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Sweatshop Sugar: Labour Exploitation in South Africa’s Cane Fields

Jason Hickel
By Jason Hickel

Jason Hickel is a postdoctoral fellow at the London School of Economics and Political Science. His research focuses on Southern Africa and covers issues related to development, democracy, labor, and political conflict.

Posted on Thursday, 29 September 2011 10:58

When you pour a packet of South African-made sugar into your morning coffee, you can feel good about the fact that the workers who milled, refined, packed, and shipped it are paid relatively decent wages, enjoy basic benefits, and are protected against severe exploitation.

In many respects, South African sugar is about as “ethical” as sugar gets, given a global industry characterised by the kind of abuses recently brought to light by projects like the “Killer Coke” campaign. That’s because the South African sugar industry bears the happy distinction of being unionised wall-to-wall.

This is the fruit of a long history of union activism shaped by strong labour leaders who fought – tirelessly and against overwhelming odds – to build a robust framework of rights and protections. In fact, the sugar industry in KwaZulu-Natal can be considered the birthplace of the modern labour movement in South Africa. Celebrated struggle icons like Jay Naidoo and Chris Dlamini, for instance, cut their political teeth organising sugar workers underground before going on to become the first leaders of the Congress of South African Trade Unions (Cosatu) when it was formed in 1985.

But the benefits and protections of unionisation apply to only one side of the sugar industry: the milling sector. The other side of the industry – the agricultural sector – has been almost completely ignored by the union movement, despite the fact that it relies on a significantly more labour-intensive process. While the industry’s fourteen mills employ a total of about 5,000 workers, upwards of 74,000 workers render their labour to plant, weed, and harvest the vast expanses of cane – around 430,000 hectares – that stretch across the rolling hills of South Africa’s eastern seaboard.

Almost none of these workers are unionised. They spend their days working in extremely dangerous conditions with very little by way of rights and protections. In fact, until recently they did not even enjoy the basic benefit of a minimum wage. It was not until 2003 that the Ministry of Labour got around to implementing a “Sectoral Determination” for farmworkers, which guaranteed workers a paltry R3.33 per hour in most regions.

Given annual adjustments, today this figure reaches closer to R7, or about $1 per hour. But this still represents only about a quarter of what even the lowest-paid workers earn for less work in the unionised milling sector.

Obstacles to Organising

Why have these workers been so neglected by unions? Part of the reason has to do with logistics. Farm workers are difficult to organise because they are thinly dispersed across a massive geographical area. They cannot be found concentrated within the walls of a factory, for instance, as is the case with the mills. To organise farmworkers, unions have to spend time and money travelling to far-flung areas, sometimes spending a whole day just to meet with a handful of workers.

To make matters worse, organisers are often threatened or shot at by farm owners when they show up at private estates. The remoteness of most cane plantations and the lack of legal infrastructure in rural areas lends itself to a sort of wild-west style capitalism.

The unions that cover the milling sector – led by the Food and Allied Workers Union (FAWU), an affiliate of Cosatu – have attempted to bring their farm worker comrades under the umbrella of the National Bargaining Council, the body that oversees labour relations in the sugar industry. But these efforts are repeatedly shut down by the big employers – most notably Illovo and Huletts, the two multinational corporations that together control around 65% of the industry.

They argue that the milling and agricultural sectors comprise interests, standards, and procedures that are too different to be compatible within a single bargaining framework. This claim flies in the face of a number of counter-examples: in Swaziland, for instance, workers from milling and agricultural operations have long sat side by side at the bargaining table.

Illovo and Huletts are learning to take full advantage of this split arrangement. Under the guise of “focusing on core operations,” they have begun to divest themselves of their agricultural holdings by selling off large tracts of cane – up to 50% of their land, in the case of Illovo – to small farmers, many of them black.

On the face of it, this seems like it would be a good thing, as it reverses the sort of corporate land-grabbing that characterised colonialism and which is gaining new steam elsewhere across the continent. Indeed, industry representatives justify the move as both “advancing Black Economic Empowerment” and complying with progressive land reform targets.

But scratch the surface of this charitable facade and more cynical motives quickly become apparent. Contrary to what one might expect, offloading land onto small farmers – typically in 1-100 hectare chunks – does not compromise the efficiency or profitability of the industry. Quite the opposite. Because KwaZulu-Natal’s cane fields are so hilly, even the biggest growers have never been able to adopt large-scale, capital-intensive farming techniques like mechanised harvesting.

Small farmers can usually do the job just as well, and the upshot for the industry is that dispersing production among many private growers – around 30,000 at last count – makes unionisation much more difficult than when farm workers are formally employed by a concentrated number of publicly listed companies.

The Walmartisation of Sugar

In fact, outsourcing agricultural operations actually allows companies like Illovo and Huletts to get cane more cheaply, because small farmers can avoid unions, slip through the cracks of regulatory mechanisms, and usually do not provide workers with fringe benefits like clinics and ARV therapy. It’s the Walmart strategy applied to sugar – a full-scale “race to the bottom” for cheap labour. Big corporations like Illovo and Huletts can effectively abandon their responsibility for maintaining decent wages and labour standards while protecting themselves from public outcry or worker insubordination.

This trend towards what analyst James Ferguson calls “socially thin” investment follows the general logic of neo-liberalism since the 1980s. During the developmentalist era of mid-century capitalism, by contrast, sugar corporations took responsibility for providing housing, clinics, schools, and recreational facilities for many of their workers. They believed that ensuring decent livelihoods for workers would deliver a stable, productive workforce.

This effort at class compromise has been almost entirely abandoned over the past couple of decades as corporations seek to maximise quarterly profits and prioritise shareholder returns at the expense of workers’ well-being. Industry leaders often justify this move as a progressive shift away from the “paternalism” that was common under colonialism.

This is where the sweatshop analogy becomes appropriate. Just as Nike avoids unions and labour laws in the Western world by outsourcing to sweatshops in the so-called third world, so Illovo and Huletts avoid unions by outsourcing to small farmers. Just like sweatshop owners, these farmers often operate with precarious, razor-thin profit margins and stay afloat by forcing down costs, usually by employing the most vulnerable and exploitable workers they can find and hiring them on a “seasonal” basis – read: “casualisation” – so that they can be retrenched on a whim.

Some of the smaller operations run as family businesses centred around homesteads, where farmers rely on their wives and children for labour and have zero recourse to the benefits that come with formal employment. Such cases illustrate the extent to which corporations have shifted the costs of social reproduction onto the family unit.

And this at a time when sugar is fetching higher-than-ever prices on the export market due to increasing global demand, and while industry majors are enjoying unprecedented new access to global markets as Western countries have been forced to abandon subsidies, quotas, and tariffs.

As with sweatshops, the labour process on the cane fields is designed to extract as much as possible from workers. Overseers set thresholds for the number of tons or rows that each worker must cut per day. Employers compensate for annual minimum wage adjustments by raising tonnage thresholds and demanding more productivity.

According to research conducted by Eric Watkinson, if workers fail to reach these thresholds they are often not paid the full rate, sometimes up to 33% less than the minimum wage. Most workers put in seven days a week with only one or two days off per month, usually without ever receiving overtime pay.

Benefits are non-existent, and maternity leave is unheard of. This is why the South African Sugar Association can boast that it produces cheaper sugar than 85% of its global competitors.

Finally, it is worth pointing out that, contrary to the industry’s self-serving claims about advancing Black Economic Empowerment, outsourcing agricultural operations does not decentralise monopoly power. Because they own the country’s only milling facilities, companies like Illovo and Huletts still control the industry from the downstream end of the supply chain, keeping profits out of the hands of small farmers and workers who have no choice but to accept the prevailing market structure.

In 2008, Associated British Foods – the world’s second largest sugar company – furthered this process of monopolisation by buying a controlling stake in Illovo.

Sweetening the Deal for Farmworkers

Much of the blame for the plight of farm workers belongs to the unions. Aside from a few half-hearted attempts, FAWU and Cosatu have made no serious effort to organise farm workers in South Africa.

They remain committed to the model of industrial unionism that worked so well for them in the 1970s and 80s, focusing on workers in higher-skilled, full-time, formal employment to the exclusion of workers in casual, rural, and so-called “atypical” jobs. As a result, Cosatu has come to be characterised by a relatively high class, often white collar constituency based largely in urban centres – what Sakhela Buhlungu has so aptly called a “labour aristocracy,” the upper-crust minority that no longer reflects the nature of the general workforce.

This approach is quickly becoming irrelevant in South Africa today. Neo-liberal economic restructuring is eroding the country’s industrial base, increasing casualisation, and forcing millions of workers into the informal sector.

In other words, “atypical” work is quickly becoming the norm. Cosatu needs to come to terms with the fact that the Fordist figure of the full-time male factory worker is a thing of the past. The labour movement must learn to adapt to new socio-economic conditions as quickly as neo-liberalism produces them.

That means fanning out into the farms, into the markets, and – yes – even organising the unemployed, to build a movement of dispossessed citizens that extends far beyond the factory floor.

The Self-Employed Women’s Association (SEWA) in India offers an example of how this can be done. SEWA has organised more than a million women who work in the informal sector without salaries and benefits – the type of work that constitutes 93% of India’s labour force. More locally, the women-led Sikhula Sonke project in the Western Cape has successfully organized both employed and unemployed farm workers around issues that range from traditional labour rights to more atypical concerns like food insecurity.

Cosatu could do the same, by extending the struggle beyond wages to issues like land tenure, evictions, and access to basic services, even if it means marching against the local ANC council. This is the only kind of movement that will ever bring about serious social change in South Africa. This is the future of labour organising.

Fortunately, new sources of hope are beginning to emerge. In 2006, organisers at Khanya College in Johannesburg spearheaded the Southern African Farm workers Network, which aims to link trade unions that organise farm workers across the region, including Swaziland, Zimbabwe, Malawi, Zambia, Tanzania, and Mauritius.

The Network’s new flagship campaign will focus on the sugar industry, with the backing of the International Union of Food (IUF) and a federation of Danish unions known as 3F. Hopefully this effort will succeed not only at unionising farm workers, but also at making decentralised, small-scale operations stable and profitable for farmers and their employees.

The task ahead is not impossible. Lest we forget, the South African labour movement under apartheid managed to defy all odds by successfully overturning the most exploitative system of racial capitalism on the planet. Those were heady times. But to this day, even with democratic majority rule and an ostensibly Marxist government in power, true liberation remains out of reach for vast swathes of the country’s rural population. As far as they’re concerned, the revolution has yet to begin.

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