Tongaat Hulett bosses must ‘pay back the money’

The financial scandal of South Africa’s largest sugar producer hurts its blue-collar employees, who are already marginalised and at risk of non-communicable diseases, the most.

In recent years, South Africa experienced unprecedented corporate governance scandals and failures of many companies that have propelled the government to establish systems that promote higher standards of ethical conduct, accountability, and transparency.

Our Constitution is founded on the principles and values of the rule of law, accountability, responsiveness, and openness. But, what does it mean when companies such as Tongaat Hulett are publicly admitting to unethical and dishonest behavior?

The sugar industry cannot ignore or deny that South Africa faces a severe and growing obesity epidemic

After falling sharply last week Friday, Tongaat Hulett shares were even on Monday morning last week as markets considered the sugar producer’s announcement that it needs to restate its 2018 financials and it would be delaying publishing its 2019 earnings while it conducts a forensic investigation. This also comes after Tongaat Hulett announced it had issued retrenchment letters to about 5,000 of its employees as it battles “significant business challenges”.

The irony is that while Tongaat Hulett executives are swimming in the gravy train – and benefitting from their inflated financial results – workers and their families are left vulnerable and facing uncertainty about putting food on the table.

Accountability for the private sector

The sugar producer said it identified “certain past practices which are of significant concern to the board and the company’s auditors”. The adjustments, of a non-cash nature, include the reassessment of land sales values and growing cane valuations.

All responsible parties in this saga must be held accountable and they should pay back the money. This unethical conduct from Tongaat Hulett is unacceptable and risk the livelihood of its employees who are already being underpaid and are faced with poor working conditions.

This distrust erodes the already fragile relationship between government, civil society, and business without which South Africa – and for that matter, any developing country – will be unable to effectively tackle poverty, unemployment, and inequality.

For too long the focus has been only on corruption in the public sector, which protects taxpayers and holds government accountable. Equally so, the private sector needs to be measured on the same standards and must be accountable not only to regulators but to South Africans – especially those in the communities where they operate.

This case, just like that of Steinhoff, provides important insights into how a supposedly indestructible corporate brand can be practically annihilated in (what appeared to be) unethical conduct. At the centre of this bizarre and unethical business practice is that working class and poor people’s livelihoods are facing a bleak future, who have been used as a proxy by the sugar and beverage industry in their war against the Health Promotion Levy — commonly known as the sugary drinks tax.

Tax is a scapegoat for the industry

The levy was introduced by the government in April last year in efforts to reduce the rates of non-communicable diseases in South Africa. The sugar industry has blamed the tax for the job losses its companies are experiencing.

The challenges the sugar farming industry is facing, such as the drought, cannot be ignored. But the industry needs to rethink its business model while considering market-related tariffs and refocusing attention on the immense opportunities to contribute towards job creation, land reform, and sustainable transformation for small-scale farmers.

But the industry cannot also ignore or deny that South Africa faces a severe and growing obesity epidemic. Being overweight or obese predisposes people to non-communicable diseases, like heart disease, stroke, diabetes and some forms of cancer. Currently, non-communicable diseases are the leading causes of mortality globally, resulting in more deaths than all other causes combined. And since 2009, deaths caused by non-communicable diseases have outnumbered communicable disease-related deaths in the country. Again, it’s our fellow working-class South Africans who are most affected by these health threats.

In 2016, the World Health Organisation estimated that non-communicable diseases account for 51% of deaths in South Africa.

While the sugar and beverage industry have often blamed their struggles on the introduction of the Health Promotion Levy, the numbers simply just don’t add up.

The sugar industry has been in crisis for more than 10 years now, and in South Africa specifically, sugar production has dropped by around a third between 2002 and 2012. Illovo Sugar reduced its workforce by 25% between 2009 and 2014 and three successive droughts have had a significant impact on cane production.

“The country’s sugar industry is not internationally competitive. The removal of the levy is not going to address these structural challenges and the industry will continue to reduce production and lose jobs,” said Nick Stacey, an Economist at Wits University’s public health research unit PRICELESS.

Instead of lambasting the government for introducing the levy as recommended by the World Health Organisation, it should be commended for its efforts at health promotion and prevention of obesity and non-communicable diseases which are currently claiming too many South African lives.

In fact, labour, civil society and the government should push back efforts to retrench workers. A healthy nation cannot be traded off for anything, including false threats to job loss. The cutting of jobs is not an option while cutting sugar gives an opportunity for a healthier and prosperous South Africa.

The industry, government and civil society share social responsibility obligations, particularly in emerging markets such as South Africa, to adhere to business practices that drive societal transformation, and to stimulate economic growth to address the dire challenges of inequality, poverty and unemployment faced by people living in the country.

We need a paradigm shift where corporate and public governance represents a system of values, policies and institutions by which a society manages its economic, political and social affairs through robust interaction within and among state, civil society and the private sector.

From the farm to the table

An organic farmer has started a farming movement in Soweto townships that support 5 000 children from 12 schools, 80 pensioners and other people from the community.

What started as a visit to a fundraising event at the Diakonia Aids Ministry in Soweto led to the creation of Kotula, a self-funded programme that has been feeding orphaned and vulnerable children, women, and elderly residents with wholesome organic food.

Founder, Adam Ginster, started a farm to provide organic food when he discovered that orphaned and vulnerable children at a nearby school were being fed mainly processed food. Since he had a farming background, he saw an opportunity to get back to his roots while making a difference.

Some of the crop being grown at the farm. Photo: Marcia Zali / Health-e News.

“I asked what the children were being fed and I wasn’t pleased with the response that I got because it was mostly processed food that was donated by the community,” he says.

“Some of them were living with HIV and diet is so important. I am quite curious so I went for a walk and I found this piece of land that was unused. And in my mind, I immediately dreamt of creating a small farm.”

He got the soil tested to see if was fertile and the result was positive.

“We then spoke to the Department of Agriculture who’ve been very supportive from the start. They helped us design a crop rotation plan so we know what crops to grow, where, and when during the year. The focus is to optimise food out of every piece of land that we have all the time.”


The soil was also fortified with organic compost. People from the community were identified to be responsible to run the farm. The department also provides training to the team.

The farm currently feeds 600 children from the school. Meals are prepared using fresh vegetables from the farm. They have also added 13 more farms, located at different schools where there were concerns of undernutrition, an old age home, and a community centre.

“From those farms, we support 5 000 children from 12 schools and 80 elderly people at the old age home, and some from the community centre. I believe in starting at the foundation to feed children right so they can have a better start in life,” said Ginster.

Through the farms, Ginster has created employment for a few members of the community. They receive a monthly stipend and can also use fresh produce, which remains largely unaffordable to many South Africans.

Chronic conditions

Thabo Motsokolo (45) was a member of a support group that promotes healthy living amongst community members who live with various chronic conditions before he started working on the farm.

“I gained a new skill when I started working on the farm and it has changed my life,” he says. “Before I started working here, I didn’t pay attention to what I ate and would mostly eat things like kota [a hollowed quarter loaf of bread filled with a variety of meats, cheese and pickles] and chips but now I make sure that my food has vegetables.”

He is happy that he can now feed his family with food from the garden.

“I save a lot because vegetables are expensive but now I get them for free. I am now a proud family man who is able to provide for his wife and children, something I was unable to do when I was unemployed.”

Noluthando (14) was only 9-years-old when the farm started and she was one of the first children to receive support from Kotula.

“I’m happy with the treatment and care we are given here especially because they also help us with our school work. I also like the fact that our meals change so we don’t have to eat the same thing over and over again.”

Healthy eating

Noluthando is pleased that they have been taught about healthy eating from a young age and has also learned to not waste food.

“I think I have become a responsible person because I am always mindful that other children might not be having the same food that we eat here so we always finish our meals and make sure that nothing goes to waste.”

Ginster says that the main goal is to make the farms self-sustaining and find more land where they can grow more produce. He also plans to sell some produce to restaurants and retail stores.

“This will allow us to create mechanisms to have independent communities that are empowered economically. Getting funds to keep this running will allow us to achieve those plans.”

Crops grown on the farm include spinach, beetroot, sweet potato, beans, cabbage, tomatoes, lettuce, spring onion and herbs such as rosemary and parsley.