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Corporate social and environmental responsibility in the South African food and drink industries

David Fig1
Sociology of Work Programme
University of the Witwatersrand
figd@social.wits.ac.za, davidfig@iafrica.com

Posted with permission of the author. Comments on the paper are invited by the author.
[Complete version - 86Kb < 1min (26 pages)]     [ Share with a friend  ]

Introduction

Food is of importance to all. To survive we need its nutrients. To secure its supply we need to engage in productive and service activities all along the food chain. Those not connected to the food chain need other resources to command access to its products. Its consumption goes beyond health and nutritional concerns, and is invested with all kinds of cultural meanings, preferences and taboos. Its mass production has commodified it, leaving consumers dependent on global trading, pricing and marketing decisions far from their control.

The world experiences overproduction of food on the one hand and hunger on the other. Developed countries subsidise their food producers and stockpile what cannot be sold, while developing countries are faced with the question of ensuring basic food security - access by all their citizens to sufficient amounts of healthy food at all times. Yet the developing countries simultaneously have to deal with the challenges of inequitable land ownership, mass unemployment, open access to more competitive imports, declining terms of trade, and steep food price inflation. The gap between the rich and the poor is growing.

This unevenness is a symptom of the commodification of food. Despite huge trade liberalisation, farmers in developed countries are still highly subsidised, having persuaded their governments to restrict market access, and allow stockpiling and dumping. The intensification of agriculture has led to high input factory farming, impacting on animal health, and leading in some areas to the spread of diseases such as BSE and foot-and-mouth. Applications of industrial chemical inputs and processes into agriculture and food production have also led to serious environmental problems such as water contamination, air pollution, and soil degradation. The application of modern biotechnology to the food chain has raised questions about the environmental, medical and ethical impacts of genetic modification of crops, as well as challenges to the patenting of life forms by large corporations seeking to extend their control over the food chain. Products of the fast-food industry, whose franchising is only beginning to slow down after huge expansion, have supplanted more traditional and local foods, reduced nutrition, raised rates of heart disease, obesity and diabetes in developing countries, and have an extensive adverse ecological and social footprint. The impact of modern patterns of industrialisation have led to serious climatic changes, impacting on agriculture and the availability of crucial inputs such as water, with Africa being particularly prone to higher incidences of drought and desertification.

Therefore the challenges to the development of social and environmental responsibility in the corporate food sector are complex and numerous.

Although this paper will largely discuss the food processing industry in South Africa, the picture cannot be understood without considering backward and forward linkages into agriculture and retailing. Each link in the food chain helps to form an understanding of a range of issues - from those of food security, nutrition, and health to those of productivity, social equity and environmental sustainability. The sector has porous boundaries: it usually includes beverages, but not always tobacco. However, this study has taken cognisance of the tobacco industry because of its backward linkages into agriculture in the Southern African sub-continent, and because it makes particular kinds of claims to social responsibility.

South Africa has, since 1652, been a provider of agricultural commodities to the rest of the world. Its crop exports include wine, wheat, fruit, tea, tobacco, groundnuts and sugar. Meat, wool, hides and fish products also contribute to exports. Although the country's staple food crop is maize, 6.7 million tonnes are consumed annually, whilst production ranges from between 2 and 10 million tonnes, depending on the vicariousness of rainfall. Under drought conditions it becomes necessary to import, whilst in good years there is sufficient excess production to export.

The country's racist past continues to be reflected in its agrarian structures. The majority of black peasants had progressively been dispossessed by the late 1930s, and white farmers were allocated the most productive land. Currently there are approximately 60 000 commercial farmers, still overwhelmingly white. During apartheid they enjoyed preferential access to agricultural credit, were major beneficiaries of state irrigation schemes, and also gained from price controls, protectionism and subsidisation. Black people were confined to cultivating only 13% of the land and effectively excluded from full participation in commercial agriculture. Efforts are under way to redress this racially skewed situation, but land and agrarian reform has been slow and not yet made a radical difference to land ownership. The harsh legacies of slavery, indentured labour, migrant labour, sharecropping, labour tenancy, child labour and the tot system (part-payment in alcohol) have all made their mark on social relations in the countryside. Currently employers are resisting the implementation of a statutory minimum wage of R650 (R800 in some areas) for farm workers, despite this being pegged at a level below that of a living wage.

Food and beverage processing has become a major part of manufacturing in South Africa. The industry developed in tandem with the needs of the mining industry, which grew after the discovery of diamonds (1866) and gold (1886). Technologies of food preservation improved during the 19th century, with canning and bottling making room for the application of refrigeration to safeguard fresh meat and fish products over time and distance. Advances in chemistry also assisted with food preservation problems, although in the late 20th century, affluent consumers began to question chemical residues in food, and to develop a preference for more organic products. The South African food processing industry grew from local efforts at dairy production, at milling and baking of cereal products, and at canning of fruit and vegetables. The mineral revolution also made it possible for foreign investors to gain scale advantages by setting up local plants: Unilever, Reckitts & Colmans, Coca-Cola and others blazed the trail in the food sector. Levels of direct investment grew in the period after 1945, reaching a peak with the boom of the 1960s and contracting by the 1980s due to consumer boycotts and sanctions. By the mid-1990s, South Africa's democratic transition led to a new wave of investment in the sector. A number of local operations sold out to foreign brand leaders, particularly in the dairy and tobacco industries. Trade unionists have contrasted the harsher behaviour of some of these new entrants against that of longer-established transnational corporations.

This paper is in the form of a preliminary working draft open to comment and critique. It forms part of a close analysis of the role of corporate social and environmental responsibility (CSER) in South Africa, being undertaken by the Sociology of Work Project at the University of the Witwatersrand, on behalf of the United Nations Research Institute for Social Development (UNRISD) in Geneva. UNRISD is implementing a broader research project on 'Promoting CSER in Developing Countries', which includes similar research programmes in Mexico, the Philippines, and other developing countries.

The paper will attempt to assess the size, shape and importance of the food sector in South Africa. It will examine how principles of CSER are understood and applied in the sector. It will raise strategic questions about the nature of partnerships in and around the sector. While it could not comprehensively survey every initiative in the sector, the study relied on published material from key companies, the business press, government, researchers, and other stakeholders, as well as in-depth interviews with key role-players from the corporate, trade union and research communities.


Footnote:
  1. I am grateful to Rahmat Omar, Fiona Bizos, Ian Macun, Shirley Miller, Xolani Ngonini and Eric Watkinson for their collaboration, and to the following for their contributions to the content and ideas expressed in this paper: Wendy Ackerman, Werda Biesenbach, Terri Lynn Cohen, Tony Ehrenreich, Ed Hall, David Kingma, Katishi Masemola, Joy Mills-Hackman, Simon Millson, Nicky Newton-King, Faiza Steyn, and Nolitha Vukuza-Linda. I also am appreciative of the logistical support of Zaide Harneker, Shameen Singh and Khayaat Fakier.


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