Whither Nedlac? Try harder, change it or chuck it?

THE National Economic, Development and Labour Council (Nedlac) was one of the earliest creations of the new, hope-filled South Africa.

The drafters of the 1994 legislation that established it saw it striving to attain consensus between business, labour, the government and the community on matters of public concern, particularly on the economy. Nedlac had mandates to consider labour-market and economic policies before they went to Parliament.

For nearly 20 years, legislation has duly been submitted to Nedlac. Among its early successes were the agreements hammered out on the late 1990s package of new labour legislation, and new competition legislation. Social dialogue was working and the path seemed open to a social compact that would bring everyone together to heal South Africa’s socioeconomic ills.

But it has been a long time since anyone had that kind of hope for Nedlac. The consultation process has become tortuous, especially if it’s about anything controversial. Nedlac is where policies go to die, some participants joke bitterly.

So when the Treasury bypassed Nedlac last week, submitting the new version of the youth wage subsidy scheme — the Employment Tax Incentive Bill — straight to Parliament, it was another blow to an ailing body.

But more fundamental for the future of Nedlac was the legal opinion the Treasury procured from senior counsel to justify this. The opinion concluded that the state was under no obligation to consult Nedlac before tabling legislation. "Nedlac is an advisory body, no more and no less," senior counsel opined. That just might be okay, except that the past year has shown the extent to which events — notably Marikana — have bypassed Nedlac as an advisory body too. At a time when social dialogue was most needed, Nedlac was nowhere. So there is a fair bit of soul-searching going on about what to do about Nedlac. And there seem to be three views, which can broadly be captured as "try harder", "change it", or "chuck it".

The "try harder" option rests on the argument that there is nothing wrong with Nedlac — the problem is with the social partners. It is no longer taken as seriously as it once was. No one sends their best people. There’s more grandstanding than negotiating, especially on the part of labour. And, some critics argue, if labour doesn’t get its way at Nedlac, it uses its relationship within the ruling alliance to lobby the government. Business also lobbies the government, through other forums. And the government itself doesn’t appear to be particularly serious about Nedlac.

The National Development Plan may talk the language of social pacts, as do some in government, but the government doesn’t send its top people to Nedlac either. And critics note the role that Economic Development Minister Ebrahim Patel, for example, has played in undermining an institution he used to dominate. He used to be labour convener at Nedlac; now he convenes summits that bypass it. In this view, social dialogue remains important. But if Nedlac is to work, the social partners must commit to making it so.

In contrast is the "chuck it" school of thought, which rejects the idea that Nedlac should be made to work at all. This view is that Nedlac was a creature of its time, formed when democracy was just coming into being in South Africa. No one was in charge so everyone had to keep talking in order to put the policies in place to take the new South Africa forward. Nedlac was the forum for that, and a creative one it was too.

But now we have a government and it must govern, though it can consult. We have a Parliament whose role it is to make laws. And as long as Nedlac negotiates legislation, it is virtually a second parliament. This view says it is time to disband Nedlac. And where there is scope for social partnerships, this can be done through specific bilateral or multilateral forums.

But why set up new forums when there is one already? Without Nedlac, would the government feel obliged to consult? And are we that ready to give up on the idea that we need institutions of social dialogue — ideally even a social pact — to fix the economy and get it to grow and create jobs?

These are among the arguments for Nedlac to be changed, not disbanded. But what kinds of reforms? How could Nedlac be repositioned to strengthen it and give it a more constructive role?

It is clearly not working well as a bargaining forum. It might work better if it focused on being a forum for social dialogue, a problem-solving institution in which the partners could share information and explore solutions to socioeconomic problems. It could be more of a think-tank for all the social partners — rather than the bargaining chamber that the latest legal opinion indicates may not even have much legal status.

This is one view of reform, one which would require an improved Nedlac office, with better research capacity. It wouldn’t rule Nedlac out as a bargaining forum. But it might position it to play a more useful role.

But that role is up for debate. After Marikana, an external review of Nedlac was commissioned, sponsored by the International Labour Organisation. That review is being taken forward within Nedlac, for now. It should throw some light on the try harder, versus change it, versus chuck it question.