Assessment on human rights in Senegal Summary Report

Transcription

1 Assessment on human rights in Senegal Summary Report Purpose As part of Arla s commitment to respecting human rights, as outlined in the UN Guiding Principles for Business and Human Rights and to our Human Rights Policy, Arla is committed to assessing our human rights impacts prior to market entrance. Due to concerns raised by NGO s and increased awareness among government bodies towards Arla s potential negative impact on local diary farmers human rights 1, we decided to further investigate and understand how our sales the of milk powder potentially effects the local dairy farmers in Nigeria and if there are possible human rights issues related this. Furthermore, we want to understand which mitigation measures can be taken to contribute to the development of a sustainable dairy sector in the country and identify Arla s potential role in these. The purpose of this Summary Report is therefore to map and understand the local dairy production in Senegal and to identify whether any action by Arla Foods and/or its business causes, contributes or is linked to a deterioration of working opportunities; working conditions; and adequate living standards for local populations that depend on the raw milk production, processing, distribution, and marketing and sales of dairy products milk powder. It provides an overview of human rights related observations during our field trip to Senegal in August Conclusion Arla has established a joint venture company with the Attieh Group in Senegal under the name of Arla Senegal S.A. The joint venture will handle packaging, marketing, sales and distribution of Arla products in Senegal, and is expected to be operational before the end of this year. Our findings indicate that Arla Foods, in its first stage of establishing a repackaging unit and an extended distribution network may only have a very limited direct impact on the local dairy farmers rights to adequate living, job, education and health. Arla s repackaging unit will be located in the city of Dakar and Arla s products are mainly targeted at urban consumers, through a distribution network of supermarkets geared to satisfy consumer needs of the increasing middleclass in the big cities of Senegal. As long as local milk production is still weak, seasonal and irregular, it is still difficult to build a business model exclusively based on local sourcing or even to substitute import of milk powder with locally produced raw milk at a commercial scale. Arla s repackaging unit provides regular and high quality products to the domestic dairy industry as well as selling milk powder directly to consumers mainly in the urban and semi-urban areas where locally produced fresh milk is not available. The current predicament is that the Senegalese dairy sector is dependent on imported milk powder to develop. The majority of the milk is harvested in the Northern regions of Senegal. However the dairy map is becoming more and more diversified and is covering more regions 2. It is mainly consumed domestically or sold at the nearby open market since the infrastructure in the dairy value chain suffers from lack of roads, lack of cold chains, transportation and thereby only to a limited extent reach the urban markets. 1 ActionAid (2011) 2 Data provided by Serena Ferrari, phd, working with CIRAD and ISRA

2 According to our observations, structural, socio-economic, cultural and barriers related to climate, are currently a larger constraint to the development of a self-sufficient domestic dairy sector than the import of milk powder. However, as Arla s business expands and the Senegalese dairy sector develops, it is essential for Arla to monitor closely its future potential involvement in market distortion, which might lead to a negative impact of local farmers right to adequate living standards and related rights such as the right to health, housing, education and work. Even though it is beyond the scope of this survey, it should be mentioned that Arla s positive impact on human rights currently relates to our introduction of high quality standards of food safety and increasing access to nutritious products at an affordable price with contributes to the improvement of health and food security amongst low income groups in Senegal. In addition, we contribute with job creation at our repackaging unit (22 people are currently set for employment), in the retail sector and in the dairy industry that uses our milk powder. At a later stage of sales and distribution, these small sachets from Arla will be available at semi-urban open markets. Detailed findings The Human Rights situation in Senegal Senegal is a semi-presidential republic and is one of the quickly developing countries in West Africa with a population of around 14 million people. Even though it is still placed relatively high on the Human Rights Index, there have been some major steps taken towards improvements and achieving internal stability. Senegal has been held up as one of Africa's model democracies. It has an established multiparty system and a tradition of civilian rule. Although poverty is widespread with an estimated MPI: Population living below $1.25 per day at 29.61% 3, a Health Index at , and unemployment rate at 48% 5, the country has one of the region's more stable economies. 6 Dairy has so far not been put to the forefront of the agricultural development agenda, despite its potential to play a significant role in terms of national income, employment and food security. Even with the importance of dairy to national economy, the local dairy production in Senegal is characterized by low capacity and faces major structural, socio-economic and environmental constraints. It is estimated that the rainfall in West Africa has decreased by about 25% over the last fifty years which has had serious consequences for the access to areas with sufficient fodder 7. The model of raw milk production is mainly based on pastoralism and has not been intensified in line with the rapid urban development. The result has been increasingly diminishing natural resources and an increase in disputes in regards to the right to land. As the most vulnerable group within local dairy production are the small scale Fulani pastoralist in the Northern region, covering a large area to the border of Mauretania who suffer from food insecurity, inadequate living standards, lack of access to water, to education and to job, and are entirely dependent on cattle breeding and milk production. Raw milk production in Senegal 3 Human Development Index: 4 Human Development Index: 5 CIA World Factbook, unless otherwise noted:

3 Senegal is facing a huge increase in demands for dairy products generated by demographic growth and an increasing consumer class. Senegal is the largest dairy importer in UEMOA (West African Economic and Monetary Union) and after rice, milk is the second largest food import. Powdered milk represents some 90% of imported dairy products since it is the basic raw material for the dairy industry, used for conditioning by even local companies. However, the gap between production and import has declined since Domestic production grew 42.5 % while import only grew 5,4 % (CFSI) 8. In Senegal, over 30% of the population is engaged in cattle breeding according to FAO statistics 9. The abundance of cattle however, has not resulted in the development of a sustainable meat or dairy sector. According to official statistics by the Institute of Research to the Ministry of Agriculture (ISRA) 70% 10 of the milk in the market is imported. To a large extent the sector is based on conditioning of imported milk powder or its direct sales, even by small and medium-sized local companies. The Fulani tribe, also known in Senegal as pulaar is the ethnic group that is predominantly involved in cattle breeding, and hence milk production, and is characterised with pastoralist or nomadic way of life. This places it as a vulnerable group in regards to human rights, with a special focus being put on the women, who in traditional terms are responsible for the milk and the profits from its sales which in general may account to up to 60% of the household income. A certain portion of the milk and the secondary products is left within the household for direct consumption and improved nutrition within the family 11. Disappointed over the lack of successful governmental interventions to improve their basic human rights, the Fulanis are raising their voices through organisations like the Bilital Maroobe Network (RBM) and ActionAid to advocate for more efficient political interventions measures. 12 Senegal has three main systems of producing milk: pure extensive, the second is agro-pastoral and the third is the intensive system. 13 The extensive system is used in the northern part of the country, which is a predominantly dry region and therefore provides further constraints. The agro-pastoral system is used in the middle and southern parts of Senegal and involves breeders and farmers, some of which are from other ethnic groups than the pulaar. According to the FAO, the aforementioned are involved in cattle breeding and in the dairy sector as they see the potential in terms of revenue and employment. The intensive system is used in the western part of the country, where they have herds of cross bread cows. More than 80% of the actors in the western part of the country are located in the areas of Dakar. The dairy sector in Senegal faces a lot of structural barriers to its development. In terms of quality control and food security, the results of this assessment show relatively low standards. Small scale farmers do not have the capacity, technology or the resources to satisfy high health and safety requirements. Issues related to the right to land also have an impact on the raw milk production. The pastoralist model, although embedded in the traditions and cultures, does not allow for large-scale development with the current political landscape. Conflicts regarding grazing areas also arise, especially in the dry season when the herds move southwards. These differ in nature- on the one hand farmers involved in crop growing raise complaints regarding pastoralist entering and hampering their production. On the other hand, cattle breeders find the continuously limiting open areas for grazing to be an increasingly serious concern. 14 After meeting with a local farmer, part of the semi-intensive scale, working with crossbred ; 10 Shared during a meeting with Djiby DIA, Director, and Astou DIO, Sociologist, ISRA, 11 Meeting with Fulani women, ADENA 12 Meetings with Fulani women, RBM 13 According to ISRA- Research Institute to the Ministry of Agriculture, Senegal 14 Aliou SamBa, Director of RBM

4 cows, who has settled, we could observe an improvement of living standards, employment and revenue 15. One of the biggest constraints is the fact that raw milk production is season-dependent. The long dry season, which often results in having ml of rain water per year, affects the access to water, forage and hence, the quantities of milk produced: The milk yield from a cow in Senegal can give up to 3-5l through two milkings per day during the rainy season if it is fed well. But during the dry season, this quantity can drop to as low as 500 ml/day. 16 Furthermore, production is highly localized, including dependent on the herds movements, and the inadequacy of sufficient infrastructure, not only in terms of roads, but a cold chain and means of transportation and preservation of the dairy products, make market accessibility difficult. During our field study, we followed the local value chain from production of raw milk to market and it seems that at this the moment, imported powdered milk and local produced raw milk represent two separate value chains geographically and product-vice. It should be considered, though, whether Arla s business model based entirely on import of milk power is a hinder for the Senegalese dairy sector to develop since it might reduce the incentive for the national dairy industry to source locally. According to market surveys and interviews with local dairy business it seems almost impossible to base industrial or semi-industrial dairy production on locally produced fresh milk which is more expensive, of lower quality and irregular in quantities delivered. The infrastructure in terms of cooling systems, cold chains and milk collection centres are extremely limited and has to be developed before local sourcing is a realistic commercial option. The most exemplary support for this argument is the experience of the company Laiterie du Berger. The Senegalese owned dairy company that works in partnership with Danone is still reliant on external funding to support the sustainable local sourcing platform. According to the company s CEO, a re-structuring of the operational model was necessary from pure local sourcing to a mix of imported milk powder and local fresh milk in order to make a business case. This is in fact a strategy incorporated by a large number of local small dairies that due to the local dairy market situation have to use imported milk powder in their dairy production. This is the instance, where we could observe a potential negative impact of milk powder importing and the pressure it may potentially put on this subdivision. Even though this segment of the dairy sector is not the focus of the assessment, as it is not estimated as the most vulnerable group, we will continue monitoring the situation and take measures, if necessary, in accordance with our mitigation planning. Currently Arla Foods is preparing to enter the dairy market in Senegal through the import and repackaging of milk powder. During the assessment, there was no substantial indications found that at this stage it would have a negative impact on the rights to adequate standard of living and employment of the communities involved in raw milk production. If a structured development policy is set by the government met with adequate investment, reaching all the existing barriers that limit the production, the situation might differ in the long run. Distribution and sales 15 Soulam Ba, cross-breeding farmer, Linguere 16 FAO, Fulani representatives

5 In general terms, milk is produced at a very local level. The milking is done manually and there is limited adequate and safe storage. There are a few existing milk collecting centres, placed strategically close to clusters of cattle breeders throughout the country 17. These however, have a fairly restricted capacity, and currently a high percentage are not functioning due to problems with equipment and its maintenance, or funding. 18 Improvements in the equipment and the cold value chain are necessary for achieving sustainable market coverage. There are two main products that reach the market- fresh milk, which is predominantly sold to small dairies and yogurt which is directly sold at the local market (often on the basis of bartering: yogurt for cereal), with sale prices differing depending on the season and availability of milk 19. This suggests a fairly unstable level of supply within the sector. Locally produced fresh milk is still sold at relatively high prices- between CFA 20 depending on the season and availability. This places it at a competitive disadvantage compared to the lower prices of imported milk powder, which may be up to 2-3 times lower. According to RBM, the imports of powdered milk have slowed the development of the sector. The representatives that we had the chance to meet support the view that having a product which meets the demands of the market and at the same time brings income directly to the state through import tax, has lessened the pressure for sustainable policies and support. The relation to Arla s activities and the local sales/distribution in Senegal is complex. Arla Foods will have high market coverage at a lower price that is affordable to the poorest segment of the population, without season limitations. Although at this stage this would not put the company in direct competition with local raw milk producers due to the scale and capacity of production, it may affect the small local enterprises that use imported milk for conditioning and mix with locally sourced products. Government policies to develop the local dairy sector in Senegal The institutional framework of the dairy sector is organized through several ministries. The Ministry of Agriculture and Rural Development, The Ministry of Livestock and the Ministry of Trade, Entrepreneurs and the Informal Sector are the most influential. Disinvestments in structural improvements by the shifting Senegalese governments, international institutions and the donor community have led to slowing of the development of the sector. NGO s and donors often assist small rural milk producers to improve the processing and distribution systems on local level and increase their capacity to access the urban and semi-urban markets. According to research, UN organisations and NGO s, the Senegalese government supports investments in local milk production on a far too limited scale. Agricultural tools are mainly geared towards commercially profitable cash crops such as rice, tomato and onion rather than supporting the transformation of raw milk production and processing in order to achieve its objective of food security, rural employment and integration into the regional market. ISRA, the Senegalese Agricultural Research Institute, and FAO are among the organisations that stress the insufficiency of the present government policy. Through interviews, it is stated that the government policy so far has focused entirely on technical solutions to the complex issue of poor milk production, poverty and vulnerability such as cross-breeding, vaccination campaigns and settlement. Such policy 17 Mapping provided by Serena Ferrari, phd, CIRAD and ISRA 18 Milk collecting centre visit, outside of Dhara, Senegal 19 Meeting with ADENA, Namarel area, Senegal 20 Equals to 0.38 euro-0.61 euro

6 does not take into account neither the environmental nor the socio-economic barriers that hinders development. The Billital Maroobe Network is representing the Fulani pastoralists and is holding a seat in the Le Conseil National des Maisons des Éleveurs du Sénégal (CNMDE). Billital Maroobe raises their voices to protect the rights of the cattle breeders across borders in seven West African countries. They seek to push the Senegalese government to invest in pastoralism and to improve investment in infrastructure in the pastoralist Northern regions of Senegal to improve their human rights in terms of the right to education, health, water and living standards. ISRA, FAO, ADENA, ADID and Bilital Maroobe express their concerns regarding the potential negative impact of milk powder import on the local dairy sector and thereby on the right to job, adequate living standards and health. Being aware that the dairy sector is still insufficient and underdeveloped, they call for government policies as well as public-private partnerships between international business, local dairy producers and government to develop the value chain in order to pave the way for an improved, selfsufficient and sustainable dairy sector. The organisations are pointing to the fact that it is the responsibility of the government to provide the necessary and basic infrastructural conditions for the dairy sector to develop 21. In the coming years, it could therefore be expected that government would initiate further measures to regulate import and stimulate the local dairy sector. The import tax on milk powder is 5 % today. However, such measures are only applicable if they are consolidated by support policies and measure to develop local production and collection 22. It is estimated that within the next years, domestic milk production will not be developed to a degree relevant for import bans like the tomato and onion business are undergone today. As Arla enters the Senegalese market and increases its market coverage over time, it is essential that the company s growth does not conflict with the governmental intentions to support the development of the local dairy sector in order to eradicate poverty and ensure food security, which are human rights of crucial importance. Our survey indicates that we do not achieve a favorable market position due to favorable European legal subsidies. European farmers are today only subsidized indirectly by EU agricultural programs equal to 0.05 euro/l raw milk The main reason for the huge price difference between locally produced raw milk in Senegal and imported European milk powder is mainly due to extremely efficient production methods amongst European farmers combined with a very high yield per cow up to 50 l/day. Together with a well-developed infrastructure in Europe, it is possible to export milk powder to a highly competitive and attractive price for private and industrial consumption in Senegal. However, by listening to the concerns from stakeholders in Senegal, our considerations are whether we might have a negative impact on the development of the local sector by only focusing on repackaging and sales of imported products. On the one hand, our interviews and discussions with local stakeholder points out, that the reason for the weakness of the local dairy sector is complex and based on lack of investments in infrastructure, resilience strategies and low yields of the cattle, as well as insufficient governmental import regulations in Senegal together with favourable EU subsidies. On the other hand, several organisations expressed their concerns due to the fact that the availability of competitive milk pow- 21 Summary of comments during meetings held with FAO, ADENA, RBM, ADID. 22 Duteurtre, 2013, as seen in Study on the formulation a program of actions Detailed development the milk sector in UEMOA, Appendix 7: Senegal Report, by Djiby Dia, May 2013, ECONOMIC AND MONETARY UNION

7 der reduces the incitement of the Senegalese government to prioritize the development sector. An issue, a number of organisations like Bilital Maroobe is lobbying to influence. Mitigation measures and support to the dairy sector in Senegal Arla s ambition in Senegal is not only to mitigate potential negative human rights impacts but also to further contribute positively to the sustainable development of Senegal. In March, 2015, Arla signed the declaration The Milky Way to development where we made a commitment to support initiatives for sustainable dairy sector development in the markets where we are present 23. During our field-trip to Senegal, we held a number of meetings with government bodies, researchers and farmers organisations such as FAO, ISRA, ADENA, RBM, ADID, in order to get their perspective and gather recommendations for a relevant future Arla involvement to support the local diary sector, that would be both corresponding to the needs of the sector, and can have a strategic value for the company. At this stage, we have identified two scenarios for further involvement in Senegal: 1. Build capacity on different levels in corporation with NGO s with in-depth local knowledge and Senegalese educational institutions. With Arla s diverse competencies on organizational, technological and business knowledge, Arla can add a valuable contribution to enhancement of the dairy the sector in Senegal. A number of local farmers organisations expressed their need for training on the basis of Farmer to Farmer knowledge sharing in order to support local farmers initiatives improve production efficiency in the dairy production. Technical as well as organisational and entrepreneurial skills were requested. 2. Engage in partnerships, advocacy and networks locally and internationally to support Arla s establishment and growth in the Senegalese market and provide knowledge on dairy sector development to organisations and government bodies Furthermore, we find it necessary to monitor closely the development of the dairy sector on a regular basis and to continuously assess our potential adverse human rights impact. This will be done as a combination of regularly stakeholder-dialogues and human rights impact assessments. Methodology This Human Rights Assessment was conducted during July and August, The report should not be seen as representing a full human rights impact assessment, and should not limit the scope of such future assessment. Rather, the observations in the report can be used to add a human rights perspective to existing activities of Arla in Senegal. We have used a combination of research methods to generate data, amongst which are desk-research; semi-structured interviews and discussions with government institutions, researchers, NGO s, UN organisations, local dairy farmers, dairy businesses companies, Arla employees and business partners, general observations and field-visits to local milk producers 24. In total, we have interviewed and/or conducted semi-structured stakeholder meetings with approx. 60 persons divided into three stakeholder groups: List of interview persons attached

8 project affected stakeholders; duty bearers/responsible parties and non-project affected stakeholders. It has been of utmost importance for us to conduct an on-ground research, where we can have the chance to visit, talk to and listen to the most vulnerable local dairy farmers in terms of human rights and thus get a first-hand understanding of the farmers involvement in the local raw milk value chain. Due to problems with the infrastructure, it was unfortunately not possible to visit local Fulani communities in the Northern part of the country in Ferlo region. However, we spent two days following the entire value chain, including a day among the Fulanis close to the Namarel area, where we observed traditional milking, cheese processing and held a meeting with the women involved in milk production in the local community. We are aware that time and limitations in numbers and range of interview persons influence our data. Our findings therefore relate to the specific time and scope of the conducted research. We are also aware, that our decision to conduct the assessment by our own internal CSR Team might have a biased influence on the views expressed. We respect the complexity of the subject and are aware that our findings should be presented with respect to the limitations in methods and data. It should be noted that valid statistical information on the dairy sector is only available to a limited extent. To support our analysis, Arla has requested FAO and ISRA to provide statistical information regarding the sector. The data from these two reports are part of our data base. The methodological framework, report-outline and process have been designed with support from The Danish Institute of Human Rights. However, it should be underlined that the conclusions are solely the responsibility of Arla Foods.