Illovo Sugar Limited, Africa’s biggest sugar producer, exports raw and refined sugar globally. After crime and conflict in South Africa over land ownership affected business operations, Illovo South Africa began working on redistributing land to local farmers, well before the government implemented such a policy. Chris Fitz-Gerald, Illovo’s Communication Manager, told The Cipher Brief that corporate social values can contribute to thriving and vibrant communities.
The Cipher Brief: Your company is a major private investor in numerous African countries, including South Africa. What challenges has your company faced because of crime and conflict in South Africa? How does this compare to the threats your company faces in other countries of operation?
CF: Illovo Sugar is guided by a clear and well-defined overarching objective to be welcomed in the countries and communities in which it operates and without whose cooperation it would not be able to sustain its businesses. For this to happen, we aim to ensure that the local people of our host countries – whether in South Africa, Zambia, Tanzania, or any of our other markets - are significantly better off with our presence there, irrespective of the implementation of the rule of law or political administration of the day. Our South African agricultural and manufacturing operations are situated in rural locations and are generally less impacted by the higher incidences of crime that are reported in urban areas. Although the immediate direct and personal losses on people and businesses resulting from criminal activity are significant, the longer-term and broader negative impacts of crime in South Africa are on productivity and growth of the country.
TCB: How is your company contributing to the reduction in violence in South Africa, specifically in regards to your support for the government’s land reform program?
CF: We believe that our endeavors improve the lives and livelihoods of the local communities in which we operate by providing essential services, such as health services and education, as well as employment, skills development, and other means to achieving economic independence. These are important factors in crime and violence reduction. Illovo supports sustainable land redistribution and the development of local grower capacity across all six countries in which it operates. Our comprehensive business sustainability and corporate social investment profile holds the preservation of community land rights as a key component.
Illovo Sugar (South Africa) Limited (Illovo SA), specifically, has distributed more company-owned cane land to black farmers in South Africa than any other sugar company in the country. As part of a major voluntary land redistribution drive, commenced in 1996 long before the introduction of the government’s land redistribution programme, Illovo has transferred 52 percent of its agricultural land holdings to black South Africans, equating to more than 26 thousand hectares. We also work proactively with black farmers, managing and holding training programs that provide technical and financial assistance to new emerging cane growers in order to ensure the long- term commercial sustainability of their farms. The primary focus of our agricultural development strategy is to promote local, rural farming-based businesses, which in turn attracts a wide range of multiplier benefits, including infrastructural and economic development of communities, and therefore the reduction in violence.
TCB: What impact have you had on some of the rural South African communities in which you operate? What is the value to your company in constructively engaging with these local communities?
CF: We are committed to being a partner in national development in the countries that host our operations. The aim of our social investment and development activities is to contribute to the development of thriving and vibrant societies against the background of our stated intent to be welcomed in the communities in which we operate. We are mindful of the rural and relatively underdeveloped nature of these locations, characterized by limited infrastructure and significant development needs. In response, we have developed a number of partnerships with development partners to improve our outreach and positive impact.
Illovo SA is a strategic partner chosen by Government to implement the RECAP (Recapitalisation) Development Programme directed at small-scale growers (SSG). Through grant funding provided by the government, RECAP projects have benefitted more than 300 small-scale farmers in the development of almost 600 hectares of land under cane in the Sezela cane supply region on the south coast of KwaZulu-Natal. Mentorship of emerging growers has played a key role in the growing success of this initiative, which will ultimately result in significantly increased cane production capacity among this important sector of the industry and economic benefits for the growers, their families, and the local community.
As a long-term investor in South Africa, the group has developed a social compact with its local communities and today administers wide-ranging social investment programs aimed at: infrastructural development, job creation, health and wellbeing, education, the provision of potable water and sanitary services, youth development, promotion of culture, sports, and active healthy lifestyles.
Investing in communities in a manner that is aligned with their own goals and values delivers demonstrable community and company benefits. These range from a positive working environment and motivated employees who believe they work for an ethical and purposeful organization; to thriving local economies that are able to build businesses that in turn provide local supply chains for Illovo in those markets; to a government that understands the value and true investment Illovo is making in its country; to shareholders who derive more than just a commercial benefit from their investment, but also a reputational benefit from supporting an organization that is positively impacting the communities that host its operations.
TCB: What lessons have you learned from this experience that you can apply to other countries of operation? From your experience, what do you believe is the role of companies in preventing conflict and crime?
CF: For Illovo, agriculture is about fostering economic development; our vision is certainly not limited merely to the growing of crops. We invest in the communities surrounding our operations, and we work with national and local government to foster and grow local economies by providing people with the real skills and support to build their agricultural capacity and achieve economic independence.
We believe that companies that work to actively improve the lives and livelihoods of people, not only providing physical infrastructure, but also the skills and platforms to achieve economic independence, are the key links in the fight against crime and unlawful activity. Companies that invest in the markets that host their operations are a critical partner to the public sector in the attainment of the peace and security, and thus are key to national development – and to the success of the private sector itself.
