According to Cosatu, the retailers argued that the code is in contravention of Section 4 (1)(b)(ii) of the Competition Act, because it divides markets by allocating suppliers and thus constitutes a prohibited horizontal practice between competitors.
The union added that it interacted with retailers and requested copies of legal opinions that informed their concerns.
Cosatu pointed out that the code neither allocates suppliers nor fixes prices, but instead seeks to promote the local industry and create and save local jobs.
"In addition, the code is an agreement between the labour movement and a number of retailers, not an agreement between competitors."
Cosatu noted that the Competition Act itself seeks to promote the objectives of social justice and employment, both of which are at the core of the proposed code.
"Notwithstanding detailed responses by Cosatu to show that there was no legal substance to these concerns, the retailers persisted in their view that any proposed code would be contrary to the Competition Act," the union said.
Cosatu said that one retailer, Fashion World, indicated that it would be prepared to sign the code, provided the Competition Commission indicated that there were no legal problems.
According to the union, this is a clear vindication of its views that there are no legal concerns with signature of the proposed code, and that retailers should now sign the code without fuure of the proposed code, and that retailers should now sign the code without further delay.
ure of the proposed code, and that retailers should now sign the code without further delay.
The call for 75% of local produce has the backing of the tripartite alliance, the South African Council of Churches, the Treatment Action Committee and the community constituency at Nedlac.
Cosatu added that the Department of Trade and Industry has endorsed the idea of a code between retailers and the labour movement on local procurement.
The Congress of South African Trade Unions.
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