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26 March, 2010Lesotho provides a haven for companies wishing to keep workers in slave like employment by escaping the enforcement of worker rights including the right to earn a decent wage. High unemployment together with fragmented and weak organised labour in Lesotho leaves workers vulnerable to exploitation through poor working conditions and poverty wages.
Wages are set low by government and whilst labour laws exist, these are ineffectively enforced, all to attract foreign investment to this small mountain kingdom, surrounded on all sides by South Africa. Sector based minimum wages are determined annually by the Wage Advisory Board, a tripartite entity consisting of government, trade unions and employees. But worker representation is weak in Lesotho and minimum wages for workers in jobs that are considered lower skilled do not provide a decent standard of living for a worker and family.
CBI, a subsidiary of South African JSE listed company Reunert, laid off workers and relocated to Lesotho in 2006 after NUMSA successfully fought in the Metal Engineering Industry Bargaining Council (MEIBC) to have the five-year exemption on minimum wage enjoyed by the company cancelled. At the time, CBI workers such as Numsa shop stewards Mpai Mile and Mathabo Mokoena were struggling to live on R320 per week, even after 18 years of service. In 2002 CBI refused to pay weekly R674 rates concluded in the industry's main agreement and threatened to relocate to Lesotho if it was not exempted from paying half of the agreed rates for five years in 2002. The council was forced to grant the exemption then fearing that 900 would lose their jobs.
This was not the first time CBI had relocated to seek reduced operating costs by paying low wages. In the apartheid era, the company set up factories in Qwa Qwa the artificially created homeland where the South African government provided lucrative wage subsidies and exempted companies from having to comply with wage rates set down by centralised bargaining arrangements.
Facing expiration of its exemption in 2007, CBI failed to secure further guarantees of exemption from MEIBC and so the company unilaterally moved is operations to Lesotho. NUMSA reports in 2006 that almost 300 out of the 900 staff complement reportedly lost their jobs when they refused to accept reduced wage offers of R168 a week in the new plant in Lesotho.
In February 2010, IMF Regional Secretary Steve Nhlapo and NUMSA International Officer, Hlokoza Motau went to Lesotho to meet with CBI workers and LECAWU, the union that has made the most progress in recruiting workers at CBI. LECAWU has traditionally organised in the textile and garment sector where it has gained much experience dealing with foreign employers and putting pressure locally and campaigning internationally on multinational companies to address poor working conditions and low wages. LECAWU was severely weakened by the collapse of the garment sector as investment pulled out of Lesotho once the preferential trade arrangement with the US under AGOA lost its lustre as quotas holding back textile and garment industries, particularly in Asia, under the 30 year Multifibre Agreement came to an end in January 2005.
IMF recognises the potential LECAWU has to represent CBI workers and does not see the need for a new sector specific union which would have relatively small membership and thus would likely be weak and ineffective. IMF has encouraged unions, especially those with small membership bases to work towards multi sectoral general unions, especially in countries with relatively small labour force. IMF will work with NUMSA, who has much to offer LECAWU with years of experience in dealing with the CBI. Together with the Lesotho union they will seek out ways to strengthen union efforts to organise CBI workers not only on wages but also on health and safety issues to ensure that the company does not get away with the exploitation of worker rights.
IMF has also been informed that two other electronics companies which one of them is Philips are also moving into Lesotho. Philips Electronics a Dutch Multinational also closed its operations in South Africa 5 years ago and they are now opening in Lesotho to take advantage of cheap wages and bad conditions of employment.