A report regarding sustainability issues in sugar cane production by the independent, non-profit research and network organisation Centre for Research on Multinational Corporations (SOMO) has rapped the Malawian division of South African sugar producer Illovo over the knuckles regarding issues, such as remuneration discrepancies, health and safety issues and benefits to locals in the area of operation.
The report, which is named ‘Bittersweet’ and was distributed in December, has unearthed and supplied details of labour rights violations as well as accusations that the JSE-listed company grabbed land from a community neighbouring one of its two plantations in the country. The report also elaborates that there is evidence of increasing casualisation of the workforce.
‘Bittersweet’, which was compiled by Vincent Kiezebrink, Sanne van der Wal, Martje Theuws and Paul Kachusa, notes that, while sugar is one of the three most important export crops for Malawi, producing raw, refined and speciality sugars, accounts were noted in interviews with 78 workers in 2013 and last year that the company pays agency workers lower wages, offers them no job security and exposes them to unsafe working conditions.
The report notes that the company, which has the resources to produce 2.4-million tons of sugar cane and about 290 000 t of sugar yearly, sells half of the supply locally, while 20% is exported to African regions. The remaining 30% of produced sugar is exported to the European Union (EU) market.
“While Malawi may not be a top supplier of sugar to the EU, it is an important export destination for Malawi,” the report notes.
The SOMO report states that the sugar company employs roughly 10 000 people at the Nchalo and Dwangwa production estates, of which 55% are permanent workers and 45% are seasonal workers. It notes that workers are contracted through independent agencies.
The permanent employees at Illovo Malawi, who work in shifts in the sugar processing factories and in the warehouses, enjoy job security and benefits such as housing, medical services, sick leave, pension schemes, bonuses and educational loan services for themselves and their children. Seasonal workers sign an eight-month contract every year, running from April to November. The about 4 500 seasonal workers enjoy the same benefits as permanent employees at the mill, but only in the contractual terms of employment.
It is noted that the seasonal workers enjoy the least benefit, as seasonal staff interviewed noted that, despite working for Illovo Malawi for many years, they have no job security. The SOMO report states that these workers are the most vulnerable group as they are not unionised and have no job security, and with the absence of a contract these workers are at increased risk of unfair dismissals and hindered from obtaining any redress as they have no proof of employment.
Illovo has since noted in a press release issued in December that Illovo Malawi submitted a full and accurate response on November 6 last year to the draft report and subsequently requested that the inaccurate and misleading information in the report be remedied.
“With limited detail, SOMO has attempted to use Illovo Sugar Malawi as a case study to gain publicity at the expense of accuracy,” the company noted.
In the release, Illovo states that with regard to the SOMO report’s Chapter 4.2, ‘Workforce: Permanent, seasonal and agency workers’, all the company’s contracts with external service providers include terms requiring them to manage their employees according to statutory provisions and in accordance with their publicly available Code of Conduct and Business Ethics and other policies.
Illovo also adds that Illovo Malawi has successfully negotiated with unions and government to regulate working hours. The company has also noted that seasonal workers at the mills and refineries have access to medical services provided at the company’s clinics under the same terms as the many local communities which surround the company’s cane fields.
“Workers are no longer permitted to work seven days a week and must have at least one day off per weekly shift cycle,” Illovo added.
The SOMO report noted the response from Illovo but labelled it “a very elaborate response to the draft findings of this case study that were presented to them before publication. In broad terms, the company response stresses that the findings are inaccurate and unfounded.”
They reiterate that the sugar company supports this view by exclusively elaborating on the recent policies it has in place.
“The company is, thus, ignoring that the present case study is focused on the reality on the ground, rather than on the policies that may be in place. Consequently, Illovo Sugar’s reaction was helpful in understanding the findings better, or when it effectively corrected inaccuracies, this information found its way into this case study,” the report concludes.