Despite much emphasis being placed on job creation and skills-transfer in SA, neither government nor labour organisations reacted recently when it came to light that a foreign company brought its own workers to complete a telecoms contract.
Chinese cellular equipment manufacturer ZTE last month brought in 400 contract workers to complete its R2.9 billion contract with third mobile operator Cell C.
However, labour organisations say they will soon engage with Telkom, which has appointed another Chinese company to put up base stations for 8ta, to protect local workers. But, while the unions are hoping to hold discussions with Telkom soon, the deal was announced two years ago already.
In Cell C's case, ZTE was contracted to install and build a network in the southern part of the country, including the installation of new equipment in at least seven cities, including Cape Town, Durban, Port Elizabeth, and East London.
While the contract did not create a single local job, nor did it facilitate skills transfer, labour organisations seem to have been caught napping. Government only took an interest in the deal when the Department of Home Affairs and police raided ZTE's premises in Durban and Cape Town to verify that the contract workers were legally living and working in SA.
Following the controversy generated by this story, the Congress of South African Trade Unions (Cosatu) issued a statement, saying South African workers should have been used, and that the Chinese workers were being exploited as they were willing to work for a lower wage.
However, neither the trade union federation, nor government, made any moves to ensure that any future large-scale contract, given to a foreign company, should include minimum criteria to protect local workers and ensure skills transfer.
Too little, too late
Meanwhile, it appears that labour unions have also missed the boat in relation to an upcoming Telkom contract. The telecoms giant appointed Chinese firm Huawei to implement a turnkey solution, and the company is set to bring in its own workers to build base stations for mobile newcomer 8ta's network roll-out.
South African Communications Union (SACU) president Michael Hare says the union is set to meet with Telkom next week to discuss the Huawei contract, signed in 2008, to make sure local workers benefit from skills transfer.
Hare is concerned that skills transfer will only take place after 2013, when the base station roll-out is complete, and the union does not have any clarity as to whether local workers will benefit. Telkom has earmarked R6 billion to build 8ta.
In addition, says Hare, the telecoms company should have consulted with unions before bringing in offshore workers.
Solidarity spokesman Maruis Croucamp says the union will engage with the Department of Communications in a bid to have a roundtable discussion to uncover why there is a need to import skills.
Croucamp says importing skills is an industry norm and all the cellular providers bring in external staff. However, he says the companies are less than honest about importing skills, which he doesn't believe is necessary. “It's happening undercover; you've got to really fish and investigate.”
Cosatu spokesman Patrick Craven says importing workers can “only be justified in exceptional cases”, where local skills are not available. In those situations, he says, companies must “urgently set up programmes to train workers”.
Cosatu lamented the fact that Chinese workers are massively undercutting the wages of South African workers, earning as little as R2 500 for a job that would ordinarily pay R30 000 a month. Cosatu argues that importing labour from overseas will worsen the “massive levels of unemployment we already have” and drag down the wage level.
Yet unions seem to have been fast asleep, because Telkom's announcement - more than two years ago - that it had decided to appointed Huawei, should have given the unions more than ample time to confront the issue. Huawei provides infrastructure for several telecoms companies in SA and in 2009 inked a deal with Neotel to build a CDMA network.
After the fact
Richard Hurst, senior analyst of emerging markets at Ovum, says the unions are looking out for the wrong people. He says Telkom has the right to look at the roll-out of its network in the most efficient way.
He says the issue of imported workers has “fallen between the cracks in terms of the unions keeping an eye on the ball”. Hurst says unions should have engaged with Telkom when the company first made its relationship with Huawei public, about two-and-a-half years ago.
The question, says Hurst, is what effect the unions' slumber will have on 8ta's roll-out and contractual obligations. He does not expect the roll-out to suffer, but anticipates a protracted negotiation period with organised labour.
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