1. L ABOUR S TRUCTURE, S UCCESSES C HALLENGES AND THE S OLIDARITY S UPPORT NEEDED FOR T RADE U NIONS Yewa Kumwenda-BAHRM, DIP ED. MUZ Assistant Director- Research and Productivity LABOUR PRACTICES, SUCCESSES, CHALLENGES AND MODE OF SOLIDARITY NEEDED FROM CIVIL SOCIETY Yewa Kumwenda MUZ-Assistant Director for Research and Productivity 17th July 2013 FATMOLS LODGE WORKSHOP

2. P APER ORGANIZATION Introduction Mission of MUZ Labour Structure/Practices in the Zambia Challenges encountered Successes scored and Solidarity support needed

3. I NTRODUCTION Zambia inherited a strong economy at independence from Britain. Its GNP was one of the highest in Africa. Zambia’s labour industry performed well after independence mostly due to the centralized economy. Prior to 1991, Zambia boasted a lot of industries such as a thriving textile industry and an organized mining industry. After 1991 with the introduction of a market economy, over 220 companies were privatized but most of them were shut down because their products could not compete with foreign goods produced mostly in South Africa. The closing down of a lot of factories created a lot of unemployment in Zambia, a trend that still continues. This paper will outline the characteristics of the Zambian labour market and zero in on mining. The paper will also look at the challenges and successes Zambia is facing in creating jobs for its citizens in mining then offer recommendations on how to speed up decent, permanent and pensionable job creation in the country. It will also highlight the solidarity support needed by Trade Unions from the civil society to achieve this.

4. MISSION OF MUZ  The mission of the Mineworkers’ Union of Zambia ( MUZ ) is to protect and promote the interests and welfare of mine and allied workers in the mining industry in Zambia and to organize and unite mineworkers into strong miners as a basis for promoting social justice, positive economic and safe working environment.

5. O VERVIEW OF Z AMBIA ’ S L ABOUR M ARKET ( THE FOLLOWING TABLES COURTESY OF DR. LUBINDA HAABAZOKA -CBU)

6. O VERVIEW OF Z AMBIA ’ S L ABOUR M ARKET

9. L ABOUR STRUCTURE IN THE MAJOR MINES IN Z AMBIA (D ATA FROM MUZ COURTESY OF KCM) Number of Employees ~20,000~16,000~4,500~5,000 Mining CompanyKCMMCMLumwanaKansanshi Labour productivity remains very low – particularly at the older legacy Mines (KCM, MCM)

10. C HALLENGES FACED BY SOME MINING COMPANIES Labour costs: have increased over 220% in the last eight years, a 100% increase over and above cumulative high inflation. Power : rates have increased by 60% over and above contractual increases since 2008 and have acceded to a further increase of approximately 30% over the next three years. Input commodities have risen by approximately 200% in the last eight years Structural challenges; high open pit strip ratios and the deep and wet conditions at Konkola and Mopani. Royalty has increased ten fold since 2008 ( 0.6%-6%) Increment of Corporate Tax from 25%-30%.

11. C HALLENGES OF TRADE UNIONS IN THE MINING INDUSTRY Massive loss of employment after privatization from 56 582 in 1991/2 to 31 033 in 1998 and now 40 000; The mines ever since the 1930s and throughout the history of the ZCCM from 1982 up to 2000, the mines established a corporate culture which extended past a workplace involvement. The employers in the mining industry provided for all employees’ needs such as housing, hospitals and medical assistance, education for children, subsidized food, free electricity, water, transport, and all social amenities for sport, recreation, and social welfare, as well as clubs in the mining communities.

12. Secrecy of D.A.s signed by GRZ and MNC in the mining sector. Unions not involved; With the fall of the metal prices in 2008-2009, the profit margins of mining companies decreased. Facing production costs between US$ 3.500 and US$ 5.500 per t of copper, the downgrade on international markets caused several hardships to the Zambian mining industry leading to retrenchment of 9516 unionized employees in most mining operations as shown below; KCMMCMLUACHAM META BWAN MUKU FQML MINI PROS. AMCO JVCGRIN LTA TOTAL 20561623172012533758912507004509516

13. Multiplicity of unions after a change of one industry one union law. Workers no longer represented with one strong and united voice; Unsafe mining and processing methods-CCS, KCM, Mopani, Lumwana (ZEMA penalised CCS, KCM and shut down Mopani’s operations in Mufulira affecting Kankoyo residents; Poor compensation rates for the injured miners by workers compensation fund; Introduction of new technology taking away the jobs; Casualisation and informalisation of labour- non pensionable jobs and poor gratuity rates(hard for unionization);

14. S UCCESSES SCORED AND S UGGESTIONS FOR CIVIL SOCIETY SOLIDARITY Fighting tooth and nail to better wages and conditions of services for mine workers; Lobbying government to repeal to secret D.A.s which were signed; Forcing mining companies to use safe mining and processing methods; Fought to raise mining taxes so that more money could go to the national treasury to be used to build schools, hospitals, roads, etc. -Corporate tax from 25% to 30% -Variable tax 15% -Mineral royalty from 0.6% to 6%

15. Currently fighting to keep 2000 workers at KCM in employment; The government stays with an investor friendly attitude compared to competitors, to make capital investments grow further; The windfall tax gets reinstalled in a way that a social fund is created to lower hardships created in economic downturns in the future, as well as to facilitate development in the mining communities;

16. The Zambian private sector gets further involved in the mining activities, especially concerning value addition. Instead of only allowing tax holidays to the big multinationals from abroad, the incentives given should be higher for nationals to create their own businesses; Technology and skills transfers gets enforced in the mines; The mining companies and their CSR strategies are scrutinized by their whole economic impact on Zambia, instead of only questioning their social surplus activities;

17. Existing labor and environmental legislations and regulations get enforced by the government, before wasting public finances on new legislations. Capacities should therefore be directed to the agencies being confronted with their implementation and monitoring, so that the demanded benefits of these legal texts find realization for the mineworkers and the mines surrounding communities; The minimum wage gets augmented considering the JCTR’s Basic Needs Basket;

18. Casual or fixed term employment remain an opportunity for times of economic hardships, instead of letting them be an alternative to durable and socially insured jobs-legislation for gratuity lacking (Tripatite Labour Council currently looking at it); Empower ZRA to carry out independent audits of mining firms in terms of production and operational costs to determine the real quantity and value of what is exported so that we can get the correct taxes for Zambia; Lobby government to come up with a law on CSR for all mining firms which will include short and long term CSR programmes that have the backing of the local communities;

19. ZEMA to ensure mining is done to protect the environment and the inhabitants of the local communities-must be empowered to make independent inspections and punitive measures; Government to partner with banks to support credit financing so that the local people can venture into mining; Additionally, there has been no deliberate policy to promote value addition industries in the mining sector which has led to colossal loss of revenue and lack of creation of job opportunities. We urge government to lobby international manufacturing companies to set base in Zambia as this will increase our export revenue, create employment and turn our country into middle income nation.

20. Creating a stabilization fund whose main aim will be to cushion any price reduction in metal prices and also to provide for reserves for future generations;

21. T HANK YOU FOR THE ATTENTION !!!