Our Burning Planet


Just transition, redux — Cosatu’s bid to save Eskom, the climate and South Africa

Cosatu has emerged as a force in favour of action on the climate crisis. (Illustrative image | sources: Bloomberg via Getty Images / Waldo Swiegers | COSATU logo)

South Africa’s most powerful trade union federation has offered the ANC a proposal: It can access PIC funds to pay off Eskom debt if the utility is not privatised and no jobs are lost. Among the conditions are a state-led renewables drive based on a ‘just transition’ for workers. The idea, on the face of it, is potentially game-changing — it extends to all sectors of the economy and stares climate collapse square in the face. For the moment, it appears, the ANC is listening.

I. Ready

“The real choice is not jobs or environment. It is both or neither.”

Back in the 1990s, when the Canadian union leader Brian Kohler uttered these words, members of the international labour movement were more concerned about the economic consequences of climate collapse than just about anyone in a government or corporate office. At the beginning of the decade, before the first global treaty on the reduction of carbon emissions had been drafted, the movement’s intellectuals were talking about a “superfund for workers” — a mechanism to offer financial support or reskilling options for labourers displaced by climate policies.

In that more innocent era, the foresight of the unionists must have sounded to the power brokers like the voice of common sense. At the Earth Summit in Rio in 1992, where the United Nations Framework Convention on Climate Change was formed, it was the thinking of the labour movement that lay behind the adoption of Agenda 21, the non-binding UN resolution that introduced the world to the concept of “sustainable development”. The core plan was to weld economic growth to social equity and then to build within the scaffolding of environmental protection. Given that communism had recently fallen victim to something called the “end of history,” Agenda 21 posed a threat to practically no one.

Two decades later, it turned out that history was still happening. In a periodical published by the International Labour Organisation in 2010, it was observed that income inequality had ballooned since the Rio Earth Summit, that workers were “gaining a decreasing share of global GDP to sustain their livelihoods”, and that long-term strategies concerning social justice and economic growth had been “undermined by corporations’ fixation on the short-term benefits to shareholders”.

The periodical was titled “Climate change and labour: The need for a ‘just transition’ ” — its chapters offered deep dives into subjects as diverse (and cutting-edge) as the linkages between climate change and employment, workers’ rights in environmental policies and the greening of the offshore energy sector. Through its 300-plus pages, one overriding theme was evident: despite their “sustainability” rhetoric, UN-backed climate negotiators had shown at best a limited interest in the fate of blue-collar workers.

From 2010 until 2019, those same negotiators would show even less interest. The phrase “just transition,” which had first been used by Kohler in a 1998 labour movement newsletter, would attach to itself the business-averse odour of eco-socialism. It didn’t help that the NGO Friends of the Earth, an international enemy of neoliberalism, had made the concept a linchpin of its climate advocacy in 2011. Neither did it help that the Republican Party, as part of its 2012 US election campaign, had mounted an attack on sustainable development, denouncing Agenda 21 as “erosive of American sovereignty”. In the end, although the idea was conceived to include both governments and global capital in the solution — and although the 2015 Paris Agreement would contain a number of references to the term — the just transition would stand in opposition to the status quo.

This may have been a good thing, because by 2020 the status quo had delivered humanity to the edge of the cliff. With not a single international climate treaty worth the paper it had been written on, every nation-state would experience the vertigo differently. 

In the third week of the new decade, around the time that asset management firm BlackRock — with its $7-trillion in holdings — was announcing its exit from fossil fuel stocks, the veil was lifted for Our Burning Planet on the economic realities of climate breakdown in South Africa. Our interviewee was Matthew Parks, Parliamentary co-ordinator for the Congress of South African Trade Unions (Cosatu), and the key protagonists in his narrative were Eskom, the mineworkers and the just transition itself. 

“Now, the National Union of Mineworkers is facing the prospect of a bloodbath in the coal sector,” said Parks, after pointing out that NUM, one of Cosatu’s foundational pillars, had lost almost half of its members to retrenchments in the past eight years. “The damage could even be higher than the coal industry jobs, if you take into account the economies that are dependent on a particular coal-fired plant, the spaza shops, etcetera.”

The coal organisers in NUM, according to Parks, had been told “again and again” that Eskom would need to shed anywhere between 5,000 and 17,000 jobs in the near-term future. Although this had everything to do with the utility’s enormous debt and the imperative to cut costs, it was nonetheless germane to the larger climate picture.

“It’s forced them to pull back a bit from talking about renewable energy and the just transition,” explained Parks, “because they feel, you know, that they’re bleeding left and right.”

And yet, in the “key intervention proposals” that Cosatu submitted to the lekgotla of the ANC’s National Executive Committee on 19 January 2020, the path ahead was clear. The document, which was shared with Our Burning Planet, contained two points that from our perspective held the promise of true change. Both of these points appeared under item 4, sub-titled “Eskom and the SOEs,” where it was stressed that the problems at the power utility threatened to “implode” not just the state but the entire South African economy.

After calling for a social compact between government, labour and industry to “stabilise and save” Eskom, the proposal highlighted its non-negotiables: the utility would not be privatised and no jobs would be lost. Then it went into the details of its “pro-worker turnaround plan”, which would be driven by a special-purpose finance vehicle to reduce the debt from R454-billion to R200-billion. Among the 15 conditions of the turnaround plan (more on which below), were those two game-changing points.

First, a just transition strategy would be developed and implemented for workers and host communities at power stations and coal mines “reaching the end of their life-spans” in Mpumalanga, Limpopo and the Eastern Cape.

Second, and related to the above, public and private investments would be leveraged to “produce renewable energy technology” in those provinces, with a firm eye on providing alternative employment to workers whose jobs were at risk.

II. Steady

Of the 12 nations that place above South Africa on the Global Carbon Atlas, which tracks the carbon dioxide and methane emissions of 221 countries, very few have trade union movements with the political heft of ours. China, at number one in the world, sends its dissident workers to be “re-educated”; the United States, at number two, hasn’t really had to deal with labour muscle since the disappearance of Jimmy Hoffa in 1975; and India, at number three, is now run by the rightwing nationalist Narendra Modi, whose ambitions for the home-grown manufacturing sector don’t sit very well with workers’ rights. 

With strongman states like Russia, Iran and Saudi Arabia taking up three places in the top 10, and Japan and South Korea seemingly unfazed by their reputations as carbon criminals, that leaves only Germany — at number six — as a comparison worth making. 

What’s instructive about Germany is that its mass conversion to renewables, widely known as Energiewende, has been driven largely by climate activists, with the unions either reluctant to advocate for a phase-out or counter-mobilising against the protesters. “The conflict in Germany,” as a visiting scholar recently explained in an Our Burning Planet op-ed, “involves clashes between unionists and environmentalists, the pitting of jobs vs climate justice and the lack of a shared vision for a just transition.” 

Here, by contrast, it’s not the climate activists who will wake the government from its slumber — in this country, without the buy-in of the workers, renewable energy is destined to remain forever on the margins. The National Union of Metalworkers of South Africa (Numsa) was wise to this truth as far back as 2011, when it first called for a “socially owned” renewables programme, a demand that its national congress adopted as a resolution in 2012. According to deputy chief Karl Cloete, who updated Numsa’s position in early 2018, the just transition had always been about the “health of workers, surrounding communities and environments”. Where Numsa differed from the ANC, wrote Cloete, was in the ruling party’s “capitalist vision” for renewables, by which he meant the contracts between Eskom and private sector providers.

Minus the incendiary language and a few important details, a renewables sector owned by the commons is exactly what Cosatu proposed at the meeting of the ANC national executive on 19 January. And the fact that Numsa was expelled from the Cosatu umbrella in 2014, dropping the latter’s active membership from 1.9 million to about 1.6 million, is likely to turn out here in the federation’s favour — if only for the reason that its collective thought processes, unlike Numsa’s under Cloete and Irvin Jim, are based way more on economic fundamentals than on “socialist revolutionary” screeds

The primary lever in Cosatu’s turnaround plan for Eskom is the above-mentioned special purpose vehicle, which is meant to consist of a “social compact” — that phrase again — between government, the Public Investment Corporation and various development finance institutions. At the centre of the bailout model is Eskom’s inescapable obligation to decommission 70% of its ageing coal fleet by 2040, by which time fossil fuels will be anathema to global capital.

If this sounds, in turn, like President Cyril Ramaphosa’s $11-billion climate finance deal, which proposes a similar blended finance facility to pay off Eskom debt and kick-start a state-owned renewables programme, that’s because it is. The major departure from Ramaphosa’s plan, as outlined by Our Burning Planet in October 2019, is the place of the PIC.

“In all reality,” Parks told us, “the PIC will absorb the biggest chunk of Eskom debt.”

Given that Cosatu had successfully lobbied in June 2019 for worker representation on the PIC board, a fail-safe engendered by the historic looting of workers’ retirement funds, this statement was neither controversial nor surprising. Behind it, however, lay an inspired parry at the ANC’s vulnerabilities, a pitch to the ruling party that it almost couldn’t afford to pass up. 

The starting assumption was that Eskom could manage R200-billion of its R454-billion debt, as Cosatu leadership and members of the NEC had been told. While the remaining R254-billion would be shouldered in the main by the PIC, there would also be significant contributions from the state, the Industrial Development Corporation and the Development Bank of Southern Africa. The payment, according to Parks, would be a once-off. “The looting and bleeding must stop,” he insisted. “We can handle one bailout. We can defend this to workers, but the PIC can’t manage that every year, financially or politically.”

Parks acknowledged that “some will be angry”, but explained that the offer to the ANC was not simply about saving the 44,000 Eskom workers’ jobs — it was about “12 million South African jobs,” he said, as there would be “no economy left” if Eskom collapsed.

“It’s important to remember,” he went on, “that the funds invested by the PIC — namely the GEPF, UIF and COIDA — are defined benefits. The amounts paid to claimants, as in ‘pensioners’, are set according to income, contributions and years of service. They are not linked to the positive or negative performance of the PIC. The PIC has done well enough to manage an investment in Eskom now. Equally, the PIC is workers’ money and it must benefit workers, not just sit on the stock market.”  

That, in all its reasonable glory, was the one side of the equation. On the other side were the conditions, the wholesome pounds of flesh that Cosatu would take for its generosity. 

“It’s not a blank cheque,” said Parks. “Our conditions, aside from workers not being retrenched and Eskom not being privatised, are that corruption must be dealt with. Those who have stolen must be charged. Not just one or two people, but the dozens we know about. We also need to see a comprehensive forensic audit of all Eskom contracts, including coal supply.”

Indeed, in the NEC lekgotla document that Cosatu shared with Our Burning Planet, these conditions were all stressed. Further conditions in the document included the implementation of a “comprehensive debt recovery plan” to recover the billions owed to Eskom by government, SOEs, municipalities, communities (“including Soweto”) and consumers at large.

No exceptions must be allowed not to pay,” the document plainly stated. “Treasury must simply deduct monies owed to Eskom by departments, SOEs and municipalities from their budget allocations and directly transfer it to [the power utility].”

It was hardball, with a nasty surprise for the coal lobby. From the point of view of climate mitigation and the long-term energy mix, the place where the lowest-cost energy option would meet the movement of global capital out of fossil fuels, the core item was that “the minister” needed to broaden Eskom’s “generation mandate” so as to allow it to “expand its own renewable energy generation capacity”.

While Parks could not be drawn on Mineral Resources and Energy Minister Gwede Mantashe’s reaction to the proposal, he did say that Cosatu had initially presented its objectives to the ANC in November and December 2019, where they achieved “broad political support”.

But the questions, like the rifts in the ruling party, were clear. In the face of such level-headedness from his partners in the Tripartite Alliance, would Mantashe, as the ANC’s national chairperson, back down? Would he foreswear his love of “clean coal” and his legacy support for the coal lobby? Would NUM, his political alma mater, side with him? 

And on a completely different tack, would the current renewable IPP model, which had been beaten into oblivion by Mantashe and his predecessors, survive the Cosatu proposal in any way, shape or form?

These and other questions were impossible to answer, except by referring again to the intractable climate.

III. Go 

In mid-January 2020, a few days before The Economist published an editorial on Big Oil’s “do-or-die decade”, Foreign Policy came out with a feature that explained how climate change was supercharging the left. Global warming was likely to elevate socialists to positions of “unprecedented power”, the piece contended, and at the same time expose its “deepest contradictions”.

The hyperbole was odd, given that for much of the 20th century, socialists had run half the planet, an era when its contradictions were on full and unpleasant display. 

Still, the underlying argument was as compelling as it was self-evident. “[The] left wings of both the Democratic Party in the United States and the Labour Party in the United Kingdom have committed themselves to programmes known as the Green New Deal,” the author, Adam Tooze, director of the European Institute at Columbia University, began. “Across Europe, the Greens now rival right-wing populists in their political energy.” 

Tooze’s thesis, in a nutshell, was that anchoring climate change politics to demands for wide-ranging social restructuring would create powerful enemies. The most empowered of those enemies, in the short-term at least, would continue to be the nationalist right — the legions of proud Murdoch media-consuming citizens in countries such as Australia and the United States who would refuse, on pain of death, to give up their hamburgers and SUVs. But these major political fault-lines would only widen, warned Tooze, exposing other fractures and seams that had been waiting to open up.

As the example of Germany proves, one such seam lies beneath the global labour movement. With both sides convinced of the existential righteousness of their arguments, the explosive potential of the showdown between activists and unionists is something we have not really begun to assimilate. Even less have we begun to consider the combustive latencies within the union movement itself.

At the UK Labour Party conference in September 2019, Tooze observed, the leader of a certain trade union was raging that a mass decarbonisation programme would require the “confiscation of petrol cars” and the “rationing” of meat consumption and airline flights, an intervention that would place the jobs of entire industries on the line. To which the leader of an opposing trade union responded with a line straight out of the Kohler school, a maxim that encompassed the essence of the just transition and the principles of Agenda 21:

“There’s no jobs on a dead planet!”

Cosatu, as a labour federation with an outsized influence on the history and politics of its own state, has now actively chosen the latter side of the divide. Following its pivotal role in smashing apartheid under the leadership of Jay Naidoo and Sydney Mufamadi in the late 1980s, the federation had brought its power to bear on issues as nationally significant as the Aids crisis and the deteriorating situation in Zimbabwe.

In 2007, at the seminal ANC elective conference in Polokwane, it had punished Thabo Mbeki for his stance on both these issues by throwing its king-making weight behind Jacob Zuma. The following decade would turn out ironically bleak for Cosatu, but now it appeared to be back — taking the high road on what was easily the most significant issue of all. 

“The waters are rising,” Parks confirmed for Our Burning Planet. “We’ve been keen to stop all this talking about a just transition and actually get things moving, so that we have it. We know we could lose whole sectors, we know we are facing a bloodbath, so we need government to use whatever sticks it’s got to force industry to look at just transitions for every sector of the economy, not only energy.”

Although the job losses implied by the Fourth Industrial Revolution were a compounding concern, it was climate change, according to Parks, that was the “big ticking bomb” — the factor that threatened the survival of not just the planet, but the workers and the communities who would bear its brunt.

“Both environmental and economic denialism are dangerous and should not be entertained,” he said. “We think we can and must tackle climate change and unemployment simultaneously. All it requires is creativity, political will, planning and resources.”

The South African industries that stood in the path of the threat, he insisted, ran the gamut from “transport and mining” to “health and education”. Throughout the interview, he returned to the mantra that preparation was better than denial; that one should “never let a good crisis go to waste”. What was truly remarkable, however, was that the ANC seemed to be listening.

“At the NEC lekgotla,” said Parks, “the economic commission was looking specifically at implementing a just transition plan for every government department. Because really, if we don’t do things like that, we could see unemployment rising from 40% to 60%.”

So there it was, a set of worst-case economic scenarios that were compelling the ruling party — via the insights and warnings of a trade union federation — to look the reality square in the face. If this was all a little hard to believe, well, that was because the enormity of climate breakdown was hard to believe.

No doubt, there would be those in the ANC and the broader Tripartite Alliance who would continue to resist. The coal-mining members of NUM, for instance, who would fail to see why they should give up their jobs for an “idea”. And such fears, although entirely legitimate, would no doubt be exploited by the higher-ups: Gwede Mantashe, perhaps, or the looters who hadn’t yet been arrested, or anyone else looking to bleed the populist vein. 

But if there was one thing these demagogues-in-waiting were sure to discover, it was that climate collapse had never been someone’s idea. The city-flattening hurricanes and the shack-destroying floods and the crop-killing droughts would continue to come. The seas would continue to rise. More every year, worse every year.

At the moment, no one knows exactly when or how the truly crippling effects of climate breakdown will play out in South Africa. There are many projections, the best of which arguably come from industry itself. In November 2019, Our Burning Planet assessed the submissions of 16 major local conglomerates — across the sectors of food retail, mining, financial services and healthcare — to the Carbon Disclosure Project. The picture painted was of a grim near-future landscape, one where current business models would struggle to co-exist with food, water and basic services for the majority.

It’s this picture, above all else, that an economy-wide just transition can help to avoid.

And whatever South Africa looks like in 2030, Eskom will still be at the centre of the canvas. Either we will have a state-run renewables programme well on its way to replacing our ageing coal fleet, or the vested interests will have ensured that we are international climate pariahs.

In a country that is the 13th-largest emitter of carbon dioxide on Earth, any mitigation is an incremental lessening of the devastation. If it takes a state-led effort to mitigate a lot, if only trade unions can ensure that minimum jobs are lost, if the politics need to shift a little to the left, so be it — we are where we are. 

In the end, the people themselves will decide what is “just”. DM

Absa OBP

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