MARCEL DREYER: Focused public-private intervention can address state failure

As the most industrialised economy in Africa, SA is an important market for many global companies. Similarly, as geopolitical tensions have risen in recent years, SA is increasingly well-positioned geographically, and in terms of its relative economic strengths, to play an even more consequential role in the global economy.

On the other side of the coin, there is little doubt that the domestic business operating environment has become increasingly challenging. This is a pivotal moment for SA to make the most of the opportunities available globally for growth while addressing the business environment challenges at home. This is not an easy task. Achieving these aims will require an adaptable partnership between the state and private sector for the good of SA, to spur the economic growth that drives job creation.

UPL is one of the world’s leading agrochemical companies, which gives it the experience of operating in the global market and experiencing the associated instability and challenges but also related opportunities for SA’s development. This view makes the necessity for public- private partnership all the more apparent.

The IMF recently stated that SA’s declining logistics and energy infrastructure is placing a major impediment on our ability to grow the economy at a rate that will have a material effect on endemic unemployment and poverty. These failings, combined with high levels of crime and the breakdown of basic governance (such as safe water provision) in many municipalities, means there needs to be urgent combined action to help turn the situation around.

While this task may seem insurmountable there is reason for optimism. Under the umbrella of the presidency and Business For SA, private sector support and expertise has been brought in to help address the three core challenges facing the country: the electricity crisis, freight and logistics issues, and crime and corruption. The progress being made in stabilising the Eskom grid is evidence that this public-private sector co-operation has the potential to bring about real and lasting improvements.

Focused intervention of this kind is welcome when it is considered how severely the challenging business environment has affected the ability of the private sector to provide jobs and investment into the economy. UPLSA has first-hand experience of this in the aftermath of the violent attack on one of our facilities during wider unrest in KwaZulu-Natal in July 2021.

UPLSA’s leased storage facility in Cornubia was targeted, along with numerous other businesses during the unrest at the time. The facility was used to store a range of agrochemical products, which are essential inputs into a variety of agricultural processes. The robbery and arson attack at the facility led to a chemical spill. In the immediate aftermath, spill response teams were hindered in their efforts to respond to the crisis because of the broad breakdown in the rule of law, contributing to a real risk to human life. This has proved extremely costly and undermined UPLSA’s operational capacity.

Despite being the victim of unrest it could not predict or control, UPL has committed enormous time and resources to the extensive process of remediating and rehabilitating the affected environment. These efforts have borne significant success, with many of the affected areas no longer posing a threat to human health or to the environment. This experience is unique because it is an example of the challenges and successes associated with the private and public sectors partnering to address complex issues.

UPL has always sought to act in liaison with and under the direction of the responsible government agencies, from the initial cleanup and remediation stages through to the current rehabilitation work. In line with this co-operative approach, UPL continues to comply with its obligations and is taking all reasonable and possible steps to continue to make progress in terms of the remediation and rehabilitation work.

Promisingly, animal and plant life are returning to many areas of the system. Experts have also led trials revegetating areas of the system, which have led to successes. Pleasingly, the specialists have confirmed that there is no longer any public health concern in the beach exclusion zone arising from the arson incident.

However, the partnership does illustrate that there will be challenges along the way when there is public and private sector co-operation. For example, the ongoing decline in public infrastructure is affecting the recovery processes as some aspects of the work have been hampered by the high levels of E coli present in the Ohlanga River tributary and estuary, due to sewage infrastructure failures. The consistently high levels of E coli in test results from across the system are far above accepted safety levels. E coli levels of this nature, along with other substances present in the raw sewage, also pose a risk to plant and animal life recovery, which is an ongoing challenge to the remediation effort.

As with any partnership, success hinges on mutually reinforcing
co-operation. Ensuring that more companies are prepared to invest and expand in SA will rely on the kinds of public-private partnerships being entered into at present, leading to more certain levels of service delivery and protections against the fundamental breakdown of law and order.

It will also serve the interests of SA that the government at all three spheres works with, and not against, the private sector when both have to confront the consequence of state failure. UPLSA remains deeply committed to providing the best-quality products that will help ensure SA’s food security and hopes that going into the future all spheres of the government will work with us (and other companies) as a partner in securing a better future for all.

• Dreyer is CEO of UPLSA