OUTSOURCING ; THE KCM STORY.
OVERVIEW AND BACKGROUND.
The definition of outsourcing in business is an agreement one company contracts-out a part of their existing internal activity to another company, it involves contracting out of a business e.g. payroll processing. Theconcept “ outsourcing “ came from American glossary ‘outside sourcing ‘ and it dates back to 1981 outsourcing sometimes, not always involves transfer of employees and assets from one firm to another.
Two organisations may enter into a contractual agreement involving exchange of services, expertise and payments, outsourcing is said to help firms perform well to their core business and/or competence. Outsourcing can offer greater budget flexibility and allows organisations pay for the services and functions they need and when they need them “Do what you do best and outsource the rest “.
It is used by several entities globally like certain companies in the shoe sector my outsource the making of the sole to a specialized company and also the tannering of the animal hide to another then they come and just complete the assembling of the shoes and hence reducing cost of resourcing labour and other cost implications.
THE ZAMBIAN SCENARIO
According to the core business of Konkola copper mines involves extracting of ore and mineral processing up to the smelting phase, now the question which begs more answers than anything else.
1. Are they outsourcing their primary core businesses or part of it?
2. Is due to lack of skill of expertise or any other arterial motive which is only known by them?
3. Are they also outsourcing labour (since they say all jobs are secure for all current employees)?
1. OUTSOURCING OF CORE BUSINESS .
(i) Among the core business is the mineral processing plants i.e. The concentrator and tailing leach plant the Nchanga concentrator engineering department is run by Africa Mechanical Super lift , this plant was the first to be placed underoutsourcing as far back as 2010 and the workforce then was taken over by FL SMIDTH which in about two years’ time failed to continue citing erratic payments by KCM , their came in a new contractor ONSHORE which took over but failing to keep the FL SMIDTH employees ( who were once KCM employees) saying their remuneration was too high and their salary have to reduced most people left and they had to bring in workforce from India and college graduates with little or no work experience .
(ii) Then comes the tailings leach plant which we hear has been planned to be outsourcedto little known MANOPEX of South Africa.
(iii) Konkola’s number four shaft which is planned to be outsourced to JCHX of China their contract involves extraction and transportation of the ore.
2. OUTSOURCING DUE TO LACK OF SKILLED MANPOWER .
If they say they have they want to outsource due to lack of expertise then that is a blue lie (refer to point 2(i) above ) they have the best man power at different levels hence a very productive work force but partially demotivated by its management, as compared to the semiskilled Asian workforce we see around, so that reason does not hold water if it’s about specialised equipment most of the equipment by the said contractors are rebuild machines which cannot operate a shift without a break down.
3. OUTSOURCING OF LABOUR
The management briefs said the jobs of the employees are safe but how possible is it that a permanent employee who is employed by the parent company can be reporting to a supervisor who is from a contracting company they can be a clash of interests where as they can be disciplinary actions every day taken against the KCM employees where on the labour laws or mining regulations does that apply? Because the norm is a KCM employee supervising a contractor, so that is indirectly outsourcing labour before we know it will all be contracted work force.
THE TRADE UNIONS .
For a long times the unionised workers had been betrayed by the trade unions who had gone to bed with the management allowing the management not to be effecting salary increments citing losses by the company. The trade unions never took the time to update their members on the status of the negotiations only to realise no meaningfulincrement now that the outsourcing of the labour in the thousands means the trade unions will loose a significant number of members hence now their voices can be heard not that they are fighting for the workers , management knows they are too weak to fight them they aresimply protecting their interests because if they had their members at heart they wouldn’t have been doing what they have these past 5 years.
We guess the $1 Billion capital injection promised by the Vedantta chairman Anil Agarwal in the meeting he had with our head of state came with conditions one of them being outsourcing of its labour.