Nedlac Principals

1
Nedlac Principals
Government
Business
Labour
Community
Overall Convenors
2
Nedlac Annual Report for The Period 2005/6

• Presentation to the Parliamentary Portfolio
  Committee on Labour
• 7 November 2006

3
The National Economic Development and Labour
Council (Nedlac) is the vehicle by which
government, labour, business and community based
organisations seek to cooperate, through
problem-solving and negotiation, on economic,
labour and development issues, and related
challenges facing the country.
Nedlac was Established Through An Enabling Act Of
Parliament. ( The National Economic Development
and Labour Council Act No. 35 of 1994.)
4
HISTORICAL CONTEXT

• Nedlacs origins lie in the struggles against
  apartheid, unilateral government
• decision-making and calls from all sectors of
  society for socio-economic
• policy decisions to be made in a more inclusive
  and transparent manner.
• Through social dialogue build partnerships that
  seek to, inter alia
• Translate the principle of The people shall
  govern into practice
• Build and deepen the newly found Democracy
• Seek to formulate policies that are geared
  towards
• Addressing the high levels of poverty
• Addressing the high levels of unemployment
• Addressing the fact that SA is among countries
  with highest levels of inequality in the world
• Rebuilding and stimulating Economic Growth and
• Redressing the legacy of the Countrys racial
  past

5
SCOPE AND BRIEF

• Strive to promote the goals of economic growth,
  participation in economic decision-making and
  social equity
• Seek to reach consensus and conclude agreements
  pertaining to social and economic policy
• Consider all proposed labour legislation relating
  to labour market policy before it is introduced
  in parliament
• Consider all significant changes to social and
  economic policy before it is implemented or
  introduced in parliament
• Encourage and promote the formulation of
  coordinated policy on social and economic matters

6
NEDLACS MODUS OPERANDI

• Protocol for tabling issues
• _at_ Nedlac
• Problem-solving

• Negotiation
• Consultation
• Information Sharing
• National Projects
• Dispute Resolution

7
STRUCTURES

• Brings together 300 delegates the summit is
  chaired by the Presidency.
• Govt Ministers of Labour, Finance, Trade and
  Industry and Public Works,
• Business President and Chairperson of BUSA,
• Labour General Secretaries and Presidents of the
  Fedusa, Cosatu and Nactu
• Community Presidents and General secretaries of
  community based Organisations

• NATIONAL ANNUAL SUMMIT
• EXECUTIVE COUNCIL has 72 seats-shared equally
  among the four constituencies and is the highest
  decision-making structure of Nedlac.

8
STRUCTURES

• 17 SEATS
• Four Overall Convenors.
• 9 Convenors from Labour market, Trade Industry
  and Public Finance and Monetary Policy Chambers
• 4 Convenors from the Development Chamber

• MANAGEMENT COMMITTEE
• (MANCO)

9
NEDLAC WORK STREAMS SCOPE

• Labour Market Policy matters
• Trade, Investment and Industrial Policy matters
• Fiscal and Monetary Policy matters
• Developmental Policy matters
• Standing Committee on trade
• Coordination of the GDS Implementation
• Resolution of Socio Economic Disputes

• Labour Market Chamber
• Trade and Industry Chamber
• Public Finance and Monetary Policy chamber
• Development Chamber
• Technical and Sectoral Liaison Committee
  (Teselico)
• GDS IMPLEMENTATION
• COMMITTEE
• Section 77 Matters

10
Governance

• Nedlac was set up through an Act of Parliament-
  Act No 35 of 1994
• Nedlac operations are governed by its
  constitution
• Nedlac is funded from Dept of Labours budget
• Four social partners, no party has a formal/
  official veto
• Mandated representatives of organised Nedlac
  constituencies
• Agreement-making on all social and economic
  policy
• Managed by representatives - Overall Convenors,
  Management
• Committee and the Executive Council
• Nedlac Secretariat administers the processes

11
Nedlac Principals
Government
Business
Labour
Community
Overall Convenors
12
NEDLAC STRUCTURE
13
Nedlac Process Flow

• The nedlac process is guided by the protocol for
  tabling and considering issues at Nedlac.
• Government tables its programmes of policy and
  legislation in Nedlac often at the beginning of
  the year.
• Labour, Business and the Community constituencies
  likewise table issues for inclusion on the Work
  Programme.
• Each chamber then prioritises the issues to be
  tackled
• Management Committee ratifies the Work programme
• Issues are tabled at least six weeks before
  sign-off is required
• Parties agree at the outset whether the issue is
  being tabled for consultation, negotiations or
  both.
• Parties then agree on a process and timeframes to
  expedite the matter.
• In cases where the issue falls within the terms
  of reference of more than one chamber, a joint
  negotiation committee or task team is
  established.

14
Nedlac Process Flow

• In cases where the issue falls within the terms
  of reference of more than one chamber, a joint
  negotiation committee or task team is
  established.
• There may also be instances where the
  intervention of the relevant Minister/s may be
  required.
• In the event that government indicates that
  giving effect to the policy requires legislation,
  then government tables the draft Bill at Nedlac
  for consideration.
• Once the process of engagement on the policy has
  been finalised, a Nedlac report is prepared for
  ratification by MANCO and EXCO respectively.
• Once the report has been signed-off it is then
  sent to the relevant Minister who in turn tables
  it in parliament. (A copy of the report is also
  sent to the Minister of Labour and relevant
  secretary of the relevant parliamentary
  committee)

15
RELATIONSHIP WITH PARLIAMENT AND MANAGING THE
PASSAGE OF NEDLAC AGREEMENTS IN PARLIAMENT

• Nedlac recognises the sovereignty of parliament
  hence upholds its supremacy in the process of law
  making.
• Parties are bound not to re-open discussion in
  Parliament on any area where agreement was
  reached in Nedlac.
• Nedlac social partners do get invited to address
  parliamentary Committees when dealing with
  issues- often as part of the general public
  hearings and in some instances in special
  sessions to address specific issues.
• Parties have the right to raise issues in
  parliament on which there had been no agreement,
  or on which a Nedlac agreement was silent.
• If parties raise issues during the parliamentary
  process on which the Nedlac agreement was silent,
  or new issues, which go beyond the reservations
  captured in the Nedlac report, they should inform
  Nedlac for the record.

16
Programme Performance

• Nedlac hosted a successful Summit on 27 August
  2005.
• The summit was chaired by the Deputy President of
  the Republic of South Africa
• The focus session was on trade and social
  dialogue.
• The discussions on trade covered a range of
  issues including China, WTO and SADC.
• The debate dealt with the question of trade
  liberalisation, its upside and downside and the
  lessons for SA.
• The debate on social dialogue examined the
  relevance of social dialogue as a platform to
  shape policy and build working partnerships to
  tackle social, economic and developmental
  challenges in SA.

• National Summit

17
Programme Performance

• The Executive council convened 2 meetings in the
  period under review
• The topics covered were Monetary policy led by
  the Governor of the Reserve Bank
• Skills Development led by the Minister of Labour
• Asgi-SA led by the Economic Advisor to the Deputy
  President

• Executive Council

18
Programme Performance

• Corporate Law reforms
• National Consumer Bill
• Protected disclosure
• BBBEE
• Consumer Policy
• Energy Electricity regulation Bill
• Cooperatives Bill
• Employment Equity and Skills Development
  road-show programme
• Superior Courts Bill resubmitted to parliament
• Modernisation of South African Technical
  infrastructure
• Clean Development Mechanism (CDM) Criteria
• Environmental Impact Assessment Framework
• The country position on WTO Ministerial
  Conference in Hong Kong
• SACU-MERCOSUR FTA Framework Agreement

• Management Committee

19
Programme Performance

• Overall Convenors, acting as a clearing house,
  dealt with various issues including
• Atypical form of employment and changing nature
  of work
• Superior Courts Bill
• Social Plan review
• Labour Market Policy Review Min Roundtable
• WTO Ministerial Conference in Hong Kong
• 5 Investible Income
• Jobs Impact monitoring mechanisms
• Proudly South African Campaign
• Section 77 Matters
• Nominations to statutory Bodies
• Nedlac Review
• Ministerial roundtable on Trade

• Overall Convenors

20
Programme Performance

• Two section 77 notices were filed with Nedlac
  during this reporting period compared to 7
  notices that were filed in the previous reporting
  period.
• One of the notices was dismissed as it was found
  to be non-compliant.
• One notice being considered by the Nedlac
  Standing Committee

• Section 77

21
Programme Performance

• Implementation of the
• Growth and Development
• Summit Agreements (GDS)
• Since the GDS does not exist in isolation, the
  implementation processes are often impacted on by
  various factors - locally and internationally.
• The unpredictable swings in the exchange rate,
  the trade environment, the commodity markets,
  administered prices, etc. at times poses a huge
  challenge for the GDS implementation.

• GDS remains the key flagship project for Nedlac.
• The pace of implementation has improved
  remarkably since the last annual report.
• Over 75 of the tasks have been implemented and
  completed with about 10 still outstanding, about
  10 work in progress and 5 new initiatives.
• The amount of bottlenecks have been reduced
  substantially since the last reporting period.
• The constituencies have agreed to conduct a peer
  review exercise on the GDS implementation.
• Coordination of various initiatives remains a
  huge challenge.
• A number of Provincial and local governments have
  also held their own Provincial and Local Growth
  and Development
• Summits.

22
Programme Performance

• Retirement Funds Trustees Conference
• Pre-Nedlac Conference on Co-operatives
• Cooperatives Legislative Framework
• Study Tour on Cooperatives
• Implementation of Finance Sector Summit
  Agreements
• Municipal Infrastructure Grant Programme
• Public Investment Initiatives
• Framework for the Expanded Public Works Programme
  Projects

• COMPLETED TASKS - GDS

23
Programme Performance

• Broad Based Black Economic Empowerment Codes
• Technological Platform to facilitate
  opportunities for BEE SMMEs
• Road shows on the Employment Equity resulting in
  significant improvement in reporting
• National Skills Development Strategy
• Strengthening of SETAs
• Business Trust life-span Extended
• Chemical Sector Partnership Agreement and
  Govt-led Customised Sector Programme for the
  Chemical sector

• COMPLETED TASKS - GDS

24
Countrys health check
Highlights
Country has

• Achieved macroeconomic stability
• Introduced micro-economic reform
• Started HRD Programme
• Increased social expenditure
• Growth and Development Summit agreement

• Lowest interest rates in over 20 years
• Lowest inflation rate since December 1959
• Social expenditure significantly high
• Public sector debt below 50 of GDP
• Longest period of positive GDP growth since
  1940s and improved wealth per capita

Excellent Achievements within such a short space
of time
25
Trends in economic performance
Most telling weakness in growth path
investment, job creation and economic growth rate
compared to countries at the same level of
development
26
IMPACT
Employment by Industry
Source Statistics SA, Labour Force Survey
27
PROMOTION OF SOCIAL DIALOGUE

• Nedlac received 20 international delegations
  during this period.
• The delegations included countries such as Japan,
  Uganda, Lesotho, Namibia, Tanzania, Vietnam and
  France.
• Hosted institutions such as WTO, USAID, IMF,
  NEPAD
• Addressed the association of African institutions
  of social dialogue in Algeria

• NEDLAC VISITS
• CONFERENCES

28
Key Priority Areas for 2006/7

• Labour Market Policy review
• Code of Good Practice on Who is an Employee
• Atypical forms of Employment changing nature of
  work
• Superior Courts Bill
• Retirement Funds legislative reforms
• Cooperatives Bank Bill
• Social Health Insurance

• Labour Market Policy
• Work Stream
• GDS CROSS CUTTING
• Public Finance and
• Monetary Policy Work
• Stream

29
Key Priority Areas for 2006/7

• Industrial Policy/Strategies
• Sector Partnership Strategies CSPs
• Trade Multilateral Bilateral
• Jobs Impact
• Fisheries Policy
• BBBEE Codes
• Education
• Transport
• Comprehensive social Security
• Health Charter
• HIV AIDS Code

• Trade and Industry Work
• Stream
• GDS CROSS CUTTING
• Development Policy Work
• Stream

30
Financial statementsIncome statement

• 2005/6 2004/5 2003/4
• R R R
• Grants received 11,551,000 9,146,000 7,673,001
• Other income 330,000 300,000 264,000
• Income 11,881,000 9,446,000 7,937,001
• Operating costs (11,612,204) (8,740,830) (6,265,35
  5)
• Operating surplus 268,796 705,170 1,671,
• Investment income 172,454 36,481 224,748
• Finance costs
  
  (2,623) (18,652) (3,060)
• Surplus for the year 438,627 722,999 1,893,
  334
• Funds transferred from(to)
  234,448 132,318 (399,779)

31
FINANCE

• Audit not qualified.
• Non submission of materiality and significance
  framework on time, resulted in the auditors
  placing emphasis of matter in their report.
• It was for the first time that the auditors were
  required to report on this aspect as it has not
  been the subject of an audit opinion in the past
  history of the Institution.
• The framework has since been submitted.

32
KEY CHALLENGES

• Issues are becoming more technical and more
  complex, hence appropriate tooling and retooling
  by all is required.
• Relationships becoming somewhat adversarial if
  not more robust.
• Uncertainty given rise to by the current Policy
  review processes.
• Issues tabled with short timeframes to complete
  engagement resulting in unavoidable delays.
• Relationship with Parliament
• Relationship with other government departments
• Relationship with other relevant institutions
• Coordination

33
WAY FORWARD

• Engaging with the Nedlac review recommendations
• Ramping up Secretariat's capacity
• Research
• Streamlining the work programme - Identifying and
  prioritizing key strategic interventions
• Improving relationship with Parliament and
  government departments
• Build relationships with other relevant
  institutions
• Continue to search for improved policy
  coordination
• THANK YOU