A Just Transition energy partnership for South Africa

On 15 March representatives from LO Sweden, CFDT, FO, TUC, AFL-CIO, the ETUC and ITUC met with COSATU to discuss the Just Transition Energy Partnership, one of the major outcomes of COP 26.

The Just Transition Energy Partnership is a political commitment to negotiate an 8.5BN USD climate finance package that will finance a just transition from coal to renewables in South Africa. The partnership includes the governments of South Africa, France, Germany, the UK, and the US, as well as the EU.
The final terms of this finance mechanism are not yet agreed. Trade union interventions with donor governments and internationally could help South African unions get an agreement that is good for workers and communities and assures a Just Transition.

The purpose of this meeting was to hear from COSATU what their demands are regarding the partnership, so that the international labour movement can collectively advocate for these demands to donor governments and international institutions such as the EU.

The finance is intended to ensure a Just Transition for workers and communities in connection with the repurposing and repowering of coal fired power plants that are scheduled for decommissioning over the next 15 years. The money will flow through Eskom, the state utility that owns the power plants. This last point is critically important for trade unions who support climate action but oppose privatizing Eskom as this would very likely result in job losses.

Trade unions in South Africa expect that this new finance will be more grants as opposed to loans. Loans will be on deeply concessional terms and would increase South Africa’s considerable debt to GDP burden. Labour want the finance to be developmental, meaning that financing should allow South Africa to achieve their development objectives such as the reduction of unemployment and poverty. The financing must not impose a debt burden. They demand that the money target the creation of decent jobs and support a jobs guarantee, as well as social and labour planning, comprehensive social protection, and training. They do not want the money to support market mechanisms, nor to come on condition that South Africa privatises its energy sector, which as mentioned would likely result in job losses.
South Africa continues to have strong social dialogue mechanisms and trade unions have been involved in negotiations of the finance package so far. They want this to continue. As sister unions have advocated in Europe: Social dialogue must be respected.

There are talks that this partnership could be a model to be followed in other parts of the world but unions in South Africa and in donor countries agree that first we must get this pilot right. Only if labour’s demands are met and the partnership delivers good jobs, high labour standards, greater social protection and clear pathways for skills can it be recommended elsewhere, for example to support the energy transitions of India and Indonesia. Further, different regions have different needs, and financial support must be adapted to these in consultation with unions and other stakeholders.

COSATU’s sister unions expressed concern about donor governments’ neo-colonial interests and committed to seek representation on an international taskforce that will oversee the partnership to increase accountability, and to pull together a list of demands for advocacy, including an increase of social protection in line with demands in the context of G7 and G20 deliberations.