Tuesday, May 31, 2011

Tea Farm Looted


The largest tea estate in the southern hemisphere, Magwa Tea outside Lusikisiki in the Eastern Cape, faces ruin after being looted and abandoned by its workers earlier this year.

The 1803 hectare farm had a turnover of R65 million a season and  provided jobs and career training for 1200 permanent and 2300 seasonal workers.

In February, the farm was shut down when workers, the highest paid in the tea industry, went on the rampage after management refused their demand for a 104% increase.

By May, tea plants usually kept pruned to waist height, for ease  of picking were shoulder high and useless.

The plants stretch as far as the eye can see on both sides of the dirt road that winds across the hills from Lusikisiki to Mbotjie on the Wild Coast, in Transkei.

“The crop for the year has been lost,” says Pierre Leppan, a director at the Eastern Cape Development Corporation (ECDC) which has managed the farm for the past seven years.   
“The names of six managers are on a hit list and the ECDC is unable to guarantee their safety. They are having to run the farm on their cellphones.”    

The farm had started thriving in recent years, after decades of plundering, corruption and mismanagement.

A Magwa manager, who declined to be named for fear of his job and his safety, says the trouble started last year, soon after a Farm Workers’ Union (Fawu) official was redeployed to Cape Town and  replaced by two others.

The original union official had understood Magwa, its history, and what was and was not viable, but his successors had not.

“The workers and the management had a harmonious relationship until then,” the manager says.
“The two new officials were confrontational from the start. They misunderstood how Magwa worked. They thought, for example, that the  management were the owners of the farm.”   
The manager said the officials postponed a Magwa workers’ council election to allow seasonal workers to “boot out” most of the permanent workers.

Last year, the new council demanded a 104% wage increase,  even though Fawu had negotiated a 7% nationwide increase  for agricultural workers.

Magwa management told the council it was not authorised to approve the increase, but that the decision was up to the ECDC board and the department of agriculture.

Incensed, the workers cornered managers in their office and assaulted them.

A violent strike, which was later declared illegal,  went on for three months.

“Throughout the strike, the managers had shots fired at them,” the manager says. “Vehicles were stolen and vandalised. Houses were looted and burned.”    

 The strike ended when the department of agriculture offered the Magwa employees a financial package to return to work.

Production was soon back on line, but the mood at Magwa remained  tense.

“Workers were not following management’s instructions, which led  to the suspension of programmes around the farm,” says the manager.

Magwa security manager Daan Schoeman recalls the tension when he  returned to work in July.
“When I went back in July, I could feel that something wasn’t lekker [right],” he says.

In March, workers went on the rampage again. “They destroyed everything in sight. They stole what they could. Fridges, freezers,  ovens and vehicles — everything,” says Schoeman.

The police were called and rubber bullets and tear-gas were fired.

He received a desperate call for help from a manager.

“He said ’Help Daan, they’re killing me’, but I couldn’t do anything. It was impossible to get in.
“They chopped him up with pangas, but he made it out [alive]. One of the security guards, though, was shot dead.

“It was terrible; that day, I started becoming an old man,” he says.

Permanent workers, who lived in houses on the 13 settlements on the farm and refused to take part in the strike, were chased off their properties.

Police spokesman Captain Mduduzi Godlwana confirmed that one person was arrested for murdering the security guard and another 48  for public violence. They are to appear in court soon, he says.

Fawu official Tonga Mbaliese blames the management for the strike.

He says the initial dispute was about the imposition of a 253kg a day tea plucking quota, up from between 180kg and 200kg.

“The target was set unilaterally without employees agreeing with  it. The workers are not the cause of the problems on Magwa. The problems are caused by the style of management,” Mbaliese says.

“There is no transparency at Magwa. Management can’t cry foul and blame everyone when they are the ones who are not working.”    

Surrounding communities, politicians and tribal leaders have all  laid claim to the land in past decades.

The plantation is in the Pondoland magisterial district of Lusikisiki, which falls under the Qawukeni Tribal Authority.

In the 19th century, the land was used to graze cattle, according to University of the Western Cape land and agrarian studies programme lecturer Thembela Kepe.  
In a study titled “Magwa Tea Venture in South Africa: Politics, Land and Economics”, he writes that cattle was herded to the coastal grasslands during the winter months, when upland grazing was limited.

In the 1960s, Johan Mills, the then secretary to the Chief Minister of Transkei, suggested to Paramount Chief Botha Sigcawu that Pondoland needed a commercial venture to provide a local alternative to migrant labour to the sugar cane fields of Natal.

“When people rejected the notion of tea being good for the Mpondos, Sigcawu is said to have intimidated the residents, claiming that the land belonged to his father anyway and implying he could force them to move,” Kepe writes.

The residents retaliated by burning down Sigcawu’s supporters’ houses. Several deaths were reported, including that of Sigcawu’s brother, Chief Vukuyibambe Sigcawu.

Even after the plantation was established, it was beset by problems. Its assets were regularly plundered through corruption that continued into the 1990s.

Another problem was a demand by Fawu that workers receive higher  wages at agricultural schemes.

It was thought that state-run enterprises should set a good example in labour practices. As a result, Magwa workers became some  of the highest paid tea estate workers in southern Africa.
The high wages and poor profitability plunged the farm into financial trouble.

A plan to lay off workers sparked violence in mid-2003 when 15 offices and a boardroom were burnt down.

In 2004, the ECDC, which was brought in as a custodian of the land, appointed a team of specialist tea farm managers to make the farm viable.

It seemed an impossible task.

Magwa was producing just 1.2 million kilogrammes of “made” tea a  season. Exports were at a minimum and the cost of production was “extremely high” at R25 a kilogramme.

However, by 2007, Magwa was achieving its highest-ever production figures, with 2.7 million tonnes of “made” tea a season.

“The department of agriculture would give us R15 million a year,  and we were giving them R65m back,” says the senior employee. “The tea was sold in advance on contract, making in roads into huge markets such as China, Pakistan and the [United Kingdom].”    

This success was despite the infrequent and late arrival of government funds and a monthly wage bill of R3.5m.

Before operations at Magwa shut down, workers were earning five times more than those in Malawi, the farm’s general manager says.

They were also earning bonuses and being taken out of the fields  and mentored.

“We were taking from the bottom and building up skills so that they could take over the running of the farm one day,” says the manager.

“Tea industry skills are in enormous demand around the world, so  many of the Magwa workers were poached, but this was fine. We would  train more. We became something of a university for the tea industry.”    

Now Magwa’s future remains uncertain.

Eastern Cape Rural Development spokesman Ayabulela Ngoqo says a new Magwa board will be appointed on June 30, and will be tasked with finding a solution to the problems.

“The board will be given the prerogative to deal with all administrative matters affecting operations,” he says.

“We won’t have a harvest this year, but our main aim is to get it up and running again.”


The history of the tea estate follows a pattern now becoming apparent: when
the new government came to power in 1994, they moved to rid many old “homeland”
structures of personnel from the old regime. Affirmative action candidates and
political comrades replaced what was an efficient band of people, whatever their
political affiliations. Thus the rot set in. The plantation was already in trouble in 1997
and was liquidated. The state pumped in R10,6 million to get it back on its feet, and in
1998, the workers became co-owners of the estate in a land reform initiative, funded
by South Africa’s taxpayers.

In May 2003, a South African agricultural magazine alerted readers to the fact
that the Eastern Province MEC for Agriculture Max Mamase was budgeting R20
million for a “turnaround strategy” to salvage what once was a successful tea
project.(7) Democratic Alliance agriculture spokesman Athol Trollip declared that
the corporation was ailing and “doomed to financial failure”.
In July 2003, another press report declared that workers on the estate hadn’t
been paid for six months and “years of gross mismanagement” had led to the torching
of the Magwa Estate’s offices by thousands of workers.(8) Fifteen offices, a
boardroom, computers and financial records succumbed to the flames. “The fate of an
entire rural economy is balanced on a knife edge”, said the article. “Workers children
have been pulled out of school to plant vegetables as their parents can no longer make
ends meet.”
The 2 500 ha estate has the potential to produce more than 3,5 million
kilograms of good quality tea per year. Last season, output was budgeted at 2,3
million kilograms, but only 955 000 kilograms were produced. To remain viable, the
operation needed to produce at least 2,4 million kilograms of tea. It is the only tea
estate in South Africa that is not irrigated.
In October 2003, the DA’s Athol Trollip issued a press statement declaring
that certain creditors had foreclosed on Magwa. One of the creditors had already
begun attaching tractors computers and office furniture. The debt dated back to 1998!
Trollip said he and DA MP Stuart Farrow had brought the plight of “this
magnificent tea estate” to the attention of MEC Max Mamase and the Minister of
Agriculture and Land Affairs in September 2002. R20 million was appropriated in
April 2003 to effect a turnaround to save the estate. Seven months had passed and no
management company had been appointed.
“Magwa lies idle as workers are not paid and the estate is now faced with
liquidation, a classic case of ‘too little, too late”.(9) If nothing is done, “Magwa will
follow the path of other failed parastatals” said Trollip. It later transpired that R15
million was owed to the Land Bank and others, and these debts would have almost
swallowed up the R20 million “turnaround” money. Further, Magwa workers had
taken management to the Labour Court over disputes arising out of non-payment of

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