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Profiting from the needy

Samir Nazareth questions cause-related marketing which extends a corporation’s markets – for water purification sachets or sanitary napkins -- in the guise of providing essential services to the poor

drinking water

In Bhopal, Unilever and Population Services International (PSI) are sensitising citizens to the importance of clean drinking water and providing them with purifier sachets. This joint initiative is being undertaken through their NGO Waterworks which, according to the company website, is “a not-for-profit programme that will provide safe clean drinking water to communities in need around the world”. “In its initial stage,” Unilever says, “PSI will train 75 Waterworkers who will educate the neediest people in Bhopal, Madhya Pradesh, India, about the need for clean water and its opportunity to improve the health and wellness of their community. They will distribute life-saving Pureit sachets and purifiers to these families.”

Pureit is a brandname for a range of water filters developed and sold in third world countries by Unilever. In India the price for these products ranges from Rs 900 to Rs 13,500. The Pureit sachet is chlorine-based and needs to be dipped in water to achieve what the company claims to be water purity comparable to boiled water. This is a new product in the Pureit family and is being test-marketed through Waterworks in Bhopal, according to Businessline, June 25, 2012 which also states: “The sachets could be an extension of its low-cost purifier brand Pureit.”

Sachets ensure that the poorest of the poor have access to products. FMCG manufacturers have seen the value of sachets as they increase product reach and the consumer base.

Though there is no doubt there are millions of people without access to clean drinking water, should a product be tested and sold in the guise of a public service, and with the involvement of an established NGO? Ashish Bhardwaj, General Manager of PSI-India in an interview with this writer at the PSI office on July 21 said this was a concern initially as they are an international NGO working in 65 countries, but it is no longer an issue now. PSI’s role he said was to train the Waterworker. This included mapping the Bottom of the Pyramid in 50 villages and 25 urban slums in Bhopal. The mapping included a transit walk, social mapping and resource mapping. According to Bhardwaj the idea was to determine where the need was maximum. It was also to ascertain whether giving products free of cost would help as people may not appreciate products given free. This project would be extended across the globe later.  He clarified that PSI projects aim to complement government projects and reach the lower strata of society.

Corporations live in difficult times, being asked to be more accountable and socially conscious, a role they are not used to playing. Corporations are bending over backwards to portray themselves as socially and environmentally conscious. Mining major Vedanta’s ad campaign ‘Creating Happiness’ projects how it has positively impacted the lives of villagers. A short film competition for film students nation-wide was announced, roping in socially aware judges. The campaign was termed 'greenwash' by activists.

ITC claims to be a water-neutral company even as it sells cancer-causing cigarettes. Coke extracts huge amounts of water thereby reducing groundwater for communities even while it gets Sachin Tendulkar to promote access to clean water for underprivileged schools.

This is not the first such ‘public service’ initiative by Unilever. In 2001, Unilever India began an initiative called Project Shakti to use its products as an economic game-changer. According to the company website, the “Shakti Entrepreneurial Programme helps women in rural India set up small businesses as direct-to-consumer retailers. The scheme equips women with business skills and a way out of poverty as well as creating a crucial new distribution channel for Unilever products in the large and fast-growing global market of low-spending consumers”. So, what the company is actually doing is creating a new consumer base. The project is touted to reach 600 million customers by 2010.

The then chairman of HLL (now HUL) M S Banga is quoted in Financial Express, March 2, 2004 as saying, “Project Shakti will be our vehicle to deepen our rural reach to the entire rural India.”  He added, “Ten years from today, Project Shakti will contribute in a major way to HLL’s sales.”

This brilliant marketing strategy has a major fallout – the spread of waste into newer areas that do not have the infrastructure or resources to deal with it. Waste and litter is what defines Indian cities.   These by-products of consumption, along with official apathy, are a major cause of blocked drains, water and soil contamination and disease. HUL's Shakti programme is going to exacerbate the problems of uncollected litter in the 100,000 villages touched by it. It will also of course introduce a demand for packaged, processed products such as soap and toothpaste that will replace cheaper, healthier, sustainable alternatives from within village ecosystems.

The company has gone a step further and created the Unilever Foundation. The corporate site states: “The Unilever Foundation is dedicated to improving quality of life through the provision of hygiene, sanitation, access to clean drinking water, basic nutrition and enhancing self-esteem. At Unilever, we aim to double the size of our business while reducing our environmental impact and delivering increased social value. The Unilever Foundation is a key action we are taking to help meet our ambitious goal of helping more than one billion people improve their health and well-being and, in turn, create a sustainable future.”

Therefore it works with the UN and other organisations to bring about social change through the use of its products. Thus Lifebuoy is used to teach aspects of health and hygiene in third world countries. According to Unilever such associations are “part of our company’s growth strategy; our brands invest in behaviour change programmes, consumer engagement campaigns and product benefits.” This is also seen in the recent Johnson & Johnson partnership with Unicef. According to the Unicef website, “Unicef and Johnson & Johnson Limited, India, supported by its Stayfree Women for Change Movement, will launch a Cause Related Marketing (CRM) campaign. From every Stayfree sanitary napkin sold, a part of the proceeds will go to Unicef for a period of six months starting April 2012. This will support a pilot programme, focusing on creating awareness and empowering adolescent girls for personal hygiene...” Over 5 lakh girls will benefit over a three-year period.

Such Cause-Related Marketing attempts are a win-win situation for everybody. The NGO gets much-needed funding in cash or kind to deliver its social objectives; the corporation gets visibility and also opportunities for brand promotion, brand extension, new markets and new consumers.

But surely this is going beyond greenwash which are attempts by corporations to hide their environmentally destructive practices with token green gimmicks? This is about seeing economic opportunity in human destitution and impoverishment. It is about seeing a market and a window to profit from delivering what is essentially everyone's right.

In many cases such corporate endeavours piggyback on the government’s failure to meet its obligations to its people. The case of 'sensitising' the poorest of the poor in Bhopal to the benefits of clean drinking water and then providing sachets to them is a case in point. Clean drinking water has been part of many election promises, it forms part of a citizen’s constitutional right. However the government has abrogated its duties to its people, leaving them to their own devices.  

In some cases the solution offered by the ‘market’ could be more dangerous than the problem itself. Satinath Sarangi, member of Bhopal Group for Information and Action, says of the Pureit sachet: "There is growing scientific evidence that chlorine in drinking water causes bladder, rectal and breast cancers. Adding chlorine to water forms total trihalomethanes (TTHMs) which cause anaemia in infants, young children, and foetuses of pregnant women.  Given all this there is no justification, let alone benefit, for adding chlorine to drinking water. The people of Bhopal who have already suffered exposure to an array of toxic chemicals would be better off without Unilever's potentially hazardous product. Instead of Bhopal, Unilever should pay attention to Kodaikanal in Tamil Nadu where the soil and groundwater has been contaminated with mercury from a factory run by Unilever's Indian subsidiary."

Pureit is also using the social media strategically. Facebook users can sponsor a needy family in Bhopal. According to the company website, “People will be invited to sign up to Waterworks and connect the application to their Facebook timeline. They will partner with a PSI-trained Waterworker and choose a small daily donation – as little as €0.10. Their funds will directly support the water-poor communities, where Waterworkers will provide education about the benefits of clean drinking water and distribute life-saving Pureit water purifiers and sachets to families in need.....Each Waterworker will be given a mobile phone, preloaded with a custom Waterworks J2ME application that will allow her to take photos and record stories. She will share these updates with her partners on Facebook, demonstrating how their funds are making an impact in her community, and inspiring her partners to continue giving and supporting her work.”  So are these donations subsidising the company's efforts and in the long run paying for the company's push into new markets? In effect, will donors be paying Unilever to distribute its products?

Globally there are 800 million families that do not have access to clean drinking water so there is a huge market waiting to be tapped. The mainstream media calls the Pureit sachets a game-changer, arguing that “sachets work well in tapping customers at the lower end of the pyramid. In fact, sachets contribute to 70% of shampoo sales in the country.  HUL is well placed to garner a larger market share with Pureit sachets when clean drinking water is an issue in urban and rural pockets of the country.” But what is interesting is the direct and indirect way in which the market will be tapped – those at the BoP can either pay for a sachet or some donor elsewhere will provide the money necessary for those at BoP to receive it. Either way the company has extended its market base.

Over the last three years we have seen how one of the major causes of inequity and continuing poverty is corporate greed and government collusion in corporate profiteering. Is seeing the poor as a market the only way to provide them what is their due? Is government cost-cutting creating a whole new consumer base and market to be tapped by corporations?

Opening new markets in the guise of helping the needy has to be questioned. Corporations need to ask themselves whether they are not akin to the vulture in the famous Kevin Carter photo which is stalking a starving Sudanese child.

(Samir Nazareth writes on environmental and socio-economic issues)

Infochange News & Features, August 2012