What Big Sugar Can Do to Help the Poor

Commentaries on economics and technology.
Nov. 24 2013 7:00 AM

The Trouble With Big Sugar

Sugar refineries trample the rights of the poor. A few organizations are trying to change things.

A sugar farmer in the Phillipines.
A sugar farmer in the Phillipines.

Photo by Romeo Gacad/AFP/Getty Images

Sugar is sweet, but the ethics of its production are anything but appealing. “Sugar Rush” a recent report released by Oxfam International as part of its “Behind the Brands” campaign, has shown that our use of sugar implicates us in land grabs that violate the rights of some of the world’s poorest communities. Better-informed and more ethical consumers could change this.

We are genetically programmed to like sweet things, and when people become more affluent, they consume more sugar. The resulting increase in sugar prices has led producers to seek more land on which to grow sugar cane.

It is no surprise that the poor lose when their interests conflict with those of the rich and powerful. The Oxfam report provides several examples of producers who have acquired land without the consent of the people who live on it, turning farmers into landless laborers. Here is one.

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In the northeastern Brazilian state of Pernambuco, a group of fishing families had lived since 1914 on islands in the Sirinhaém River estuary. In 1998, the Usina Trapiche sugar refinery petitioned the state to take over the land. The islanders say that the refinery then followed up its petition by destroying their homes and small farms—and threatening further violence to those who did not leave.

As recently as last year, the fishing families say, employees of the refinery burned down homes that had been rebuilt. Trapiche moved the families to a nearby town, where they gained access to electricity, water, sanitation, and schooling, but if they want to continue to fish, they have to travel a long distance. Many of them are still seeking to return to the islands.

Both Coca-Cola and PepsiCo use Usina Trapiche sugar in their products. Does that make them responsible for the wrongs done to the people whose land Trapiche is using to produce that sugar? In the 1990s, Nike tried to wash its hands of responsibility for the use of child labor and other unconscionable labor practices in the factories that produced its sneakers. That did not go down well with its customers, and in the end Nike decided to do the right thing, inspecting factories, tackling problems, and being transparent about its suppliers. 

Likewise, McDonald’s initial response to criticism of its suppliers’ animal-welfare practices was to sue the activists who made the allegations. The company expected that its critics would give up. But when two of them, with nothing to lose, defended themselves in court, the result was the longest libel trial in British legal history—and a public-relations disaster for the corporate giant.

After the judge held that some of the activists’ claims were not defamatory, because they were true, McDonald’s began to accept responsibility for its suppliers’ practices. It has since become a much-needed force for improvement in the treatment of animals used for food in the United States.

More recently, the collapse of the Rana Plaza garment factory in Bangladesh earlier this year, which killed more than 1,000 people, posed a similar question for the garment industry. Associated British Foods, which is both a major sugar producer and the owner of the retail clothing chain Primark, took responsibility for its suppliers by signing up, along with 80 other clothing brands, to a legally binding building-safety agreement supported by trade unions and the Bangladeshi government.

What applies to the clothing industry should hold for the food industry, too—and not just for sugar, but for all food production. Oxfam is asking the 10 biggest food brands to show leadership by acknowledging their responsibility for land-rights violations involving their suppliers.

In particular, Oxfam wants these global companies to avoid buying from suppliers that have acquired land from small-scale food producers without these producers’ free, prior, and informed consent. Where land has already been acquired without such consent, and the acquisition is in dispute, Oxfam wants the corporations to insist on fair dispute-resolution procedures.

“Behind the Brands” includes a score sheet, ranking the Big 10 on a range of issues, including their impact on workers, water, land, women, and climate change. On land issues, Oxfam rates PepsiCo, and ABF either “poor” or “very poor.” Nestlé scores better, because its guidelines for suppliers—used for the sourcing of sugar, soy, palm oil, and other commodities—require that they obtain the free, prior, and informed consent of indigenous and local communities before acquiring land.

Nestlé was the first of the Big 10 to support this principle fully. Then, on Nov. 7, Coca-Cola responded to the Oxfam campaign by declaring that it would have “zero tolerance” for land grabbing by its suppliers and bottlers. Coca-Cola committed to disclosing the companies that supply it with sugar cane, soy, and palm oil, so that social, environmental, and human rights assessments can be conducted; it will also engage with Usina Trapiche regarding the conflict with the fishing families of the Sirinhaém River estuary.

Oxfam’s advocacy is raising the standards for the global food industry. If PepsiCo and ABF want us to regard them as ethical producers, they need to follow the lead of Nestlé and now Coca-Cola, and accept responsibility for their suppliers’ conduct toward some of the world’s poorest and most powerless people.

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