Of Corporate Social Responsibility and Tobacco Companies in Zimbabwe – The forgotten 2 Ps

The 5th largest producer of tobacco in the world and largest in Africa, Zimbabwe has every reason to celebrate of such a huge achievement. Often times competing with the world super power, the United States of America for the number 4 slot, it is no wonder all eyes are on the country in terms of business ethics in the sector. Lately, the media has been awash with different articles most of which are showing how the country is not getting maximum benefits from the esteemed position that it holds in the world. It is saddening to note that although the sector is a multi-billion dollar sector world-wide, and the country competes favorably in terms of production, yet the communities producing the golden leaf are not bearing the same smiles that are decorating the multi-national companies’ executives and their parent companies outside the country.

Our tobacco production record is a cause of much celebration, especially in the face of adverse conditions the country finds itself in. So much effort has been put to ensure the country achieves such a feat. Ordinarily, the foreign currency coffers should be overflowing with inflows of brand new crisp United States Dollar through the exports, and the farmers producing the golden leaf should be bubbling with joy, living in modern dwellings, with bank accounts full to the brim with the esteemed currency. The tobacco companies’ profits on the other hand, should also be following suite, with Zimra tax revenues also showing generously, how the production of the golden leaf is benefiting the country. The planet, also called the environment should also be bearing testimony of our production levels – which they are actually doing, albeit in a negative way.

This opinion piece was written with a view to contribute to literature about the state of the tobacco sector in Zimbabwe in relation to Corporate Social Responsibility (CSR) also known as the triple bottom line, which are Profits, People, and the Planet. It will show that although the businesses involved in tobacco production are making massive profits, yet they have neglected the people who are producing the crop, as well as the planet, through which they are getting the crop. Without that balance however, there is no talk of sustainable tobacco production, traceability issues are compromised, and if we are not careful, the production of the golden leaf will be compromised going forward.

Corporate Social Responsibility

According to Tim Stobierki of the Harvard Business School Online (HBS), until fairly recently, most large businesses were driven almost exclusively with a single goal in mind: profit. Maximizing profits was at the heart of every action taken or initiative pursued. In the past few decades, however, more business leaders have recognized that they have a responsibility to do more than simply maximize profits for shareholders and executives. Rather, they have a social responsibility to do what’s best not just for their companies, but people, the planet, and society at large. This gives rise to what has come to be known as corporate social responsibility (CSR), he postulates.

Firms that embrace corporate social responsibility are typically organized in a manner that empowers them to be and act in a socially responsible way. It’s a form of self-regulation that can be expressed in initiatives or strategies, depending on an organization’s goals.

Types of Corporate Social Responsibility

It is generally accepted that CSR is broken down into 4 major areas. These areas include:

·????????Environmental Responsibility which relates to how companies should behave with regards to the environment. The general belief is that companies should behave in ways that are friendly to the environment. Generally, companies that are environmentally responsible do embrace some actions which includes, pollution reduction, green house emission gas reduction, increase renewable energy reliance, offsetting negative environmental impacts like tree planting, funding activities related to such among many others

·????????Ethical responsibility is concerned with ensuring an organization is operating in a fair and ethical manner. Organizations that embrace ethical responsibility aim to achieve fair treatment of all stakeholders, including leadership, investors, employees, suppliers, and customers

·????????Philanthropic responsibility?refers to a business’s aim to actively make the world and society a better place.?While many firms donate to charities and nonprofits that align with their guiding missions, others donate to worthy causes that don’t directly relate to their business. Others go so far as to create their own charitable trust or organization to give back.

·????????Economic responsibility?is the practice of a firm backing all of its financial decisions in its commitment to do good in the areas listed above. The end goal is not to simply maximize profits, but positively impact the environment, people, and society.

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Benefits of CSR

Benefits accruing to companies practicing good corporate citizenship are too numerous to mention. Some of these include, but are not limited to increased productivity, employee satisfaction, improved public image, increased customer loyalty, can be a powerful marketing tool, can help a company position itself favorably with government, investors, regulators among others. Increased profits are also a result, with too many other benefits too numerous to mention

CSR activities by Zimbabwean companies in different sectors in Zimbabwe.

Most major blue chip companies in Zimbabwe are well known for their different activities in the CSR space in Zimbabwe. Notable names to come to mind include the likes of Delta Corporation, with their works in supporting various activities are well documented. Their support for soccer is well documented as well as supporting various charities among others. Econet wireless is well known for their various initiatives which include the J Nkomo scholarships and their foundation responsible for taking thousands of children to school through the Higher Life Foundation. Other much smaller companies such as locally owned banks and insurance companies are all over the show, some maintaining certain parts of the towns, others drilling boreholes while some are well known for helping government in the fight against COVID-19 by availing PPEs and vaccines among others. As recent as last week, Sakunda holdings availed sponsorship to two local football clubs. Of interest to those in the agricultural sector would be the coming in of a mining company to avail funding of over USD15 million for the revitalization of the livestock in Zimbabwe. A mining company, setting up a revolving fund in the agricultural sector to benefit members of the community not only where they are involved in mining, but the whole country at large is mind blowing. Such is the extent to which companies in Zimbabwe are involved in the triple bottom line in Zimbabwe

Of CSR and tobacco companies in Zimbabwe – Is it really necessary?

The importance of good corporate citizenship through the adoption of CSRs cannot be over-emphasized. The devastating effects of tobacco farming are well documented, and well known. These include deforestation, health issues caused by chemicals used in the production of tobacco as well as other diseases like lung cancer caused by smoking of tobacco. These ills therefore need to be compensated for by those who are enjoying the profits of tobacco farming in Zimbabwe.

According to a recent report, only 2% of tobacco produced in Zimbabwe is processed into cigarettes. 96% is exported by the multi-national merchants whose shareholders are out of the country. Massive profits are made from the export of this leaf, the bulk of which is exported unprocessed.

The forgotten 2 Ps

Famed for its flavor, the Zimbabwean tobacco is sought after the world over. The exporters of the golden leaf are thought to be amassing massive profits from the sale of the golden leaf. Lack of transparency in the sale of the golden leaf has not done much to help with the speculation that is rife within the industry. With talk of transfer pricing and invoicing of related entities across the border at lower prices, and repricing of the same leaf once across the border, speculation if high that the Zimbabwean tobacco merchants are making massive profits, which are not declared here in Zimbabwe.

Now that the first P, which is Profits is secured, it is sad that the other 2 Ps are forgotten. These are the People and Planet, as they relate to the triple bottom line approach of tobacco production in Zimbabwe.

Our farmers (the first P) are wallowing in poverty and are swimming neck deep in debt. It has been intimated that owing to the level of indebtedness, farmers were going to lose their livestock and little assets they have acquired through other enterprises like horticulture. It might be prudent at this point in time to state that the indebtedness is thought to have been caused by the overpricing of inputs by the merchants, lack of agronomic support to the farmers, lack of working capital, inadequate inputs, poor timing of input supply to the farmers and poor prices offered to the farmers among many other factors, to which the merchants are directly responsible for.

In our quest to be among the best in the world in terms of tobacco production, our forests have not been spared. A drive through the tobacco growing regions of Mashonaland West, Central and East, as well as Manicaland paints a gloomy picture of our forests. Our trees have been cut as our farmers did what had to be done in order to cure the golden leaf to the required standards. Contrary to the laws that require that farmers be supplied with coal for the curing of tobacco, most merchants have ignored that dictate.

For each hectare of tobacco produced every season, the law has it that a quarter hectare of plantation be planted to replenish the forests that are being decimated every season. According to this requirement, of the 120,000 ha of tobacco of tobacco that was planted in the 2020/21 season, 30,000 of plantation should have been planted just this past season. Driving along the highways, one can easily decipher if a tenth of that was even planted. The honor is upon the merchants to ensure this is done. Sad as it might be, yet if nothing is done to rectify this anomaly; we might find ourselves with a desert forming in our midst.

Except for only 3 recorded companies, all of which are local companies, with local shareholders, two who donated motor cycles and bicycles to a police station in Karoi, and another that donated PPEs to various clinics around the country, nothing is recorded for other companies in terms of their CSR. Most of the multi-national companies are known for closing doors in the face of proposals to better the communities they are operating in.

According to TIMB CEO in a recent interview, the minimum standards for licensing include commitments to human and labour rights, safe farm practices, elimination of child labour, sustainable curing fuel, corporate social responsibility programmes and governance practices. A closer look at these requirements shows the regulator’s desire to have contracting companies to be good corporate citizens. The question though is, ARE THEY?

An avid on-looker is bound to make some conclusions, which of course can be or might be misplaced. They are bound to ask the following questions –

·????????Which companies control 96% of the total exports in Zimbabwe?

·????????What is their shareholding – are they locally owned or foreign owned?

·????????What is their motive – are they driven by the desire to make profits, while improving the welfare of the citizens, and the country they are operating in, or they are only after profit maximization?

·????????Is there any relationship between their lack of interest in things that matter, and their desire to make profits?

·????????Is there any relation in the way these companies (locally owned and foreign owned) involve themselves in the affairs of CSR and nation building?

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Taking the bull by its horns – Farmers should unite

Unless the farmers will come together and get united, we are less likely to see any of the big tobacco companies doing anything about CSR in their areas of operation. They will continue to amass wealth and never do anything to help the people who are enriching them, and the environment through which they are exploiting continuously.

Conclusion

CSR is the heartbeat of any company. Where CSRs are neglected, a number of questions arise. It is therefore imperative that only those companies that involve and identify themselves with the ethos, hopes and aspirations of the general populace, are responsible for the upkeep of the planet they are operating in, and are responsible for nurturing the people in whose territories they operate in, should be allowed to operate. Everything else should be treated with suspicion.

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Phineas Mukomberanwa writes in his personal capacity. He is a farmer, founder and CEO of The Farmer Talk Trust. He is reachable on 071 564 5064

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