JAUNDICED EYE
It’s one of the unfathomable mysteries of the capitalist universe — the obliviousness of many businesses to self-inflicted reputational damage.
Corporations have an unquenchable appetite for expensive advertising campaigns, marketing schemes and public relations frippery. Their CEOs boast of their green credentials, their TBL (triple-bottom-line) adherence to socially responsible behaviour, their ESG (environmental, social and governance) performance, and their DEI (diversity, equity and inclusion) pledges.
They bob their heads respectfully to LGBTQI+ headcounts and the employment of the physically and mentally disadvantaged. In South Africa, they comply, without venturing a murmur of dissent, with race-based employment regulations that now rival those of the apartheid regime. ___STEADY_PAYWALL___
All these vast amounts of money go to build one of the most fragile things in the commercial world, that great intangible, “brand value”. Then these selfsame CEOs allow their empowered and demographically chosen minions to trash their carefully curated corporate reputations by engaging in acts of unbelievable stupidity and monstrous callousness.
There’s been a rash of these incidents locally. In recent weeks, the standing of some of the country’s biggest business names — Tiger Brands, Dis-Chem and Shoprite Checkers — have taken a thumping in the communities to which they claim so much commitment.
And the weird thing is that they perversely persist. They keep coming back for more, round after round of boxed ears, bloodied noses and black eyes.
Why? These are not once-off incidents where some rogue, low-level employee makes an impulsive or ignorant move that damages the company which those higher in the food chain then scramble to repair. On the contrary, these misguided acts are carried out over long periods of time as part of strategies approved by the top executives.
The most egregious recent example is that of Tiger Brands, an iconic South African company with a once-lustrous name built painstakingly over the course of more than a century. As our biggest food company, now with an international footprint, one would think that it would try to rid itself as quickly as possible of the stench it became enveloped when the National Institute of Communicable Diseases identified its Enterprise Meats factory in Polokwane as the source of the 2017/18 listeriosis outbreak that killed 218 men, women, children and babies.
Not so. It seems there’s nothing more aromatic to executive nostrils than the odour of the raddled polony it sold to the poor. For years Tiger Brands, as well as insurers Stalker Hutchison Admiral and QBE Insurance Group, have been using every conceivable delaying tactic against a class action lawsuit brought on behalf of those harmed by what was basically a lack of workplace hygiene.
On this week’s sixth anniversary of what is the world’s largest and most deadly listeriosis outbreak, the families’ lawyer, Richard Spoor, issued a public appeal to Tiger Brands. In light of what he says is irrefutable evidence which the company has known of since January, it should man up and pay up. Its liability is estimated at R1.5-2.5 billion.
The genetic sequencing evidence leaves “no doubt” that its polony was “the main and likely only” source of the outbreak. Yet, says Spoor, Tiger Brands is “using every legal loophole available” to delay compensating the survivors, including children infected while in the womb and who are now experiencing serious health complications and developmental delays.
The SA Catholic Bishops Conference (SACBC) has also weighed in. “Legal delay equals justice denied not only from big business, not only from insurers, not only from health departments, but also justice denied by a system that allows legal games to be played, games which go well beyond the right of a company or individuals or groups to protect themselves.”
Another corporate behemoth determined to exhaust every avenue of lawfare is Vodacom. Or, more cynically, it’s perhaps playing for time and hoping that the Grim Reaper will resolve the matter in its favour.
For more than two decades Vodacom has been in dispute with Nkosane Makate over the wildly successful Please Call Me free text service for its subscribers who have run out of air time, which he conceptualised while employed by them as a junior accountant. The innovation earned Vodacom massive amounts of money across Africa, where prepaid cell phones are the norm, but Vodacom has used every possible legal stratagem to avoid compensating Makate.
In February, the Supreme Court of Appeal ordered the company to pay Makate 5-7.5% of the revenue generated by the service between 2001 and 2019. This is estimated to be between R205 billion and R1 trillion, potentially entitling Makate to R20 billion. The Vodacom CEO’s final offer to Makate has been R47 million. The matter has now reached the Constitutional Court for the second time, where Vodacom, with its annual revenue of R120 billion, is this time arguing that to pay such a large amount would severely damage its operations.
Tiger Brands and Vodacom can at least claim that their behaviour is justified by the fact that their potential costs are so enormous. Dis-Chem and Shoprite Checkers have no such defence. Their actions are at the lower level of the emotional intelligence scale, somewhere between earthworms and ostriches. So dumb as to defy belief.
Earlier this year pharmaceutical chain Dis-Chem — Better Health Starts Here — fired Refilwe Mantiketsa, who had worked for them for five years as a warehouse stock picker. Her crime was that she had developed cancer that had reached the stage of needing a stoma, an abdominal opening that allows the collection of urine and faeces. This, in turn, meant she could no longer lift and carry heavy items.
Dis-Chem refused to find Mantiketsa a permanent light-duty job, saying this was not feasible because of restructuring. The dispute-resolving CCMA ruled in Dis-Chem’s favour because the redundancy process had been followed to the letter.
Dis-Chem operations director Brian Epstein felt hurt by the public disapproval of the chain’s behaviour. Dis-Chem was “not a heartless organisation”, said Epstein. “It’s very sad … we empathise with her.” However, after nearly two years it had exhausted all options to assist her and “had to unfortunately let her go”.
Readers must judge for themselves the size of Dis-Chem’s heart — We Always Do the Right Thing is its other motto — in setting Refilwe free. It has 327 stores with aR36 billion of revenue in the fiscal year to March 2024.
Dis-Chem is no stranger to controversy. In 2023, it took a hit over a leaked internal memo from the company’s now-retired chair and founder. In it, Ivan Saltzman callously but accurately outlined the crude arithmetic of race classification that inspired him to order an indefinite moratorium on hiring whites.
“It’s the ratio that counts,” he explained to his executives. “When no suitable black candidate is found and a white is appointed, we need several blacks just to maintain the status quo, never mind moving forward.”
Finally, there’s Shoprite Checkers, described this week by a Business Day analyst, enthusing over its R240 billion in revenue in the past financial year, as perhaps “the most iconic company in South Africa”. Earlier this year the retailer fired Godfrey Makaloi, who had worked for them as a baker for 33 years with an unblemished work record.
When the firing was overturned by the CCMA, Shoprite Checkers — “always surprising and delighting our customers”, is the phrase used endlessly by CEO Pieter Engelbrecht in his recent results presentation — appealed to the Labour Court. It’s now, no surprise here, just lost again.
Makaloi’s terrible offence was that he was seen on the security video stirring sugar into a cup during his tea break. This single teaspoonful of sugar, asserted Shoprite Checkers, must have been stolen from the 25kg bag used for baking. This“caused the company shrinkage” and warranted instant dismissal.
Unfortunately for Shoprite Checkers, as both the CCMA and the Labour Court pointed out, there was not an iota of evidence, human or video, to support this conclusion. All the bakery employees received regular supplies of coffee, tea, sugar and powdered milk, which they kept in their personal containers. This personal stash, not the company’s baking stock, was the source of the sweetness to his cuppa, Makaloi explained.
While managerial pettiness and spite have always been rife, this disputed teaspoonful of sugar for the baker must, uh, take the cake. But even more mind-boggling is that Shoprite Checkers executives were willing to tolerate, over many months and publicly reported hearings, a legal vendetta against a poor man who had given them 33 years of loyal service. It is simply disgusting.
The reaction of the SACBC to Tiger Brands’s recalcitrance gets to the nub of it: such legal games go well beyond the right of defence. This applies equally to Dis-Chem and Shoprite Checkers.
Unfortunately, public revulsion doesn’t on its own cut it. Morally reprehensible behaviour by big companies, while they simultaneously claim to be model corporate citizens, will continue until it costs them big time. At present, they are undeterred because consumer disapproval is short-lived and rarely affects revenue significantly.
What is needed is legislative reform to punish harshly the corporate bullies when they abuse judicial processes against vulnerable individuals and groups.
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