DATE: 03 May 2004
Johannesburg
NUMSA PRESS RELEASE – FOR IMMEDIATE RELEASE
COMPETITIONS COMMISSION RULING ON STEEL PRICING DESTROYS ECONOMY.
The National Union of Metalworkers of South Africa (NUMSA) strongly condemns the recent ruling by the Competitions Commissions in favour of Import Parity Pricing (IPP) charged by ISCOR Steel giant. The ruling will derail the issue of IPP in the metal industry and impede on job creation. This is a policy failure on the part of the Competition Commission to do right things for the economy. We doubt very much that research was conducted by the commission before the ruling was pronounced. There is plenty of evidence commissioned by business ,labour and government under the auspices of metal and engineering study, which explicitly found that IPP was consistently raised as an impediment to the employment-creating potential of downstream sectors within the metals and engineering industry. The ruling by the Competitions Commission is erroneous because companies that are charging IPP will continue to attack the economy.
We hope the Department of Trade and Industry (DTI) will have the wisdom to go beyond the parochial behavior of the Competitions Commission by pronouncing solid , positive and constructive policy on IPP. NUMSA was not consulted on new initiatives by the Department of Trade and Industry to send top-level delegation to UK to start talks on ISCOR’s Steel pricing to the local companies. However, we appreciate the move by the department to steadfastly initiate action on ISCOR’s Steel pricing. In fact, this initiative is long overdue. Our members are highly affected by sudden changes to ISCOR policies, from where we stand the UK mission can present a window of opportunity for the union to engage vigorously on job losses and the future of the company.
Recently, ISCOR announce steel price increases by over 6%. As a result of IPP, lSCOR is charging double the price of steel to the local companies and consequently stifles the local economy and destroys jobs in the entire metal and mining industry industries. The IPP prevent entry of the new companies in the downstream sector of the engineering, thus preventing the creation of new jobs in the local economy. It also undermines the potential for further beneficiation and fabrication downstream. Iscor in this regard, is causing harm in the broader economy of South Africa.
We want to advise the Competitions Commission that policy development and growth of the economy is much more about price competitiveness. It is not about emulating companies that are successful. It is about a process where the actors constantly searches and learns how to build and restructure its economy in a way that works for the entire society. The problem in South Africa why we do not achieve acceptable economic growth rates is that those assumed to be incapable of contributing positively are discarded and marginalized. This results in the country opting for wrong policy decisions.
For more information contact Dumisa Ntuli @ 689-1700 or cell 0829737282