Whenever giant international corporations say they are chipping in dollars for development – building schools, clinics or water wells in the Third World – a cloud of skepticism often dims the bright promises.
Either the cash was too small to matter. Or local leaders and their cronies quickly appropriated the benefits. The good intentions of abandoned projects litter the landscape of Asia and Africa, often leaving an empty building with a fading sign from some huge multinational corporation.
Some years ago in West Africa, multibillion-dollar oil extraction companies such as Shell and Chevron touted the fact that they shelled out about $7 million to villages afflicted by oil spills and chronic poverty. But the aid proved fleeting as local governments refused to pass on cash and benefits to the needy.
Now one of the biggest of these corporations, Unilever, has been charged by government agencies in India, South Africa and Kenya with exploiting the very poor people they claim to protect and develop.
South African’s Competition Commission recommended on March 2, 2017 that Unilever be prosecuted for price fixing of baking and cooking products, according to South African media. The prosecution alleges that Unilever participated in anti-competitive business practices in which one firm would produce only bulk margarine and the other would monopolize the small packages for retail shoppers.
The commission conducted search-and-seizure operations at the offices of Sime Darby in Boksburg and at Unilever’s headquarters in Durban.
This is not Unilever’s first brush with anti-graft agencies. In 2011, the European Commission fined Unilever for fixing the price of soap powder in eight European countries.
Monopolistic practices clash with humanitarian statements by Unilever CEO Paul Polman who reportedly said: “as CEO of Unilever, my personal mission is to galvanize our company to be an effective force for good.” He further pledged to “put sustainable practices above shareholder profits” and to provide less developed nations with economic opportunities.
Unilever is a British-Dutch company that is perhaps the world’s largest producer of margarine and many other foods and consumer products. It has been accused by Indian, South African and Kenyan officials, as well as non-governmental advocates for human rights, labor rights and environmental protection such as Greenpeace― of talking big about “sustainable development” while paying attention only to the bottom line. Accusations include:
* Ignoring sexual harassment of Unilever tea workers in Kenya
* Delaying clean up of mercury poisoning in India
* Doubling or tripling royalty fees from partners in India, South Africa and elsewhere.
India’s Business Standard newspaper reported last June that India’s largest fast-moving consumer goods company Hindustan Unilever saw its technical fees almost double in three years.
According to the Business Standard, Unilever had initially charged its Indian local partner low license fees to produce soaps, detergents, deodorants and foods. But after a few years, it vastly increased fees. The resulting impact has shocked India’s fragile economy and led local partners to sharply cut local salaries.
In Pakistan, after Unilever increased royalty fees, workers earning less than $100 per month were fired in 2013, local press reported, and subcontractors were called in to produce Unilever soaps and other products at lower salary levels.
It seems that often labor rights are sacrificed and corporate charity is only skin deep. Front page humanitarianism exists mainly as a branch of public relations.
For example, Paul Polman, CEO of Unilever, stalked the corridors at multinational conferences as a self-proclaimed leader for corporate social responsibility. He called on corporate leaders to “put sustainable practices above shareholder profits” and provide less developed nations with economic opportunities.
The Unilever leader was appointed by the UN Secretary General to promote the UN sustainable goals and was named co-chair of the B-20 Food Security Task Force, a business organization that promotes and defends Western investment in developing countries.
His humanitarian pronouncements, however, are undercut by allegations that Unilever has not treated labor issues with the compassion he voices in multinational fora.
To boost Unilever profits, Polman has leaned harder on developing country producers for cash, mostly in the form of increased royalty fees that local companies pay for the right to manufacture Unilever products.
In India in 2015, the Indian company, Hindustan Unilever, saw its royalty fees increase by more than 100 percent, leading the company to cut salaries. Polman called this “no big deal”.
Perhaps to divert attention from labor, corruption and other negative publicity, Unilever planted over 150,000 trees across South Africa and it pledged to plant one million over the next three years.
But newspapers in Pakistan saw the forest through the trees and reported that Unilever has taken advantage of local partners there, boosting royalty fees leading to replacement of workers earning only $100 a month with replacement workers accepting even less.
Meanwhile, Greenpeace recently blasted Unilever for “failed promises” to stop buying palm oil from producers who chop down Asian forests to grow palm.
All in all, Unilever has a long way to go to match its corporate practices with the human and labor rights it embraces verbally.
Ben Barber is an independent journalist covering foreign affairs and has reported on environment, labor, development and other issues for 30 years.