What happens when corporate ownershipshifts to China? A case study on rubberproduction in CameroonSamuel Assembe–Mvondo, P...
OutlineBackgroundMethodsResultsDiscussionConclusion
Background:
BackgroundChina’s investment in Africa’s agricultural sector haveincreased over the past 10 years, and one themodalities ...
Research QUESTIONCan the geographicorigin of investmentaffect the Performanceand the Corporate SocialResponsibility (CSR) ...
Theoretical frameworkThis study draws on the concept ofCorporate Social Responsibility (CSR),in which companies go beyondc...
MethodsThe following Social sciencesMethods have been used: Literature review; Interview with 7 managers, 5administrativ...
Results
THINKING beyond the canopySummary of main events in the life of the rubber companyTypes ofinvestmentsState of Cameroon: pu...
THINKING beyond the canopySummary of management evolution of a rubber companyState of Cameroonownership (1975-1997 )Singap...
THINKING beyond the canopyTowards Chinese investment Management New Strategy Cameroonian subsidiary has just started the ...
Discussion
In general, this study shows that employment conditions andrelations between local communities and a Camerooniansubsidiary...
ConclusionIn summary, the case of two –phasedprivatization of rubber company inCameroon, challenges a number of prevailing...
Thank You for your AttentionChina’s Trade and Investment in Africa Project is funded by BMZ
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What happens when corporate ownership shifts to China? A case study on rubber production in Cameroon

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In the last decade, China's investments in Africa's agricultural sector but can the geographic origin of investment affect the Performance and the Corporate Social Responsibility (CSR) of the Company?

CIFOR Scientists Samuel Assembe-Mvondo, Pablo Cerutti, Louis Putzel and Richard Eba'a Atyi present "What happens when corporate ownership shifts to China? A case study on rubber production in Cameroon".

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What happens when corporate ownership shifts to China? A case study on rubber production in Cameroon

  1. 1. What happens when corporate ownershipshifts to China? A case study on rubberproduction in CameroonSamuel Assembe–Mvondo, Paolo O Cerutti, Louis Putzel & RichardEba’a Atyi
  2. 2. OutlineBackgroundMethodsResultsDiscussionConclusion
  3. 3. Background:
  4. 4. BackgroundChina’s investment in Africa’s agricultural sector haveincreased over the past 10 years, and one themodalities of investment is the acquisition of pre-existing corporate holdings: It is in this framework that one Chinese transnational Companyhas became the main shareholder of the Singaporean basedtransnational company in 2008; Then, a subsidiary main rubber company in Cameroon has alsobecome a part of Chinese Company; The Cameroonian subsidiary share: 87% to Chinese; 3% toemployees (last year agreement); 10% to State; State (1975-1997); Singaporean ownership (1997-2008);Chinese (2008- today).
  5. 5. Research QUESTIONCan the geographicorigin of investmentaffect the Performanceand the Corporate SocialResponsibility (CSR) ofthe Company?
  6. 6. Theoretical frameworkThis study draws on the concept ofCorporate Social Responsibility (CSR),in which companies go beyondcompliance and undertake actionsthat seem to provide for social andenvironmental well-being over andabove the interests of and its legalobligations (see McWilliams & Siegel2001; Logsdon & Wood 2002); CSR requires to the company torespect: human rights; labour rightsand environmental conditions.
  7. 7. MethodsThe following Social sciencesMethods have been used: Literature review; Interview with 7 managers, 5administrative authorities, 2NGOs leaders; Interview with 35 lower –ranking employees; Focus group discussion in 7adjacent villages; Participatory observation
  8. 8. Results
  9. 9. THINKING beyond the canopySummary of main events in the life of the rubber companyTypes ofinvestmentsState of Cameroon: publiccapital, 1975-1997Singapore capital1997- 2008 Chinese capital2008-todayIndustrialinvestments 41,339 ha 18 000 ha of rubberplantation 1 24-ton capacity industrialrubber transformationfacility 5000 employees Increase intransformation capacityto 50,000 tons 4500 employees Renovation of plantations:2000 ha Creation of a researchlaboratory and nurseries Plan extension of plantations 5500 employees Adoption of a sanitation-security-environment policySocial investments  Construction of 17 campsand 3 villages 2 nursery schools 1 primary school 1 secondary school 1 hospital with140-beds 1 cultural centre Sports and recreationalareas, a swimming pool Increase in enrolmentcapacity in schools Increase in technicalcapacity of the hospital First step in electricityinstallation in camps Improvement of hospitalcapacity New insurance policies foremployees Safety equipment and meansof transport for workers Salary readjustments in 2012 Payment of bonus toemployees, following thestrike Transfer 3% of the capitalto the employees, followingthe strike and negotiation Opening of discussions withlocal communities onestablishing rubberplantations
  10. 10. THINKING beyond the canopySummary of management evolution of a rubber companyState of Cameroonownership (1975-1997 )Singaporean (1997-2008)Chinese (2008-today)CSR No CSR, especiallyland conflict withlocal communities;Claims of localcommunities on theirland and financialcompensationSalaries wereacceptable ; No internalenvironmentalstrategy No CSR, conflictswith localcommunities oncustomary land;Worse workconditions foremployees; Salaries conditionswere bad;Reduction ofemployeesNo internalenvironmentalstrategy Yes, existence ofCSR;Improved salaries ,security and healthconditions ofemployees; adopted theinternal security andenvironmental policy;Dialogue with localcommunitiesISO 9001 certificatePerformance  10 000 tons of latexproduction in 1992 26 000 tons of latexproduction in 2002 no plantationextension 30. 000 tons oflatex (2010);49% of the globalprofits in 2010
  11. 11. THINKING beyond the canopyTowards Chinese investment Management New Strategy Cameroonian subsidiary has just started the expansionrubber Plantations, areas will be increased to 18 300 ha,with creation of 3 000 jobs; Chinese Transnational company has just created anothersubsidiary in Cameroon (SUD- Cameroun HEVEA), with45 000 ha land concession for planting rubber, with 9 500jobs;
  12. 12. Discussion
  13. 13. In general, this study shows that employment conditions andrelations between local communities and a Camerooniansubsidiary have oftentimes been conflictual. The causes andintensity of conflicts and their degree of violent manifestationvaried with time. But overall they were and still are, based ona sense of perceived injustice, inequity and unfair treatmentby the local communities and the workers. Such feelings andthe suboptimal remuneration and employment conditions canbe traced first of all to the heritage bequeathed by the formerowner (state of Cameroon), to the Singaporean group at thetime of privatization. However, this subsidiary companyunder Chinese investor management seems determined toadopt, implement and improve social strategy.
  14. 14. ConclusionIn summary, the case of two –phasedprivatization of rubber company inCameroon, challenges a number of prevailingassumptions: First, it challenges the notion upon whichthe privatization was based i.e. Would bringnew employment to sector and improveworking conditions;Second, it challenges the commonperception in the Western media thatinvestment of China will result lesssatisfactory corporate social practices thannon-Asian companies.Finally, the origin of company’s capital doesnot really have impact for this case study.
  15. 15. Thank You for your AttentionChina’s Trade and Investment in Africa Project is funded by BMZ

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