President Cyril Ramaphosa promised a new social compact during his 2022 State of the Nation Address (SONA). However, the compact has not been finalised, and government and business have in the interim forged ahead with plans to solve some of the more pressing challenges in the country. Cas Coovadia, the CEO of Business Unity South Africa, explains how we can resolve the current impasse.
The proposed social compact to revive the country’s economy has not been put in place, despite President Cyril Ramaphosa’s aim to achieve agreement within 100 days of his SONA address in February 2022. What is the status of the social compact, and what are some of the sticking points?
Social compacting is a legitimate method to mobilise a broad cross-section of society to be active citizens in backing a vision for our country and supporting the implementation of critical interventions needed to attract investment, grow an inclusive economy and address our socioeconomic crises.
However, social compacting is not meant to replace the responsibility of government to govern ethically and responsibly, take tough decisions, and work bilaterally with stakeholders to implement.
The social compacting processes at the National Economic Development and Labour Council (Nedlac), which are based more on ideological or policy matters, have not been successful because we spend inordinate amounts of time trying to agree on ideological and policy issues, instead of taking decisions on critical issues facing our country. In this sense, the concept of a social compact is becoming a cop-out.
What were some of the private sector’s objections to the proposed compact?
We often find that government – and sometimes labour – try to get us to commit to a course of action not agreed on during negotiations. There are processes in the country on how to get legislation passed, for example, and these must be adhered to – these issues should not be forced into a compact.
Also, we can’t commit to specific employment numbers over a certain number of years, although we can agree on what needs to be done to create employment.
What can we learn from a successful compact like the one undertaken to fight the Covid-19 pandemic?
The social compact on the pandemic at Nedlac worked because it was issues-driven and action-oriented, with particular focus areas and deliverables. There was a sense of urgency because we knew that if our response wasn’t appropriate, people were going to die. Instead of engaging in ideological debates, we optimised resources, and business played a critical role in pulling resources together.
Creating Business 4 South Africa, a structure of Business Unity South Africa (BUSA), helped us to move quickly, remove blockages, and work flexibly. Whether we can apply what we’ve learnt to the current crisis is debatable because the context is different, and we can’t necessarily bring all stakeholders on board in our efforts to address specific challenges, such as fixing the energy crisis. Pandemic lessons are valuable, but we need to be realistic about what can be achieved.
In the absence of a social compact, how are government and the private sector cooperating?
Over the past couple of years, business has taken the view that some of the critical interventions to address crises in energy, logistics and law and order must be driven through bilateral engagements between business and government, and government consulting with other stakeholders on these matters.
Such bilateral engagements must be time-based, have a limited set of clear objectives, be well-resourced, and must be properly structured as a real partnership between government and business. This does not exclude other stakeholders, but the process must identify specific roles for government, and then for other stakeholders.
Importantly, government and business need to come to the party as equals and be focused and accountable. Government cannot be partisan in its role and must govern, which means it must guide bilateral engagements and take necessary decisions to avoid delays and to ensure implementation.
Do you believe there is still a role for social compacting in the country?
Numerous organisations continue to grapple with the concept of social compacting. I participate in the work being undertaken by the Indlulamithi Scenarios 2030 initiative, which puts social compacting very high on the agenda and has done excellent work on the subject. However, the work done, and outcomes of the work, cannot be cast in stone.
Social compacting is a necessary tool, but we do not want to create a situation where it is frowned upon as a tool to effect change. We need to concentrate on issues-based and action-oriented compacts that have a greater chance of success, so that social compacting consolidates its rightful place as a tool for change.
This also enables social compacting to be a mechanism for building trust and releasing the energies and capacities of different stakeholders in tackling specific issues and implementing interventions that demonstrate concreter results.
We have a history in South Africa of attempting different forms of social compacting and have sufficient experience to agree on what works and what does not. Let us concentrate on what works. We do not have the time to do otherwise.
Cas Coovadia
CEO of Business Unity South Africa
cas.coovadia@busa.org.za
https://www/busa.org.za/
Source: The original version of this article was published in the Trialogue Business in Society Handbook 2023 (26th edition).
