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Adequate provisions lead to Job Security for locals

Feb 21, 2017
Adequate provisions lead to Job Security for locals

The recent articles in the media, particularly the City Press - North West bonanza for Chinese - highlights one of the biggest challenges faced by recipients of inward Foreign Direct Investment (FDI). This has sparked the debate in the country about how do we ensure that those intended to benefit from socio economic activities actually do benefit?

South Africa (SA) has been categorised  amongst the top African destination for inward FDI by project numbers, this following the recently announced results by foreign Direct Investment (fDi) Report (2016) on Global greenfield investment trends.

China is understood to be the largest single trading partner for Sub-Saharan Africa (SSA) including South Africa, according to the International Monetary Fund (IMF) report (2016).

In the third quarter of 2016 the country’s unemployment rate sat at 27.1 percent, reaching the highest unemployment rate since 2004. (Statsa)

Inward Foreign Direct Investment into South Africa is not only required to grow the economy but seeks to create much needed jobs that ultimately lead to improved living standards.

According to the Immigration Amendment Act, 2007 - no 3 of 2007, visitors are permitted to enter South Africa under strict provisions by the Department of Home Affairs and they are outlined below as follows:

  1. Applying for a Business Visa
  2. General Work Visa
  3. Intra – Company transfer. 

In the act “intra - Company Transfer Work Permits” is a stipulated provision that seeks to guide companies with multinational origins. The act stipulates that – “multi-national companies may decide to transfer an existing employee from a foreign branch to a branch in South Africa. “

The ACT further goes on to say “these employees must apply for intra-company transfer work permits. In such cases, no proof of steps taken to obtain the services of a South African citizen/permanent residence will be required.”   

The transaction for employees of a multi-national company seemingly requiring ‘no proof of steps taken…’ nor an indication of the critical skills identified by the country does raise considerable red flags in ensuring it adheres with the critical skills list as outlined by the Department of Labour.          

The CDC’s Labour Management Model

One of the critical pillars in ensuring job security is to have provisions that seek to ‘ring fence’ jobs for locals at project level. The CDC through its Human Capital Solutions business unit has implemented some key pillars, which effectively look at a holistic approach to labour management.

In the process managing supply of human resources demands, maintaining compliance to South African labour legislation and developing an employee relations framework that ensures labour stability. Much of the success at Coega comes from adhering to very strict provisions for employing local workers. This has resulted in the Coega IDZ’s ensuring that 86% of all employment opportunities from construction on the IDZ and Port have gone mainly to residents of Nelson Mandela Bay.

The CDC has a proven track record in sourcing skilled labour and developing skills through the organisation’s advanced systems for registering work-seekers and competency-based recruitment functionality. Some 85% of the people trained through programmes facilitated by the CDC often find sustainable employment.

As part of the key pillars, a skills database, managed by the CDC, ensures that projects being implemented in the Coega IDZ and elsewhere the organisation has operations, utilises and are able to recruit local workforce. Furthermore, the Coega skills database also allows the companies in the IDZ, the Eastern Cape Government, and Institutions of Learning to identify gaps in terms of skills required to meet the demand of the Eastern Province economy. These gaps are filled through a Coega focussed training programme. Some of the skills required by employers in the IDZ are in the Mathematics and Physical Sciences in sectors such as Metals and Metallurgical, Energy, Chemicals, Business Process Outsourcing, Maritime, Logistics and Services, which are the main focus areas for the Coega IDZ.

The CDC has employed inspectors who ensures that contractors adhere to the requirement that 80% of the people working on construction projects should reside within the area the projects are situated.

Another important key pillar of the CDC’s Labour Management is the Zone Labour Agreement (ZLA), the only ZLA in effect in Southern Africa. The ZLA contains agreements negotiated between stakeholders in the South African construction industry in 2003. The ZLA has effectively ensured the rights of employees and the interest of employers are maintained, while working on the Coega IDZ and Port of Ngqura.

The ZLA ensures consistent application of the labour management framework that contractually binds all parties and provides standards for employment relations that has the long term interest of the development of the Coega IDZ.

The CDC further provides skills training aligned to a national skills framework, and assists clients and investors with contractual risks reviews and labour management systems, included in these are programmes for training of artisans in all the scarce skills sectors.

In conclusion, all stakeholders and government must work together to comply with the Laws of the country in the management of the influx of unskilled labour, in particular, to the detriment of local labour.