South Africa strikes escalate with petrol stations dispute

Reuters News
Posted: Aug 27, 2013 9:51 AM
South Africa strikes escalate with petrol stations dispute

By Ed Stoddard and David Dolan

JOHANNESBURG (Reuters) - South Africa's petrol station and car dealership workers on Tuesday announced a strike for higher wages next week, signaling more labor disruption to a struggling economy also facing stoppages in gold mines.

Africa's largest economy is facing a wave of wage increase demands and strikes by increasingly militant workers, renewing a challenge to President Jacob Zuma after violent mines strikes last year dented growth and led to sovereign credit downgrades.

Citing escalating living and transport costs, leading manufacturing union NUMSA said its 72,000 members working in petrol stations, automotive retail shops and car dealerships would walk out from Monday "in demand of a living wage and improved conditions".

The petrol station and car dealership employees will join workers from the auto industry who have already downed tools for a week in a wage dispute, costing the economy an estimated $60 million a day.

Strikes also started this week in the country's construction and airport sectors, but their impact has been limited so far.

"Workers are no longer willing to be subjected to starvation and poverty wages," the National Union of Metalworkers of South Africa (NUMSA) said in a statement announcing the strike from Monday. It said wage talks with employers had reached deadlock.

Jakkie Olivier, chief executive of the Retail Motor Industry Organisation, which has been in negotiations with NUMSA, said talks were still going on and the strike plan was "totally irresponsible".

More worrying for South Africa's faltering economy is the looming prospect of stoppages in the gold and platinum mines, where unions demanding pay increases of between 60 and 150 percent appear on collision course with producers battling rising costs and falling metals prices.

On Saturday, the main mining union NUM gave bullion producers, including AngloGold Ashanti, Gold Fields, Sibanye Gold and Harmony Gold, a seven-day ultimatum to meet its demand for pay rises of up to 60 percent or face strikes.

At current spot prices, a gold industry stoppage would cost the economy an additional $35 million in lost output daily.


Frans Baleni, head of the main mining union NUM, held out a slight hope on Tuesday that a compromise could still be found with gold producers before the Friday deadline.

"A strike is always the last resort; we are not trigger-happy about a strike," Baleni, General Secretary of the National Union of Mineworkers (NUM), told Reuters on the sidelines of a mining conference in Johannesburg.

"We have said: let the employers put something on the table ... If it was something reasonable then I am sure our members would consider it," Baleni added, indicating that NUM would be open to some kind of counter-offer by the companies.

The Chamber of Mines, which is negotiating on behalf of the gold producers, made a "final offer" on Tuesday of basic wage increases of between 6 and 6.5 percent, slightly above the projected inflation rate for 2013.

The offer was promptly rejected by NUM, indicating a wide divide between labor and employers, who have said they can ill afford the union pay demands.

Kgalema Motlanthe, deputy president in Zuma's African National Congress government, expressed sympathy on Tuesday for the mineworkers. He said the industry had for years under white-minority rule "developed methods of making super-profits by relying on the super-exploitation of unskilled workers.

"Sadly, the mining industry has remained a prisoner of its apartheid past in this core element of cheap labor sourced through a migrant's punishing annual work cycle and all the social evils associated with that cycle," he told the mining conference. Apartheid ended in 1994.

The ongoing and threatened strikes are expected to further hit South Africa's growth prospects, even though the country registered an acceleration of growth in the second quarter thanks to a robust expansion in manufacturing.

GDP expanded 3.0 percent quarter-on-quarter, the highest figure for a year, Statistics South Africa said on Tuesday.

Despite this upbeat number, the rand hovered near the four-year lows it plumbed last week over news of the start of the auto industry strike and the threatened gold industry stoppage.

The quarterly growth figure, which undershot economists' expectations of 3.3 percent, was largely due to a one-off bounce from the manufacturing sector, which grew 11.5 percent in the second quarter on a recovery in base metals.

Manufacturing is the second biggest sector in the South African economy. The industry's expansion in the second quarter was the highest since the first quarter of 2011, according to Stats S.A.

(Additional reporting by Xola Potelwa and Wendell Roelf; Writing by Pascal Fletcher; Editing by Jon Herskovitz and Mark Heinrich)