Friday, June 11, 2010


Response to Comrade Netshitenzhe on Nationalisation

Floyd Shivambu

Since the release of the discussion document on Nationalisation of Mines at the end of January 2010, the ANC Youth League has received satisfactory levels of constructive engagement with the entire perspective. The inputs, particularly from renowned academics, public intellectuals, members of the ANC, the alliance, and importantly ordinary people at grassroots level are particularly appreciated. They are appreciated because most did not only identify the problems and weaknesses in the perspective, but provided concrete solutions on how a better and more effective method of mines’ nationalisation should be ushered in by the democratic State. This does not however mean that there were no detractors, who sought to divert our attention from the strategic questions raised in the perspective.

Now the input by Comrade Joel Netshitenzhe is not part of detractors, but represents a conservative ideological wave in the ANC. This ideological wave oddly believes that some of the tactical retreats taken upon transition by the ANC-led liberation movement constituted total capitulation. The wave has been dominant in the state since the democratic breakthrough in 1994, and pretends oblivion to the reality that whilst commendable, ANC’s efforts to transfer wealth to the ownership of the people as a whole have not been adequate to decisively break the racial, class and gender dialectic of colonial-cum-apartheid repression. This ideological wave begun from the premise that the colonial economy and spatial development patterns did not need to be radically changed, but polished with a hollow hope that it might make today better than yesterday.

This ideological wave underpinned the adoption of the Growth, Employment and Redistribution (GEAR) strategy, which achieved some level of fiscal stability, yet dismally failed to achieve its own strategic objectives—mainly economic growth levels, investments and creation of jobs. The United Nations Development Programme (UNDP), recently observed that “at least between the years 1995 – 2000, for which there is adequate data—economic growth was associated with declining incomes across households at all income levels, but with the sharpest income declines occurring among the least well off” (1). The ideological wave further underpins a national spatial development perspective that basically says much attention, efforts and resources should be dedicated to apartheid centres of economic potential, whilst other areas are reserved as suppliers of labour and natural resources.

In its official input to the ANC Youth League’s perspective on Nationalisation of Mines, the Congress of South African Trade Unions (COSATU) observes this ideological wave and says it had “sought to present the historical approach of the ANC as some form of social democracy, inserted to address a colonial situation. The economic ideology that underpins this tendency finds expression in a watered down version of the interpretation of the Freedom Charter. They present to the current generation of the membership of our movement, and the people of South Africa as a whole, what can be characterized as Freedom Charter Lite—a Freedom Charter without class content. We therefore congratulate the ANC Youth League for re-affirming a consistently democratic interpretation that people who gathered in Kliptown in 1955 gave to the economic clause of the Freedom Charter” (2). The ANC Youth League welcomes the congratulations and re-affirms that the Freedom Charter will never be hijacked by anyone for whatever narrow purpose.

Consistent with the broader thrust of the ANC’s strategic vision as contained in the Freedom Charter, the ANC Youth League’s perspective on Nationalisation of Mines represents a decisive break from the not so neutral ideological disposition, which underpinned the first 16 years of democracy. Why? Such has to be the case because efforts to decisively break the unemployment and poverty challenges have not substantially succeeded under the policy trajectory which Comrade Joel argues should be retained. It is not an overstatement that whilst a considerable progress has been recorded in the empowerment of historically disadvantaged individuals, the broader thrust of the Freedom Charter’s objective for the people to share the country’s wealth has not been attained.

The ANC 52nd National Conference in Polokwane proclaimed that “Our vision of the economic transformation takes as its starting point the Freedom Charter's clarion call that the People Shall Share in the Country's Wealth!”. The conference further resolved to build “a developmental state [which] must ensure that our national resource endowments, including land, water, minerals and marine resources are exploited to effectively maximise the growth, development and employment potential embedded in such national assets and not purely for profit maximisation”. Now as part of giving practical meaning to these resolutions, the ANC Youth League proposes the democratic government’s nationalisation of Mines in order to achieve what Polokwane said we should strive for.

Comrade Joel Netshitenzhe could give a conservative interpretation and meaning to Polokwane resolutions, yet the ANC Youth League’s understanding is that they call upon the ANC government to make sure that the mineral resources are used to benefit all people, not few corporations. The ANC Youth League’s straightforward interpretation of the Polokwane resolution is that there ought to be greater State participation in the economy. Polokwane took these resolutions in appreciation of the reality that the status quo is not desirable and should be changed. We are also aware that attempts to misinterpret the Freedom Charter have recurrently failed and will never succeed under our guard of the revolution. The perspective on Nationalisation of Mines dedicated adequate time and space on how the ANC understood the transfer of mineral wealth to the ownership of the people as a whole and such has not changed.

In the first public lecture on nationalisation of mines organised by the ANC Youth League in Atlas studios, Auckland Park in October 2009, two members of the audience, Mining & Metallurgy students from the University of Johannesburg made two outstanding observations. The first student remarked that it is so strange that a security guard in the coal mines of Emalahleni got arrested for taking 25 kilograms of coal, whilst the mines steal coal everyday in loads and loads of trucks and transport it to Richards Bay, whilst ordinary people around the coal mines do not benefit from the coal. The second student remarked that she decided to study Mining Metallurgy because her home town, Sekhukhune had lots of mining opportunities, yet she could not get any access to opportunities from the mines just across where she resides, as those who worked at the mines said she should travel to Rustenburg or Johannesburg if she wanted opportunities.

Unlike those who were around Mpanza, ingwenya in Makeni, Lusaka, our concerns are not about abstractions of whether nationalised mines will lead to socialism or not, but inspired by the objective suffering of our people and the opportunities which young people do not get in the democratic dispensation. Our concern is the reality that the colonial features of the South African economy are still vivid, exporting virtually all natural resources and importing finished goods and products, but also enriching the white minority at the expense of the black majority. As youth, we know that South Africa produces platinum group metals and is home to more than 70% of the world reserves, yet most of us do not know how platinum looks like and what it is used for. Statistics recurrently point to the reality that black people and Africans in particular do not own anything above 5% of South Africa’s wealth, yet they constitute more than 80% of the South African population. As we have argued in the ANCYL document, this does not mean that this wealth should be transferred to a few black elite. On the contrary, the public ownership and control, institutionalised through the state will enable the people to determine the production and distribution of our wealth.

Comrade Joel Netshitenzhe observes that the ANC’s interpretation of the Freedom Charter has neither been static, nor homogeneous, yet argues that the ANC Youth League’s view on Nationalisation is inconsistent with the latter day interpretations of the Freedom Charter. It can never be correct that anything that does not agree with Comrade Joel Netshitenzhe’s interpretation of the Freedom Charter is counted outside the ANC’s official positions. It is a misleading and sad reflection because our reading of the Freedom Charter is consistent with how the ANC viewed it upon adoption in 1955 by the real Congress of the People and in 1956 by the ANC, wherein there were racialised inequalities alongside massive mineral wealth controlled by few conglomerates. Indeed the Freedom Charter was adopted in 1955 amidst massive inequalities and economic subjugation of the black majority and Africans in particular, and the reality is that 55 years later, such has not changed. Attempts to substitute the Freedom Charter have always existed in the ANC and our generation vows that such can only be considered once the entirety of the Freedom Charter objectives and aims are realised.

It is our considered view that an absolute majority of South Africans agree with the nationalisation of mines, which should be directed towards the betterment of people’s lives and creation of decent employment for all. What seems to worry many commentators is the question of State capacity to manage and administer mines as state owned enterprises. Recurrently, a concern is raised around the perceived and/or real administrative challenges and glitches in ESKOM, SAA, and SABC. Worrying though is that a rather lame conclusion is made that because these institutions had problems, glitches and sometimes board squabbles; the state is generally incapable of managing corporations. This observation is sad and ignores the substantial factors relating to the management of state owned enterprises and their relationship with the state as a principle.

What is relieving amidst these observations is the fact that that the discussion document on nationalisation of mines foresaw the potential opposition to nationalisation on the basis of a supposition that the state is inherently incapable of managing corporations. In the document, the ANC Youth League said, “The State capacity to manage enterprises is doubted, often in comparison to the State’s oversight or lack thereof of key State owned enterprises such as the South African Airways (SAA), ESKOM, SABC and Denel. The comparison is not fair because in most instances, these have failed due to sheer criminality, mismanagement and patronage which characterised the most of these entities and very weak accountability systems. The capacity of the State to decisively intervene in SAA and ESKOM for instance was inhibited by lack of proper systems and legislative framework concerning the extent of interventions the State can make alongside Boards of Directors”. More often than not, the State’s only role in these enterprises is appointment of Boards with no clearly defined developmental mandates.

Further than that, all the state owned enterprises that are said to have failed were purely run on private sector principles, wherein progress and success is measured as per the profit margins, instead of concrete developmental outcomes such as employment creation and infrastructure investments. Concerning this aspect, the discussion document on nationalisation says that “the State Owned Mining Company’s progress should be measured as per its ability, capacity and coherent determination to create jobs, maximisation of the country’s gain from mineral resources, contribution to socio-economic development and assistance of communities where mining happens”. This is one principle that should guide all state owned enterprises and it finds adequate resonance in the ANC’s 52nd National Conference resolution that commits to “strengthening the role of state-owned enterprises and ensuring that, whilst remaining financially viable, SOEs, agencies and utilities - as well as companies in which the state has significant shareholding - respond to a clearly defined public mandate and act in terms of our overarching industrial policy and economic transformation objectives” (3).

In the process of questioning the state’s capacity to manage and oversee corporations, there is also some level of neo-liberal hypocrisy that is defined by a deliberate oblivion to the successes recorded in the SOE established by the post 1994 democratic government . The Petroleum, Oil and Gas Corporation of South Africa (Pty) Limited (PetroSA) owns, operates and manages South Africa's commercial assets in the petroleum industry. Whilst legislated in the 1940s, PetroSA was officially established and given strategic leadership by the democratic government, run at board and management level by historically disadvantaged individuals, and is currently the country’s most successful petroleum corporation, even in comparison to privately owned petroleum corporations.

Despite infiltrating a highly competitive market, PetroSA is in the forefront of expanding South Africa’s capacity to refine oil. The 100% State owned PetroSA is currently using cutting-edge technology to establish a 400 000 barrel per day oil refinery (Project Mthombo) in Coega Industrial Development Zone in the Eastern Cape. The oil refinery has potential to create than 10 000 jobs for the people of the Eastern Cape and open lots of other upstream and downstream economic opportunities. Neo-liberals opposed to state ownership will not mention this reality because in their neo-liberal text books, innovation is solely a function of private ownership.

If there is ever any balanced comparison on how successful a State Owned Mining Company should be run, that comparison should be with PetroSA, because PetroSA trades with commodities in a highly competitive environment. The SOEs that are said to have failed are often said to have failed because of their internal management squabbles. But also the failed SOEs operate on private sector principles of narrow profit maximisation at the expense of everything else. Then the detractors of nationalisation of mines will raise false alarms and forever make lame attempts to link state ownership with inherent inefficiency and corruption. The collapse of the economy globally happened as a result of narrow capital accumulation models pursued by privately owned corporations, and they all relied on public finance for revival and sustainability. It appears that the neo-liberals who want to rubbish the role of the state in the economy only choose a handful of state owned enterprises that encountered difficulties and ignore the successes of ACSA and PetroSA. Efficiency of enterprises is not a function of shareholding, but a consequence of a variety of both subjective and objective conditions under which businesses operate.

The ANC Youth League accepts that in the management of vital economic resources such as minerals, a need will certainly arise for strong accountability systems and legislative guidelines of how mines are operated, buttressed by strong public accountability mechanisms. With the lessons derived from SAA, ESKOM, DENEL, and countries that are in minerals extraction partnerships, South Africa is suitably located to institutionalise a more effective, efficient and durable mechanism, systems and legislative framework to manage mines more efficiently. So the challenges of SAA and ESKOM should not serve as a discouragement to the State’s control and ownership of mines, but as a lesson of what should be done moving forward, particularly that mines nationalisation has lots of other benefits as argued in the document.

In a previous intervention and response to this conservative ideological current in the ANC, we argued that the question of when we nationalise Mines should be interrogated within the context of dialectical materialism, not through raising of false alarms intending at causing panic amongst revolutionaries in the cause of a National Democratic Revolution. In Philosophy and Class Struggle, Dialego says, “if we stress the materialist component of our philosophy at the expense of the dialectical, the result will not be ultra-leftism but its twin opposite — right-wing opportunism: the tendency to overestimate the strength of the enemy so that the superficial appearances of the moment are mistaken for the deeper trends at work in historical reality. Indeed, legalistic illusions which stem from an insufficiently dialectical approach to politics, may even lead to the kind of unprincipled compromises which make short term gains, but weaken the movement as a whole” (4).

Encountered with a bigger difficulty of a per se underdeveloped nation and almost non-existent socialist consciousness amongst the few workers in Russia in the early 1900s, Vladimir Lenin never raised false alarms. He was instead inspired by the existent conditions and documented a clear programme titled “What is to be done?” Lenin never asked “Should we do something”; nor did he ask “whether conditions are favourable for something to be done”. As a revolutionary, he documented a clear programme on what was going to happen and virtually all of the things he said were to be done happened. He understood that as a revolutionary, you do not fold your arms and wait for the balance of forces to be in your favour, but should work towards ensuring that balance of forces are in your favour.

The conditions in our country are currently favourable to a revolutionary programme and that is conclusively objective. Affirming this observation, the ANC Strategy & Tactics says, “Overall, since 1994, the balance of forces has shifted in favour of the forces of change. It provides the basis for speedier implementation of programmes to build a truly democratic and prosperous society. The legal and policy scaffolding for this is essentially in place. Most of society wants this to happen”. Various other objective conditions provide reason why we have an adequate space to could move decisively on altering property relations. The people are already on the streets protesting for better lives, the ANC should mobilise the whole of our people and refocus their struggles to be directed towards real economic emancipation.

The ANC Youth League’s recent visit to Venezuela discovered amongst other things that the people can immediately benefit from the State’s democratic ownership and control of key sectors of the economy, and oil in this case. Venezuela’s democratic control and ownership of oil refutes a neo-liberal scarecrow that any form of State ownership will repulse foreign investors. The United States, which has recurrently failed to remove the revolutionary leadership of the Bolivarian Republic of Venezuela, continues to be the biggest consumer of Venezuelan oil, and most of its corporations and brands continue to do business in Venezuela.

Forward to nationalisation of mines forward!


Pollin, R. Epstein, G. Heintz, J. and Ndikumana, L. (2006) An Employment-Targeted Economic Program for South Africa. New York: United Nations Development Programme (UNDP).

COSATU (2010) “Towards the Nationalisation of Mines and Monopoly Industry”. February 2010.

ANC 52nd National Conference resolution of Economic Transformation, December 2007.

Dialego (1975) Philosophy and class struggle.

1 comment:

Anonymous said...

Great post. Anticipating the next.