More from Satemwa

Hello again-- although I am back in the States, I have more to say about Satemwa. I told you in the last post that I would describe the Fair Trade situation in some detail. So:

Satemwa achieved Fair Trade (FT) status about a year ago. It is the only tea plantation in Malawi to have it, though some others are going through the process necessary to get it. The process is quite rigorous; the FT association (FTA) sends an "auditor" to the business in question and spends days or weeks checking whether or not the business meets FT standards. If the business receives FT status, they still get audited regularly.

The auditors check for things like whether or not the laborers receive a "living" wage, whether or not they have access to health facilities, whether their hours are reasonable, and so on.

Satemwa, like many other FT businesses, does not meet every single standard set by the FTA. They are, however, supposed to make measurable, significant progress towards achieving them; otherwise, the FT folks can revoke their status.

One problem for Satemwa is that many of the standards are unreasonable in their situation. For instance, the FTA is telling Satemwa that they must have bathrooms accessible throughout their tea fields for the workers to use. This, however, would cost hundreds of thousands of dollars which Satemwa cannot afford-- although tea used to be a cash crop back in the days of the British East India Company and for many years after that, it is now almost like a commodity-- and Satemwa, being a small producer, has less market power than most other players. In fact, there are estates in India that produce more tea than all of Malawi combined!

Aside from the bathroom requirement, there are other standards that make it difficult for Satemwa to compete. According to Satemwa staff, the reason that so many of these standards do not jive with the Malawian tea business is that the standards were developed in Costa Rica, which, developmentally, is like New York City compared to Malawi, one of the poorest countries on a pretty poor, materially speaking, continent. Ideally, every laborer in the world would have benefits like they do in Scandinavia-- but the world is not yet there, and besides, who wants to pay 10 bucks for a cup of tea? :)

Fair Trade should challenge companies. If it did not, then it would not be improving the lot of laborers. However, FT standards should not be so rigorous that businesses consider abandoning them in order to stay afloat. This would be self-defeating-- although the tea pickers and other laborers at Satemwa have a hard life, they are much better off with their jobs than without, a fact borne out in multiple conversations here.

The solution, according to Mike the VSO volunteer and many Satemwa staff members, is to tailor FT standards to each country individually. They can be rigorous and demanding while at the same time making concessions to a country's stage of development.

In the last post I mentioned that Mike is helping the workers manage the funds they are receiving as a result of their FT status (he and his partner Penny also provided us with housing in the latter half of our stay, relieving us of the beautiful but time-consuming walk to and from the Sports Club). The sums they are receiving are significant, and dwarf those received by Satemwa's management. Most of the workers are illiterate, however, and earn a dollar or two per day. They do not know what to do with all the money pouring into their coffers. Mike is there to help them learn to manage their money for projects like boreholes, micro- and macro-loans, and English classes for workers. Without such guidance, much of the money would likely be funneled into pockets and local shebeens.

It is interesting to note that Satemwa's FT status has benefitted its workers far more than the Management. Yes, the improvement in the workers' quality of life probably improves morale and thus Satemwa's overall efficiency, but this benefit is minor when one considers the effort and money that Satemwa Management funnels into the effort to maintain their FT status.

So why did they decide to get FT status? Although management felt that it was the right thing to do for the workers, ultimately I think they saw that this is one way to escape the commodity trap-- a way for them to escape the vagaries of the market price for tea. Achieving FT status is a way of differentiating their product and making it more appealing to some consumers. The estate is also beginning to sell more specialty teas, enabling them to further differentiate and increase their profit margin.

There are so many interesting issues here, and so many of them touch on the relationship between business and international development. It's hard to focus on any one issue, because they all interconnect and influence each other.

CSR, Fair Trade

The main Satemwa offices are about a five mile walk through hilly tea fields. The overwhelming impression is GREEN.

As you can see, it is quite beautiful-- about 1300 hectares of coffee, tea, lumber, food crops (for the workers) and indigenous forest.

The property has belonged to the Cathcart-Kay family since the 1920s. There are many other tea estates in southern Malawi, and despite the size of the spread, Satemwa is one of the smaller ones.

We've met quite a few interesting people so far. Charles Mware is in charge of the Satemwa health clinic (left), which takes care of employees and their families. There is also a separate clinic for HIV/AIDS testing, counseling and treatment. Charles is by all accounts a very dedicated, hardworking guy. He has a mighty burden to bear: according to UNICEF, the national HIV rate in Malawi is about 12% for 15-49 year-olds (as appalling as this is, it is not high for sub-Saharan Africa-- Botswana is at 24%). This is on top of less headline-grabbing problems such as malaria and cholera. Many women have difficulty in childbirth; many die in the process.

Mike Shaw is a VSO volunteer (VSO is a British organization akin to the Peace Corps) at Satemwa. He is trying to help the workers manage the funds that they have received as a result of Satemwa's having gone Fair Trade. More on this in another post, but the workers (see the picture below of a guy picking tea) generally have no formal education beyond primary school and earn a couple bucks a day, and money management is not their forte. Mike has his work cut out for him.

I originally became interested in Satemwa through some internet research I did for the UN Global Compact on corporate social responsibility (CSR). Using CSR as a framework, I focused on Satemwa's security apparatus, which not only works within the estate's boundaries but also cooperates with the surrounding villages to help them arrest, hold and transport suspected criminals to the police in Thyolo, who have limited means of transport. To the left is a picture of some community leaders holding a book containing records of the security actions taken in their area and with which Satemwa assisted.

Have learned alot in the past couple days. Satemwa provides a number of services for its employees-- health care, housing, security-- but this is nothing exceptional; most tea estates in the area do this. One of the more unique things that Satemwa has done is to conserve a significant amount of indigenous forest, which benefits workers by conserving water, reducing erosion, and encouraging rainfall. Besides benefitting the workers, this conservation is intrinsically valuable-- in additon to being beautiful and peaceful, it contains an unknown number of endemic species. A French team recently discovered a buttefly species in the Satemwa forest that occurs nowhere else. The picture to the left shows one patch of indigenous forest in the background; tea pickers are in the foreground.

What has really piqued my interest though are the issues surrounding Fair Trade. I will get into this in another post, but suffice to say, there are issues surrounding Fair Trade that don't make it onto the backs of those Starbucks sacks of coffee beans describing happy workers holding hands by clear mountain streams...

Arrival at Satemwa Tea and Coffee Estate

After a long trip, we (my girlfriend Ronit and I) arrived at Satemwa. To get here, we took a plane from NYC (JFK, a real joy) to Dubai and on to Johannesburg, South Africa. After spending the night in Joburg we caught a morning flight to Blantyre, Malawi. We spent two nights in Blantyre, at a backpacker's hostel called Doogles.

Doogles is as much a place to stay as it is a place for the locals to come eat food, drink and play pool. We did all three of those activities with some white Zimbabweans, Pete and Rogen. Their farms in Zimbabwe were seized by Robert Mugabe's government and they came to Malawi to start over. For anybody who does not follow African affairs, Mugabe, in an attempt to shore up his political base, seized almost all white-owned land and handed it to his supporters, who for the most part have failed to use these lands productively. Zimbabwe's former economy was highly dependent upon these white-owned farms (tobabcco was a huge industry) and since the land redistribution program started, Zimbabwe's economy has tanked. Inflation is so high that in neigbouring Zambia, curio stalls are selling Zimbabwean bills of 100 trillion dollars (that is not a typo-- I believe a trillion requires 12 zeroes: 100,000,000,000,000), which is worth approximately zero US dollars.

It seems that Mugabe could have found a better way to address the colonial legacy of unequal land distribution.

Anyway, after spending the night listening to Pete and Rogen wax lyrical about the old days under white rule and stories from the Zimbabwean war for independence (guess which side they were on), we went into town to buy supplies for our time at Satemwa. In town, we found huge crowds congregating around a stadium. People were blowing plastic horns and drinking local beer everywhere. Turns out that we had stumbled upon a World Cup qualifying match between Malawi and Burkina Faso. We bought a couple tickets-- 2 dollars a piece-- and entered. See the video (video camera provided by the Kogod Center for Business Communications!):

It was quite a scene, and it was a great introduction to the Malawi.

The next day we boarded a minibus for Thyolo town. The ride took us higher into Malawi's Southern Highlands. The land was very fertile and green; markets were selling all sorts of fruits and vegetables like corn, kale, collards, beets, mangos, and papayas.

Luckily, we happened to see the sign for Satemwa and we asked the minibus to pull over. Since it was getting late, we did not head to Satemwa; instead we walked to the Thyolo Sports Club, where we had arranged to camp. Here is the view from the Sports Club:

The Sports Club has a very colonial feel. Surrounded by a regular Malawian village, it has a swimming pool, tennis and squash courts, even a nine-hole golf course.

Before dinner, Ronit and I went for a walk in the surrounding village. We talked for a while with this man and his family (with alot of hand gesturing to make up for his poor English and our non-existent Chichewa). He and his family, like most families in the area, are subsistence farmers.

On our way back, we happened upon a party. They had set up a stereo-- using batteries for which they had started a collection-- and were playing Congolese music and everybody was dancing and having a good time. Ronit and I sampled the local booze. There were two kinds of alcohol. One was from maize (corn) and had the consistency of watery grits without any salt or butter, but with a bunch of unknown bits of brown stuff. Not the tastiest stuff but it's cheap and after a while it does the job. The other stuff was moonshine-- distilled liquor made from who knows what. This stuff did the trick, and after having enough of the stuff, I ended up dancing (be warned, the following video may be offensive to those of you who have rythmn):

We then returned to the Sports Club, had dinner and hit the sack after a long day.

Preparing to go...

All -
My upcoming trip is to Satemwa Tea and Coffee Estate (satemwa.com) in Thyolo, Malawi. Satemwa places uncommon emphasis on corporate social responsibility. They have health, education, and other programs in place for their employees and their families, as well as a partnership with the local authorities to boost the local security.

I am going in order to ascertain the effectiveness of Satemwa's CSR program. Does it work? Why does Satemwa believe this is worth their investment? If the program is effective, what is Satemwa doing to make it so? What do the employees think of the CSR program?


I am leaving June 4th for Malawi. The flight will take me through Dubai and then Johannesburg, and from there we will take another flight to Blantyre, Malawi. From Blantyre we'll take a Dala-Dala, which is usually a small bus or a minibus, to Thyolo, Malawi, which is where the study will be carried out.


I've included a picture of a typical dala-dala (though I believe this picture is from Kenya, where they are referred to as matatus). They are crazy.


You can see Thyolo on Google Maps here.