THE National Union of Metalworkers of South Africa (NUMSA) has filed papers at the Constitutional Court in an effort to force parliament to intervene in the future of all major State Owned Companies (SOCs), with specific reference to SA Express and Denel.
Numsa said both these entities are on the verge of collapse due to decisions taken by the Finance Minister Tito Mboweni, and the Minister of Public Enterprises Pravin Gordhan, effectively allowing them to collapse.
Numsa said the purpose of its Constitutional Court application is to compel the Portfolio Committee on Public Enterprises and the Standing Committee on Accounts (Scopa) to hold public hearings on whether SAX or Denel, or any other similarly placed SOE should be permitted to go insolvent, and consequently to be liquidated by a court.
The union wants the Constitutional Court to grant it direct access on the issue.
“We want the Constitutional Court to grant us direct access on this issue. It must be put to the National Assembly whether Denel or SA Express (and for that matter any other major SOC) should be wound up or liquidated,” said Numsa’s General Secretary Irvin Jim in a statement.
“Parliament’s portfolio committee on Public Enterprises and/or SCOPA and ultimately the National Assembly itself, should be the ones to make the determination on whether SAX and Denel or any other major SOC should be liquidated. This is not something that the courts should be given the power to decide on purely from a liquidation perspective given the strategic role these Companies play in the economy and the development of the country.”
Jim said should these entities no longer be regarded as strategic assets of the State then Parliament must pass a resolution on this and legislate accordingly.
“If the decision is that these are strategic entities, then the Executive must give effect to Acts of Parliament and ensure that these entities are properly funded and resourced,” said Jim.
“The purpose of our Constitutional Court application is to compel the Portfolio Committee on Public Enterprises and the Standing Committee on Accounts (SCOPA) to hold public hearings on whether SAX or Denel, or any other similarly placed SOC should be permitted to go insolvent, and consequently to be liquidated by a court.”
Jim said workers at the SOCs have paid an extremely high price for the collapse of these entities.
“At Denel at least two workers committed suicide because of the emotional strain of being forced to go without pay for months and with no support or relief from government whatsoever. We are deeply shocked and saddened as an organization at the suffering that workers are enduring. Unfortunately, they are not alone,” said Jim.
“Thousands of families are going through unbearable suffering as a direct result of Minister Pravin Gordhan’s uncaring attitude towards workers. The DPE has not lifted a finger to help any workers at SOCs. All our attempts to get assistance have fallen on deaf ears.”
Numsa said government has wasted over R231 million on the business rescue process in respect of SAA and the BRP’s earned a whopping R78 million, but workers at SAA and its subsidiaries starved and they continue to suffer.
“Besides the unnecessary suffering which Pravin Gordhan is imposing on workers, there are likely to be thousands more jobs lost as SOCs are restructured by the DPE. 3200 workers have already lost their jobs, and only 1000 remain at SAA; all 691 workers at SA Express face job losses if the airline is finally liquidated,” said Jim.
“At Denel at least 3137 jobs are on the line if government refuses to intervene to save it. So far, Mboweni and Gordhan have shown that they have no conscience. They are oblivious to the suffering of workers at SOC’s. SOCs are collapsing because of Treasury’s strategy of extending guarantees instead of capitalising SOCs.”
He said Denel, on the other hand, is held hostage by these guarantees in that out of the R1.8 billion which Denel was capitalized with, and whatever little cash flow which Denel may generate, all money is being used to service the debt which they owe to the banks because of the guarantees.
“DPE has no political will to engage the banks to be part of a turnaround strategy for Denel and other SOCs. All that it is busy driving, is to ensure that the banks continue to be first in line in receiving their money from servicing loans they extended at the back of government guarantees,” he said.
“The banks do not care whether the SOCs that were given these loans are economically viable or not. In fact, as things stand the banks have demonstrated that they do not care about the survival of these SOCs. We have always said that there needs to be an investigation into these government guarantees which are given to banks who charge above market rates.”
- Inside Politics
