Home Press Releases Archived 2013 Sactwu commenses restoration process of missing Provident Fund millions
Sactwu commenses restoration process of missing Provident Fund millions PDF Print E-mail
Thursday, 25 April 2013 11:04


MEDIA RELEASE: EMBARGOED UNTIL 11H30 ON 25 APRIL 2013


Thank you for attending this media briefing.

YESTERDAY’S BANGLADESH DISASTER

In what is likely to be the worst ever industrial accident in Bangladesh, more than 100 garment workers have died and hundreds more are injured. This tragedy occurred yesterday 24 April 2013, at the eight-story  Rana Plaza building in Savar, 30 kilometres outside of the capital city, Dhaka. The building housed 6 garment factories employing hundreds of workers. It was illegally built. A large structural crack appeared in its wall, the day before the disaster.  Local authorities brought the crack to the attention of the factory owners. They ordered them to evacuate the building. Their orders were ignored.  The consequence was that, as at yesterday, 102 workers are now dead, 500 workers are known to have been seriously injured and many more workers could be heard from under rubble, screaming for help.

SACTWU extends its condolences to the families. We pledge our solidarity to bring the guilty to justice. 

Ironically, all of this happened, just as our union opened this year’s round of clothing sector wage negotiations, yesterday morning. Our key caution to our employer counter parts was as follows: do not table any employer proposals to us that would ignite a race to the bottom.

In a press release, this is what IndustriAll Global Union General Secretary, Jyrki Raina said about yesterday’s disaster:

“This terrible tragedy highlights the urgency of putting a stop to the race to the bottom in supplying cheap means of production to international brands, a race in which hundreds of workers have lost their lives. Global clothing brands and retailers have a responsibility for their full production chains. Now it is time for them, suppliers and the Bangladeshi government to sit down with IndustriAll and its affiliates to agree on a safety programme that will ensure this will never happen again”.

SACTWU echoes those sentiments.

We call for all garments to carry a union label, to indicate that it was manufactured under fair labour conditions.

We have, earlier this morning, at an Executive Committee meeting of the clothing industry bargaining council, formally requested South African clothing employers to publicly call on their Bangladeshi counter parts to heed the IndustriAll call for a significant step up in health and safety standards.

Finally, we call on all SACTWU members, to observe a minute of silence in all the union meetings that they will have in their workplaces and elsewhere, over the next two weeks, as a sign of respect to our fallen Bangladeshi co-workers.

Provident fund restoration

In 2010, the SACTWU National Executive Committee (NEC) resolved to launch an investigation into what it suspected was a serious problem in the provident management of some clothing and textile workers.  It soon became clear that millions of rands from provident funds to which some SACTWU members belong, had gone missing, due to fraudulent, negligent and/or criminal conduct, mainly by persons associated with Trilinear, Canyon Springs, the Pinnacle Point Group and others. Over R400 million was discovered to have been so affected.

My mandate from the SACTWU NEC was to leave no stone unturned in discovering what had happened, to ensure that those found to be guilty of wrong doing are properly prosecuted, and to take steps so that every single cent is restored.

This media briefing is mainly about where we are in the restoration process.

First, let me clarify the following:

SACTWU itself was never involved in the investment decisions of the affected provident funds (of which there are 6: Textile Open Provident Fund, Cape Clothing Industry Provident Fund, Textile & Allied Workers’ Provident Fund, Pep Provident Fund, the Textile Industry Provident Fund and the Northern Areas Clothing Industry Provident Fund). These funds have all been affected, but to different degrees. These investment decisions were taken by the respective retirement fund Boards of Trustees, constituted as 50% employer representatives and 50% employee representatives. We expected these representatives to carry out their responsibilities properly.

Despite this, the union cannot just sit around whilst the investigation is still continuing and do nothing about restoring the lost monies. It is in this context that our NEC has resolved to set aside R200m of union funds, to voluntarily help with this restoration process, whilst the recovery process is continuing.

We now announce that we have secured the R200m, and are ready to start that restoration roll out. The  following 5 core principles will be followed in this phase of the restoration process (the union’s national structures may vary this in future, if necessary):

*we will commence with the most vulnerable affected provident funds;
*all those SACTWU members who have already retired, must also benefit retrospectively;
*for current workers, it will only be applied to workers who are fully paid up as SACTWU members
*it will not be a loan to the funds, but a permanent, non-refundable “donation”
*any recovery which takes place over and above full restoration, will accrue back to the union

The first fund to benefit will be the Textile Open Provident Fund.  A  ‘Restoration Roll Out’ planning meeting with shop stewards and senior management from factories covered by this fund has been set for this Friday. This planning meeting is expected to decide on a date for the hand-over of the restoration monies, a report on where we are with the general investigation, the administrative practicalities to give effect to the restoration and a programme for detailed report backs to union members.

We are delighted that, after a very difficult period on this matter, we can now report positive news. Amongst other: our investigations are far advanced, we now have a clear idea of what had happened to the monies, we know exactly who were involved and what they had done, there have been some arrests, some criminal trials are under way, we have launched civil claims to recover some of the monies, we are putting in place steps to help prevent a recurrence in future, and we have started the restoration process.

Today we focus on the restoration process part of our mandate. We will call future media briefings to focus in more detail on the other aspects.

Issued by
Andre Kriel
SACTWU
General Secretary

If further information is required, kindly contact Nazmia Leite on email address This e-mail address is being protected from spambots. You need JavaScript enabled to view it , on office number 021 4474570 or on cell number 0721986061 to make arrangements.