Fair Trade in Malawi’s Sugar, Tobacco, Cotton, etc

Most western organisations thrive on philanthropy. Firstly, because they genuinely believe in giving something back to society. This has brought arguments as to whether company directors are really interested in giving back to society or that the exercise is merely a marketing gimmick.

Well, both arguments hold true. Society benefits when organisations sponsor projects such as recycling to cut the rate of global warming but at the same time, an ethically minded organisation improves its image and therefore attracts new or continued custom. Corporate Social Responsibility(CSR) as is popularly known has become a fundamental concept for most companies, it is a vehicle through which both society and organisations benefits. Most governments are willing to give companies revenue or capital grants for undertaking specific CSR projects.

In Malawi, the National Insurance Company(NICO), National Bank of Malawi and SOBO are some of the organisations setting the tone for good CSR by sponsoring a variety of projects and sports.

During my undergraduate research here in the United Kingdom, I was intrigued to discover that TESCO which is the largest supermarket in the UK stocks Fair Trade Brown Sugar and Tea Bags from Malawi. Another German owned LIDL supermarket also sells this Fair Trade product(sugar). Both sell these products at above normal or prevailing market prices. Companies are involved in selling Fair Trade products not because they necessarily want to make a profit(costs are high) but simply to enhance image.

One of the attributes of Fair Trade is that companies such as TESCO have become so powerful, they promote good Labour practices in producing countries, discourage child labour as was the case with GAP in Thailand and India. However, I wonder if Malawi is benefitting from these Fair Trade practices? I ask this because my dad who has been a smallholder farmer in Nkhota-kota(Dwangwa) for nearly 30 years still lives in abject poverty. He gets peanuts every year and the reason advanced to him and other farmers for this situation is that of poor world prices for sugar. Whilst I do not believe this, and have my own theory I believe in the spirit of professionalism that my blog is not the right forum to address matters of this nature. Fair Trade has become such a political tool to force companies to reform. NIKE manufacturers of the popular brand of sports shoes was accused of exploiting cheap chinese labour paying just above £1 for the productions of a pair of shoes while they sold the same shoe in the UK, USA and many countries including china for over £100 making lots of million pounds in profits. It was until the company was faced with calls by rights groups for people to abandon NIKE products that the company asked their suppliers to improve working conditions. Today, as I write, NIKE enjoys massive publicity by premiership football stars. Matter of fact, Arsenal football club which I support are sponsored in part by NIKE. I dont wear NIKE products for personal reasons, one of which is that I cant afford them but also that substitute products such as AND1 are equally and fashion-wise impressive but cheaper.

There has never been a better time to promote Malawian products to the rest of the world than this. The government should support cotton, bananas, fishing, sugar associations to get Fair Trade accreditation and encourage western supermarkets to invest in the expansion of their supply chain that undercuts unscrupulous middlemen for fair prices. The wholesale liberalisation of the economy just over 10 years ago resulted in some dubious traders conning farmers into selling their produce at below acceptable prices using phoney bags and tampered with scales. For this to work indegeneous companies must adopt good CSR policies, that encourage enterpreneurship from their suppliers by adopting fair prices when buying raw materials. There is no point in encouraging foreign companies to intervene in our mess when we let our own companies make huge profits at the detriment of farmers. Directors motive should not only be profit maximisation- Profit is just one element of measuring an organisation’s success, all other things are equally important.

The economics in the Tobacco industry leaves alot to be desired. Too much politics and a strong cartel aimed at breaking farmers hearts through price fixing. Suffice to say that sales for 2008 as reported in different media outlets at both Lilongwe and Limbe auction flours seem to be putting a smile on farmers faces. I strongly hope that this trend shall continue and that it simply not a political ploy as 2009 general elections draw nearer.

Fair Trade in Malawi’s Sugar, Tobacco, Cotton, etc

Most western organisations thrive on philanthropy. Firstly, because they genuinely believe in giving something back to society. This has brought arguments as to whether company directors are really interested in giving back to society or that the exercise is merely a marketing gimmick.

Well, both arguments hold true. Society benefits when organisations sponsor projects such as recycling to cut the rate of global warming but at the same time, an ethically minded organisation improves its image and therefore attracts new or continued custom. Corporate Social Responsibility(CSR) as is popularly known has become a fundamental concept for most companies, it is a vehicle through which both society and organisations benefits. Most governments are willing to give companies revenue or capital grants for undertaking specific CSR projects.

In Malawi, the National Insurance Company(NICO), National Bank of Malawi and SOBO are some of the organisations setting the tone for good CSR by sponsoring a variety of projects and sports.

During my undergraduate research here in the United Kingdom, I was intrigued to discover that TESCO which is the largest supermarket in the UK stocks Fair Trade Brown Sugar and Tea Bags from Malawi. Another German owned LIDL supermarket also sells this Fair Trade product(sugar). Both sell these products at above normal or prevailing market prices. Companies are involved in selling Fair Trade products not because they necessarily want to make a profit(costs are high) but simply to enhance image.

One of the attributes of Fair Trade is that companies such as TESCO have become so powerful, they promote good Labour practices in producing countries, discourage child labour as was the case with GAP in Thailand and India. However, I wonder if Malawi is benefitting from these Fair Trade practices? I ask this because my dad who has been a smallholder farmer in Nkhota-kota(Dwangwa) for nearly 30 years still lives in abject poverty. He gets peanuts every year and the reason advanced to him and other farmers for this situation is that of poor world prices for sugar. Whilst I do not believe this, and have my own theory I believe in the spirit of professionalism that my blog is not the right forum to address matters of this nature. Fair Trade has become such a political tool to force companies to reform. NIKE manufacturers of the popular brand of sports shoes was accused of exploiting cheap chinese labour paying just above £1 for the productions of a pair of shoes while they sold the same shoe in the UK, USA and many countries including china for over £100 making lots of million pounds in profits. It was until the company was faced with calls by rights groups for people to abandon NIKE products that the company asked their suppliers to improve working conditions. Today, as I write, NIKE enjoys massive publicity by premiership football stars. Matter of fact, Arsenal football club which I support are sponsored in part by NIKE. I dont wear NIKE products for personal reasons, one of which is that I cant afford them but also that substitute products such as AND1 are equally and fashion-wise impressive but cheaper.

There has never been a better time to promote Malawian products to the rest of the world than this. The government should support cotton, bananas, fishing, sugar associations to get Fair Trade accreditation and encourage western supermarkets to invest in the expansion of their supply chain that undercuts unscrupulous middlemen for fair prices. The wholesale liberalisation of the economy just over 10 years ago resulted in some dubious traders conning farmers into selling their produce at below acceptable prices using phoney bags and tampered with scales. For this to work indegeneous companies must adopt good CSR policies, that encourage enterpreneurship from their suppliers by adopting fair prices when buying raw materials. There is no point in encouraging foreign companies to intervene in our mess when we let our own companies make huge profits at the detriment of farmers. Directors motive should not only be profit maximisation- Profit is just one element of measuring an organisation’s success, all other things are equally important.

The economics in the Tobacco industry leaves alot to be desired. Too much politics and a strong cartel aimed at breaking farmers hearts through price fixing. Suffice to say that sales for 2008 as reported in different media outlets at both Lilongwe and Limbe auction flours seem to be putting a smile on farmers faces. I strongly hope that this trend shall continue and that it simply not a political ploy as 2009 general elections draw nearer.

Fair Trade in Malawi’s Sugar, Tobacco, Cotton, etc

Most western organisations thrive on philanthropy. Firstly, because they genuinely believe in giving something back to society. This has brought arguments as to whether company directors are really interested in giving back to society or that the exercise is merely a marketing gimmick.

Well, both arguments hold true. Society benefits when organisations sponsor projects such as recycling to cut the rate of global warming but at the same time, an ethically minded organisation improves its image and therefore attracts new or continued custom. Corporate Social Responsibility(CSR) as is popularly known has become a fundamental concept for most companies, it is a vehicle through which both society and organisations benefits. Most governments are willing to give companies revenue or capital grants for undertaking specific CSR projects.

In Malawi, the National Insurance Company(NICO), National Bank of Malawi and SOBO are some of the organisations setting the tone for good CSR by sponsoring a variety of projects and sports.

During my undergraduate research here in the United Kingdom, I was intrigued to discover that TESCO which is the largest supermarket in the UK stocks Fair Trade Brown Sugar and Tea Bags from Malawi. Another German owned LIDL supermarket also sells this Fair Trade product(sugar). Both sell these products at above normal or prevailing market prices. Companies are involved in selling Fair Trade products not because they necessarily want to make a profit(costs are high) but simply to enhance image.

One of the attributes of Fair Trade is that companies such as TESCO have become so powerful, they promote good Labour practices in producing countries, discourage child labour as was the case with GAP in Thailand and India. However, I wonder if Malawi is benefitting from these Fair Trade practices? I ask this because my dad who has been a smallholder farmer in Nkhota-kota(Dwangwa) for nearly 30 years still lives in abject poverty. He gets peanuts every year and the reason advanced to him and other farmers for this situation is that of poor world prices for sugar. Whilst I do not believe this, and have my own theory I believe in the spirit of professionalism that my blog is not the right forum to address matters of this nature. Fair Trade has become such a political tool to force companies to reform. NIKE manufacturers of the popular brand of sports shoes was accused of exploiting cheap chinese labour paying just above £1 for the productions of a pair of shoes while they sold the same shoe in the UK, USA and many countries including china for over £100 making lots of million pounds in profits. It was until the company was faced with calls by rights groups for people to abandon NIKE products that the company asked their suppliers to improve working conditions. Today, as I write, NIKE enjoys massive publicity by premiership football stars. Matter of fact, Arsenal football club which I support are sponsored in part by NIKE. I dont wear NIKE products for personal reasons, one of which is that I cant afford them but also that substitute products such as AND1 are equally and fashion-wise impressive but cheaper.

There has never been a better time to promote Malawian products to the rest of the world than this. The government should support cotton, bananas, fishing, sugar associations to get Fair Trade accreditation and encourage western supermarkets to invest in the expansion of their supply chain that undercuts unscrupulous middlemen for fair prices. The wholesale liberalisation of the economy just over 10 years ago resulted in some dubious traders conning farmers into selling their produce at below acceptable prices using phoney bags and tampered with scales. For this to work indegeneous companies must adopt good CSR policies, that encourage enterpreneurship from their suppliers by adopting fair prices when buying raw materials. There is no point in encouraging foreign companies to intervene in our mess when we let our own companies make huge profits at the detriment of farmers. Directors motive should not only be profit maximisation- Profit is just one element of measuring an organisation’s success, all other things are equally important.

The economics in the Tobacco industry leaves alot to be desired. Too much politics and a strong cartel aimed at breaking farmers hearts through price fixing. Suffice to say that sales for 2008 as reported in different media outlets at both Lilongwe and Limbe auction flours seem to be putting a smile on farmers faces. I strongly hope that this trend shall continue and that it simply not a political ploy as 2009 general elections draw nearer.

Are Harare and Nairobi setting the African Political pattern?

I hate to think that I may be a prophet of doom. But the elections in Kenya that were marred by seens of violence and intimidation compounded by Mugabe’s Zanu PF reluctance to release results and order an unwarranted recount in 23 parliamentary seats gives me a dozen of reasons to worry. More so because Malawians will be going to polls in or around May 2009. I hate to imagine that my vote will be rendered useless by the corrupt electoral system as is the case in Zimbabwe. The dilemma faced in that country is that the person who won before the recount is not known. We will never know, will we?

History has shown that politics follow a certain pattern/trend in Africa. I do not want to give merit to bad politics that we have witnessed, so I will not highlight examples. However, it is my prayer that all Malawians of goodwill shall condemn any attempt by our political leaders to disintegrate a united country such as our own in order to remain in power or gain positions of influence. A violent country such as Kenya and Zimbabwe retards the development of the Tourism Industry and slows foreign investment.

After so many Arrests, Intimidation, Torture, the worst economy…..and still no elections results, Thabo Mbeki says,"There is no crisis in Zimbabwe"

As a Malawian I am hurt by sweeping statements such as the declaration by Thabo Mbeki that there is “No crisis in Zimbabwe.” It hurts because the economic turmoil in Zimbabwe impacts negatively on Malawi but most importantly, Zimbabweans are like a family member. Our Malawian brothers and sisters settled in Zimbabwe for economic reasons and now consider themselves as Zimbabweans. We have also been at the mercy of some unspeakable dictatorial tendencies under Dr.Kamuzu Banda and no sane person would wish another country to go through the same hurt as we did.

Zimbabwe has gone through the worst economic period in history. The facts are there for everyone to see yet Thabo Mbeki deliberately chooses to wear blindfolds for the sake of personal relationship with Mugabe. As far as Mbeki is concerned nothing exists in his infinite wisdom. First, he denied that HIV/Aids existed, today, South Africa remains one of the highly ravaged nations with the epidemic. His persistent denials refused him the opportunity to institute HIV/Aids preventative programmes. Many children are now opharned and live in care. Second, he denied that crime rate is high in South Africa but the truth is that RSA is the worst country on armed robberies and gun crimes in the southern Africa. Today, he does not seem to appreciate that the situation in Zimbabwe is worth of a crisis.

It does not suprise me that the ANC chose Zuma to stand as a presidential candidate. Not that am a fan of his but I guess he is good for a change than the clown in Mbeki. How many Zimbabweans can the South African government accommodate who are now flooding the country everyday for a better life. Until Mbeki and Mugabe realise that the era of the liberation struggle is long-gone, there shall be unprecedented damage like none we have seen before.

After so many Arrests, Intimidation, Torture, the worst economy…..and still no elections results, Thabo Mbeki says,"There is no crisis in Zimbabwe"

As a Malawian I am hurt by sweeping statements such as the declaration by Thabo Mbeki that there is “No crisis in Zimbabwe.” It hurts because the economic turmoil in Zimbabwe impacts negatively on Malawi but most importantly, Zimbabweans are like a family member. Our Malawian brothers and sisters settled in Zimbabwe for economic reasons and now consider themselves as Zimbabweans. We have also been at the mercy of some unspeakable dictatorial tendencies under Dr.Kamuzu Banda and no sane person would wish another country to go through the same hurt as we did.

Zimbabwe has gone through the worst economic period in history. The facts are there for everyone to see yet Thabo Mbeki deliberately chooses to wear blindfolds for the sake of personal relationship with Mugabe. As far as Mbeki is concerned nothing exists in his infinite wisdom. First, he denied that HIV/Aids existed, today, South Africa remains one of the highly ravaged nations with the epidemic. His persistent denials refused him the opportunity to institute HIV/Aids preventative programmes. Many children are now opharned and live in care. Second, he denied that crime rate is high in South Africa but the truth is that RSA is the worst country on armed robberies and gun crimes in the southern Africa. Today, he does not seem to appreciate that the situation in Zimbabwe is worth of a crisis.

It does not suprise me that the ANC chose Zuma to stand as a presidential candidate. Not that am a fan of his but I guess he is good for a change than the clown in Mbeki. How many Zimbabweans can the South African government accommodate who are now flooding the country everyday for a better life. Until Mbeki and Mugabe realise that the era of the liberation struggle is long-gone, there shall be unprecedented damage like none we have seen before.

The FieldYork Education Scandal-Justice delivered or denied?

I commend the Judge and the councel for the prosecution in a case involving the former Education minister of Education Sam Mpasu. The judge for a well reasoned judgement and the prosecution councel for presenting a plausible and persuassive case leading to the conviction last week of the said person. However, I have problems with the delay with which such a high profile and important case has been handled. The offences were committed in 1994 when the convict was serving as a Minister of Education in theUDF-government. In the first count the court concluded that the prisoner abused his office by concluding an arrangement with Fieldyork international without authority and in disregard of procurement procedures. On the second count it was established that the prisoner arbitrarily directed his Principal Secretary to sign and send a fax to the sameFieldyork. On the third count the court concluded that Mr. Mpasu directed Mr. Safuli (former secretary for education) to send a letter of intent to Fieldyork. Mr Mpasu benefitted from the fieldyork transactions in 14 years ago and facts to that effect immediately became public knowledge.

His suspension was seen as superficial as Mpasu continued to enjoy executive previleges under Bakili Muluzi yet the free primary school suffered as the scheme lacked materials. The ministry was subsequently rocked by numerous corruption scandals including the K187m involvingCassim Chilumpha and Jeff wa Jeffrey. The catalogue of scandals that ensued occured because Mpasu was not punished at the time. Did the prosecution fail to carry out their job? Was Mpasu protected by the UDF government or indeed Mr Muluzi who is alleged to have been complicit to the case? Did Mpasu act alone or as the judge concluded he merely is a sacrificial lamb?

Contrast the handling of Mpasu case with that of Matilda Katopola(the clerk of parliament) who also fraughted procurement procedures by awarding contracts to her own firm(Monik’s Enterprise).Public servants must always put the interest of the public first before their own. Selfishness is a serious disease in Malawi which has made many Malawians in villages suffer because one individual wants everything for themselves. FridayJumbe built sunrise hotel from the alleged proceeds from sale of Maize when he worked as Excutive Director of Admarc. Malawians starved yet as I write, Jumbe is a free man.

One thing for sure is that the conviction of Mpasu will act as a deterent to those that might want to be involved in corrupt practices. Thats comforting for me,but as they say, Justice delayed is justice denied.

Northern Rock Bank and Directors Remuneration

Some things dont just make sense. Northern Rock, a Nationalised financial institution in the United Kingdom has just confirmed that it paid its former Chief Executive Adam Applegarth who resigned amidst claims of taking high risk ventures, a sum of nearly £800,000 as golden handshake, £360,000 as pension top-up and he continues to enjoy cut-price staff mortgage. The Bank also paid its former CEO £5,000 towards personal legal fees and around £7,500 for his personal security at home.

Northern Rock sought government assistance from the Bank of England in September 2007. The Bank made a pre-tax loss of £167.7m in 2007 against profits of £626.7m in 2006(www.ft.com). This followed it writing-off £239.7m in bad debts and another £232.2m from investments linked to the US sub-prime property market which affected the Bank massively for not spreading its investments across many business lines.

Against the background of this mismanagement, it is sad to note that the taxpayers money has gone towards redeeming the troubled bank as well as paying its former directors as a tocken of appreciation for simply mismanaging the bank.

Meanwhile, job-cuts are looming, the bank has also intensified repossessions of properties under mortgage on its books, the exact time during which the bank is to repay the loan of about £25bn owed to tax-payers is very uncertain, the general economy has suffered leading into other banking institutions also asking the government for protection. Tax payers will have to incur alot of costs to lawyers, accountants, consultants and PR companies.

My concern is that terms of employment contract that allow directors to a huge payout following business failure is wrong as is absurd. It is the shareholders who suffer massive losses as these Executives are guaranteed their income for steering companies in hard waters. Its seems just 7 years after the collapse of Enron, most corporate governance regimes including the the self-regulatory UK’s Combine Code has alot of work to be done. The Sarbenes Oxley Act 2002, in the USA does place emphasis on CEO and CFOs responsibility to ensure that their risk management procedures are adequate otherwise they are punished by not paying out their bonuses.

If I were a shareholder of Northern Rock, I would be asking serious questions to the CEO and Finance Director to explain how a pre-tax profit of £626.7m in 2006 became a loss of £167.6m in 2007. Sadly, the former CEO has his career intact and his income unaffected and yet the shareholders have lost everything following the Nationalisation.