Share­hold­ers join the boy­cott against Woolies

The Star Early Edition - - BUSINESS REPORT - Nom­pumelelo Mag­waza

BOY­COTT, Di­vest­ment and Sanc­tions (BDS) South Africa ratch­eted up its fight against Wool­worths yes­ter­day, rop­ing into the fray peo­ple it de­scribed as share­hold­ers to press its de­mands for a to­tal ban on Is­raeli im­ported prod­ucts.

Even though the cam­paign presents the high-end re­tailer with a pub­lic re­la­tions chal­lenge, its shares and trad­ing have been un­af­fected by the ac­tion dat­ing back to Au­gust. The cam­paign is lever­ag­ing so­cial me­dia plat­forms like Twit­ter to spread its mes­sage and or­gan­ise store protests.

Yes­ter­day BDS con­vened a press con­fer­ence in Jo­han­nes­burg, at which share­holder rep­re­sen­ta­tives ques­tioned why Wool­worths had made no at­tempt to meet with the group to un­der­stand its griev­ances.

Last week, Wool­worths ap­plied for a court in­ter­dict to bar BDS from protest­ing inside its stores as that put its staff and cus­tomers at risk.

But ac­cord­ing to BDS, “the man­age­ment of Wool­worths has re­fused to meet so that this is­sue can be re­solved”.

BDS is de­mand­ing a face-to­face meet­ing with Wool­worths man­age­ment.

“The real is­sue is not the num­ber of Is­raeli prod­ucts on the shelves of Wool­worths, but rather the ex­is­tence of con­tracts be­tween Wool­worths and Is­raeli busi­nesses,” Marthie Momberg, a Stel­len­bosch-based au­thor and writer who also owns shares in Wool­worths, said. “Is­rael is well known for its con­tin­ued, sys­temic vi­o­la­tions of hu­man rights in the oc­cu­pied Pales­tinian ter­ri­to­ries (Gaza, the West Bank and East Jerusalem).”

BDS said it planned a mass protest at Wool­worths’ an­nual gen­eral meet­ing on Novem­ber 26 in Cape Town.

Pa­trick Craven, a spokesman for Cosatu, which has thrown its weight be­hind BDS, said “var­i­ous af­fil­i­ates of Cosatu have be­gan a dis­cus­sion within the fed­er­a­tion re­gard­ing the Pub­lic In­vest­ment Cor­po­ra­tion’s shares in Wool­worths. Var­i­ous unions have work­ers that con­trib­ute to the PIC via the Gov­ern­ment Em­ploy­ers Pen­sion Fund (GEPF).”

Ac­cord­ing to a note on the BDS Twit­ter page the protest would take place from the city’s Grand Pa­rade precinct to the re­tailer’s head­quar­ters on Long­mar­ket Street.

In its re­sponse to the lat­est de­vel­op­ments, Wool­worths said: “We have no po­lit­i­cal af­fil­i­a­tions. We fully com­ply with the South African gov­ern­ment guide­lines on prod­ucts from Is­rael and the Mid­dle East.

“Wool­worths ab­hors vi­o­lence and loss of life, par­tic­u­larly of chil­dren, in any cir­cum­stance and we are deeply sad­dened by the tragic con­se­quences of the on­go­ing con­flict in Gaza,” the re­tailer added.

It said all of its prod­ucts, in­clud­ing the three prod­ucts it cur­rently sourced from Is­rael – pret­zels, figs and pomegranates – were clearly la­belled for cus­tomer choice.

“None of our prod­ucts are sourced from oc­cu­pied ter­ri­to­ries, nor do any of our sup­pli­ers have op­er­a­tions in the oc­cu­pied ter­ri­to­ries.”

Wool­worths made no men­tion of any plan for the re­tailer to meet with BDS. “We re­ceive reg­u­lar cor­re­spon­dence from the BDS, we have re­sponded to all of their ques­tions and ex­plained our ap­proach to in­ter­na­tional sourc­ing.”

The shares of Wool­worths were lit­tle-changed yes­ter­day fol­low­ing the BDS brief­ing. Wool­worths share price ended 0.1 per­cent lower at R81.52.

Eq­uity an­a­lysts de­scribed the rop­ing in of share­hold­ers into the BDS cam­paign as a to­tal sur­prise, but added that the im­pact of the boy­cott could only af­fect the share price if store trad­ing was dis­rupted.

Chris Gil­mour, an eq­uity an­a­lyst at Absa In­vest­ments, said Wool­worths was prob­a­bly be­ing tar­geted be­cause of its business re­la­tion­ship with Marks & Spencer, which has for decades been at­tacked by an­tiIs­raeli groups.

At one point in time, the two re­tail­ers had cross hold­ings. “They ex­change man­age­ment ideas and talk to each other on reg­u­lar ba­sis and the whole con­cept of Wool­worths is iden­ti­cal to Marks & Spencer,” Gil­mour said.

AGROUP of se­nior black busi­ness­men who hold shares in Wool­worths have in­structed me to rep­re­sent them here to­day as well as at the up­com­ing an­nual gen­eral meet­ing, where I will make the views of th­ese share­hold­ers known.

The group of busi­ness­men that own shares in Wool­worths have made it clear that they are con­cerned about the in­creas­ingly ir­re­spon­si­ble man­ner in which the man­age­ment of Wool­worths is han­dling the #Boy­cottWool­worths cam­paign.

The busi­ness­men are of the view that, firstly, the man­age­ment of Wool­worths should have met with the ac­tivists ad­vanc­ing this cam­paign – re­gard­less of wether the company agrees with the ac­tivists or not. Meet­ing and try­ing to re­solve this is­sue should have been the first step.

Go­ing to court to re­solve this is­sue should only have been the last op­tion pur­sued by Wool­worths.

That to date Wool­worths has de­clined a face-to-face meet­ing with BDS South Africa and other hu­man rights groups goes against good gov­er­nance prin­ci­ples.

For so­ci­ety, cor­po­rates are ar­guably one of so­ci­ety’s most po­tent change agents for a sus­tain­able world. The eco­nomic re­al­ity to­day is that the drive to­wards a safer, cleaner, health­ier and thriv­ing so­ci­ety lies not only with pol­i­cy­mak­ers, but with cor­po­rates too, as they in­flu­ence pol­icy, at­ti­tudes and be­hav­iour through their op­er­a­tions and business philoso­phies.

Wool­worths cer­tainly fits the mold not just in South Africa but in a global con­text of a company want­ing to be a so­cially re­spon­si­ble company. This was acutely pointed out by the group’s chief ex­ec­u­tive and chair­man’s state­ment in the Wool­worths’ 2014 Good Business Jour­ney. Here is an ex­cerpt: “Our cus­tomer re­search around our cam­paigns and ini­tia­tives as well as track­ing stud­ies, show an ever grow­ing aware­ness of the [Wool­worths] Good Business Jour­ney… cus­tomers in­ter­act with us in­creas­ingly through so­cial me­dia chan­nels, and are a key source of fresh ideas and pri­or­i­ties for the business… We see th­ese in­ter­ac­tions as op­por­tu­ni­ties to im­prove our business, to bring in­no­va­tion and to bet­ter un­der­stand what is im­por­tant to our cus­tomers.”

UN sig­na­tory

Last year Wool­worths was ranked first in the RepTrak Rep­u­ta­tion In­dex survey of South African com­pa­nies. It was also rated in the top three of the Sun­day Times Top 100 com­pa­nies for 2013 and was in­cluded in the JSE So­cially Re­spon­si­ble In­vest­ment in­dex for 2013/14.

It must there­fore come as a sur­prise that Wool­worths now faces the prospect of on­go­ing boy­cotts and protests.

Why is Wool­worths seem­ingly be­ing sin­gled out? The most ob­vi­ous rea­son is that Wool­worths has com­mit­ted it­self and its prac­tices to cer­tain val­ues, for which it en­joys in­cred­i­ble support. For ex­am­ple, Wool­worths is a sig­na­tory to the UN Global Com­pact (UNGC). Ac­cord­ing to the UNGC, it is the world’s largest cor­po­rate cit­i­zen­ship and sus­tain­abil­ity ini­tia­tive.

The UNGC asks com­pa­nies to embrace, support and en­act, within their sphere of in­flu­ence, a set of core val­ues in the ar­eas of hu­man rights, labour stan­dards, the en­vi­ron­ment and anti-cor­rup­tion.

BDS South Africa and oth­ers con­tend that Wool­worths is flout­ing the first prin­ci­ple by trad­ing with Is­rael – par­tic­u­larly with com­pa­nies that may have in­volve­ment, trade or some other deal­ing with Is­raeli set­tle­ment firms. By re­fus­ing to en­gage in pub­lic dis­course over the Is­rael trade is­sue, Wool­worths is not only po­ten­tially un­der­min­ing its com­mit­ment to the UNGC, but invit­ing ques­tions about all its other com­mit­ments and so­cial obli­ga­tions.

It is not dif­fi­cult for com­pa­nies to support univer­sal causes like pro­mot­ing ed­u­ca­tion, healthy eat­ing or ad­dress­ing poverty. But a company that claims to be the bas­tion for cor­po­rate gov­er­nance and cor­po­rate cit­i­zen­ship, we be­lieve, can­not sim­ply put its head in the sand when faced with com­plex is­sues.

Bal­anc­ing the ex­pec­ta­tions (and some­times com­pet­ing ob­jec­tives) is ar­guably the most crit­i­cal chal­lenge a company’s lead­er­ship faces. From Wool­worths’ per­spec­tive, the an­swer is sim­ple: ei­ther make a con­certed ef­fort to up­hold the prin­ci­ples it prom­ises to up­hold, or openly move away from those prin­ci­ples.

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