Course:CONS370/Projects/Empowerment of Indigenous communities in South Africa through business development of Fairtrade rooibos tea

Rooibos tea blend

The Indigenous Khoi-San peoples and their "mixed-race" descendants in South Africa have a long history of marginalization and have struggled to claim their rights ever since the British settlement in 1861, and throughout apartheid which took place between 1950 and 1991. During this time, the Cape colonists recognized the economic potential of rooibos (Aspalathus linearis), an Indigenous shrub native to the Cederberg region of South Africa that the Khoi-San peoples have consumed for over 300 years. Since the end of apartheid, the "mixed-race" descendants of colonial settlers, slaves, and Khoi-San peoples have slowly increased their involvement in the global rooibos tea industry. Fairtrade was implemented in 2010 in the industry to empower these marginalized farmers, with the help of numerous NGOs who have supported these communities financially and in developing their business capacity. As a result, these historically marginalized communities have achieved access to the international market, have greater income security, and have been able to support local community development. Nevertheless, the communities in Cederberg continue to occupy the lowest income groups in comparison to the higher-earning white-occupied positions in the industry, and the objective of development has been heavily reliant on economic growth over cultural and environmental management. The place-based approach and policies must be implemented to support local entrepreneurship with the help of NGOs and the government.

Keywords: Fairtrade, Rooibos tea, Empowerment, Indigenous Peoples, Marginalized communities, Small-scale farmers, South Africa

Description

Local Khoi and San Peoples

This community case study is located in the Cederberg region of South Africa, and explores empowerment of the descendants of Khoi-San peoples and the development of the Aspalathus linearis shrub, commonly known as rooibos in Fairtrade. The rooibos plant has been historically used by the Khoi-San people native to the arid Western Cape. French heritage is noticeable in the southern Elim communities whereas Dutch names are common in Cederberg. The Khoi-San are evidently the most historically significant in the region, and artworks can be found in many Wuppertal caves in the mountainous region.

African Indigenous language groups, including the Khoi-San

Regional History in Cederberg

In 1861, British colonial authorities settled in the area of Elandskloof, Cederberg. They subsequently formed a Dutch Reformed Mission Church, to convert the local Khoi-San community. Nearly a century later, the national apartheid Party imposed the Group Areas Act of 1950. This act meant that the presence of the Elandsklowers on “white-owned” land, which had been sold to farmers from the church, was illegal and legal actions were implemented on 11 community leaders and their families. This led to over 600 people being forcibly removed from the area, some of whom never returned. In 1991, many communities including the Elandskloof rallied for the return of land they claimed belonged to them and successfully applied to the Supreme Court of South Africa to cancel Deed’s orders under missionary purposes.

Context of Indigeneity in South Africa

The concept of indigeneity is unique in African countries, including South Africa, as there are no clear distinctions between Indigenous and non-Indigenous communities — many argue that all Africans are Indigenous. This has been problematic for Indigenous populations in Africa to have their rights recognized nationally and globally due to challenges with communication amongst policy-makers. However, there have been various movements to fight for the rights of African communities. The African Commission on Human and Peoples’ Rights (ACHPR) have published reports conveying that Indigenous communities in Africa deserve to have their rights recognized with or without a strict definition of Indigenous peoples. Furthermore, the Commission notes that the importance of distinguishing Indigenous groups is not to disregard the commonly held belief that all Africans are Indigenous, but rather to bring attention and identify solutions for the communities that currently face discrimination under nation-states. Practice of Fairtrade is one of the ways in which marginalized and vulnerable communities in Africa take part in empowerment. Under the Fairtrade International standards scheme, all African countries are currently eligible for Fairtrade certification.

Tenure Arrangements

Cederberg Wilderness Area and Town of Elandskloof

Cederberg region in the Western Cape area of South Africa

Our paper is centered around the Cederberg and Clanwilliam mountainous region in South Africa, where the rooibos plant is local to and historically populated by the Khoi-San people.  After the segregationist policies of the apartheid legislation in the 20th century, the majority of land remained in white South Africans’ hands and “Indigenous claims have taken on increasing importance as political rallying points and means of economic survival.” Some progress for the protection of these lands has occurred. In 1973, it was deemed that 66,811 hectares of land was ecologically sensitive so “a large proportion of the Cederberg was proclaimed a wilderness area and was declared a world heritage site in 2004.” The town of Elandskloof, situated south of the Cederberg wilderness area, is issued under the Land Claims Court to the Elandskloof community.

Struggle for Land Reforms and Indigenous Rights

The predominantly unfair distribution of land has lead to associations in South Africa such as the Communal Property Association to allow disadvantaged communities to acquire and manage properties, record their communities' rights legally, as well as ensure that the communal tenures legal infrastructural support is treated in the same manner as individual tenure. Tribal groups throughout the continent are heavily impacted from state withdrawal in agricultural, production and marketing sectors, and struggle to protect agreements and rights for communal grazing and tenure protection. This makes it increasingly important for associations that protect these rights. The Cederberg region’s racially mixed ethnic heritage has resulted in emerging rooibos farmers racial designation to be coloured with remnants of the French and Dutch farmers in the 1800’s. These descendants do not identify as Indigenous or associate themselves with the San and Khoi political structures, despite their geographical and historical relation to them. Small farmers in the area remain unaware of the Access and Benefit Sharing (ABS) regulations created in 2004 that provide numerous benefits. These benefits include managing the sustainable use of Indigenous biological resources, fair trade and equitable sharing among stakeholders, and the protection of Indigenous rights. The hesitation by those living in the region to identify as Indigenous has meant there have been limited attempts for collaborative management agreement, and the majority of land remains under private freehold tenure or protected wilderness areas. There are few rooibos farmers who own their own land and although those living in Wupperthal can rent plots from the church, it is difficult for farmers to find suitable land. There are now efforts being made by the San Council and National Khoisan Council to contact these communities, but so far it has been difficult to do so. Rooibos farmers who do not associate themselves with the Khoi or San peoples may find it unacceptable to be represented by these councils and subsequent benefit sharing agreements.

Administrative Arrangements

Black Economic Empowerment (BEE) and Broad-Based Black Economic Empowerment(BBBEE) Policies

The decades of colonialism and apartheid rule made Black Economic Empowerment (BEE) policies even more urgent. The goal of these policies is to empower the workers of marginalized groups in the previous century. After the implementation of the BEE policies, issues arose in the agricultural industries as they remained highly exploitative. To strengthen the institutional commitment, the government developed more comprehensive standards in the form of the Broad-based Black Economic Empowerment (BBBEE). This legislation sets in place eight codes of good practice for companies to follow, and addresses inequalities in ownership, management, and socioeconomic development of small enterprises. The BBBEE protocols have been integrated into labour standards with the FLO and address racial inequalities in agriculture. BBBEE protocols are not easy to follow, as black ownership must be demonstrated, some speculate that the protocols may place barriers on fair trade growth. Although the BBBEE codes are intended to facilitate commercial growth of the Indigenous sector, they have yet to significantly shift ownership to marginalized groups. In comparison, BEE labor rules have seen some progress and “smallholder BEE entry may help emerging farmers address land tenure concerns that prohibit their ability to secure living incomes.”

The rooibos (Aspalathus linearis) plant, native to the Cederberg mountainous region of South Africa

Rooibos Tea Control Board (RTCB)

Apart from the political BEE and BBBEE policies, other arrangements have affected the regional development, such as the Rooibos Tea Control Board (RTCB), which was founded in 1954. Commercial farmers who have worked in contractual agreements with the RTCB have been the main producers of rooibos tea in the commercial market. In 1993, the body was reconstructed to form what is now the public company, Rooibos Limited. There are also 200 medium sized enterprises that produce Rooibos tea, mainly situated near Clanwilliam, South Africa. The management authority responsible for regulating Rooibos limited along with the entire rooibos tea sector is the South African National Department of Agriculture. This government body supervises the development and implementation of quality standards of rooibos tea exports.

Moravian Church Institution

Perhaps the institution that has affected the rooibos farmers in Cederberg the most is the Moravian Church. Most of the communities are located within church stations, and some leaders have expressed concern that the communities may become divided over church conflicts. For example, the Wupperthal community face crippling transportation costs when going to their remote plots and blame the lack of telecommunications infrastructure and landlines for other issues. A portion of the community blame the church, since it is responsible for managing road and infrastructure investments and collects taxes for those specific purposes.

Affected Stakeholders

Rooibos farm labourers

Small-Scale Rooibos Farmer Communities

The main affected stakeholders whose livelihoods are dependent on the land in and around the Cederberg mountains are the small-scale rooibos farmer communities. These communities comprise of “mixed-race” and “coloured” descendants of the former white colonial settlers, slaves, and Khoi and San peoples. They live on the land through subsistence farming and have been historically marginalized through apartheid, continuing to remain fairly isolated from urban centres in South Africa due to their geographical positioning and less developed road infrastructure. The rooibos farm communities such as in Wupperthal and Heiveld have low household incomes and are highly reliant on the rooibos tea industry. Over 50% of the households in Wupperthal had an annual income less than US$2995, with the rooibos tea industry providing between 55% to 68% of income in producer households. The main objectives of small-scale rooibos farmers are to enhance prosperity in their livelihoods and in their communities through fair accessibility and income generation from the rooibos market, as well as through skill and human capital development. Although they are highly and directly affected by decisions made on the land and in the rooibos industry, these small-scale farmers have relatively very little power and influence. They control approximately 2% of the total planted rooibos area in comparison to the 93% under large-scale white-owned rooibos producers. A major reason for their lack of influence is due to historic marginalization and discrimination first by colonial settlers in the 1800s and then by apartheid policies in the 20th century which have stunted their ability to access land, investments, and to develop human capital - an effect that continues to limit these communities decades after apartheid.

Stakeholders involved in the rooibos industry case-study in South Africa

Stakeholder	Affected or Interested	Main Objectives	Relative Power	How Power is Instituted
Small-scale rooibos farmers	Affected	- Prosperous livelihoods - Capacity building - Equitable access to land, capital, markets	Low	Co-operatives
Fairtrade International	Interested	- Equitable compensation for small-scale producers - Sustainable development	High	- Certification and standards scheme - Global prominence
Conventional rooibos industry producers	Interested	- Profit - Industry growth	High	Dominating market share of industry
Governmental agencies (various)	Interested	- Public welfare - Balancing stakeholder interests	High	- Regulations - Standards - Acts - Granting licenses to operate
Khoi and San organizations	Interested	- Recognition of traditional knowledge contributions - Benefit-sharing	Medium	- National, regional, and international acts - Coalitions
Other NGOs	Interested	- Environmental goals (ie. biodiversity) - Social justice goals (ie. human rights, poverty alleviation)	Medium	- Mobilization of monetary funds and resources

Interested Outside Stakeholders

The main interested stakeholders, those whose livelihoods are not directly tied to the land in the Cederberg area but who are nevertheless linked to the rooibos industry, include Fairtrade International, the conventional rooibos industry, South African and Pan-African governmental agencies, the Khoi and San peoples’ organizations, and non-governmental organizations such as the Environmental Monitoring Group.

Fairtrade International

Fairtrade International certification logo

Fairtrade International is a non-profit standards and certification association founded in 1997, consisting of 3 regional producer networks from Latin America, Africa, and Asia as well as 19 national Fairtrade organizations. Under its constitution, the stated purpose of the association is “the promotion of development co-operation leading to sustainable development by means of improving the position of disadvantaged producers and workers in countries of the developing world”. When producers are certified under the Fairtrade trademark, they receive equitable compensation through Fairtrade Minimum Prices and Fairtrade Premiums for their products, which are then marketed and sold to consumers globally. Fairtrade International holds immense influence in providing support and ally-ship to small-scale rooibos farmers. Being one of the “most globally recognized ethical label[s]”, Fairtrade International in its ideal practice provides a way for otherwise marginalized farmers to access the international market and receive fair compensation for their work, an issue that is difficult to address in the presence of monopolistic and oligopolistic industries.

Conventional Rooibos Industry Producers

Unlike the small-scale “coloured” rooibos farmers, individuals descended from the white colonial settlers in South Africa have enjoyed a century-long development of the rooibos industry, beginning its trade and advertisement in 1904. In 1954, the South African government set up the Rooibos Tea Control Scheme with an all-white board team, acting as the single buyer and exporter from producers and to exporters. This scheme created a monopoly on the rooibos industry and explicitly excluded coloured farmers. After 40 years of holding this monopoly and with the end of apartheid in the 1990s, the Rooibos Tea Control Scheme became a public company, Rooibos Limited. Today, Rooibos Limited continues to hold a dominating share of the market, with 55% shares of South Africa’s herbal tea export market and 90% of the domestic market. The conventional rooibos industry, named “conventional” in this case study to distinguish it from the small-scale, fair trade subsection of the market, is now a R$300 million industry, owned largely by white producers, packagers, and sellers. Like most businesses, their main objectives are profit, business expansion, as well as maintaining their dominant hold on the industry. These large-scale rooibos producers hold a lot of power and influence as they control 93% of the planted area for rooibos, although their power can be limited by governmental regulations and standards.

South African and Pan-African Governmental Agencies

South African and pan-African governmental agencies, although not directly invested in the transactions within the tea industry, create and establish the framework and context within which all of the stakeholders operate. The government’s main objective is to create balance between powers in order to maintain overall public welfare. Therefore, governmental agencies can be allies and provide support to any of the parties, as it deems fair. Governmental power is generally high, depending on the stringency of policies that are implemented - whether it is for example a normative framework or a legally enforced act. The African Commission on Human and Peoples’ Rights, a pan-African judicial body, has provided a framework for conceptualizing Indigenous Peoples in Africa as well as for applying the human-rights case to these collective groups. South Africa’s National Environmental Act in 1998 as well as the signing of the Nagoya Protocol in 2011 have led to the development of a national Biodiversity Act which legitimizes Indigenous rights through explicitly protecting Indigenous biological resources and knowledge.

Khoi and San Peoples Organizations

The Khoi and San are Indigenous peoples that have occupied the southern African region for thousands of years. They lived in the Cederberg region prior to colonial contact, were then enslaved for over 300 years by the Cape colonists, and were further displaced from their traditional lands and discriminated against under the apartheid regime. The current and ongoing goals of the Khoi and San peoples are the recognition of their rights through addressing human rights concerns, acknowledging their traditional knowledge and use of biological resources including those that have been commercialized by colonial descendants, recognition of their traditional languages as official languages, and addressing historical land dispossession. Although many of today’s farmers in the Cederberg region are “mixed-race” descendants that do not necessarily identify with these Indigenous groups, the Khoi and San peoples hold important connections to the rooibos plant which they traditionally consumed from the Cederberg lands for its medicinal and therapeutic properties. Historically, their power has been minimal because of suppression by Cape colonists and apartheid, but through the democratic changes in the 1990s, the assembly of councils and coalitions, as well as governmental recognition of their rights, the influence of the Khoi and San peoples has been increasing.

Non-Governmental Organizations

The goals of non-governmental organizations (NGOs) can often align with the goals of local communities, thus positioning them as a key ally for the small-scale rooibos farmers in the Cederberg area. Such NGOs may be motivated for environmental reasons, such as conserving biodiversity or promoting sustainable development, or for social justice reasons, such as human-rights and poverty alleviation. Though NGOs do not necessarily hold the extent of power such as that of the government, through legally-binding rules, nor like the large industry players through monetary power, they can have a large influence by mobilizing resources such as donor funds and human capital.

Discussion

Intention of Implementation

Fairtrade was implemented in the rooibos tea industry in 2010 to empower marginalized farmers by alleviating poverty and stimulating local economic development through participation in the international market. Initially, the rooibos tea production was managed by the Cape colonists from 1904, using the knowledge of the Khoi-San community. The global interest for rooibos tea sparked when Annique Theron scientifically supported its health benefits in 1968. This simultaneously raised the national interest of rooibos tea in South Africa and NGOs to assist marginalized farmers, including the Heiveld and Wupperthal communities, to become more involved in the industry for the purpose of empowerment.

Involvement of Local Communities

The employment rate of marginalized farming communities have drastically increased through the involvement of the fair trade sector in the rooibos tea industry. In 1998, before the rooibos tea initiative, 80% of the Wupperthal population was unemployed. While only 25 people from the Wupperthal community were involved in the beginning, the number of employees increased to 170 by 2006. Throughout South Africa, there are over 5000 locals involved in the rooibos tea production.

Many relationships were established along this process. Through their participation in the Fairtrade market and Eco-Cert — a certification for ethical environmental and social practices — rooibos tea became recognized globally. This also attracted many NGOs who then supported the involvement of marginalized farmers by funding and coaching of business skills. The national interest of rooibos tea simultaneously developed: rooibos tea is now supplied by core tea brands including Laager, Vital Khoisan Tea, and Freshpak, dominating 30.9% of the South African tea market. The growing interest of rooibos tea at both national and international levels will continue to increase the involvement of local communities.

Economic Growth

Participation in the fair trade of rooibos tea has allowed local communities to secure a stable income. As mentioned previously, the interest in rooibos tea is expanding nationally and internationally. This has resulted in the rooibos tea industry to generate R300 million (US$22.2 million) per year. The profits are often allocated to individual farmers and community projects. In the Heiveld community, 30% of the profit is used for community development, while the remaining 70% is distributed to the farmers. Furthermore, the growing field of rooibos research and discoveries of its health benefits have diversified products using the Indigenous shrub. Not only are they consumed as tea, but they are used as ingredients in nutraceutical and cosmetic goods.

Persistence of Marginalization

While Faitrade has allowed greater involvement of local communities and economic development, there are still disputes over benefit sharing. Cheap labour is predominantly provided by coloured or mixed populations. This is problematic because these communities often heavily rely for their source of income on the rooibos tea industry, yet their work is vulnerable to climate change. Recently, rooibos plantations have experienced severe drought and forest fires from climate change, affecting the quality and quantity of harvest. Farmers are likely to remain marginalized due to the lack of business skills, rights to land, credits to traditional knowledge, and access to external services including finance.

NGOs have been playing a significant role in filling these shortages. In the Wupperthal community, NGOs including Agribusiness in Sustainable Natural African Plant Products (ASNAPP) granted a total of R590,000 (US$26,750), a tractor, a new store, and storage space. ASNAPP also assessed potential products with the application of traditional knowledge and skills for the economic development of organic, fair trade rooibos production. In the Heiveld community, the Environmental Monitoring Group (EMG) led a knowledge exchange program with the rooibos initiative in Wupperthal and coached development in their business management skills. Many NGOs have been supportive at the beginning stages of community involvement, however, Indigenous farmers are mainly employed for cheap labour instead of higher-level positions.

Governance and Power Asymmetries

High Power of Conventional Producers, Low Power of Small-Scale Producers

Within the system of the rooibos tea industry, power is heavily imbalanced. Conventional large-scale rooibos producers, who are often white, exert far more influence on the industry than the groups whose livelihoods are directly linked and dependent on the Cederberg lands and the tea industry. While colonists and their descendants have been developing the rooibos market since the early 1900s, marginalized “coloured” communities have only recently been able to enter the market in the 1990s. The strong influence that governmental agencies and Fairtrade International hold have been essential in attempting to balance the asymmetries in the industry. However because of the perpetuating effects of centuries-long discrimination and marginalization, the small-scale rooibos farmers continue to occupy the lowest income groups while holding the least power in the industry. Because “coloured” farmers were historically prevented from acquiring land, profits, and capital, they were never able to develop the knowledge and human capital to the extent of the white commercial rooibos producers, and thus into the 21st century continue to be limited to positions of cheap labour. To exert some power and influence over their own affairs, small-scale farmers have created co-operatives such as the Wupperthal Original Cooperative, in which they “support each other in capacity development, skills training and marketing their produce under their own brand”.

Importance of Governmental Power

Governmental agencies have the power to legitimize claims by Indigenous peoples, set the normative framework for approaching the issues experienced by Indigenous and marginalized communities, as well as some regulation of the power of the conventional rooibos industry. In 2014, the Department of Environmental Affairs commissioned research on the traditional uses of the rooibos plant after the Khoi and San peoples claimed intellectual rights. The report concluded that there was not enough evidence to reject their claim that knowledge and use of the rooibos plant had originated from the Khoi and San Indigenous peoples, which then led to the government requirement of commercial rooibos producers to negotiate a benefit-sharing agreement. Although the industry resisted, even commissioning its own report which contrarily concluded insufficient evidence of Indigenous use of rooibos as a tea, the South African Rooibos Council eventually negotiated the first ever industry benefit-sharing agreement in 2019 with the South African San Council and National Khoi-San Council, out of fear of losing their licenses to operate. In this way, governmental policies such as the Access and Benefit-Sharing Regulations as well as the provision of licenses to operate, can incentivize preferred behaviour and regulate the power of oligopolies like in the rooibos industry. Unlike many other cases regarding Indigenous rights and the state government, it is important to note that in this specific case, the onus was on the government to prove Indigenous peoples’ claims to traditional knowledge and use of resources.

Strategic Self-Empowerment of Khoi and San Peoples

Despite having their power suppressed in the past, the Khoi and San peoples have strategically developed stronger power and influence through creating organized Councils and coalitions with each other to “realize shared traditional knowledge and intellectual property rights”. Their power is further strengthened through the utilization of inter-governmental and national acts, such as the Biodiversity Act, which legitimize their claims to rights. However, although their efforts have helped support the farmers through providing a portion of the benefit-sharing agreement, the farmer communities do not necessarily identify with the Khoi and San’s contemporary identities and political structures. Thus, their goals can differ and power for the Khoi and San peoples does not necessarily translate into power for the local farmer communities.

Critical Role of NGOs

As discussed previously, non-governmental organizations have played a critical role in empowering marginalized small-scale farmers in the Cederberg region. In the Wupperthal and Heiveld communities, NGOs were the single most important player in helping economically-marginalized and geographically isolated communities access the global market in rooibos tea. Specifically, the organizations helped the farmers access the market through an alternative route: fair trade certified products, which would help ensure a niche for them in the market as well as equitable compensation. Although NGOs do not have the enforcing powers of government, they are able to collect and mobilize resources such as money and human capital to empower disadvantaged communities.

By becoming one of the “most recognized ethical label[s]” globally, Fairtrade International is able to exert significant influence in disrupting the conventional global food and commodity market. As identified earlier, fair trade certification organizations position themselves as supporters of small-scale farmers through ensuring compensation that ideally allows an adequate quality of life, as well as for local community development. Certification organizations like Fairtrade International empower the marginalized communities in Cederberg by providing an entryway into oligopolistic markets like the rooibos industry, where the capacity and competitiveness of a few large-scale producers are a huge barrier to entry for small-scale producers.

Recommendations

A common issue with community forest projects is that there are often trade-offs for development, between the economic aspect and the cultural or environmental aspect. Organizations involved with the intention of assisting development often apply their definition of development, which is economic growth. However, this frequently causes cultural and environmental degradation. Economic benefits have been serving as the major driver of motivation to farmers. Greater portion of profits are allocated for the purpose of expanding their business. Insufficient motivation for community projects and environmental sustainability threatens traditions and biodiversity of native species. This issue arises from the lack of understanding of the environmental objectives of the Fairtrade system in comparison to the economic objectives. The Fairtrade certifications also require high input costs, which motivates farmers to make as much profit as possible to ensure that there will be returns to this extra cost. Values and motivation behind these factors are expected to diverge more with greater profit generated from their business. In order to overcome this issue, the Fairtrade scheme should revise to incorporate and provide better explanations of the motivations behind community development and environmental sustainability when introducing the certifications to farmers. Furthermore, studies have shown that female farmers and young farmers are more socially and environmentally motivated to adopt Fairtrade certificates than male farmers and old farmers. Therefore, female and youth involvement can encourage Fairtrade and sustainable agricultural practices. More importantly, governments and organizations should collaborate with the Indigenous community and recognize what the community’s objective of development is.

As mentioned in previous sections, marginalization of farmers persists. Most of the cheap labour is provided by coloured or mixed populations, whom lack access to resources and skills in order to access higher-earning jobs such as the managerial and business-oriented positions. NGOs and governments should intervene to boost human capital in these communities so that they may continue to diversify their income in light of climate change, as well as continue to improve their livelihoods.

The best solution for both of these issues is the place-based approach, which is critical in empowering Indigenous communities. Community-led Indigenous businesses allow greater security of income and help to achieve their objective of development. Policies which support Indigenous entrepreneurship must be developed, which will improve the allocation of credit and stimulate empowerment. Collaboration with the government will also help to increase access to financial resources, opportunity to improve business skills, and participation in the policy decision-making processes.