Tayo Fashoyin ILO Sub-Regional Office for Southern Africa Harare, Zimbabwe

1. Governance and the Labour Market:The Contribution of Bipartite and Tripartite Cooperation in South Africa Tayo Fashoyin ILO Sub-Regional Office for Southern Africa Harare, Zimbabwe 4th African Congress of the IIRA Cape Town, South Africa. 26-28 March 2008

2. Objectives of the paper To show how bipartite cooperation between labour and business contribute to tripartite cooperation on social and economic issues of national importance. To present a case study on the relationship between South Africa’s NEDLAC (tripartite/plus) and the MLC (bipartite) on social and economic issues.

3. The Arguments Social dialogue is an important part of the interwoven processes of governance and development. It builds consensus, widens participation and identifies needs from the perspective of those most directly affected. Bipartite dialogue between business and labour can promote and enhance tripartite cooperation at the national level.

4. Definitions Governance: The exercise of economic, political and administrative authority to manage a country’s affairs at all levels. It comprises the mechanisms, processes and institutions through which citizens and groups articulate their interests, exercise their legal rights, meet their obligations and mediate their differences. (UNDP)

5. Definitions (2) Good Governance: Predictable, open and enlightened policy-making, a bureaucracy imbued with a professional ethos acting in furtherance of the public good, the rule of law, transparent processes, and a strong civil society participating in public affairs. (WB)

6. Definitions (3) Labour Market Governance: An institutional framework and processes that allow government and the social partners (employers and workers in bipartite and tripartite structures) to engage in employment relations in a manner that balances workers’ employment interests with those of business and national development.

7. The NEDLAC of South Africa A tradition of dialogue among progressives even in apartheid years. The National Economic Development and Labour Council Act of 1994. NEDLAC is an institution for information sharing, consultation, negotiations and decision-making. Covers labour market issues, economic growth, public finance, monetary policy, productivity, competitiveness, social policy. Goal of NEDLAC is to deepen democracy in post-apartheid society.

8. NEDLAC: The report card Responsible for some of the most important pieces of labour legislation in post-apartheid era, including” Labour Relations Act Basic Conditions of Employment Act Employment Equity Act Skills Development Act Growth and Development Summit, 2003 These laws create environment for participation, labour market stability, equity in the work place.

9. NEDLAC: The report card (3) Parties must operate with mandate given to them by the respective constituency. NEDLAC processes are time-consuming, and progress on issues slow. The review of the LRA: Case in point. Delays led to threats of a general strike by labour.

10. Emergence of the MLC It was in the midst of these events that the MLC was created. MLC brings together top leaders in business and labour to discuss and proffer solutions to some of the critical social and economic challenges facing South Africa. MLC is a non-representative forum. MLC provides a forum for brainstorming, to explore common interest and promote common action. MLC processes seek a win-win solution to problems.

11. Emergence of the MLC (2) Initial preoccupation of the MLC were: Unemployment, job loses, lack of job creation, new initiatives to promote improved quality of life and decent work for all.

12. MLC agenda and process Issues that are unlikely to bring about consensus through NEDLAC create agenda for the MLC. Quite often MLC does not take on the whole issue, but those specific points that are more controversial. MLC members will have to go back and help form the mandates for the representatives in NEDLAC.

13. MLC agenda and process: Example One of the agreements adopted at the 2003 Growth and Development Summit mandated NEDLAC constituencies to work towards investing 5 percent of their ‘investible income’ in ‘appropriate’ financial instruments. This matter gained impetus and reputation as the “Development Bond” issue. In the post-GDS period, whilst dealing with the implementation of the agreements, concerned parties sought to clarify the vague and imprecise articulation of the development bond, as stated in the GDS report. The MLC was at the centre of the effort to bring more clarity about the implications of the bond and the expectations that constituencies had with regard to its implementation.

14. Conclusions MLC enriches the processes of social dialogue in South Africa. MLC offers a refinement to social dialogue, facilitating the NEDLAC processes to come to fruition, particularly when dealing with difficult issues. The MLC brings together senior leaders from the two sides of industry to discuss and facilitate the national institution on the broader development agenda. MLC promotes the democratic process in NEDLAC, which in turn advances labour market governance in South Africa.

15. Conclusions (2) Does MLC create an ‘insider/outsider’ phenomenon, that could lead to misunderstanding around its role? At founding, ILO concern was relations vis-à-vis NEDLAC. ILO anticipated that MLC process would strengthen NEDLAC, lead to ‘win-win’ solutions. To a large extent this expectation appear to have been realized.

16. Conclusions (3) Can MLC be replicated elsewhere? The issue is not to replicate, but to adopt what works, based on national experience in social dialogue. Bipartite cooperation, as in MLC, could be a viable option in African countries that do not have effective national tripartite institutions. Bipartite dialogue can work at RECS on issues that ultimately promote regional integration, e.g. avoidance of ‘race to the bottom’.

17. THANK YOU