EXXAfrica unpacks the data and trends behind the main insurance policies available to commercial entities in South Africa, debunking popular opinions around strikes and terrorism in particular.
Media reporting and click-bait headlines largely drive popular opinions around the primary security threats facing commercial entities in South Africa. In particular, significant attention is often given to the incidence and impact of strikes, riots, and civil commotion, and more recently, terrorism. Our latest analysis briefing delves into these threats, providing an historical overview of each peril along with a current assessment of the available data to forecast each threat.
Industrial action becomes less frequent but more severe
Strikes or industrial action in South Africa have gained infamy, primarily as a result of major incidents such as the 2010 public and private sector strike that caused 20,674,737 working days to be lost in one year. The year 2010 was characterised by a number of work stoppages in both the public and private sectors. Six country work stoppages across sectors contributed to the high number of workdays lost according to the Department of Labour.
Instances of violence also became more frequent and strikes were more protracted. In 2012, the Marikana ‘Massacre’ involved the deaths of 34 mineworkers. In 2014, a platinum strike involved 70,000 mineworkers and lasted five months. The effectiveness of such incidents and the seeming strike culture in the country is largely as a result of the historical (political) strength of trade unions and the rights afforded to them in the Constitution.
The role that South African labour unions played in the dismantling of Apartheid is well known. As a result of this, trade unions continue to enjoy a privileged position in politics. For example, unions have a voice in the National Economic Development and Labour Council (NEDLAC), which is a statutory body that brings together government, business, and labour unions to find consensus on policies and legislation.
According to the Department of Labour, there are over 180 registered trade unions, representing over three million workers that constitute around 25 percent of the formal workforce in the country. The Constitution further affords these unions the right to call strikes, during which their workers are protected from being dismissed – allowing for extended actions.
However, while South Africa has garnered much international attention for industrial action, studies conducted in the first half of the decade show the nature of strikes in the country is not dissimilar from other emerging economies – such as Brazil and India – and occasionally even developed economies, such as the US. More recently, research conducted by the Mandela Initiative in 2017 shows that the frequency of strikes has actually decreased since 2000 – as demonstrated in ‘Figure 1’.
The Department of Labour attributes this drop to the improvement in labour relations via various legislation. A drop in unionisation rates over the past 20 years has also likely driven this decrease. Unionisation of the workforce peaked in 1997 at 45.2 percent of total employment. At 25 percent today, South Africa is now more on par with developed economies, such as Canada and the UK.
On the other hand, while the frequency of strikes has decreased, research shows that when industrial action does occur, it does so more intensely with a higher number of workdays lost per incident – demonstrated in ‘Figure 2’. This finding is supported by data released by the South African Special Risk Insurance Association (SASRIA). According to its 2018 Integrated Report, in the financial year that ended 31 March 2018, it paid net insurance claims of ZAR 663 million (around USD 45 million) – a 15.5 percent increase on the previous year with a marked increase in claims severity.
Looking more closely at which sectors are most affected in this regard, SASRIA notes that its biggest claims come from strikes and protests relating to service delivery. In terms of strikes, the mining, manufacturing, transport, wholesale or retail trade, construction, and agricultural sectors generally have the highest share of striking workers on average – driving up this impact.
Service delivery protests buck the trend
Data around service delivery protests suggest that such incidents do not just high impact, as indicated by SASRIA above, but are actually occurring more frequently – bucking the industrial action trend. In this regard, SASRIA notes that between 2010 and June 2018, South Africa experienced 1,330 violent service delivery protests spurred on by service delivery failures, corruption, and growing youth unemployment. This situation worsened in 2019 where according to research conducted by Municipal IQ; by June 2019 alone, South Africa had already recorded 140 service delivery protests countrywide, compared to 137 in 2016 and 82 in 2011.
Virtually all of these incidents, according to SASRIA, were exacerbated by criminal elements driving up the propensity for violence, as shown in the recent xenophobic attacks in the country (See SPECIAL REPORT: SOUTH AFRICA ANTI-IMMIGRANT VIOLENCE TRIGGERS AFRICAN RETALIATION). Such service delivery protests predominantly occur in Gauteng and the Western Cape provinces – the two major commercial hubs in the country.
An established history of terrorism
While South Africa has garnered significant global attention for strikes, riots and civil commotion, little focus has been given to the terrorism threat within the country. Despite this, there is a long and dynamic history of such a threat in even post-Apartheid South Africa.
Looking firstly at the domestic threat, ie a homegrown threat, it is worthwhile recalling that South Africa was the site of Islamist bomb attacks in and around Cape Town as recently as the 1990s and 2000s. These incidents carried out by a group known as the People against Gangersterism and Drugs (PAGAD), included targeted attacks against Planet Hollywood at the V&A Waterfront in 1998, a Wynberg synagogue in 1998, and a bagel shop in Seapoint in 2000, among others.
South Africa also has a history of right-wing radicalisation movements, particularly among the Afrikaner community. Attacks in post-Apartheid have been attributed to a group known as the Boeremag in particular and have included a series of nine bomb attacks that exploded over two days in a Johannesburg based township in 2002 and a foiled plot to stage bomb attacks in townships on the eve of the Football World Cup in 2010.
As both PAGAD and Afrikaner radical movements have diminished in South Africa over recent years, the focus has now shifted to the transnational terrorism treat. In this regard, it is well known that South Africa is used as a transit point for global terrorist groups. Various leaks by Al Jazeera in 2015, for example, pointed to this specifically noting that Al Shabaab and Al Qaeda use the country to run training camps and as a ‘cool off’ location. South Africa’s porous borders go a long way to facilitating this (See THREATS TO AFRICAN BORDERS).
Beyond being a transit point, threats have been made against the country itself. Both Al Shabaab and Boko Haram made calls for attacks against South Africa during the outbreak of xenophobic violence in April 2015, for example. Al Shabaab specifically mentioned conducting revenge attacks in the metropolitan centre of Durban. New episodes of xenophobic violence as recently as this year will likely continue to drive intent by these groups to target the country, although the capability will be lacking (See THE THREAT OF ISLAMIST TERRORISM IN SOUTH AFRICA).
Islamic State: Foreign fighters and self radicalised individuals
More recently, the transnational terrorism threat has shifted to the Islamic State (IS) militant group. This focus has in part been driven by the estimated 128 South Africans who moved to the group’s self-declared caliphate in Iraq and Syria during the height of its operations and the subsequent return of around 75 such members by 2018. However, research has shown that the majority of these individuals indicated a willingness to be interviewed by the State Security Agency upon their return. Such willingness demonstrates a noteworthy trend of individuals trying to distance themselves from the group, lessening the threat posed by these returning foreign fighters (See
However, it is important to recall that these individuals reportedly came from “multiple educational backgrounds” suggesting that they were likely self-radicalised as opposed to being part of a direct recruitment campaign, although there has been some evidence of this in Gauteng Province. The prevalence of access to online IS-related websites and social media in South Africa, as well as dire socio-economic environmental conditions further help create an environment for self-radicalisation in the country. As evidence of this, a series of firebomb attacks at Woolworths stores and a mosque attack over 2018 and 2019 were linked to 12 self-radicalised men accused of being aligned with IS.
South Africa’s current involvement in the fight against militant organisations allegedly aligned with IS in the Democratic Republic of Congo and Mozambique has further sparked debate that it may become the target of retaliatory attacks. However, it is our assessment that while this may drive intent by the IS, this threat is most likely to manifest in these conflict areas, targeting the South African Defence Force specifically.
Having reviewed the data around strikes, riots, civil commotion and terrorism in South Africa, it is clear that the threats posed are more nuanced than often presented in the media.
Firstly, it appears that the most prominent civil disturbance threat is posed by service delivery protests by aggrieved communities in major urban centres, as opposed to strikes. This is likely to remain the status quo given the various economic challenges facing the country, particularly the high unemployment rate – officially estimated at 29 percent, and unofficially at 38.5 percent. While these protests predominantly occur in informal settlements, they have the potential to impact commercial operations and indeed the wider economy, as evidenced by SASRIA’s findings in 2018.
Secondly, it is important to reflect on same of the gains when comes to industrial action. The dramatic drop in the incidence of strikes over the last two decades is noteworthy although it is clear that further work needs to be done to contain the severity of strikes when they do occur. However, given that violence is often driven by the infiltration of criminal elements during such incidents, reversing this trend cannot be achieved through legislation or the Department of Labour alone, particularly in light of the high violent crime rate in the country.
Finally, while South Africa has not been the site of major terrorist attacks witnessed in even Western states, the country nevertheless has a history of such incidents. As terrorist groups rise and fall, the current threat is driven predominantly by self-radicalised individuals inspired by global groups, such as Islamic State, as opposed to foreign fighters or established militant organisations in the region.