Shareholders join the boycott against Woolies
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.