BTR Sarmcol (Hansard, 22 April 1986)

§ Mr. Dave Nellist (Coventry, South-East)
This debate arises as a result of representations that I have received from two leading black South African trade unionists who have visited Britain in recent weeks. At a press conference held in the House on 10 April, Moses Mayekiso, the Transvaal organiser of the Metal and Allied Workers' Union, and Jeremiah Zulu, the president of the Transport and General Workers' Union in South Africa, who are both members of the central executive committee of the recently formed Congress of South African Trade Unions, or COSATU, reported to me their federation's concern for the actions of the South African subsidiary of the British-owned BTR Group. Under the code of conduct by which British owned multinationals operate in South Africa they are requested, each year, to declare to the Department of Trade and Industry answers to a number of questions under the EEC code of conduct. For the period ended 30 June 1985 BTR stated under the heading "Progress made in Implementing Policy" the following: At BTR Sarmcol, Howick a trade union with majority representation was responsible for collective bargaining on behalf of all waged employees and had negotiated a wage agreement and were negotiating on grievance and disciplinary procedures and a retrenchment procedure. Negotiations broke down and the agreement with the trade unions was discontinued. New negotiating machinery is currently under review. Those weasel words belie the fact that almost a year ago—on 30 April 1985—1,000 workers who were on a legal strike were sacked by BTR after a 10-year battle for union recognition and a two-year negotiation with the company.
One of the major concerns of COSATU and the Metal and Allied Workers Union which represented the victimised workers is that the EEC guidelines which are supposed to protect the interests of these workers, and the Government's policy of "constructive engagement" with South African capitalism which is supposed to ameliorate the worst excesses of apartheid have acted in this case—I would argue in all others—as nothing more than smoke screens for the exploitative actions of British companies which are only too happy to reap the super-profits that come from the cheap labour system which is the essence of apartheid.
BTR can effectively put its case through its press officers and the British press. That avenue is largely denied to workers. It has led to a series of wild claims by BTR management. In an interview in the January 1986 edition of the European Rubber Journal the chairman of the newly merged operation—BTR South Africa and Dunlop South Africa—the perhaps aptly-named Peter Fatherley made a series of allegations on how well the company was run and on its operations. The unions' response to those allegations in a leaflet appropriately headed "BTR's Fatherley Advice" picked those points to pieces.
I shall give an example of some of those allegations as an illustration to the Minister this evening. BTR claimed that it provided a pension scheme and loans for home purchase. Perhaps that is true. But the company does not agree to requests from the workers because its policy is not to extend home loans to hourly paid employees.
274 I shall quote a number of cases which will illustrate the value of the pension scheme. Mr. S. Zuma a national executive member of MAWU, employed by Sarmcol for two periods which totalled more than 20 years was given, on retirement, a pension of 4.2 rand per month which represents less than £2 a month. Mr. S. Zuma has now passed away.
Mr. Zakwe stopped work in 1982 after 25 years' service with BTR. His pension was the equivalent of £10 per month. Another worker with 22 years' service received 35 rand per month, which is less than £10 a month.
BTR claims to provide educational grants for the children of black employees and to provide basic education for their employees. BTR's educational grants amount to the following: for primary schools grants of 120 rand, about £40 per year for 16 selected schoolchildren. That is a total of 1,800 rand, the equivalent of £600. Secondary school grant is nil and the grant for tertiary education is also nil.
BTR claims to have set high standards in its relationship with its black employees, as it claims it has an integrated work force, with black foremen. It does not mention the fact that these racial groups cannot even share the same toilet facilities, and not a single black person is in lower middle management or above.
Perhaps the best example of the two worlds that are inhabited by the senior management of BTR and those who comprise the bulk of its work force is given in an interview about four and a half years ago with Sir Owen Green, the managing director of BTR, in The Observer of 27 September 1981. He said: Growth is the objective, profit is the measure … I don't believe British industrial companies really commit themselves to the bottom line, to profit … The education system doesn't encourage this idea. Those educated post-war have been taught, almost brainwashed, that it is socially undesirable to make much money. So they combine other objectives: that it is just as important to have good personnel policy, decent factories, to play a significant social role. They blur the issues—the key is the bottom line. The salary of Sir Owen Green was raised from £97,000 a year to £142,000 a year in late 1984, but the starting wage of an employee at BTR Sarmcol is 336 rand—approximately £80 a month, or £20 a week.
For these reasons, Brother Zulu of the TGWU is visiting the House tonight. I ask the Minister when he replies to these points to bear in mind that he is not speaking directly just to the few hon. Members who are in the Chamber this evening. He is also speaking indirectly to the 500,000 organised workers in the South African trade union federation, COSATU. They have been involved in solidarity action with the BTR Sarmcol strikers, who include 90 per cent. of the workers in the Howick-Pietermaritzburg area who went on strike on 18 July 1985. There was also a two-month boycott of white businesses in the same area and in recent weeks solidarity strikes have taken place in a number of other plants in the newly merged BTR-Dunlop group. These workers will want clear answers from the Minister about whether the British Government intend to oppose the circumvention of the pious hopes that are contained in the EEC code of conduct, or whether they are prepared to condone the open flouting of what is widely regarded among the South African working class as a "bulldog with rubber teeth."
I draw the Minister's attention in particular to the misleading nature of much of the information that is contained in BTR's own report on the code of conduct for 275 the 12 months to 30 June 1984. In its submission the company claims that only 95 of its 2,377 employees are paid below the university of South Africa's supplementary cost of living level. This was set at 287 rand a month in February 1984. That is approximately £25 a week. MAWU has consistently claimed that many more BTR employees are paid below the level to which the company will admit. This is borne out by a company circular entitled "Revised Wages Structure" dated 2 August 1985. It is in the union's possession and it gives details of the wage rates being paid to the strike-breaking work force that has been recruited to run the Howick plant. This document shows that, despite an increase of between 12 and 18 per cent. on basic wages, employees in grades 1 to 4, in which the overwhelming number of employees are located, are still being paid starvation wages, below the minimum requirements of the EEC code. Indeed, allowing for an annual inflation rate of 18 per cent., by the end of July of this year the basic minimum rate of BTR Sarmcol will be more than 40 per cent. below the supplementary living level requirements in the Durban area.
This failure to provide factual information about the activities of companies such as BTR is enough to call into question the EEC code. However, my criticism goes far deeper. Since 1977 Britain has subscribed to the EEC code of conduct for companies with subsidiaries in South Africa. This code requires that these companies should submit to the Department of Trade and Industry an annual return that provides information about their attitude towards worker representation, trade unions, the pay of their black employees, their wage structures, fringe benefits and the extent of desegregation at work. The most important aspect of the code is the pay recommendations, which have become enshrined not as the minimum level but as the goal to which these companies aspire. The minimum standard of living level is the lowest sum upon which a specific size of household can live in the South African social set-up. The MLL contains 10 basic elements, such as food, clothing, rent, fuel and light. Their costs are meticulously calculated, and make fascinating reading. For example, under personal hygiene a household of six is assumed to use per month 3 x 100g Lifebuoy soap, toilet paper, 15 razor blades per year for Blacks and 45 for Coloured and Indian males over 18 and sanitary requisites. Replacement of household equipment assumes that a bed, or chair will last 15 years, saucepans, kettles and fry-pans 10 years. Any wage below this would be a starvation wage. The Supplemented Living Level makes provision for more items … the SLL is not a subsistence budget, nor is it a luxury budget. Perhaps it can best be described as an attempt at determining a modest low-level standard of living. Again these standards differ for different racial groups. The SLL makes some allowances for personal care, for example, toothpaste, one toothbrush per person per year, and for hair-cuts, for recreation and entertainment, contributions to pensions, unemployment, medical and burial funds. It also allows for additional expenditure on the basic items in the minimum living level. In practice, the SLL is roughly 50 per cent. greater than the MLL, and still represents a very low standard of living.
In fact, both these figures are merely reflections of starvation levels and are not even recognised by black workers and their unions as being a realistic assessment of 276 the actual living needs of workers in South Africa. In addition, a number of highly questionable premises are used in drawing up the figures. For example, an inflation rate was assumed, for the period February to August 1985 of 3.6 per cent. when the actual annual rate of inflation was 16 per cent., more than twice the rate assumed. The study also established 5.5 dependants in the average-sized black family, despite the fact that the average is more like eight persons per breadwinner in the Howick area.
This might seem like abstract statistical hair-splitting to hon. Members, but what it adds up to is that the EEC code of conduct and the university of South Africa living levels serve to whitewash a situation in which 20 per cent. of the children of BTR employees in Howick aged between two and nine suffer from malnutrition. The literally starvation wages paid by this company mean that in 1984 BTR's South African operations contributed 3 per cent. of the company's £200 million profits after tax on only 2 per cent. of its sales, while the British operations contributed 42 per cent. on 45 per cent. of sales.
That would be a sufficiently outrageous state of affairs if it were the only misuse of the code of conduct by one single unscrupulous employer. However, it is increasingly obvious that the policy of this Government and of big business generally and the interests that they represent is to use that code to shield companies from the outrage of workers in Britain and South Africa and internationally. Only a minority of the 400 British companies, which between then own half the 2,000 foreign-owned companies in South Africa and therefore control £12 billion of foreign investment in that country, even send in reports. One of the first actions of this Government, on taking office in 1979, was to cease the practice of listing those companies which failed to comply with the guidelines for the code.
Had it not been for some sharp eyes, the latest Department of Trade and Industry report would have claimed that the number of black employees of British-owned companies paid below the EEC levels had halved. My hon. Friend the Member for Sheffield, Central (Mr. Caborn), who is present with me this evening, has noted that the EEC report has already had to be amended by an erratum slip since it was issued three weeks ago and now shows a massive 21 per cent. increase in the number of black workers in South Africa paid below the lower datum level and a 33 per cent. increase in those paid below the upper datum level, taking the situation back to 1978 levels.
One company alone, Pritchards Services Group, which is not unknown to at least one Tory Member, has admitted to paying 1,660 black workers less than poverty wages. That is almost double the 900 total figure disclosed three weeks ago by the Britain Government.
There is a growing realisation among workers in British and South Africa of the manner in which the capitalist class and its political representatives use the EEC code to prop up rather than undermine apartheid. That common cause of the BTR management and the Tory Government is precisely the same common cause made between its South African subsidiary and the Botha Government, whose police have arrested over 100 striking workers in Howick and in September last year opened fire on a crowd of strikers and their families, killing one child and causing the hospitalisation of three others.
This realisation by workers has been accompanied by an understanding that the only way to tackle companies 277 such as BTR, which seek to use the apartheid system as a source of ready profits, is to use their own strength as workers by building direct links between British and South African workers to expose and undermine the thousands and millions of threads that tie together the City of London and the slave labour system in South Africa.
Through this debate I give notice to the Minister and to his friends in the British multinationals. They have had an easy ride so far, but the formation of COSATU and its clear appeal to workers internationally for support mean that in future the Minister and his friends will face the wrath of the organised working class of South Africa. Workers will not just show solidarity in single disputes such as that at BTR, but will take the campaign further. The working class movement will have a clear answer in Britain and in South Africa to people in companies that seek to enslave their class brothers and sisters in that country. Increasingly, that answer will be public ownership, nationalisation and the control and management by workers so that investments that are being used to prop up the racist regime can be turned against it.
Internationalism is not just a moral matter facing British workers. For us, internationalism is summed up in a simple phrase: a chain is only as strong as its weakest link. Trade unions in South Africa are denied the right to organise and workers are paid cheap labour poverty wages of £20 to £25 a week. That means that British firms with factories in Coventry and the midlands and elsewhere in Britain can co-operate in South Africa and play off workers in one country against workers in another.
We in the Labour movement learned early in our history, perhaps as far back as 100 years ago, that where factories were operated up and down Britain and were owned by the same employer, the same gaffer, we could form combines to make sure that our union policies were equal to the joint policies of management. That lesson is being learned internationally, and that is why Transport and General Workers Union members at a Dunlop factory in Leicester donated in recent weeks £200 to the families of strikers in South Africa.
The conditions of black workers in South Africa cannot be summed up in a few phrases. The polarisation caused by apartheid in South Africa has led to the richest 5 per cent. owning 88 per cent. of all personally owned wealth—double the rate in the United States of America. Whites own 98 per cent. of all farms, 93 per cent. of private property, 99 per cent. of quoted shares and 95 per cent. of unquoted shares. That is the society that the Government and the Prime Minister defend.
Britain is South Africa's fourth largest trading partner and that is why the Prime Minister has not even taken up the suggestion of economic sanctions against that country. She has not taken up that suggestion because of the £12 billion worth of British investment in that country and not because of the excuse that she gave to me in the House, that sanctions might affect the lives of 250,000 British workers and threaten their jobs. She does not care for the 2.5 million she has put on the dole in the last seven years. What leads us to believe that she cares for another 250,000 if sanctions were to be employed?
The Prime Minister does not care about a society where one in three black children under the age of 14 are stunted in growth because of malnutrition. In the country that pioneered heart transplants, there is only one doctor to 278 every 174,000 people. Some 11 million blacks are forced to live in the Bantustans, the concentration camps, the so-called homelands.
The Congress of South African Trade Unions is a movement beginning to organise hundreds of thousands, and soon millions, of workers under its banner, and it stands on the Freedom Charter of 1955. That charter offers to the workers and peasants of South Africa the hope that the wealth that only they have created in their country can be fairly and equally divided among them and their families. This debate is about one company, the breaking of the EEC code of conduct by one management, but the surrounding facts and figures of the dispute and the growing power of the trade unions is a warning not just to P. W. Botha but to BTR, to the Minister and to all others in Britain and in South Africa who seek to prop up the hated system of apartheid.

§ The Minister for Trade (Mr. Alan Clark)
By raising this subject this evening the hon. Member for Coventry, South-East (Mr. Nellist) has given me an opportunity to stress the importance which the Government attach to full compliance by British companies and their South African subsidiaries with the EC code of conduct. It also gives me an opportunity to congratulate the majority of companies on a generally high standard of performance under the code and to thank them for their co-operation in submitting reports to my Department.
However, the hon. Gentleman has made a number of allegations about a particular company. I shall not comment on those, either to agree with them or reject them, because it is our consistent practice not to comment on the performance of individual companies under the code. I shall elaborate on the background to this practice in a moment.
I am naturally aware of the dispute which has arisen between BTR/Sarmcol and the Metal and Allied Workers Union. It has been accompanied at various times by incidents of violence and intimidation. I am sure that the hon. Gentleman will join with me in condemning those who seek to pursue their disagreements by such means.
Meanwhile, one can only have sympathy with the plight of the destitute former employees of the company. But this is something which is happening thousands of miles away in another country and ultimately the company and the union must resolve their disagreements directly.
For those reasons, it would not be appropriate or helpful for the Government to intervene with the company. But I remain confident that they will continue actively to seek ways to resolve this dispute. I hope, too, that the hon. Gentleman will urge his contacts in the union to act in a similar manner. I understand that the dispute is to be considered by the industrial court. That is apparently the appropriate forum for the dispute to be considered in at this stage. I believe that it should be given every opportunity to resolve the problems between the company and the union.
The hon. Gentleman has alleged that the company has failed to comply with the EC code of conduct, that it is in breach of the code provisions. The company's report under the code is available for public inspection and it speaks for itself. Members of the House and of the public may judge for themselves whether the hon. Gentleman's allegations against the company are justified or not.
279 I recognise that the code encourages companies to ensure that their workers are free to form or join a union. Under the revised code, agreed last year by the EC member states, companies are encouraged to pay particular attention to unions representing black African workers and to be prepared to sign recognition agreements with them. But that does not mean that companies are obliged to recognise unions not representative of their work force or that companies must accept all the conditions which unions may seek to impose. Free collective bargaining has to be free on both sides if it is to have any meaning.
I mentioned that it is not our practice to comment on the performance of individual companies under the EC code. That is a long-standing practice, and there are a number of very good reasons for it. The hon. Gentleman must not expect me to depart from this, either to condemn or praise individual companies. His intention has plainly been more to condemn than to praise. In so doing he ignores the considerable contribution which British and other European subsidiaries in South Africa have made to the advancement of black Africans and to the changing opinions there in favour of fundamental, peaceful change.
My Department produces an annual analysis and summary. The latest, covering the period July 1984 to June 1985, was placed in the Library of the House prior to the Easter recess.

§ Mr. Richard Caborn (Sheffield, Central)
It is wrong.

§ Mr. Clark
It has been corrected since. In that document, we list all the companies which have provided reports under the code to the Department, as well as those whose interests are known or believed to warrant a full report but which have declined to submit one. But we do not otherwise consider it appropriate or helpful to single out individual companies and comment on their performances. Our purpose is to give a concise, factual summary of the position emerging from the reports as a whole, drawing attention to the areas where progress has been made in terms of the response of the subsidiaries of British companies to the standards and objectives laid down in the code.

§ Mr. Caborn
rose—

§ Mr. Clark
The hon. Member for Conventry, South-East has left me little time, and I feel in fairness to the parties to this dispute and the points that he has raised that I should progress in response to his argument as far as I can.
The credibility of the code as a catalyst to promote better conditions and opportunities for black African employees depends heavily on the co-operation of the companies concerned. We should not encourage this if we were to set ourselves up as judge and jury and put individual companies on trial. We and our partners in the 280 EC are clear that the code must remain a voluntary code. We must continue to give companies every encouragement to comply with it on a voluntary basis. The Department's analysis of code returns demonstrates the success which this approach has achieved. Only three companies still decline to submit a report: 98 per cent. of all the companies whom we believe ought to submit reports did so. Our analysis also demonstrates the contribution which these companies, that is, the vast majority of them, are making towards the social and economic advancement of their black African work forces. I shall say more about this in a moment. It is significant that the business sector, both local and European companies, are in the forefront of those in South Africa calling for fundamental reform of the system and the abolition of apartheid.

§ Mr. Caborn
How the Minister can actually make that statement I do not know. The report, although it was wrong in its compilation, now shows clearly a reduction of 21 per cent. paid below the lower datum line. We are back pre 1979. That is the situation on the code itself.

§ Mr. Clark
I think the hon. Gentleman was mistaken. What I was drawing the attention of the House to was the high level of companies which are filing reports under the code. There are virtually no exceptions to this. Judgments and assessments about whether or not companies are in breach of code guidelines are unlikely to be simple or clear cut. In an extreme case, the Department might be involved in a risk of legal proceedings if companies sought to contest accusations against them made outside this House.
All the information submitted to the Department about companies' performance is publicly available. Copies of all company reports are available in the Library of both Houses, as well as in the Department's Library and our diplomatic posts in South Africa, where they may be inspected by callers. It is possible for interested members of the public to judge for themselves and to study in detail the records of individual companies in complying with the code.
The companies themselves are also asked to make their reports available. Some of the larger companies publish and distribute their reports widely, attaching considerable importance to the contribution they are making, welcoming the opportunity to publicise it, and accepting a responsibility to give a lead.
The company mentioned by the hon. Member will doubtless take careful note of the points he has made and consider whether or how to respond. The facts about the company's performance under the code are on the record and publicly available in the company's report. Interested shareholders, customers, consumers or members of the public at large may judge for themselves and react as they consider appropriate.