LABOUR STRUCTURE, SUCCESSES
CHALLENGES AND THE SOLIDARITY SUPPORT
NEEDED FOR TRADE UNIONS
LABOUR PRACTICES, SUCCESSES,
CHALLENGES AND MODE OF SOLIDARITY
YewaSOCIETY
Kumwenda-BAHRM, DIP ED.
NEEDED FROM CIVIL
Yewa Kumwenda MUZ Assistant Director- Research and Productivity
MUZ-Assistant Director for Research and
Productivity
17th July 2013
FATMOLS LODGE WORKSHOP
PAPER ORGANIZATION
 Introduction
 Mission
of MUZ
 Labour Structure/Practices in the
Zambia
 Challenges encountered
 Successes scored and Solidarity
support needed
INTRODUCTION

Zambia inherited a strong economy at independence from Britain. Its GNP was
one of the highest in Africa.

Zambia’s labour industry performed well after independence mostly due to the
centralized economy.

Prior to 1991, Zambia boasted a lot of industries such as a thriving textile
industry and an organized mining industry.

After 1991 with the introduction of a market economy, over 220 companies
were privatized but most of them were shut down because their products could
not compete with foreign goods produced mostly in South Africa.

The closing down of a lot of factories created a lot of unemployment in Zambia,
a trend that still continues.

This paper will outline the characteristics of the Zambian labour market and
zero in on mining.


The paper will also look at the challenges and successes Zambia is facing in
creating jobs for its citizens in mining then offer recommendations on how to
speed up decent, permanent and pensionable job creation in the country.
It will also highlight the solidarity support needed by Trade Unions from the
civil society to achieve this.
MISSION OF MUZ

The mission of the Mineworkers’ Union of
Zambia (MUZ) is to protect and promote
the interests and welfare of mine and
allied workers in the mining industry in
Zambia and to organize and unite
mineworkers into strong miners as a basis
for promoting social justice, positive
economic and safe working environment.
OVERVIEW OF ZAMBIA’S LABOUR MARKET
(THE FOLLOWING
TABLES COURTESY OF DR. LUBINDA HAABAZOKA-CBU)
OVERVIEW OF ZAMBIA’S LABOUR
MARKET
OVERVIEW OF ZAMBIA’S LABOUR
MARKET
OVERVIEW OF ZAMBIA’S LABOUR
MARKET
LABOUR STRUCTURE IN THE
MAJOR MINES IN ZAMBIA (D
ATA FROM
MUZ COURTESY
OF
KCM)
60
52
50
40
30
18
20
8
8
Number of
Employees
~20,000
~16,000
~4,500
~5,000
Mining Company
KCM
MCM
Lumwana
Kansanshi
10
0
Labour productivity remains very low – particularly at the
older legacy Mines (KCM, MCM)
CHALLENGES FACED BY SOME MINING
COMPANIES
Labour costs: have increased over 220% in the
last eight years, a 100% increase over and above
cumulative high inflation.
 Power : rates have increased by 60% over and
above contractual increases since 2008 and have
acceded to a further increase of approximately
30% over the next three years.
 Input commodities have risen by approximately
200% in the last eight years
 Structural challenges; high open pit strip ratios
and the deep and wet conditions at Konkola and
Mopani.
 Royalty has increased ten fold since 2008 (0.6%-6%)
 Increment of Corporate Tax from 25%-30%.

CHALLENGES OF TRADE UNIONS IN THE
MINING INDUSTRY
Massive loss of employment after privatization
from 56 582 in 1991/2 to 31 033 in 1998 and now
40 000;
 The mines ever since the 1930s and throughout
the history of the ZCCM from 1982 up to 2000,
the mines established a corporate culture which
extended past a workplace involvement. The
employers in the mining industry provided for all
employees’ needs such as housing, hospitals and
medical assistance, education for children,
subsidized food, free electricity, water, transport,
and all social amenities for sport, recreation, and
social welfare, as well as clubs in the mining
communities.

Secrecy of D.A.s signed by GRZ and MNC in the
mining sector. Unions not involved;
 With the fall of the metal prices in 2008-2009 ,
the profit margins of mining companies
decreased. Facing production costs between US$
3.500 and US$ 5.500 per t of copper, the
downgrade on international markets caused
several hardships to the Zambian mining
industry leading to retrenchment of 9516
unionized employees in most mining operations
as shown below;

KCM
MCM
LUA
CHAM
META
BWAN
MUKU
FQML
MINI
PROS.
AMCO
JVC
GRIN
LTA
TOTAL
2056
1623
1720
1253
375
89
1250
700
450
9516

Multiplicity of unions after a change of one
industry one union law. Workers no longer
represented with one strong and united voice;
Unsafe mining and processing methods-CCS,
KCM, Mopani, Lumwana (ZEMA penalised CCS,
KCM and shut down Mopani’s operations in
Mufulira affecting Kankoyo residents;
 Poor compensation rates for the injured miners
by workers compensation fund;
 Introduction of new technology taking away the
jobs;
 Casualisation and informalisation of labour- non
pensionable jobs and poor gratuity rates(hard for
unionization);

SUCCESSES SCORED AND SUGGESTIONS
FOR CIVIL SOCIETY SOLIDARITY
Fighting tooth and nail to better wages and
conditions of services for mine workers;
 Lobbying government to repeal to secret D.A.s
which were signed;
 Forcing mining companies to use safe mining and
processing methods;
 Fought to raise mining taxes so that more money
could go to the national treasury to be used to
build schools, hospitals, roads, etc.
-Corporate tax from 25% to 30%
-Variable tax 15%
-Mineral royalty from 0.6% to 6%




Currently fighting to keep 2000 workers at KCM
in employment;
The government stays with an investor friendly
attitude compared to competitors, to make
capital investments grow further;
The windfall tax gets reinstalled in a way that a
social fund is created to lower hardships created
in economic downturns in the future, as well as to
facilitate development in the mining
communities;



The Zambian private sector gets further involved
in the mining activities, especially concerning
value addition. Instead of only allowing tax
holidays to the big multinationals from abroad,
the incentives given should be higher for
nationals to create their own businesses;
Technology and skills transfers gets enforced in
the mines;
The mining companies and their CSR strategies
are scrutinized by their whole economic impact
on Zambia, instead of only questioning their
social surplus activities;


Existing labor and environmental legislations
and regulations get enforced by the government,
before wasting public finances on new
legislations. Capacities should therefore be
directed to the agencies being confronted with
their implementation and monitoring, so that the
demanded benefits of these legal texts find
realization for the mineworkers and the mines
surrounding communities;
The minimum wage gets augmented considering
the JCTR’s Basic Needs Basket;
Casual or fixed term employment remain an
opportunity for times of economic hardships,
instead of letting them be an alternative to
durable and socially insured jobs-legislation for
gratuity lacking (Tripatite Labour Council
currently looking at it);
 Empower ZRA to carry out independent audits of
mining firms in terms of production and
operational costs to determine the real quantity
and value of what is exported so that we can get
the correct taxes for Zambia;
 Lobby government to come up with a law on CSR
for all mining firms which will include short and
long term CSR programmes that have the
backing of the local communities;

ZEMA to ensure mining is done to protect the
environment and the inhabitants of the local
communities-must be empowered to make
independent inspections and punitive measures;
 Government to partner with banks to support
credit financing so that the local people can
venture into mining;
 Additionally, there has been no deliberate policy
to promote value addition industries in the
mining sector which has led to colossal loss of
revenue and lack of creation of job opportunities.
We urge government to lobby international
manufacturing companies to set base in Zambia
as this will increase our export revenue, create
employment and turn our country into middle
income nation.


Creating a stabilization fund whose main aim
will be to cushion any price reduction in metal
prices and also to provide for reserves for future
generations;
THANK YOU FOR THE ATTENTION!!!