South Africa’s largest labor union, the National Union of Metalworkers or South Africa (NUMSA), on October 14 conducted a one-day national strike for jobs and against corruption.
“South Africa is in the vicious grip of worsening mass unemployment, retrenchments (layoffs), deepening inequality, and poverty, ” said a statement that NUMSA issued about the strike.
Another statement issued by the union said that, “It is time to end the systemic corruption in our society.”
The union said that the two issues are intertwined.
Thousands of NUMSA members and their supporters marched through the streets of Johannesburg to deliver their demands to government offices.
The anti-corruption demands included a call for the government “to investigate the problem of illicit financial flows, transfer pricing, and money laundering” and for a more aggressive approach toward ending graft and bribery in the procurement of government contracts.
The union also demanded that the government take steps to protect and create jobs by, among other things, requiring that steel manufactured in South Africa be used in all public infrastructure projects, accelerating its infrastructure improvement program, and nationalizing key companies such as the country’s largest steel producer ArcelorMittal, and “plac(ing) them under worker control.”
“The ultimate objective of our class struggle,” reads the NUMSA media statement. “Is to raise levels of consciousness of the working class to overthrow the system that advances greed as its main motive force, and replace it with socialism – the only truly democratic and civilized state for humankind.”
In an interview with CNBC Africa, Sizwe Dlamini, NUMSA’s regional secretary, said that the union’s “strike is calling for engagement against corruption” in the public and private sectors.
He went on to say that public corruption is diverting money away from services that the people need and that corruption in the private sector is holding down wages and costing workers’ their jobs.
“Companies are not taking their responsibility to create and protect jobs seriously,” said Dlamini.
In 2014, the Financial Mail, South Africa’s leading business newspaper, reported that PriceWaterhouseCoopers’ survey on global economic crime found that “eight out of ten senior managers in South Africa have either committed procurement fraud or bribed and engaged in corrupt business activities.”
The report goes on to say that, “Asset misappropriation leads on the list of the so-called ‘big three’ economic crimes.”
One example of asset misappropriation is transfer pricing–the transferring of assets by a company to a related company for the purpose of hiding assets.
One example of such a practice was recently exposed by South Africa’s Alternative Information and Development Center (AIDC), which conducted an investigation into the strike by miners at the Marikana platinum mines owned by Lonmin, a global mining company.
The 2012 strike resulted in the deaths of 46 people. AIDC was trying to determine if Lonmin had the financial resources that would have allowed it to increase the miners’ low pay and avoid the bloody strike.
Lonmin has argued that it couldn’t have raised the miners’ wages because it simply did not have adequate resources to do so.
According to the AIDC report, Lonmin hid assets that could have been used to increase wages by paying questionable sales commission to one of its subsidiaries in Bermuda.
Lonmin paid its subsidiary, Western Metals Sales, 1.2 billion rands ( $84.6 million) in sales commissions between 2008 and 2012.
However, Western Metals was little more than a mail drop with no apparent sales staff.
Lonmin also paid $1.4 billion in management fees to Lonmin Management Services located in the UK.
AIDC’s report called these management fees exorbitant.
According to the Mail & Guardian, “the AIDC report concluded that had Lonmin mines not paid about R400-million a year in management and marketing fees to other companies in the group, it could have afforded the 2012 wage demands (of the Marikana miners).”
Lonmin’s actions are not an aberration. The Daily Maverick, an online South African newspaper, reports that between 2003 and 2012, “US$122 billion was illegally transferred out of South Africa” by companies seeking to hide their assets from taxes and social responsibilities.
According to NUMSA statements on the strike, this kind of corruption is an inherent feature of capitalism, and there is only one way to put an end to it.
“Capitalism as a system of private individual greed does not have solutions for problems that confront humanity and our environment. As we take up the campaign against corruption, we remain resolute that the permanent solution to corruption is the overthrow of capitalism. We are dedicated to this cause.”