An increasing focus on payment from the poor for services has often become synonymous with their participation. There is much discussion about how the poor can and do pay for their services. However, one of the lessons of poverty reduction projects and community participation in service delivery projects is that participation means decision-making first, and payment second. Requiring the poor to pay without involving them in the decisions that lead to those services is inappropriate. In this context, developing cost recovery within poor communities can be introduced in a number of ways, through communal or individual approaches. These are explored further in Chapter 9.
Box 6.18 A Story of Labour Relations | |
The municipality of Nelspruit has had to engage in complex and extended negotiations with trade unions about the water services concession with a private consortium, aimed at extending coverage to the town's poor areas. The protracted negotiations brought to the fore the need for due consultation with labour, and the complexities of negotiation with unions, especially in situations where trade unions are well organised and institutionally well established. Even though the project has gone ahead, it remains the source of much controversy and trade unions question its appropriateness and successes. When the local council announced in 1996 its intention to explore PSP options, it obtained cooperation from the local branch of the South African Municipal Workers Union (SAMWU). The early drafts of proposed project documents all attempted to assure workers that their employment conditions would not be jeopardised, and included an extensive section on workers' rights, labour conditions, employment equity and recognition of collective bargaining laws and procedures. In part the council consulted the local union as a stakeholder, while in part South Africa's labour legislation compelled it, as an employer, to engage in such elaborate interactions with organised labour. The local unions briefed their national office about these developments, and soon the latter became an integral part of the process. At national level, the union officials were in principle opposed to the partnership, and their terminology reflected a categoric opposition: they branded it 'privatisation', profit-seeking that showed scant concern for service provision to the poor. The differences between the municipality and SAMWU became so fierce that the council suspended negotiations with the preferred bidder in late 1996. The provincial government established a team of provincial politicians to engage with the different parties, and in February 1998 a 'water summit' was held, involving the council, provincial politicians and trade union officials. SAMWU's approach here attempted to make PSP a fallback option, with public provision being the preferred option. The council concluded that this offered no meaningful solution to their capital financing needs. By April the differences were still not resolved, and the council decided to re-enter its talks with the preferred bidder, without union agreement. A series of meetings followed between the national government department responsible for local government, the South African Local Government Association (SALGA), and the national leadership of the Congress of South African Trade Unions (COSATU), to which SAMWU is affiliated. A framework agreement was concluded in late 1998, presumably as a guide to the conditions under which partnerships at the municipal level would be acceptable to labour, government and organised local government. However, differences about the authority and meaning of the agreement soon became apparent, as COSATU insisted that no partnerships should proceed unless approved by a newly formed sectoral forum established under the terms of the agreement, whereas the government and SALGA insisted that the agreement had not made partnerships subject to such approval. Nelspruit did submit its draft contract however, and the national department's legal advisor argued the case for it was consistent with the agreement. Although union officials continued to object to this, the council decided to go ahead with the process and the contract was signed in April 1999. Subsequently, union officials have continued to question the arrangement, and there have also been a number of reports by trade union sources claiming that the private service provider is not honouring the contract. Occasionally, public exchanges still occur, and labour sources insist that infrastructure extension is slow, services are unreliable and costs are escalating. These claims are denied by the council and the service provider. The opposition from SAMWU and COSATU must be placed in a national context. They see this scheme as a pilot for their national anti-privatisation campaign, fought on a number of fronts nationally by COSATU. Therefore, the resistance to the Nelspruit proposals must be viewed in conjunction with resistance to similar strategies against national privatisation and partnerships, as well as private sector participation in other municipalities. This makes negotiations very difficult for the local council, and also increases the risk for the private operator. In each partnership negotiation process, an assessment must made of whether national trends have this effect, and whether the council will gain more from engaging in the partnership than from succumbing to the external pressure. It also underscores the importance of gaining external support from higher levels of government to help create an environment conducive to PSP. | |
Sources: Kotze, Ferguson and Leigland, 1999; NBI, 2000 | |