The financial collapse of Tongaat Hulett Sugar… a colonial legacy of subjugation and exploitation that continues today. By Selvan Naidoo

The collapse of any financial institute is never a pleasant experience. In most instances, working class employees bear the brunt of financial meltdowns with the corporate executives often getting away by virtue of their obscenely amassed wealth reserves. In 2001, false accounting practices contributed to the spectacular collapse of Enron, an American energy company based in Houston, Texas where fired 5,000 workers were fired the day after Enron declared financial bankruptcy. Closer to home the Steinhoff debacle of 2017 qualified as the biggest case of fraud committed in South African corporate history. Typical of the malfeasance graft that grips our country, the former CEO of Steinhoff, Markus Jooste is yet to report to any correctional facility two years since his audacious crime! In almost all cases of financial collapse, these meltdowns are solely the result of mismanagement by company executives with the use of clever, but deceptive, accounting practices.

Another corporate institute that has garnered much attention in recent weeks is Tongaat Hulett whose books show serious financial discrepancies with false profit reporting to the tune of R3 to 4 billion. The company has acknowledged the growing scandal and admitted that its financial statements have to be restated. The board has requested the Johannesburg and London stock exchanges to suspend its listing. The company’s response to the huge escalation in its debt has been to retrench more than 5 000 workers. The bulk of whom are employed in sugar production industries. Equally concerning is the possible eviction of some of these workers from their places of residence provided by the company.

 

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Given the historical significance of this company in growing the economy of KwaZulu-Natal and its relationship to indentured ancestry, the imminent collapse of Tongaat Hulett’s sugar related operations conjures up a multitude of bittersweet reflections. One reflection would most certainly be centered on the romantic spirit of the pioneering colonial settlers who developed colonial Natal while the other would be centered on an anger that sees yet another generation of the privileged elite being exonerated for crimes committed against the working class.

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A shack that housed two families, Tongaat 1960s, picture credit: Tongaati by RTG Watson
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Saaidi, a mill engine driver working at the Tongaat Mill, picture credit: Tongaati by RTG Watson

Tongaat Hulett, a brief history.

To contextualise the current crises, it is important to look at the history of the company from its origins. The company that now manages some 120 000 hectares of land for sugarcane production was formed through the merger of two sugar companies that are each almost 130 years old. Today, Tongaat Hulett is an agricultural and agri-processing business that includes integrated components of land management and property development. In recent years, Tongaat Hulett’s property development has certainly yielded better profit dividends given the successful commercial and property development boom to the North of Durban. Contrastingly, sugar production and its associated business entities that once formed Tongaat Hulett’s core business have taken a step in the opposite direction.

The present company was formed in 1962 as a result of a ‘merger’ between the Tongaat Sugar Company founded by Edward Renault Saunders and Hulett Sugar founded by Sir Liege Hulett. At this time of the renaming, the Hulett family claimed that the merger was nothing more than a hostile takeover. They had no controlling interest in the company with Guy Hulett being told to step down as chairman after a consortium of seven businessmen gained more than a 50% share control of Sir J L Hulett & Sons Ltd. In the years that followed the only legacy that enshrined the Liege Hulett’s legacy was found in just the name of Tongaat Hulett.

Sir Liege Hulett, knighted for his contributions to the colony of Natal, arrived in Durban as a 19-year-old lad with just 5 pounds in his pocket on board the ship Lady Shelbourne in 1857. Two years later, he borrowed money to purchase a farm near Compensation where he made steady progress growing vegetables. A year later he purchased 600 acres of land that he named Kearsney growing a host of crops from cotton to tea. Today, this farm famously houses the elite boys high school, Kearsney College near Hillcrest. Given the land debate that stirs up much emotion in our country, you will be hard pressed to find an ordinary 21 year old to be owing some 800 acres of land, having stated out with just under R100 (5 pounds converted) in his pocket. By 1882 Hulett consolidated his interests by floating J.L. Hulett & Sons Ltd with capital of 50 000 pounds. In 1903, Hulett operated his first sugar mill at Tinley Manor and by 1908 controlled a sizable portion of the Sugar dominated production of Natal.

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Sir Liege Hulett, picture credit: https://www.kearsney.com/college/

The genesis of the Tongaat Sugar Estate that eventually contributed to the name of Tongaat Hulett was formed through a generous grant of land of 6000 acres in 1848 to E. Chiappini, a Cape Town merchant. Just how Theophilus Shepstone, an 1820 settler, got away with moving Black people into ‘Native Reserves’ to ‘grant’ much sought after land to colonial farmers is a question for another article. By 1860 James Renault Saunders who gained vast experience of sugarcane farming in Mauritius, acquired a portion of Tongaat’s company holdings. Both Saunders and Hulett were noted for their strong advocacy of the importation of indentured Indian labour to grow the economy of an undeveloped colonial Natal. On closer inspection, the advocacy of Indian labour was a carefully constructed plan concocted by colonial farmers to bring in cheap labour from India to maximize profits. By 1855, Edmund Morewood, the founding father of sugarcane cultivation in Natal noted that African labour was indeed available but that farmers were unwilling to pay for ‘Native’ labour.

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James Renault Saunders 1882, picture credit: Tongaati by RTG Watson

 

Abuse of the Indentured

Given the strong advocacy for Indian labour by both Saunders and Hulett, it is not surprising to note that much of this advocacy was done with sinister intent. In highlighting the powerful stature of the Huletts, the case of Dr. H.W. Jones of the Stanger Medical Circle is worth outlining. In a letter to the Hulett’s, Dr. Jones lambasted them for their treatment of indentured labour by stating the following: “Well I happened to ride the corner of the old factory – when lo and behold there were five Indians – who were very ill. One woman had her womb right out…. Now were these people hiding there? During the summer months you make your Indians toil in the blazing sun… You may say perhaps that the industry would not thrive unless the coolies were sweated… Very well then, let the industry go to the devil. It benefits no one but yourselves” Given the political and economic clout of the Huletts within the colonial administration circles it was no surprise that Dr Jones was summarily dismissed from his position as medical officer. Clearly if colonial officials could not challenge the power of the Huletts, how then could the indentured labourers challenge the atrocities they endured?

Plantation owners clearing 'virgin' territory, early 1900s picture credit 1860 Heritage Centre
Plantation owners clearing ‘virgin’ territory, early 1900s picture credit: 1860 Heritage Centre

The Tongaat Sugar Company run by the Saunders of Tongaat were also not exempt from meting out abuse. From the years 1875 to 1911, the Tongaat Sugar Company was rated second only to the Reynolds Brothers Estates (now Ilovo Sugar) for the highest incidence of suicides committed by indentured labourers on the plantations of Natal. The high prevalence of abuse on the sugar plantations of Natal prompted Hendry Polak, a journalist who followed Gandhi during his stay in South Africa to say this in 1903, “ The Indian labourer is often regarded by his employer as less account than a good beast, for the latter costs money to replace, whereas the former is a cheap commodity

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Page one of a Suicide List  from 1880 to 1911 as complied by the Public Protector of Indian Immigration in South Africa.

Given the evidence that validates the colonial planters intent to manipulate the workforce to yield maximum profits, it was not surprising to note that when India had finally stopped indenturing Indians to Natal in 1911, that the defensive position of the planters that advocated for Indian labour would then deliver anti – Indian sentiments in wanting to remove ‘the alien menace’:       “ They (coolies) are a restless people and are a thieving set of vagabonds. To my mind coolies are more a curse to the country than a benefit.” “ I do not go so far as to say that you must take the Asiatic by the throat and throw him out of the country… They are here, but we can put them in their own areas”

Indentured workers loading sugarcane for railway transport, early 1900s, picture credit 1860 Heritage Centre
Unloading cane, Mt Edgecombe, early 1900s, picture credit: 1860 Heritage Centre

 Clearly the troubles that afflicted the Tongaat Hulett group from their formatives years through to their current financial woes have failed to teach them how to effectively treat their working class employers. Much like their predecessors of colonial times, the former chief executive and his team at Tongaat Hulett responsible for the present financial irregularities are yet to face criminal charges. The implicated former CEO, who retired last year after 16 years as chief executive, received R94-million in bonuses and incentives over the past 10 years. Surely if this money is recovered from assets acquired through criminal precedes, a portion of the 5000 working class jobs that are in the firing line could be saved.

Tongaat Sugar Estate workers outside the Grand Entrance, 1960s, picture credit Tongaati by RGT Watson
Grand Entrance to the Tongaati Sugar Estates 1960s, picture credit: Tongaati by RTG Watson
Indentured workers bagging sugar at Mt Edgecombe, early 1900s, picture credit The 1860 Heritage Centre
Indentured labourers, bagging sugar, early 1900s, Mt Edgecombe, Natal Sugar LTD, picture credit: 1860 Heritage Centre

In addition to the human salvage operation of this financial debacle, the revisionist history that hopes to dignify our fractured past contained in the farm properties of Tongaat Huletts must be preserved for future generations to fully gauge what their ancestors endured. Similar to the history of slavery and should the company close its sugar production divisions, this history, through the memorialisation of indentured farm sites, stands a good chance of being lost forever. In endorsing the heritage status of the many historic sites that are owned by Tongaar Huletts, much attention must be given to its protection and historical preservation by activists, civil society and the government alike. Additionally, the massive land reserves amassed through questionable means must be apportioned for not just the building of luxurious profit driven estates but equally for the continued development of low-income properties found in Cornubia, built on land bought by the KZN government to the tune of some R350 million. Like the generous land grants of 1848 more land must be allocated for further housing developments that benefits all our people! Long before this takes root however, civil and government priority must be energized toward the protection of those 5000 jobs that Tongaat Hulett hopes to shed in a severely depressed economy in the coming months.

 

Written By Selvan Naidoo,Curator of the 1860 Heritage Centre as published in The Mercury, 16/10/2019, page 6

 

4 Comments

  1. Sorry but Kearnsley Hillcrest and Compensation are miles apart …. one on the North coast the other far inland …. get the facts straight please….

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    1. Two years later, he borrowed money to purchase a farm near Compensation where he made steady progress to eventually purchased 600 acres of land that he named Kearsney that grew a host of crops from cotton to tea. NOTICE THE word to eventually purchase…..

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  2. Wow ….. so left it walks in circles….. your comments on suicide … let’s compare that to modern day India’s farming community…. What of the many that have progressed ….

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