and decentralisation, “which created circumstances of exploitation”. Moreover, the failure of business to allow black people into senior positions “will prove to have been the biggest obstruction to economic growth. Under-utilisation of blacks is a greater cost than the brain drain”.

91 Some submissions from the white business sector highlighted its efforts to improve industrial relations and work towards a new framework that promoted black unions. SEIFSA said it: led South Africa in respect of forward-looking industrial relations practices. We were the first major industry to eliminate race from our agreements, and the SEIFSA minimum wage has been a target of achievement for many other industries.

92 SEIFSA said that it had addressed the skills shortage in various ways in the past. In the 1960s, the industry looked to immigration and the training of black people. In 1972, the industry and unions agreed that blacks would be allowed to advance into higher operations. In 1978, the industry negotiated “the complete removal of all job discrimination and racially based provisions from the main agreement”. In 1982, SEIFSA negotiated a training agreement that provided a system to train workers who had missed the opportunity to become formally apprenticed. In 1993, SEIFSA and the National Union of Metalworkers’ of South Africa (NUMSA) agreed to investigate shared industry restructuring objectives.

93 The ANC submission recognised that “business’s attitude towards trade unions representing black workers evolved over time”, but it sought to record that during much of the apartheid period, business by and large worked in co-operation with the state to undermine and crush trade unions.

At decisive moments in the re-emergence of the democratic movement, business’s initial reaction was invariably one of opposition, victimisation of activists and union officials, and recourse to the regime’s security forces. The first reaction to a strike or attempt by unions to organise workers, was all too often to call on the police. Many violations of human rights occurred as a consequence.

94 The submission added that the trade unions survived because of the commitment and organisation of thousands of workers, despite the suffering they endured as a consequence. It was because of these efforts that the union movement grew to be a force that business could no longer repress or ignore.¹⁸

95 COSATU argued that, from 1973, union growth was characterised by “fierce battles” over these rights.

KQUOTE> Business has always opposed the development of well-organised and militant trade union movements... This was co-ordinated with, and for all practical purposes indistinguishable from, state strategy in relation to union organisation throughout the 1970s and well into the 1980s. Although trade union organisations of African workers were never unlawful, business was not prepared to recognise them, but continued to have cordial relations with the established [racially based] white trade union movement of that time, which was committed to paternalistic or outright racist policies. Only mass pressure forced capital to change its tactics in relation to trade unions. KQUOTE>

96 Old Mutual’s submission on the costs and benefits of apartheid was illustrative. On the negative side, the submission pointed to the lowering of economic growth (which constrained the market for life insurance), the Bantu education system which limited the pool of quality employees and the existence of exchange controls which limited their expansion overseas. Old Mutual offered only two possible ‘positives’: their acquisition of assets from Colonial Mutual of Australia when it disinvested in 1987 and the “marketing opportunities” created by the expansion of the homeland bureaucracies. On this latter score, however, Old Mutual reserved judgement as to whether this would have resulted in a net gain or loss compared to some other (non-apartheid) scenario.

97 Again, not all businesses profited equally from apartheid. It is, however, difficult not to conclude that, between 1910 and 1994, government and business (despite periodic differences and conflicts between them) co-operated in the building of an economy that benefited whites. On the one hand, they promoted and maintained the structures of white power, privilege and wealth and, on the other, the structures of black (mainly African) deprivation, discrimination, exploitation and poverty. To this extent, business was part of the mindset of white South Africa. This point was made in the AHI submission and granted in several other submissions, as well as in the oral evidence of several business leaders in response to questions posed to them by commissioners.

14 See the detailed submission by the Building Industries Federation of South Africa. Note, however, that job reservation was primarily in response to pressure from white trade unions. 15 See the submission by SACOB in this regard. 16 See the SACOB submission for a review of this history of protest. 17 The most extensive discussion of the Urban Foundation is to be found in the submission by Ann Bernstein. 18 From the early 1970s, there was an attempt to revive the crushed black union movement. Strikes and worker stay aways began to increase in number. “Between 1965 and 1971,” records Steven Friedman (Building Tomorrow Today, Johannesburg: Ravan 1987), “less than 23 000 African workers had struck. In the first three months of 1973, 61 000 stopped work. By the end of the year, the figure had grown to 90 000 and employers had lost 229 000 shifts – more than seven times the number lost through African strikes in the past eight years.” From cautious beginnings and despite heavy repression, the union movement grew to be a significant force by the end of the 1970s. In 1985, COSATU was formed, becoming the largest union body in the country. The National Council of Trade Unions (NACTU), heir to the black consciousness-aligned CUSA and the Azanian Council of Trade Unions (AZACTU), remained aloof and in 1986 a third union group, UWUSA, backed and funded by Inkatha was formed.