Published in 2019
South Africa’s Constitution
Embedded throughout the Constitution of the Republic of South Africa and its Bill of Rights is the pursuit of social justice for South Africa’s citizens.
Social justice entails the fair and equitable distribution of wealth as well as access to opportunities and social privileges.
Social justice is a prerequisite to the dignity that every South African is Constitutionally entitled to.
The preamble to the establishment of the International Labour Organisation (ILO) recalled that “universal and lasting peace can be established only if it is based upon social justice.”
It is a sine qua non that our democratically-elected Government’s policies should advance the cause of social justice, including in its international trade policies.
I’m sure the custodial ministry of South Africa’s trade policies, The Department of Trade and Industry, would fully subscribe to the foregoing, particularly in that it is now led by Mr Ebrahim Patel MP. The Minister’s background in labour activism, amongst others, during the apartheid years gives South Africa’s workers cause for optimism that finally the Country will ‘grasp the nettle’ in the preservation and pursuit of job creation. Government policies that destroy jobs are anathema to social justice and thus it could be argued, if not explicitly then certainly implicitly, are contrary to South Africa’s Constitution.
South Africa’s International Trade Agreements
All of South Africa’s international trade agreements should have safeguard measures to protect against unintended and unforeseen outcomes; and where in the unlikely event that these provisions are not explicitly included in existing agreements, their inclusion should be negotiated by way of amendment.
Safeguard measures are precisely that; they protect South Africa’s citizens and promote social justice, both of which are Constitutional obligations imposed upon Government.
It goes without saying that the foregoing must apply to the Southern African Customs Union (SACU) agreement as well.
The emaSwati Nation
The Kingdom of eSwatini is a small nation with a population of just over a 1 000 000.
Its GDP per capita is roughly US$4,6k, below that of SA’s US$6,4k but above that of Nigeria’s US$2k and many others.
Its GDP of US$4b is understandably dwarfed by SA’s US$370b. It is heavily dependent on SA economically, with the bulk of its exports and imports being with SA. Its currency, the lilangeni, is linked to the ZAR on a one-for-one basis and is in the common monetary area. The eSwatini fiscus relies on the SACU common revenue pool (tariffs mainly collected by SA and improportionally redistributed to eSwatini, amongst others) for its budget revenues.
Without in any way disparaging eSwatini and its sovereignty, these metrics suggest that eSwatini is more akin to one of SA’s larger cities economically and demographically.
The SACU Agreement and the South African Sugar Industry
Despite repeated calls for it to act, the Dti under former Minister Rob Davies, adopted a lassaize-faire approach towards resolving the eSwatini issue and by so doing failed
- to protect the South African sugar industry against the assault by the eSwatini sugar industry on the former’s sustainability,
- to protect the 1 000 000 livelihoods dependent on the sugar industry in SA, and
- to protect and grow the 350 000 jobs, both direct and indirect, provided by the SA sugar industry.
Former Minister Davies might defend this stance by stating that on many occasions he requested the South African sugar industry to meet with its counterparts in eSwatini to thrash out a resolution. This approach failed repeatedly. This is not surprising – it was a ‘fools errand’, a task with no hope of success. Minister Davies should have known there was no appetite from SA’s counterparts to compromise, as well as the fact that the Council of the SA Sugar Association has conflicted Councillors whose investments in the eSwatini sugar industry enjoy the benefits of the status quo.
It is worth noting that the 1 000 000 livelihoods dependent on the SA sugar industry is not substantially dissimilar in number to the total population of eSwatini. One could forgive the oft quoted charge that hitherto the policy of the Dti towards eSwatini’s sugar exports to SA has seemingly ranked the livelihoods of eSwatini’s citizens ahead of its own; and as such has failed in the pursuit of social justice and job creation as it is Constitutionally required to do.
Win-Win
As I remarked at the outset, now that there is a new Minister in situ, there is cause for optimism.
The dramatic escalation of sugar imports from eSwatini dwarfs the other challenges facing the SA sugar industry and is by far the single biggest issue threatening its sustainability.
The good news is that in conflict resolution there is more often than not a win-win option available.
The sugar industry in eSwatini is an important sector in its economy; a sector which is overly concentrated in terms of ownership and control. Three corporates own and control the eSwatini sugar industry; RCL, Illovo and Tibiyo Taka Ngwane – the latter an SOE corporate in eSwatini.
Given the importance of the eSwatini sugar industry to its economy coupled with eSwatini’s dependence on SA economically, surely the R2 billion the SA sugar industry transfers to eSwatini each year can be delivered in way that does not bring the job-strategic SA sugar industry to its knees. The current situation is tantamount to asking the SA sugar industry to enjoin with the SA government in providing eSwatini with financial and fiscal assistance.
The argument that the SACU agreement prevents any action, which I believe the previous administration might have made, does not wash. Government‘s international trade policies must not and cannot threaten and prejudice the pursuit of social justice in SA.
The request of Minister Patel (perhaps with the Minister of Finance) would be to find a way of continuing to render financial assistance to eSwatini (which should not be too difficult to restructure given that it already receives assistance via a wide range of measures) without sacrificing jobs and social justice in SA.
1 000 000 SA livelihoods wait and watch with renewed hope.
Justice Hunt