The challenge of Building the power and movement of burial societies and co-operatives in South Africa today

Message from Blade Nzimande, SACP General Secretary and Chairperson of the Financial Sector Campaign Coalition (FSCC)

To the 2004 Annual General Meeting of the Imbalenhle Burial Society , Johannesburg City Hall , 16 October 2004

Delivered by Mazibuko K. Jara (Head of the Office of the SACP General Secretary)

Comrade Blade Nzimande apologises for his absence today from this important meeting. He has other commitments that he could not get out of. He has sent me to deliver this message on his behalf in his my capacities as the Chairperson of the Financial Sector Campaign Coalition (FSCC) and as the General Secretary of the South African Communist Party (SACP).

1. INTRODUCTION

1.1 I salute and congratulate all members and leaders of the Imbalenhle Burial Society. The Communist Party is very pleased and heartened with your burial society, its achievements and growth. Your history of 17 years of existence is impressive and inspiring! Your history is an important lesson in how ordinary people can organise themselves based on their common social, cultural and economic needs. Indeed, your history confirms the validity of the slogan: The People Shall Govern! Amandla ngawethu!

1.2 Your history also shows that burial societies in this country must unite and work together to build a single united and powerful organisation and movement. Burial societies have nothing to lose but their chains of oppression which are tightened every day by the capitalist banks and funeral insurance brokers and companies. Your own dealings with the Standard Bank show that these capitalist banks are only interested in taking money from poor and working people without giving anything in return. BUT this can change! Through our own financial power and organisations, we as poor and working people can take back what is ours and build our own institutions. We can, indeed, Make Banks Serve the People!

1.3 Since we launched the Campaign to Make Banks Serve the People in October 2000, we have been involved in negotiations with government, the financial industry and trade unions. Over the last 4 years, we have been asking many questions:

1.4 In asking these questions, it has become clear to us these capitalist banks, interested in getting business and maximum profits from its business activities, will not listen to our concerns unless we take direct action. They may have their power. BUT we also have our power: our money, our families and friends, our burial societies, our powerful churches and trade unions, and our government which we can use to put in place new laws in favour of us as the workers and the poor. We must use our power to make them listen to us and to build our own co-operative banks, our own funeral insurance co-operatives, our own coffin-making and undertaking co-operatives.

1.5 Using some of our power, we have able to score some achievements:

2. FROM THE FINANCIAL SECTOR SUMMIT AGREEMENT TO THE FINANCIAL SECTOR CHARTER

2.1 But what was the content of the NEDLAC Financial Sector Summit Agreement? The Summit reached 13 detailed agreements on measures to be implemented jointly by government, labour, community and business to make the financial sector to serve the people. But what have been the results of implementing these agreements? Have our people seen and enjoyed the fruits of these agreements?

AGREEMENT

PROGRESS

Universal access to basic, affordable and convenient financial services for basic payments and savings by every South African

  • The banks are launching the Mzansi bank account on 25 October. Good! But there was no consultation with labour and community. And this account will still include bank charges!
  • Universal access is not just about the bank account. More must still be done to realise access to financial services for all.

Establishment of co-operative banks and legislation for financial co-operatives

  • The Department of Trade and Industry has drafted a Bill on Co-operative Banks. But labour and community have not yet seen it and made their inputs.

Supporting financial co-operatives

  • There are no support programmes in place yet. These programmes must include support for burial societies.

Regulation of micro-lenders

  • Little progress

Regulation of credit bureaus

  • The Department of Trade and Industry published draft regulations last year but after comments were received these regulations were delayed and we do not know what has happened since.

Removal of unfair discrimination

  • Despite this agreement, our townships are still red-lined, women still face discrimination, and English and Afrikaans are still the main languages used in the financial sector.

Removal of HIV/AIDS discrimination and appropriate services for people living with HIV/AIDS

  • An earlier proposal for automatic household insurance for mortgage bonds of R100,000 for people living with HIV/AIDS was withdrawn

The increase of overall investment

  • The Financial Sector Summit Agreement was incorporated into, and is now part of the agreement reached at the Growth and Development Summit held in June last year
  • The Financial Sector Charter gives only R72,5 billion for housing, agriculture, black SMEs and infrastructure development over 10 years whilst it gives R50 billion to finance BEE transactions for the creation of a small elite of black capitalists. It is a problem that the biggest single item in the money committed is the R50 billion for funding a small elite at the expense of more broad-based empowerment. These targets must be reviewed and that is we said and what was agreed to at the 1 st meeting of the Financial Charter Council held on Thursday.

Development finance institutions

  • No progress.

Savings culture and initiative

  • Practical steps must still be seen.

2.2 In other words, despite significant achievements in some areas, overall delivery on the Summit Agreements is, on the overall, disappointing. Much remains to be done. The commitment to working collectively has been consistently eroded in the implementation period, with parties, mainly business going outside the NEDLAC process to implement selective parts of the agreements package, thus denying labour and community organisations any involvement in shaping the outcomes. The best known example of this unilateral hijacking of the Summit agreements is that of the Financial Sector Charter.

2.3 As we have noted in numerous forums since the launch of the Charter in October 2003, it has a number of positive elements, but falls short of the goals articulated in the Summit agreements.

2.4 Where do these developments leave the struggle to fundamentally transform the financial sector and how should the workers and the poor chart their course in the next period?

3. THE WAY FORWARD

3.1 Immediately, we will place firmly on the agenda the question of ownership in the sector. For us, transformation of ownership of the sector does not mean installing a few black shareholders heavily indebted to white capitalists. For ownership means, direct collective ownership and control of alternative financial institutions by the workers and the poor themselves. It is the provident and pension funds, banking and insurance savings of the workers, the funds from their burial societies and stokvels, their very wages that finance this sector. This immense financial power potentially under the control of the workers and the poor can be used to build alternative financial institutions within the next decade. The FSCC is working together with the National Co-operative Association of South Africa (NCASA), the Savings and Credit Co-operatives’ League (SACCOL), trade unions and burial societies to convene a National Conference on Co-operative Banks by March next year to ensure that the Co-operative Banks’ Bill is passed without undue delay and meets the needs of alternative financial institutions controlled and owned by the workers and the poor.

3.2 After a long and hard fight we are now part of the Financial Charter Council. We will use this effectively in finalising Charter targets, in setting new ones and in ensuring that the rest of the NEDLAC Financial Sector Summit agreements are implemented without any delay. These new targets must include specific services and concerns of burial societies. We call on your burial society and the South African Federation of Burial Societies (SAFOBS) to submit its demands and concerns in this regard.

3.3 The parliamentary hearing in parliament in September was important but we must all work together to ask the provincial legislatures to organise public hearings on problems of discrimination in the financial sector, credit bureaus, concerns of burial societies, HIV/AIDS discrimination and other key issues such as evictions. We call on your burial society and SAFOBS to join the FSCC in calling for these public hearings in provincial legislatures and to be part of these public hearings to ensure that concerns about exploitation of burial societies by the funeral and insurance industries are made public and inform what the national and provincial legislatures do about all these problems.

4. BURIAL SOCIETIES ARE CRITICAL IN BUILDING A STRONG CO-OPERATIVE MOVEMENT

4.1 Our long struggle for new democratic South Africa will be in vain if economic power is not in the hands of the people. Unless our economy is transformed to meet the needs of the majority of our people – in particular the working people and the poor – our very democracy is under threat. Unless our people are able to control the economy directly themselves then those with capital will continue benefiting at the expense of the majority: we see this in every sector of the economy including funerals and undertaking.

4.2 The work of your burial society and the launch of SAFOBS in May is injecting new urgency and energy into building co-operatives. 3 years ago, many co-operatives were isolated and not effectively co-ordinated. We still have thousands of co-operative activities initiated by our people themselves: stokvels, savings clubs, etc. These generate billions of rands each year, but the strategic use of these resources is not in the hands of the members. We must work together to effectively strengthen, mobilise these resources and effectively co-ordinate all our efforts. In the case of the burial society movement, we call for:

4.3 An important challenge any effective co-operative movement is to mobilise poor and working people behind these initiatives. No co-operative movement can survive unless it is rooted amongst the people themselves. A key dimension in the mobilisation of our people, that we should not lose sight of, is particularly the mobilisation of women behind this effort. As members of burial societies know, it is largely women who carry most of the burden of poverty and hunger. It is women who have to care for the unemployed, the sick and the elderly, as well as hungry children growing up in poverty. It is also women who are particularly vulnerable to all forms of oppression and pain. Therefore any co-ordinated effort at the eradication of poverty stand to benefit women more than any other sector of our society.

4.4 How do we use and coordinate the money that is already in the hands of stokvels, burial societies and savings’ clubs? It is time now that these funds are used in a manner that serve the interests of its members rather than those of commercial banks and other financial institutions. In your case, Standard Bank takes, through bank charges, about 6 cents for every deposit made by each member of your more than 50,000 members. This come close to R300,000 per month! We do not know what other profits they make from your own money! You also know that Standard Bank is doing nothing to invest this money into your own members. Right now, Standard Bank wants to make profits from your members’ money by suggesting that it must be your underwriter: they want to act as middle-men. This, you must refuse and explore other options. The FSCC will work with you in this regard. We have relations with SAFOBS, NCASA, SACCOL, the Dora Tamana Co-operative Centre and the International Co-operative Funeral Insurance movement. We must use these relationships for the benefit of your members. We also call on you to work with the FSCC and SAFOBS to ensure that burial societies can deal with one bank on the basis of needs and interests of members of burial societies and not the profit interests of banks.

4.5 None of our efforts will succeed unless the state contributing to the building and sustainability of an autonomous and democratic co-operative movement. We call on government to:

5. CONCLUSION

5.1 None of the above will be possible unless we meet and work together. We therefore call on the Imbalenhle Burial Society to join the other 50 organisations and be a member of the Financial Sector Campaign Coalition. Your membership will add to our own strength and will also mean that we open our ears and eyes to the concerns of burial societies. In this way, we can then use our participation in NEDLAC and the Financial Sector Charter to bring representatives of burial societies to speak directly to government, labour and business. We also invite your burial society to send representatives to the National Consultative Forum of the FSCC to be held at the end of November.

5.2 Immediately, we propose a meeting between the FSCC and your burial society to discuss a plan to address all the problems that you have identified including the problems you face from Standard Bank. From this joint meeting, we can then prepare to meet Standard Bank.

5.3 We also propose to IBS to consider working with NCASA and the Dora Tamana Co-operative Centre in order to educate its members on what co-operatives are and to take practical steps to build co-operatives in catering, coffin-making, undertaking services and other potential areas.

5.4 If we work together like this, who knows what we may achieve by the 20 th Anniversary of the Imbalenhle Burial Society (in 2007)? Maybe we will have established a co-operative bank. Why not? What will stop us? Indeed we must work together to ensure that by 2007 burial societies control their own money, run co-operatives for catering, coffin-making and undertaking.

5.5 With these few words, we wish the Imbalenhle Burial Society all the wisdom, unity of purpose, success, strength and courage that it needs in this Annual General Meeting and in the future!

AMANDLA NGAWETHU! THE PEOPLE SHALL GOVERN!