South African Federaons involved in the Campaign - BWI

Published by the Building & Wood Workers Internaonal (BWI) & Labour Research Service (LRS)Author: Eddie Cole, Co-ordinator, Campaign for Decent Work Towards & Beyond 2010, LabourResearch Service, eddie@lrs.org.zaEditor: Samia SinghBuilding & Wood Workers Internaonal – BWISouthern Africa Project OfficeP.O. Box 30772Braamfontein 2017South AfricaTelephone: +27 (0) 11 339 44 17/9Facsimile: +27 (0) 11 339 39 10Email: sapo@bwint.orgLabour Research ServicePO Box 376Woodstock 7915,South AfricaTelephone: + 27 (0)21 447 1677Facsimile: + 27 (0)21 447 9244Email: lrs@lrs.org.zaWeb: www.lrs.org.zaDesign and Layout: Designs4development, info@d4d.co.zaPrinted and bound by: Hansa printPhotos by: Sharon McKinnon of Workers World Media ProduconsPublished: October 2007

This booklet is dedicated to the construcon workersof South Africa who have died, been injured and whoendure ongoing hardship and super-exploitaon tobuild the transport infrastructure, stadia and relatedinfrastructure to ensure that South Africa hosts asuccessful 2010 Soccer World Cup.Company Profiles in Construcon for 2010 World Cup 1

South African Unions involved in the Campaign:Building, Construcon and Allied Workers Union (BCAWU)Naonal Union of Mine Workers (NUM)South African Building and Allied Workers Organisaon (SABAWO)South African Federaons involved in the Campaign:Confederaon of South African Workers Unions (CONSAWU)Congress of South African Trade Unions (COSATU)Naonal Council of Trade Unions (NACTU)Internaonal Federaons involved in the Campaign:Building & Wood Workers Internaonal (BWI)Internaonal Confederaons of Trade Unions (ITUC)Global Unions (GU)Internaonal OrganisaonsSolidarSocial AlertSwiss Labour Assistance2Company Profiles in Construcon for 2010 World Cup

Purpose of this booklet 4Acknowlegements 5Why a Campaign for Decent Work? 6What is Decent Work? 8What are our demands to ensure Decent Work? 9Construcon Company Profiles: 11Wilson Bayly Holmes Construcon (PTY) Ltd 11Basil Read 12Grinaker-LTA 13Group Five 14Interbeton 15Murray & Roberts 16Bouygues 17Bombela Member Consorum 18Annexure 1: Construcon sector performance in 2006 19Annexure 2: Civil engineering minimum wages 2006–2009 20Resources 20Company Profiles in Construcon for 2010 World Cup 3

This booklet is a resource for construcon trade unions, shop stewards, workers and allied organisaons involved inthe struggle to improve working condions for those involved in FIFA World Cup 2010 construcon projects. It alsoserves as a resource for the construcon sector as a whole.This booklet provides profile ‘snapshots’ of the major companies, naonal and internaonal, involved in World Cup2010 construcon projects. These ‘snapshots’ include a descripon of history and operaons, profits for the 2006financial year, execuve and non-execuve remuneraon and state the specific 2010 contract awarded to eachcompany. To give a broader picture of profitability in the construcon sector, we have included other companies(in Annexure 1), that may not be involved in 2010 projects directly. We also provide informaon on the minimumwages for the civil engineering sector, which is contrasted to the remuneraon packages of execuves in theindustry.Through this booklet, we aim to arm those involved in the struggle for decent work with informaon to be used fordiscussion, debate and acon amongst workers; and contribute to the building of the independent knowledge ofthe working class. Aer all, ‘knowledge is too important to be le in the hands of the bosses’.4Company Profiles in Construcon for 2010 World Cup

This booklet is a product of a much lengthier process of discussion and debate around the ‘Campaign forDecent Work’. It has both internaonal and naonal components and is a necessity for the labour movementin the construcon sector in South Africa. The campaign was first launched in Nairobi, Kenya at the WorldSocial Forum in 2007. The naonal launch in South Africa takes place on 27 October 2007.We wholeheartedly thank the following:Our internaonal allies – the Decent Work for Decent Life Alliance, the Internaonal Trade UnionConfederaon (ITUC), European Trade Union Confederaon, the Global Progressive Forum and Solidar – forproviding polical support for the campaign.The Building & Wood Workers Internaonal – especially its affiliates from Switzerland, Sweden, Denmark andBelgium who have been at the centre of the campaign polically, organisaonally and financially.The Swiss Labour Assistance especially Zoltan Doka and Joachim Merz for their keen interest, enthusiasm andconnuous support for the campaign.Finally, we must also thank the South African trade unions involved in the campaign: the Building,Construcon and Allied Workers’ Union (BCAWU), the Naonal Union of Mineworkers (NUM) and theBuilding and Allied Workers Organisaon (SABAWO) who have priorised the Campaign and who haveworked in a collecve manner to ensure a successful outcome for construcon workers in the light of the2010 World cup in South Africa.Company Profiles in Construcon for 2010 World Cup 5

Globally, the construcon sector is experiencing a boom, with governments’ realisaon that good infrastructureis an important factor for economic growth. Besides the South African government’s commitment to spend someR372 billion from 2006 to 2009 in its infrastructure development programme, it has also commied some R30billion for the 2010 World Cup. This massive investment of public funds is going to be of direct benefit to theconstrucon companies that will be contracted to develop water, electricity, housing, health, roads, buildings,stadiums and rail and ports infrastructure. Construcon workers are fully aware of the billions in public funds thatare being spent, but do not see the benefits as their wages and working condions have worsened. Addiconally,there is sll a racial dimension to poverty and skills development.While the construcon sector is experiencing a boom which is likely to last way aer 2014, construcon workersare experiencing poor working condions through poverty wages, vulnerable employment through sub-contracngand labour brokers, and a lack of health and safety consideraons at the workplace.The construcon workers’ working condions reflect a larger problem – that of increasing inequality and poverty inthe context of massive profits and wealth accumulaon in the construcon sector and the general economy.A boom in profits!An analysis of the construcon sector company performance indicates an increase of 36% in pre-tax profits.Execuve directors’ remuneraon increased, on average, by 39% – the highest increase over all the economicsectors. Together, the 25 execuve directors surveyed earned R81million.Addionally, chief execuve officers (CEOs) in the sector had an average remuneraon increase of 38%. Forexample, the CEO of Murray &Roberts, BC Bruces, remuneraon increased by 40%, totalling R7.4 million. The CEO6Company Profiles in Construcon for 2010 World Cup

Poverty wagesThe same cannot be said for construcon workers who, despite receiving an above-inflaon increase of 8%, arenot able to move out of the poverty wage category because of their low income. This is because food inflaon is8.7%, meaning that workers can afford less food despite an increase in income. The current minimum wage of R11per hour for a general worker for a 44 hour week amounts to R484 per week or R1 936 per month. The currentminimum wage for a skilled arsan is R26 per hour or R1 144 per week or R4 576 per month.Taking a conservave esmate of a living wage of R3 000 per month by implicaon means that the vast majority ofconstrucon workers receive an income well below a living wage and are thus earning poverty wages.This is why the Campaign for Decent Work in the construcon sector becomes an important vehicle to challengethe construcon ‘bosses’ for a fair share of profits and improved working condions.Poor working condionsDid you know?It would take a general worker 139years to earn the average income of aconstrucon sector execuve in one year!It would take a skilled arsan 56 years toof Aveng, Carl Grims, remuneraon increased by 47%, totaling R4.7 millionearn the average income of a construconfor the financial year.sector execuve in one year!Globally over 100 000 construcon workers die through preventable accidents each year. Besides death due toaccidents, there are direct work related health problems such as deafness, vibraon syndromes, back injuries,muscular skeletal disorders, respiratory illnesses and an alarmingly high HIV/AIDS rate in the construcon sector.Workers are also, transported on unsafe open vehicles regardless of the harsh weather condions. The right todecent work is therefore, of paramount importance to ensure safe working condions for construcon workers.Company Profiles in Construcon for 2010 World Cup 7

“Decent Work is work that is carried out in a safe physical environment with condions which respect the rightsof workers as defined in naonal law and internaonal convenons” Internaonal Labour Organisaon (ILO).Economic growth is not enough – As workers, we can hear the economists, government officials and bosses talkabout the growing economy. But all we see is the rich geng richer and the poor geng poorer. There has beena steady increase in poverty in the post-apartheid period. Using a 2 dollar poverty datum line, we find that thenumber of people living in poverty increased from 32% (1995) to 34% (2000). Decent Work is a key strategy toensure that the wealth is redistributed and poverty is eliminated through a living wage for all workers.Not any job is a good job – Between 1995 and 2004, unemployment rose from 4.2 million to 8.1 million – a 90.7%increase. Women and blacks in general have been hardest hit by unemployment. Structural shis in the economyare resulng in a rising demand for ‘skilled’ workers and a slackening of demand for ‘unskilled’ workers. There istherefore sll a racial dimension to poverty as the large pool of ‘skilled’ labour is sll white.With business demanding a ‘flexible’ labour market, we see very low quality jobs being created that pay so lilethey make no impact on poverty. The challenge is thus not only to create jobs, but to create Decent Work. DecentWork is a means to ensure that all workers not only have decent jobs but are able to live in dignity!8Company Profiles in Construcon for 2010 World Cup

1. The right to work, to organise and to bargain – access to construcon sites and to workers for the purposesof communicang their rights and recruitment, without fear of discriminaon.2. Decent work – agreements with companies must ensure that there is real improvement in wages, workingcondions and safety for workers.3. A living wage – a wage that takes workers out of poverty.4. Zero accidents – enforcement of health and safety measures and full-me health and safety unionrepresentaves on site.5. No downward variaon – all subcontracng terms to reflect those of the principal tender.6. Quality jobs – maximise the creaon of quality jobs, especially for women and youth so as to contribute toresolving unemployment.7. Improve basic condions – decent accommodaon and improvement in working condions for all workers.8. Health awareness – promote awareness of HIV/Aids; provide voluntary tesng, accessible counselling andtreatment.9. Skills development – effecve skills development programmes that promote the future employability ofworkers.Company Profiles in Construcon for 2010 World Cup 9

10Company Profiles in Construcon for 2010 World Cup

Wilson Bayly Holmes Construcon (Pty) LtdWBHO Construction (Pty) LtdHistory:The origins of the group date back to 1970 whenWilson-Holmes (Pty) Ltd was formed by John Wilsonand Brian Holmes. Aer subsequent mergers, the namewas changed to WBHO Construcon in 1994.Geographic spread of projects:Major construcon projects in southern Africa, theMiddle East and the Indian Ocean islands.Construcon acvies:Building construcon, civil engineering, and roads andearthworks.Offices:In Johannesburg, Cape Town, Durban, Port Elizabethand East London.WBHO’s subsidiary, Probuild Construcons, has itsheadquarters in Melbourne, Australia.Profitability:Profit before tax increased from R197 872 000 (2005)to R304 614 000 (2006) or by 54%.Chief Execuve Officer remuneraon:The CEO of WBHO, JW Abbo’s remuneraon for 2006was R1,3millionBlack economic empowerment:Akhani Investment Holdings holds a 15% share of thecompany.Employment:WBHO has 4 307 permanent and 3 004 non-permanentemployees, totalling 7 311 employees.2010 ProjectsPeter Mokaba Stadium in PolokwaneAfrican Renaissance Stadium in Cape TownMoses Mabhida Stadium in eThekwiniCompany Profiles in Construcon for 2010 World Cup 11

Basil ReadHistory:Based in South Africa since 1952 and is listed on the JSESecuries Exchange.Geographic spread of projects:Basil Read focuses its operaons in South Africa andsouthern Africa.Construcon acvies:Civil engineering projects such as earthworks, bridges,pipelines, infrastructure, harbour and marine works,industrial plants and sports facilies.Offices:Head office in Boksburg, Durban and Cape Town.Chief Execuve Officer remuneraonThe CEO of Basil Read, ML Heyns’s remuneraon for2006 was R2,7millionBlack economic empowerment:35.8% of the company is owned by AmabubesiInvestments.Employment:Basil Read has 2 024 employees.2010 ProjectsMbombela Stadium, Mpumulanga ProvinceProfitability:Profit before tax increased from R24 266 000 (2005) toR57 229 000 (2006) or by 136%.12Company Profiles in Construcon for 2010 World Cup

Grinaker LTAHistory:The company dates from the late 1800s and wasowned by James Thompson. The company is asubsidiary of Aveng Ltd.Geographic spread of projects:Grinaker focuses its operaons in southern Africa.Construcon acvies:Civil engineering projects, building and retail, energyand mining, road and earthworks and mechanical andelectrical projects.Black economic empowerment:Qakazana Investment Holdings (Pty) Ltd owns 25%while Aveng owns 75%.Employment:Grinaker employs over 18 000 people.2010 ProjectsAfrican Renaissance Stadium in Cape TownNelson Mandela Stadium in Port ElizabethSoccer City in JohannesburgOffices:Kempton Park.Profitability:Aveng Ltd’s profit before tax increased from R402400 000 (2005) to R787 100 000 (2006) or by 96%.Company Profiles in Construcon for 2010 World Cup 13

Group FiveHistory:The company was formed in 1978. It is listed on theJSE.Geographic spread of projects:Africa, Middle East and Europe.Construcon acvies:Building, engineering projects and infrastructure.Black economic empowerment:iLima Group and Mvelaphanda Group Ltd hold 21.6% ofGroup Five.Employment:11 000 people, of which 6 500 are permanent.2010 ProjectsMoses Mabhida Stadium in eThekwiniOffices:Sandton.Profitability:Company profit before tax increased fromR133 710 000 (2005) to R231 973 000 (2006) or by73%.Chief Execuve Officer remuneraonThe CEO of Group5, MH Lomas’s remuneraon for2006 was R5,9million14Company Profiles in Construcon for 2010 World Cup

InterbetonHistory:Interberton bv is part of the Dutch Royal BAM Groupand was formed in 1958.Geographic spread of projects:Contracts outside of Western Europe, Africa, theAmericas, the Arabian Gulf/Middle East and Asia-Pacificregion.Construcon acvies:Building, marine, industrial and civil engineering.Black economic empowerment:Not applicable.Employment:Royal BAM has about 30 000 employees worldwide.2010 ProjectsSoccer City in JohannesburgNelson Mandela Stadium in Port ElizabethOffices:Head office in Gouda, Netherlands. The company alsohas offices in Libya and Ghana.Profitability:Profit before tax for the Royal BAM Group decreasedfrom R2.3 billion (2005) to R2,.2 billion (2006) or by-1%.Company Profiles in Construcon for 2010 World Cup 15

Murray & RobertsHistory:Murray & Roberts was established around 1903 and isa South African company. It is listed on the JSE.Geographic spread of projects:Operates in southern Africa, Middle East, SoutheastAsia, Australasia and North America.Construcon acvies:M&R focuses on industry and mining, oil and gas,power and energy, building and infrastructure, civil,mechanical, and electrical engineering, and themanagement of concession operaons.Offices:M&R is based in Bedfordview, Johannesburg, SouthAfrica, has an internaonal co-ordinang office inLondon, United Kingdom and regional offices inAustralia, Botswana, Canada, Namibia, the United ArabEmirates and Zimbabwe.Profitability:Profit before tax increased from R615 600 000 (2005)to R736 400 000 (2006) or by 20%.Chief Execuve Officer remuneraonThe CEO of Murray & Roberts, BC Bruces’sremuneraon for 2006 was R7,4millionBlack economic empowerment:Has an employee broad-based economicempowerment trust Letsema, which holds 10% ofcompany shares.Employment:24 492 employees.2010 ProjectsAfrican Renaissance in Cape TownGautrain in Johannesburg16Company Profiles in Construcon for 2010 World Cup

BouyguesHistory:The Bouygues group, founded by Francis Bouyguesin 1952, has been run by Marn Bouygues, Chairmanand Chief Execuve Officer, since 1989. It is a Frenchcompany and has been listed on the Paris stockexchange since the 1970s.Geographic spread of projects:The group has operaons in 80 countries in North andSouth America, Europe, the Middle East and Asia.Construcon acvies:Its business acvies focus on two sectors: BouyguesConstrucon (building, civil works and electricalcontracng); and Bouygues Immobilier (propertydevelopment) and Colas (roads).Profitability:The company’s net profit increased from R8.2 billion(2005) to R12.2 billion (2006) or by 33%.Black economic empowerment:Not applicable.Employment:Employs 122 500 staff, of whom 96.4% are permanent.69 000 are employed in France.2010 ProjectsMbombela Stadium in MpumulangaGautrain Project in GautengOffices:The group’s office is in Paris.Company Profiles in Construcon for 2010 World Cup 17

Bombela ConsorumShareholding in the Bombelaconsorum:· Bombardier (Canadian) 25%· Bouygues (French) 25%Loliwe Rail Express is a new BEE company whoseshareholders include African Legend, BMFI, Prop5Corporaon and Powerhouse, which has a 20-yeartrack record and has delivered in excess of R1 billionworth of major projects in last six years.· Murray & Roberts (SA) 25%· Loliwe Rail Contractors (BEE) 16.5%· Loliwe Rail Express (BEE) 8.5%BEE represents a 25% shareholding in BombelaConsorum.Loliwe Rail Contractors is a new BEE Companywhose shareholders include the Black ManagementForum investment company, Prop5 Corporaon; andBEE contractors including Blackstone, ZMK and LetProperes. Loliwe Rail Contractors have a collecveturnover of more than R360 million.18Company Profiles in Construcon for 2010 World Cup

Construcon SectorPerformance in 2006CEOCompanyCEO (Name)2005Remuneraon2006Remuneraon% IncreaseBonus 2006(included in pay)Aveng Carl Grim 3,212,000 4,717,000 47 1,467,000Cashbuild Pat Goldrick 3,025,000 1,775,000 -41 0Group Five MH Lomas 5,585,000 5,969,000 7 3,625,000Murray & Roberts BC Bruce 5,273,000 7,385,000 40 4,000,000PPC JE Gomersall 1,503,000 1,851,000 23 1,000,000Wilson Bayly Holmes JW Abbo 2,425,000 1,336,000 -45 750,000Basil Read ML Heyns 1,587,966 2,681,929 69 1,200,000Average % increase 18,598,000 25,714,929 38Average annual increase (Rands) 3,719,600 5,142,986 1,423,386Average monthly increase (Rands) 309,967 428,582 118,615Execuve directorsCompanyExec. Dir.2005Exec. Dir.2006Total 2005 Total 2006 Ave.2005 Ave.2006 % Incr.Aveng 6 5 14,881,000 21,565,000 2,480,167 4,313,000 74Cashbuild 4 4 5,614,000 6,154,000 1,403,500 1,538,500 10Group Five 2 2 7,842,000 9,142,000 3,921,000 4,571,000 17Murray & Roberts 5 5 16,642,000 23,326,000 3,328,400 4,665,200 40PPC 6 5 10,434,000 12,913,000 1,739,000 2,582,600 49Wilson Bayly Holmes 2 3 3,281,000 4,945,000 1,640,500 1,648,333 0Basil Read 1 1 1,587,966 2,681,929 1,587,966 2,681,929 69Average % increase 26 25 60,281,966 80,726,929 2,318,537 3,229,077 39Average annual increase (Rands) 2,318,537 3,229,077 910,540Average monthly increase (Rands) 193,211 269,090 75,878Non-execuve directorsCompanyNon-exec.2005Non-exec.2006Total 2005 Total 2006 Ave.2005 Ave.2006 % Inc.Aveng 8 8 1,802,000 1,921,000 225,250 240,125 7Cashbuild 4 4 1,088,000 1,025,000 272,000 256,250 -6Group Five 4 6 760,000 1,382,000 190,000 230,333 21Murray & Roberts 11 10 1,896,000 2,135,000 172,364 213,500 24PPC 7 7 769,000 896,000 109,857 128,000 17Wilson Bayly Holmes 3 3 326,000 254,000 108,667 84,667 -22Basil Read 0 6 0 1,345,000 0 224,167 0Average % increase 37 44 6,641,000 8,958,000 179,486 203,591 13Average annual increase (Rands) 179,486 203,591 24,104Average monthly increase (Rands) 14,957 16,966 2,009Company performanceCompany Profiles in Construcon for 2010 World Cup 19

Net profit before taxCompany NPBT 2005 NPBT 2006 % IncreaseAveng 402,400,000 787,100,000 96Cashbuild 126,710,000 135,413,000 7Group Five 133,796,000 231,973,000 73Murray & Roberts 615,600,000 736,400,000 20PPC 1,536,000,000 1,876,000,000 22Wilson Bayly Holmes 197,872,000 304,614,000 54Basil Read 24,266,000 57,229,000 136Company Performance (%) 3,036,644,000 4,128,729,000 36Civil Engineering MinimumWages 2006–2009Grade Occupaonal group 2006 2007 2008 20091 General worker 10.27 11.09 12.48 14.02 Arsan aid, construcon hand grade iv, operator grade v, checker, chainman 10.4 11.23 12.58 14.43 Construcon hand grade iii, operator grade iv, site support 11.0 11.88 13.31 14.44 Construcon hand grade ii, operator grade iii, driver grade ii, site support 11.56 12.48 13.86 15.35 Construcon hand grade 1, operator grade ii, driver grade I, site support 13.87 14.98 16.63 18.36 Operator grade i 16.18 17.47 18.87 20.87 Supervisor grade I, plant serviceman 19.01 20.53 22.07 23.88 Supervisor grade i 21.38 23.09 24.82 26.79 Arsan 24.27 26.21 28.05 30.15Note: The table indicates an increase of 8% for each grade from September 2006 to September 2009From: Government Gazee, Regulaon No. 8635, Pretoria, 16 February 2007, No. 29635Labour Research Service, Bargaining Indicators, volume11, 2007S Godfrey and J Theron, South Africa – The expandedpublic works programme, Labour Enterprise project,October 2006www.ilo.orgwww.wbho.co.zawww.grinaker-lta.comwww.bam.nlwww.aven.co.zawww.basilread.co.zawww.cashbuild.co.zawww.murrob.comwww.g5.co.za20Company Profiles in Construcon for 2010 World Cup

Copy your own pamphletDid you know?The salaries of the CEO of Murray & Roberts, increased by 40% totallingR7,4m and the CEO of Aveng, increased by 47% totalling R4,7m for the 2006financial year.The current minimum wage of R11 per hour for a general worker for a 44hour week amounts to R484 per week or R1936 per month!san is R26 per hour or R1144per week or R4576 per month.It will take a general worker 139 years to earn the average income of ave in one year!Workers at Green Point went on two strikes in September and won theirdemand for transport.Workers at the Gautrain project went on strike in September and won theirdemand to remove racist managers.Where:Date:Time:onal and Labour Research Service, 2007.lead campaign launches at all siteson and Allied Workers Union (BCAWU)onal Union of Mine Workers (NUM)on (SABAWO)on sector willWhat are our Demands to ensure Decent Work?1. The right to work, to organise and to bargain onng their rightson.2. Decent work – agreements with companies must ensure that there isons and safety for workers.3. A living wage – a wage that takes workers out of poverty.4. Zero accidents – enforcement of health and safety measures and fullveson site.5. on ng terms to reflect those ofthe principal tender.6. Quality jobs on of quality jobs, especially forwomen and youth so as to contribute to resolving unemployment.7. I ons on and improvementons for all workers.8. Health awareness – promote awareness of HIV/Aids; provide voluntaryng, accessible counselling and treatment.9. Skills development – eff ve skills development programmes thatpromote the future employability of workers.How do we achieve Decent Work?on sites.ve in launching the campaign at the site.es.on.