NATIONAL LABOUR MARKET COMMISSION REPORT
Chapter 9

Labour Migration

  1. The terms of reference require the Commission to consider:

    ... an appropriate policy framework for dealing with access to the South African labour market by non-South African nationals with due regard for the following factors; the supply of labour; the availability of employment and the imperatives of regional economic co-operation and development.
  2. The first section of this chapter surveys the relevant data on migration patterns. This is followed by a description and analysis of the various mechanisms governing entry into the labour market. The third section examines institutional mechanisms and arrangements governing economic interaction between the states of the Southern African region. The final section examines the impact of migration on key sectors of the South African economy. The chapter does not consider in any detail issues relating to citizenship, broader human rights implications of pursuing certain migration policies and the status of refugees, as these fall beyond the scope of the Commission's Report.
  3. We should note that jurisdiction over key issues relating to labour migration and the regional labour market belongs to a range of government departments. Departments involved include Labour, Home Affairs, Foreign Affairs, Trade and Industry, Defence and Police. This clearly has implications for the manner in which policy is implemented and, at least, necessitates co-ordination between affected departments to ensure that individual policies are both complementary and effective.
  4. While the Commission is not solely concerned with the movement of labour within the region, this is clearly of central significance. The overall approach of the Commission is premised on recognition of recent developments outside the labour market. Cognisance must be taken of the rapid opening of regional capital markets in consequence of the liberalisation of national capital and investment regimes coupled with the liberalisation of foreign exchange markets. Thus, although data is not readily available, it is clear that South African investors are currently keenly opening up investment opportunities and purchasing long-term financial capital assets in neighbouring countries without being impeded. Indeed, South African investors are being assiduously solicited by the governments of Mozambique, Zambia, Malawi and Zaire. Over and above these capital flows is the increase in the level of trade between South Africa and its neighbours in a manner that immensely favours the former country.
  5. These emerging capital and trade flows within the sub-region have particular relevance for the balance that must, of necessity, be struck between the appropriate degree of regulation, on the one hand, and, on the other, the gradual opening up of the South African labour market. They suggest that the temptation to over-regulate labour flows because of anticipated negative consequences of migration on employment of nationals should be tempered by an appreciation of the positive employment and income benefits accruing to South Africans as a result of the liberalisation taking place in these other areas. It should be emphasised that balanced regional development is strongly dependent upon capital flows from South Africa into the neighbouring countries and strengthened exports back to South Africa. Attempts by South Africa to curtail these flows are short-sighted and ultimately self-defeating. In particular, the development of a national, productive and humane approach to regional labour market integration will not be possible in the context of constrained trade and capital flows.
  6. What emerges from all these developments is that there are immense benefits to be derived by all regional parties from the current trend toward the liberalisation of capital, commodity and labour markets. These trends should be reinforced rather than restrained or curtailed. In this respect the Commission believes that labour market policy should be informed by the need to regulate migration flows in a manner that complements, rather than defeats the move towards the integration of labour markets as well as capital and trade markets.

Trends Relating to Migration

  1. An evaluation of the extent of migration to South Africa is hampered by a lack of comprehensive and accurate data, particularly in relation to farm workers and undocumented workers. Available information shows that there are at least 250 000 foreign workers working legally in the country. This excludes contract workers on farms (other than refugees). Broadly speaking, labour migrants to the country may be categorised into four main groups: those entering under the Aliens Control Act 96 of 1991; contract workers, mainly for the mines, entering under bilateral treaties; undocumented workers; and refugees.

Immigration and Emigration Under the Aliens Control Act

  1. Persons entering the country for work purposes under the Aliens Control Act can be divided into those entering on immigration permits (that is permits for permanent residence), work permits and workseekers' permits.

Economically Active Immigrants

  1. The annual number of economically active immigrants rose from 3,085 in 1986 to a high of 6,727 in 1990 and then decreased steadily to 1,762 in 1995. The highest proportion of economically active immigrants (EAI) in 1995 were in professional, semi-professional and technical occupations (798), followed by managerial occupations (374) and then in clerical and sales occupations (250). The highest number of immigrants in the professional category was in the engineering and related technological occupations (178).
  2. Since 1986 the proportion of professional/semi-professional/technical and managerial/administrative immigrants has increased fairly steadily while immigration in the clerical/sales and artisan categories shows a relative decline. This reflects, in part, a stricter application of the government's job preference policy, especially since 1991.
  3. Countries in the region argue that they are losing many of their skilled people to South Africa because of the better salaries and higher standard of living in the country. Thus while there might be a brain drain of South Africans to Europe and elsewhere, there is, it is argued, a secondary brain drain from the rest of Africa to South Africa. The evidence demonstrates that African countries have lost skills to South Africa but at a declining rate. Between 1986 and 1994 economically active immigrants to South Africa from Zimbabwe peaked at 1,144 in 1988, and then declined almost steadily to 221 in 1994, while economically active immigrants from Lesotho increased from eight in 1986 to 76 in 1990, and then decreased to 38 in 1994. Immigration from Botswana, Swaziland, Mozambique, Zambia and Malawi peaked in 1990/91, then declined for the next few years to 1993, and all experienced a small increase in 1994.
  4. Although overall the number of economically active immigrants from the region has declined since 1988, the proportion of professional immigrants has increased, in contrast to the proportion of persons in clerical/sales and artisan occupations which decreased over the period. In absolute terms the number of professional immigrants from the region fluctuated from 361 in 1988, to 233 in 1992 and to 259 in 1994.

Economically Active Emigrants

  1. The number of economically active emigrants fluctuated from 5,578 in 1986, to 2,077 in 1992 and to 4,526 in 1995. The highest losses in 1995 were in the professional, semi-professional and technical category (1,680), up from 803 in 1991. Within this group engineers showed the highest attrition rate, 319 leaving in 1995, followed by persons from the education and related occupations (314), and then accountants (234). The number of medical practitioners and specialists leaving increased sharply from a low of 23 in 1991 to 93 in 1994 and then dropped to 71 in 1995. There was a sharp increase in the exodus of managerial and related people in 1995 (664 leaving the country), this representing a peak for the ten-year period. The number of clerical people who left (861) was slightly down on the previous year's figure of 1,008. A sharp increase in the emigration of artisans was recorded in 1994, 402 leaving (up from 244 in 1992), with a slight decrease to 319 in 1995. The emigration of professional, semi-professional and technical workers to Africa increased from 25 in 1993 to 209 in 1995, while emigration to SADC countries increased from 24 to 191 over the same period.

Net Gain and Loss

  1. South Africa experienced a net loss of 2,764 economically active people in 1995. The highest net loss (882) was in the professional, semi-professional and technical category, followed by clerical and sales (611), managerial, executive and administrative occupations (290) and then artisans (216). Of the professional category, the highest net loss was among accountants (199), then educational occupations (187), and engineers and related occupations (141). There was a small net gain in the number of medical practitioners and specialists (3).
  2. While these figures point to a serious loss of skills for the country, their real significance can only be gauged when compared with the vacancy rates and wage premiums in those particular categories. Unfortunately, the last survey on vacancies nation-wide was undertaken by the National Manpower Commission in 1992 and thus its use as a means of gaining a picture of the skills shortage is limited. The survey showed that the occupation with the highest vacancy rate was the supplementary medical profession (38.5%), followed by engineers in the agricultural sector (23.1%), and the education professions (22.8%). A more up-to-date and exact comparison of vacancies is needed in order to gain a clear picture of skills shortages in the South African labour market. Movement in wage rates is an indicative proxy for shortages which can be monitored.

Work Permit Holders

  1. In 1995, 43,891 applications for work permits were approved compared to 38,066 in 1994 and 36,551 in 1993. Of the number approved, 17,937 represented applications for new permits (18,098 in 1994 and 20,512 in 1993), and 25,954 were renewals for the continuation of employment (19,968 in 1994 and 16,039 in 1993). The number of applications refused was 3,013 (4,352 in 1994 and 3 548 in 1993). Unfortunately, a breakdown per country or occupation was not available. The figures show that there was a total of 19,699 new foreign entrants (immigrants and work permit holders) to the labour market in 1995 (20,666 in 1994) under the Aliens Control Act.

Contract Labour

Mines

  1. In 1994, of the total 368 463 workers employed by members of the Chamber of Mines (gold, platinum, copper and collieries), 45% were foreign workers. The highest number of foreign workers was from Lesotho (87,421) followed by Mozambique (50,619). The ratio of foreign to South African labour in gold and coal mines peaked at 77:23 in 1974 after which it declined. Employment numbers in the industry dropped by 37% from 583,391 in 1986 to 368,463 in 1994. South Africans were, however, the main casualties with their numbers decreasing by 42% as compared with a decrease in the foreign labour complement of 29%.

Farms

  1. It is unclear how many foreign contract workers are working on farms. Some indication of the numbers illegally employed can be gleaned from the regularisation of undocumented workers under a special dispensation introduced by the Department of Home Affairs in 1991 whereby farmers could apply for a special permit to employ undocumented workers for a six-month period. The dispensation applied to the Nelspruit, Tzaneen, Empangeni and Rustenburg areas. The Department of Home Affairs estimates place the figure variously at between 7,800 and 12,800 permits. The Department is currently attempting to gain a clearer picture of the position.

Undocumented Workers

  1. It is, by definition, difficult to compute just how many undocumented people are in the country. Various estimates have been made of the number of undocumented people. However, the methodologies employed in making these estimates are highly suspect and their conclusions should be treated with considerable caution:
  1. It is a common phenomenon world-wide for foreign workers to become the target for local animosity, particularly during times of economic hardship. The influx of undocumented migrants to South Africa in a climate of rising unemployment and scarce resources has given rise to xenophobic sentiments, in some instances leading to clashes between South Africans and foreign migrants. Xenophobic fears are easily fanned and, given this, media reports and public statements by officials which play on these fears are cause for concern. Spurious estimates of the numbers of undocumented migrants bear a significant measure of responsibility for xenophobic sentiments.
  2. The influx of undocumented people to the country has been identified as a recent phenomenon, dating for the most part, since 1990. In the Commission's view it is highly unlikely that the country has absorbed five to eight million foreigners, documented and undocumented, in this short space of time. If this had been the case, the effect of undocumented people on the labour market and social services would have been far more startling than it appears to be. These estimates have nevertheless influenced the policy debate and public perception.

Refugees

  1. Most refugees in the country are Mozambicans who fled the civil war in their country in the 1980s and were allowed to settle in former KaNgwane and Gazankulu. The United Nations High Commissioner for Refugees (UNHCR) placed the figure initially at 250,000 refugees. About 120,000 came forward to register for repatriation between September 1993 and April 1995 under the repatriation programme, with some 31,000 officially returning home. The Department of Home Affairs says that many have also returned to their homes of their own accord. It estimates that there are at least 90,000 Mozambican documented refugees still in the country. An estimated 60,000 permits were issued to Mozambican refugees allowing them to work on farms near to where they settled.
  2. Applications for refugee status from all countries as at 31 December 1995 (excluding the above group) totalled 11,760 adults, of which 5,043 had been approved, with the rest outstanding. Most were from Angola (about 3,000) followed by Zaire (about 2,500). Refugees granted asylum are given permission to work.

Summary: Data on Migration

  1. An assessment of the impact of non-nationals on the national labour market, and hence, the development of policy, is severely hampered by a lack of accurate and comprehensive data. Data gaps are particularly evident in relation to undocumented immigrants. However, data relating to categories and levels of labour shortages in the country as a whole and regionally, are also inadequate. In consequence, labour shortages are determined in a rather ad hoc manner. It is vitally important for the development of a coherent labour migration policy that current methods of data collection be reviewed, expanded and updated and that there be better co-ordination between the Department of Labour and the Department of Home Affairs in assessing the labour needs of the country. The Commission recommends as a matter of urgency that the Department of Labour undertake a survey of occupational vacancies in the country and that this be done on an annual basis, so that the Department of Home Affairs is better able to administer its migration policy. In addition, liaison between the two departments on the issue of labour shortages should be co-ordinated and systematic.

Mechanisms Governing Entry

  1. In common with most other countries, the central tenet of South Africa's policy on the migration of labour is the protection of jobs for its own citizens. Current application of the policy reflects heightened concern with the perceived challenge to local jobs by undocumented foreigners. Entry of non-nationals to the labour market is governed by a dual system of control in the form of immigration and work permits under the Aliens Control Act 96 of 1991 (as amended in 1995) and bilateral treaties between South Africa and the governments of Botswana, Lesotho and Swaziland (the BLS countries) and Mozambique. The treaty with Malawi seems to be non-functional.
  2. This "two gates" system is clearly inequitable insofar as those entering the country in terms of the Aliens Control Act may gain permanent rights to work and residence whereas those whose status is governed by the bilateral treaties remain perpetual contract workers. The perpetual temporary status of contract migrants reflects government's concern to limit the number of foreign workers to whom permanent status is granted as well as concern for the impact that a drastic change in the pattern of labour supply would have on the sending countries and on South African employers.

The Aliens Control Act

  1. Control of labour migration in terms of the Aliens Control Act is enforced via a system of immigration, work and workseekers' permits. Amendments to the Act in 1995, arising out of deliberations of a government interdepartmental committee on the problem of illegal entry to the country, seek to tighten controls over entry and to broaden the scope of sanctions on offenders. However, the necessary institutional arrangements have not been made and the amendments have yet to come into force.
  2. In terms of the Act, applications for immigration permits or work permits may only be granted if there are not sufficient numbers of South Africans for the specific occupation for which the application is made. In determining whether there are vacancies in particular occupations, the Department of Home Affairs liaises with the Department of Labour and with professional agencies. Immigration permits may be granted immediately or after the applicant has worked in the country for a number of years. This is left to the discretion of regional committees of the Immigration Board. After a period of five years a permanent resident may apply for South African Citizenship in terms of the South African Citizenship Act No 88 of 1995.
  3. At present work permits are usually granted for an initial period of six months only, renewable on application. The granting of permission for further periods of stay will depend on whether there is still a shortage of South Africans qualified to fill the position. Applications for work permits and workseekers' permits are considered by the Director General of Home Affairs. In order to tighten up control of people entering the country, the 1995 amendments provide that all applications for work permits, workseekers' permits and study permits will in future have to be made from outside the country, thus preventing people from changing their status while in the country. Persons granted permanent residence or work permits are permitted to bring their families with them.
  4. Strong anecdotal evidence suggests that applications for work permits from skilled workers and potential investors are dealt with in an unsystematic and haphazard manner. It is widely held that the South African labour market is characterised by a shortage of skilled workers and professionals. Skills shortages are manifest, in part, in unusually large occupational wage differentials. Under these circumstances, there are few grounds for a restrictive approach to applications for work permits from skilled foreign workers. Indeed, the Commission recommends that greater effort be made to attract skilled labour from some of the larger developing countries. The premium for attracting skills from these countries will be considerably lower than that attached to an equivalently skilled worker from an industrialised country. In this respect, the Commission is particularly concerned at the role played by local professional associations in the evaluation of an application for work status in this country. It appears that these organisations adopt a highly protectionist stance to the entry of foreigners into their ranks.
  5. Apart from tightening controls through stricter entry requirements, the amendments and regulations also broaden sanctions on offenders. Inter alia, they provide for:
  1. While the main purpose of the amendments is to tighten control over entry to South Africa, they also aim to bring the Act into line with the requirements of the Constitution. This is reflected in amendments to provisions relating to search and entry of private premises, in providing for review where certain categories of person are declared prohibited, and in limiting detention to an initial period of 48 hours. Despite these amendments, aspects of the Act leave much to be desired from a human rights perspective, and certain provisions may still offend the Constitution. A discussion of these issues is beyond the scope of this Report, but should nevertheless be noted. Of relevance are certain requirements of International Labour Organisation instruments on migrant labour relating to the accrual of more permanent rights to work and residence, especially after a worker has been in the host country for more than five years.

Bilateral treaties

  1. The policy of job preference for nationals is also reflected in the bilateral treaties. The BLS treaties provide that recruitment of labour is subject to the availability of South African labour. While there is no such provision in the Mozambique agreement, it nevertheless provides that the number of workers to be recruited will be mutually agreed upon by the two governments, thus in fact allowing for the operation of a regulated quota system. The most common categories of worker regulated by these treaties are lower-skilled mineworkers (grades one to eight) and farm workers, although they are also used to regulate the entry and stay of skilled contract workers.
  2. There are a range of problems associated with the operation of the bilateral treaties. Firstly, as noted earlier, workers admitted under the treaties have fewer rights than those admitted under the Aliens Control Act. Under the Aliens Control Act a foreigner who has a skill needed by South Africa can obtain a temporary work permit (usually for six months at a time), can apply for permanent residence, and if granted such residence may apply, after five years, for South African citizenship. Contract migrant workers, however, are employed on temporary contracts usually renewable every 12, 18, or 24 months, and have to be repatriated once their contracts expire. They are usually given valid return guarantee certificates which permit them to return to the same job provided they return within a specified period of time. Because of the temporary nature of their contracts, even if they work for 20 continuous years in South Africa these contract workers cannot qualify for permanent residence or for citizenship. In addition, they may not bring their families with them, unlike persons granted immigration and work permits admitted under the Aliens Control Act.
  3. In its submission to the Commission, the National Union of Mineworkers (NUM) drew attention to this discriminatory aspect of government policy, and called for an end to the unequal treatment of migrants from the region. In particular, it proposed that migrant workers should have the right to permanent residence status and to acquire citizenship after five years of work in South Africa.
  4. The bilateral treaties do not provide adequately for compensation and unemployment insurance, and the provisions that do exist are out of date. In relation to compensation, migrant workers are covered by South African legislation, namely by the Compensation for Occupational Injuries and Diseases Act No. 130 of 1993 (COIDA) and the Occupational Diseases in Mines and Works Act. Compensation in terms of COIDA is often made through TEBA (now an independent company with labour processing, financial and modest development functions) except in relation to Mozambique where it is paid to the Mozambican labour delegate. There is a great deal of dissatisfaction among Mozambican miners relating to the system of compensation. They claim that they either do not receive the money due to them or that they receive only part of it. A joint study in 1995 by the NUM, TEBA and the Rand Mutual Assurance Company found that, in consequence of corrupt practices by Mozambican officials, not all the money was reaching the beneficiaries.
  5. The compulsory deferred pay system applicable to migrant miners from Mozambique and Lesotho was also brought to the attention of the Commission. The Lesotho deferred pay scheme originated in 1974 as an initiative of the government of Lesotho. The scheme operates on a compulsory basis. Originally, in terms of the scheme, 60% of the wage was deducted by the employer on a monthly basis, but this was reduced to 30% in 1990. This deducted amount is then transferred into the deferred pay pool account at Lesotho Bank. Miners are allowed to withdraw money on two occasions during the contract period. However these withdrawals may not exceed 50% of the individual's accumulated money. Each miner is therefore obliged to save a minimum of 50% of his accumulated amount. At the end of the contract period, the money in the account can then be voluntarily saved or withdrawn as a whole. The Act also provides that a worker who wishes to pay money to a dependant in Lesotho may request the employer to pay a specified amount either from cash in his possession or by deduction from his wages. Where the payment exceeds 20% of the worker's wages, the excess may be offset against the deferred pay.
  6. The governments of the sending countries justify the scheme in terms of harnessing these forced savings for national development or re-investment in the domestic economy or as a mechanism for encouraging savings for the benefit of the mine workers and their families. However, these deferred pay schemes have all the features of the paternalistic phase when trade unionism was suppressed in South Africa's mining industry. This scheme was basically an arrangement between the affected governments in the region, with TEBA having the responsibility of co-ordinating deductions made by individual mines and transferring the money to a national bank or the appropriate government agency of a sending country. It was a corollary of the migratory labour system.
  7. In a submission to the Commission the NUM demanded the abolition of the compulsory deferred pay arrangements. The union argued that the compulsory character of the schemes undermines the basic human right that entitles workers to receive their full pay.
  8. The Commission is persuaded that these schemes do constitute a human rights violation. Mindful of the impact that abrupt termination of these arrangements would have on the economies of Lesotho and Mozambique, the Commission recommends that compulsory deferred pay be phased out within five years and that appropriate transitional arrangements be agreed between the governments concerned and representatives of the affected mineworkers. Voluntary deferred pay schemes, however, should be permitted.
  9. Employee contracts governed by the treaties are also outmoded and contrary to international requirements insofar as they do not contain details of the occupation the miner will be engaged in nor the remuneration he will receive. Newly recruited workers only receive these details when they arrive at the mine. This is unsatisfactory and ways should be found of ensuring that migrants are fully cognisant of their conditions of work before they arrive in South Africa.
  10. It is clear from the above that the bilateral treaties treat workers less favourably than entrants under permits in terms of the Aliens Control Act, that they do not conform in many respects to ILO norms and standards, that they are not uniform and that they are outmoded. In their submissions to the Commission the NUM and the Chamber of Mines opposed continued discrimination in the application of migration policy and law. In its submission, the Department of Home Affairs indicated that investigations were under way with a view to amending the treaties.

Special Measures

  1. Recently, the government has investigated regularising the position of certain categories of undocumented immigrants through granting, on an ad-hoc basis, special dispensations in terms of the Aliens Control Act. Section 41 of the Act has been used to grant temporary work permits to undocumented Mozambican and Zimbabwean farmworkers who are employed extensively on farms on the eastern and northern borders, as well as in northern KwaZulu-Natal and in Northwest Province. Section 41 provides that the status of persons illegally in the country can be regularised by the issuing of a permit for a short-term contract. Section 41 permits have also been granted to refugees to permit them to work in the country.
  2. The Cabinet has also announced a special dispensation for undocumented people who meet certain criteria. The dispensation is in terms of Section 28(2) of the Aliens Control Act which provides that the Minister may under special circumstances grant people the right to stay in the country. At present there is confusion over the exact criteria to be applied. As initially announced, persons could qualify if they had been in the country for five years, were in gainful employment (whether formal or informal), were involved in a long term partnership with a South Africa citizen and had children born in the country. It is unclear whether all conditions had to be met or only one of them.
  3. Pressure has been exerted on government by the NUM to abolish the discriminatory system applicable to contract miners. An agreement has been concluded that provides that miners who voted in the general election in 1994 and were in the country before 30 June 1986 may apply for permanent status. The dispensation ended on 31 March 1996, although the NUM wants it extended in certain regions. There is controversy about the status of the families of such persons, however. According to the Department of Home Affairs, miners' families can apply for residence in South Africa only if they are physically in the country. However, the NUM wants the right of families to join migrants to be automatic. The acquisition of permanent residence rights for miners will also allow them to qualify for various mining housing schemes and possibly other social benefits including housing subsidies. It will also have implications for the continuation of the deferred pay system as such people would probably no longer have a need to send money to their country of origin. By 31 March 1996, 37,000 successful applications had been processed.
  4. Apart from these special dispensations, border concessions are also granted to foreigners from neighbouring countries who travel across the border on a daily basis. While the concessions are mostly for social purposes, some would be for work. About 115,000 such permits were granted in 1995.

Border control and internal policing

  1. The legislative framework and system of bilateral agreements governing migration to the country are underpinned by border controls and internal policing aimed at controlling the entry and stay of undocumented people. There are currently 16 internal tracing units in existence and approximately 750 personnel deployed in these units and on the border. The aim of the border and policing section of the SAPS is to increase this number to 1,600. The South African National Defence Force also assists the police with border control with an estimated 3,000 personnel involved.
  2. Despite vast resources spent on border control, the extent of undocumented immigration to the country demonstrates that these measures have not been very effective. The cost effectiveness of an approach that involves allocating immense resources to a system of external and internal controls which seemingly does not have the desired effect needs to be reviewed. The police budget for border control and internal policing of undocumented people and undocumented goods is currently R66 million. In 1995 the Department of Home Affairs spent an estimated R12 million on air and train tickets for those repatriated, apart from the other costs. The cost to the SANDF is estimated to be R441,876 per day for 3,071 troops. The failure of current border control measures in preventing an influx of undocumented people has demonstrated the difficulty of policing a border which is as long and as porous as South Africa's. The SANDF estimates that it apprehends only one in four undocumented immigrants who cross the border, while many people when deported just slip over the border once again. Corruption of officials as well as the fraudulent issuing of identity documents are also factors which make policing more difficult. The SAPS reports greater success with its internal tracing units and believes that internal policing is more effective than border control. Despite border control measures, only 157,000 people were repatriated (most, 131,689, to Mozambique) in 1995. While this represents a 75% increase on the figure for the previous year, it nevertheless constitutes a small percentage of the number of undocumented people estimated to be in the country.
  3. The high cost and relative lack of success of border control measures raise the question of whether a revised approach is not called for and whether resources spent on border control could not better be spent on developing scarce facilities. Part of such a revised approach could be the increasing of sanctions on employers employing people illegally. In the Commission's view, however, the failure of these control measures lends support to a policy trajectory aimed at securing, in the longer term, greater formal integration between the national labour markets of the region.

Summary: Mechanisms Governing Entry to South Africa's Labour Market

  1. Current policy on labour migration is unsatisfactory for a number of reasons: it is discriminatory because of the two-gates approach, it fails to meet international norms in a number of respects and it is applied on an ad-hoc basis. The Commission recommends that the current migration policy be thoroughly reviewed. Policy should be informed by a coherent set of non-discriminatory principles based on international norms and must obviously pass constitutional muster. The revised policy should be given effect to by a single renamed immigration statute governing the entry of all foreigners into the country. The implication would be that all workers would be treated equally. In other words they would all be able to apply for work permits, the renewal of such permits and for permanent residence on the same basis and would be able to bring their families with them while they were working in the country.
  2. The Commission recommends that in allocating permits for entry to the South African labour market, either on a permanent basis (immigration permit) or temporary basis (work permit), three criteria should apply:
  1. The Commission welcomes South Africa's recent ratification of international instruments relating to refugees. It notes that the terms of these instruments provide that persons granted refugee status be allowed to work while in the host country, and that this should guarantee Mozambican refugees the right to work. The Commission also notes the government's intention to revoke the refugee status of Mozambicans still in the country and, given that many have long been integrated into South African communities, recommends that consideration be given to granting permanent status to those meeting the criteria specified above.

Institutional Arrangements in the Region

  1. We have noted in the introduction to this chapter that balanced regional development is strongly dependent upon strengthened financial and trade flows between South Africa and its neighbours. We indicated that labour market integration will not be possible in the context of constrained trade and capital flows. This underlies our overall conclusion, namely that policy should seek to regulate migration flows in a manner that complements, rather than defeat the move towards the integration of labour markets as well as capital and trade markets.
  2. Regional economic relations are currently in flux. The ongoing multi-lateral processes of re-negotiating the South African Customs Union (SACU) agreement and re-orientation of the institutions of the South African Development Community (SADC) is creating a very fluid institutional environment for regional integration. The approach of the government towards these trade integration negotiations has been described as one of "variable geometry" with different arrangements at different levels of integration applying among different groups of countries within the SACU - SADC region. Currently South Africa is involved at one level in negotiations for a revised SACU agreement, and at another level in developing a programme of increasing sectoral co-operation within the SADC framework to promote a more integrated and balanced pattern of trade.
  3. In its submissions to the Commission, the Department of Trade and Industry (DTI) outlined the complexities surrounding these negotiations. Among these problems are the need for clarity of vision about the integration process that should be pursued both at the SACU and SADC level. This vision should be able to reconcile conflicting and competing national interests and make the trade-offs explicit. There is a need for clarity over appropriate institutions and decision-making roles given the asymmetry between the negotiating states, in particular the role of South Africa as a potentially dominant player in this regional integration project.
  4. The approach of the South African government towards regional integration must be consistent with its commitment to principles of equity, mutual benefit and balance. This will require the building of institutions better oriented towards the SADC model of development integration. This model ensures that both macro and micro policy co-ordination occurs within the ambit of a multi-sectoral programme which embraces investment, production, trade and infrastructural provision. Furthermore the development integration approach emphasises the need for an equitable balance of the benefits of integration and argues that trade liberalisation measures need to be complemented by compensatory and corrective measures oriented in particular towards the least developed member countries.

The SADC Draft Protocol

  1. The major trends in the regional labour market outlined above provide a backdrop for considering the emerging regional institutional arrangements, frameworks and proposals. The most important proposal in this regard is the Draft Protocol on the Free Movement of Persons in the SADC Region of June, 1995. The main objective of this protocol is, in relation to every citizen of a member state, to confer, protect and promote:
  1. The ultimate objective set by the Draft Protocol is the progressive abolition of controls on citizens of a Member State at an internal border with another Member State. In addition, the Draft Protocol proposes that, within the right of residence, SADC nationals would be able:
  1. As already noted, the Commission identifies itself with the ultimate objectives underlying the Draft Protocol. The long-term policy objective should be the integration of the labour markets of the region. However, in the current circumstances of highly uneven development in the SADC region, the Commission believes that it would be premature for South Africa to agree to the implementation of all the proposals as contained in the Draft Protocol. The impact of the proposals would be economically and politically unsustainable.
  2. While the free movement of labour (human resources) is desirable since it increases output and productivity in so far as it enhances allocative efficiency, this presupposes an economic union with supra-national institutions and capacity to redress the possible adverse impact of this integration process. In such an economic union, it is possible to address the costs and benefits of labour migration in a manner that guarantees equity, balance and mutual benefit. It is the Commission's view that the integration process in the SADC region does not as yet satisfy that criterion and appropriate supra-national institutions are yet to be established, despite SADC's commitment to the development integration paradigm.

The Challenge of a Regional Reconstruction and Development Programme

  1. The call for a Regional Reconstruction and Development Programme (RRDP) was made in the submissions of the NUM and COSATU to the Commission. COSATU's proposes that a regional summit be convened to discuss and develop policy on a short to medium term RRDP. Governments (in the SACU and SADC regions), employer and employee representatives, and other relevant NGOs should be represented at this summit.
  2. The rationale and justification for this call for such a summit is based on the need for an adequate regional response to the multi-faceted and multi-sectoral challenges posed by the magnitude of informal undocumented immigration to Southern Africa in general and South Africa specifically. As argued above, the problem of undocumented immigrants in South Africa, an issue of considerable political and social sensitivity, is a symptom of a much more complex problem of underdevelopment, unemployment, population displacement, economic stagnation and destabilised livelihoods in some of the countries of origin.
  3. This socio-economic crisis in some of these SADC countries is a well known legacy of multiple causal factors which call for short-, medium- and long-term strategies which recognise the linkages between relief, rehabilitation and livelihood stabilisation with medium- to long-term sustainable development. In terms of COSATU's perspective, the region as a whole needs to develop a coherent strategy to deal with economic imbalances in the region.
  4. The Commission fully appreciates the magnitude of the challenge that is posed by this call for an RRDP. In essence this is a call for a development integration strategy where in the medium to long-term, the trade integration process has to be complemented by the following supporting pillars:
  1. This is the paradigm that should inform the on-going process of regional integration that the SACU-SADC states are committed to in terms of the SADC Treaty. The Commission has identified the following role players and potential role players as development institutions:

The Economics of Labour Market Interaction between South Africa and the Region

  1. A variety of factors account for the steady influx of skilled and increasing number of unskilled, largely undocumented, people to South Africa from the region. These include the economic decline of the region ­ particularly, Mozambique ­ arising in part from South Africa's past policy of destabilisation, the severe drought in southern Africa in 1992, the effect of structural adjustment programmes on the region, the relative strength of the South African economy and the country's perceived promise of jobs, higher wages and economic opportunity, the perception that South Africa is now more sympathetic to people from the region than before and the disbanding of the old government's counter insurgency units which acted as a border control mechanism.
  2. It is relatively easy to assess the impact on the South African labour market of skilled immigration. The migration of most skilled labour is well controlled. Given that the numbers of skilled migrants is small and that they would be filling a gap in the skill needs of the country, it is unlikely that their presence would exert a negative effect on labour standards. However, given their relatively small skills base, the negative impact of skilled worker migration on the sending country may be extremely negative. The concern expressed by some countries in this regard has led to the development of informal agreements with South Africa limiting the migration of skilled people in certain occupations.
  3. While the past five years has seen a net inflow of skilled migrants from the region to South Africa this inflow has reduced somewhat in recent years. The evidence shows a decline in the number of professional, semi-professional and technical migrants from SADC to South Africa since 1994 and even evidence of a small net loss of skilled South Africans to the region. The Commission recommends that, should the brain drain from the region to South Africa resurface, appropriate policies should be formulated to redress the deleterious impact this would have on the region.
  4. However, the impact of unskilled and semi-skilled immigration on the South African labour market is more difficult to gauge, the complexities being exacerbated by the uncontrolled nature of much of the influx and the lack of accurate and comprehensive data relating to this phenomenon. What little information there is points to fairly significant numbers of unskilled (and undocumented) immigrants in the agricultural, hospitality and construction industries. It is difficult to gauge the extent to which these workers are fillings gaps in the labour market or are taking the jobs of local people. In the introductory paragraphs of this chapter the general features that characterise current interactions between the regions capital, product and labour markets were outlined. Here we focus on key sectoral impacts that derive from patterns of labour migration.

Foreign Labour in Agriculture

  1. In its submission to the Commission, the Transvaal Agricultural Union (TAU) argued that farmers near the eastern and northern borders were unable to attract sufficient numbers of South Africans, and thus many employed foreign workers, often illegally, to meet their needs. Among the reasons which the TAU cited for the shortage of local labour were the unpleasant nature of farm work, the lower wages as compared with other sectors, remittances to rural families by urban wage earners, and competition from special employment creation projects.
  2. Claims by farmers that they are unable to pay more and that South African workers will not work for the wages they are prepared to pay need closer examination. Available information suggests that the employment of large numbers of undocumented workers has exerted a downward pressure on wages on farms, making such work even more unattractive to local people. The ease with which farmers are able to employ undocumented people and the vulnerability of such workers means that there is little incentive for farmers to improve wages and other employment conditions. There are indications, for instance, that some workers on farms are earning as little as R3 to R4 a day, while others receive payment in the form of a plate of food only. There have also been reports that farmers employ undocumented workers without paying them, and then once their labour is no longer needed, they are handed over to the police for deportation. The Department of Home Affairs is currently conducting an investigation into the employment of farmworkers in the northern and eastern areas in order to gain a more accurate picture of the use of foreign workers and their effects on the local labour market. While it seems clear that undocumented people would have a more depressing effect on wages than people employed legally, comparative research seems to indicate that in general unskilled immigrants earn less than local people and that this pattern persists over many years, although it decreases the longer the immigrant is in the country.

Migrant Labour and the Mining Industry

  1. The employment of large numbers of foreign workers in the mining industry resulted in part from the refusal of South African workers to work on the mines, particularly underground, at the level of wages offered. The decrease in the foreign/South African ratio since the early 1970s, is accounted for by a number of interrelated factors, including the relative increase in mining wages compared with wages in other sectors, fewer alternative sources of employment, and the undermining of the rural economic base as a result of land hunger caused by apartheid policies. Industry sources indicate that the industry's current needs could probably be met by local rural workers. This calls into question the continuation of the migrant labour system in the context of an available local labour supply and the government's policy of job protection for its nationals.
  2. It was also pointed out that a sudden disruption in supply patterns would cause considerable hardship for communities historically dependent on the mines for earnings. Cognisance also needs to be taken of the importance of miners' earnings for the sending country and the negative impact that shedding such labour might have on their economies. However, given the decline of the industry, the demand for foreign labour will inevitably shrink. Already the number of novices recruited for the mines is very limited. Changes are also occurring in the pattern of recruitment, in part as a result of the freeing of the movement of South African labour consequent on the abolition of influx control in 1986. It is now becoming increasingly possible for employers to recruit at the mine gate.
  3. In its submission to the Commission, the Chamber of Mines argued for the continuation of the migrant labour system since "it is in the interests of the mining industry that the full potential of the Southern African labour market be tapped in the search for labour with the required qualities". According to the Chamber of Mines, "the industry needs to obtain the appropriate people in sufficient numbers and at appropriate wages in order to continue mining at the same scale as at present".
  4. The Commission believes that the migrant labour system must be phased out. This does not mean that citizens of the region ­ in particular citizens of Lesotho and Mozambique who have long depended upon employment in South Africa ­ should be denied access to the South African labour market. On the contrary, as outlined above, we propose that their terms of access be easier relative to citizens of other countries. However, the use of migrant labour in its present form cannot be justified.
  5. While the Commission acknowledges that, on a select number of mines, significant improvements have been made to the living conditions of migrants, the regime for most of these workers is still characterised by poor housing in single sex hostels and inadequate recreational facilities and opportunities for training. Many of the complaints of mine managers about unmotivated workers surely stem from the adverse living and working conditions to which they are subject. The Commission therefore recommends that, during this process of phasing out the migrant labour system, conditions of migrants must be improved and humanised in terms of higher quality housing and provision of affordable family accommodation near the mining areas. Two Commissioners pointed out that if the costs of improving accommodation on marginal mines are such that they would result in job losses, then a conflict arises between the Commission's goals of prioritising employment, and that of upgrading accommodation. They argued that in such circumstances, maintaining employment should be of central concern, and that any trade-offs should be managed through negotiation with the workers concerned.
  6. The TEBA recruiting and labour processing system which binds mine workers to particular mines should be reviewed since it results in allocative inefficiencies from the perspective of workers' mobility within the industry. Furthermore, evidence indicates that migrant miners have little incentive to acquire skills because their only path for advancement is within a particular mine.

http://www.polity.org.za/html/govdocs/commissions/fin9.html

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