Exporting corporate social responsibility into Africa? The experiences of South African companies in Swaziland

ABSTRACT

The economic expansion of South African corporates across the continent is an evolving and contested process. This paper seeks to inform knowledge on the experiences of South African companies expanding into Africa by looking at the social investment approach of five large companies within South Africa and in their Swaziland operations. While social responsibility programmes are proving to be useful for the private sector, the experiences of these companies highlight the need for more studies to find evidence on the developmental role of major private sector players like South Africa in the region and the impact of corporate social investment and corporate social responsibility in Africa.

KEYWORDS:

• South Africa
• Africa
• South African companies
• economic expansion
• corporate social responsibility
• corporate social investment

Disclosure statement

No potential conflict of interest was reported by the author.

Notes on contributor

Diana Sanchez Betancourt is a senior researcher with the Democracy and Governance Unit at the Human Sciences Research Council. Her areas of research and publication include socio-economic transformation, African corporate expansion, sustainable urbanisation and citizen and community engagement. She can be contacted at: [email protected]

Notes

1. Interviews took place during September and October 2010 in South Africa (Johannesburg and Cape Town) and Swaziland (Mbabane and Ezwilini) following a semi-structured questionnaire, which was sent to all participants before the meeting. Interviews were one-on-one with either managers or employees involved with CSI in South Africa and Swaziland. Companies also provided information about CSI in other African countries. Company reports were used to complement field data. Two extra interviews with the CSI consultancy Tshikululu and Trialogue served to expand knowledge. It is important to note that these are only the perceptions of managers which most certainly will differ from those of beneficiaries and other employees. Field studies with workers of South African companies in the continent are encouraged to throw light on the social and working conditions of employees.

2. For instance, Fig argues that the term CSR has been abandoned by most South African firms in favour of the term CSI in order to divert attention from calls on business to redress the consequences of its historical contribution to apartheid. In this analysis, as Fig points, the almost exclusive use of the term CSI is a strategic response by the South African business community to deflect regulatory pressures, particularly regarding environmental responsibilities (Fig 2005).

3. The four pillars are: Administration, Merchandise, Promotion and Social Responsibility and People (Pick n Pay 2010).

4. CSR is managed by the sustainability division looking at issues of efficiencies in energy, recycling, better ways to do business and food security.

5. Instead of a percentage, Pick n Pay allocates resources to the Foundation on a yearly basis following an assessment of needs. This is complemented with internal funds available for various CSI initiatives.

6. In 2011–2012, the government nearly defaulted and struggled to pay civil servants’ salaries and debts incurred with private businesses instigating a major wave of strikes and protests (Laterza 2013). Furthermore, there are allegations from Swaziland-based investment consultants that: ‘All big companies in Swaziland have to accommodate royal family members to their boards’ (Lukhele 2012). For instance, in 2012, 25-year-old Princess Sikhanyiso Dlamini, King Mswati’s eldest daughter, was appointed to MTN Swaziland’s board of directors. See: http://www.iol.co.za/business/companies/plum-job-at-mtn-for-swazi-king-s-daughter-1.1378665#.VAbF9aMgtr5

7. Research done on the role of corporate South Africa in the continent by the South African Institute of International Affairs (SAIIA) illustrates a couple of things. First, contrary to what might be a general perception, it is a relatively small but prominent group of South African companies that are investing throughout the region. And second, their investments are so prominent on the African business landscape because unlike most foreign investors who concentrate in mining, South African companies have major investments in other sectors (e.g. financial, tourism, retail, manufacturing, construction, agricultural and telecommunications) (Grobbelaar and Besada 2008).

8. In October 2009, the parastatal SPTC proposed to sell its 51% holding in MTN Swaziland in order to raise funds to expand SPTC’s mobile network coverage in the country. SPTC’s plans were blocked, reportedly by the king who wanted to protect the Swaziland mobile phone market for MTN. The elimination of SPTC from the Swazi mobile phone market effectively forced Swazis who rely on mobile phones to use MTN’s more expensive service. See: http://www.freedomhouse.org/report/swaziland-failed-feudal-state/annexes#.VAbNH6Mgtr4

9. The initial business success of this operation was broadly based on the growth of international tourists who used Swaziland as a gate into South Africa and South Africans who used Swazi casinos to bypass gambling restrictions during apartheid. Therefore, ironically, the democratisation of South Africa negatively affected business and the company had to adjust its facilities (Royal Swazi Spa, Ezwilini Sun and Lugogo Sun) to cater for the local market.

10. The company sold out of the Tanzania stores due to a difficult business environment.

11. In Nigeria, for example, it has been alleged that MTN prioritises banks and companies with South African interest, while MultiChoice in the pay-TV industry has been accused of using its dominant position and deploying arm-twisting tactics in their struggle to dominate the industry.

12. By the end of 2009, MTN foundations were established in Swaziland, Uganda, Nigeria, Cameroon, Cote d’Ivoire, Guinea-Bissau, Ghana, Benin, Congo-Brazzaville, Yemen and Afghanistan (MTN 2009).

13. Using around 10% of their budget in South Africa, the Pick n Pay Foundation invests in enterprise development initiatives in a few African countries where they have operations (e.g. Lesotho).

14. This has been the case everywhere in the continent except in Zambia. According to the manager, since this operation has not matured, money cannot be ‘given away’ yet for social investments. This is in contrast with older operations like those in Namibia where the structure is highly developed and managed by an external board of trustees.

15. See note 13.

16. In South Africa, this does exist in the various industry-wide charters negotiated between employers and other stakeholders, including the government – the Mining Charter is obviously the applicable instrument here. In Zimbabwe, there was previously no legal requirement for CSR, but new legislation requiring the indigenisation of companies contains regulations which stipulate that 10% of gross profit must go to the community.