The capacity of the National Economic Development and Labour Council (Nedlac) to address SA’s socioeconomic challenges through progressive policies has been cast in doubt after a slew of leadership challenges.

The forum, which was established 24 years ago, serves as a social dialogue platform for the government, business, labour and community stakeholders to discuss and agree on the country’s economic and labour direction. The national minimum wage legislation, for example, was initiated at Nedlac.

However, during Nedlac’s annual summit in September, Business Unity SA president Sipho Pityana questioned whether the forum is still fit for its declared purpose or whether it should be relegated to  the scrapyard of history.

Pityana, an outspoken business person, argued that due to the country’s socioeconomic crisis and the challenges brought by the technological revolution, Nedlac is fast losing relevance and should not rest on its laurels.

Nedlac has had its fair share of challenges.

In 2015, former labour minister Mildred Oliphant was criticised by stakeholders for “protecting” former executive director Herbert Mkhize after a forensic investigation found he and then CFO Umesh Dulabh had fraudulently and illegally spent almost R2m in Nedlac funds.

In October 2018, auditor-general Kimi Makwetu found that Nedlac had contravened supply chain management regulations, resulting in irregular expenditure, and failed to act in line with the Public Finance Management Act.

In November 2018, forensic investigators recommended that disciplinary action be taken against new CFO Mfanufikile Daza and executive director Madoda Vilakazi, who allegedly interfered in the appointment of service providers and irregularly awarded contracts to preferred providers, among other transgressions. There were also claims of conflict of interest.

Nedlac’s credibility has also been rocked by the exclusion of the largest labour confederation, the SA Federation of Trade Unions (Saftu). 

The federation, led by former Cosatu general secretary Zwelinzima Vavi, has cried foul over the Nedlac admissions criteria and procedure, claiming they are being used to systematically block the new entrant from being a part of the organisation that formulates labour market policy.

The Nedlac labour constituency — Cosatu, the Federation of Unions of SA (Fedusa) and the National Council of Trade Unions (Nactu) — is responsible for the admission of labour federations.

In January 2017, the Nedlac executive council approved amendments suggested by the labour constituency on the criteria of prospective members, requiring that they be in existence for at least two years and can produce audited financial statements for that period. Saftu has described the requirements as “exclusionary”.

“I certainly believe Nedlac must be reviewed,” said labour analyst Michael Bagraim. “It’s completely bogged down by opposing parties that the decisions that come out of it take us nowhere. They are so heavily negotiated that they are not making any difference to job creation.”

He said it took the committee about five years to see the national minimum wage legislation enacted. “Unemployment is a bigger disaster than Eskom. That’s supposed to be their mandate, regarding how do we create an environment for job creation, but that has been a complete failure.”

He said his “strong feeling is that Nedlac needs to be relooked at and not necessarily scrapped because it does help with labour peace”.

Black Business Council (BBC) president Sandile Zungu said SA is better with Nedlac in place, “but we can obviously do much better with a Nedlac that works efficiently”.

“Many things could have gone wrong in this country if there was no Nedlac. We are of the view that Nedlac, like all structures of society, must be open to a continuous review,” said Zungu.

He stressed, however, that a review must not be misconstrued as a crisis of dysfunctionality because “Nedlac is not faced with an existential crisis. We just have to make sure that it works effectively and efficiently and that it delivers outcomes that take our society forward.”

SA National Civic Organisation (Sanco) president Richard Mdakane said Nedlac plays a critical role in harnessing the spirit of co-operation between its social partners.

“In my view, Nedlac as it stands is serving its purpose, but they have to revamp themselves to ensure they remain relevant to address the ever-present socioeconomic conditions of our time. They must renew themselves from time to time to remain relevant and serve our communities,” said Mdakane.

He said Nedlac needs to have a permanent executive director and CFO to preserve its institutional memory, arguing that just because some of its decisions do not get implemented does not mean it is dysfunctional. “Nedlac must be empowered to hold implementers of decisions accountable, otherwise it risks becoming another talk shop.” 

Narius Moloto, general secretary of Nactu, described Nedlac as an important social dialogue forum. “Whether it’s achieving the purpose it’s intended for is a debate for another day, but I don’t agree with the narrative that it’s outdated,” said Moloto.

“Nedlac is a modern social dialogue platform that most countries in Africa do not have.”

When contacted for comment, Cosatu general secretary Bheki Ntshalintshali, who is labour’s overall convener at Nedlac, said he was attending a meeting abroad and could not talk.

However, in an interview with Business Day, Nedlac’s acting executive director, Thembinkosi Mkhaliphi, said the forum is playing a meaningful role in addressing some of the challenges dogging the country.

“The issue of the national minimum wage and the strike ballot and the amendment of the Basic Conditions of Employment Act were all implemented at Nedlac,” said Mkhaliphi.

“We are busy implementing the job summit agreements. There is a meeting that is held every first Monday of the month that is attended by all stakeholders.”

The meetings are chaired by President Cyril Ramaphosa, and he is presented with progress reports on implementation of some of the agreements, he said.

“Nedlac has a big role to play, and no doubt the country is facing big challenges on the economic front. We’ve got to come together as we are doing now to reinforce the intervention and ensure that we are taking the right decisions.”

Mkhaliphi said they are addressing the leadership issue at Nedlac, saying the executive director and CFO posts were recently advertised. “We hope that permanent appointments will be made before the end of year.”


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