Customer Case: Shell Conserving Biodiversity in South Africa’s Floral Kingdom

November 5, 2015

Linking Conservation and Local Economic Development through Sustainable Harvesting of Biodiversity Resources in South Africa

 

Introduction

Shell has been working for the past 10 years with Flower Valley Conservation Trust and other partners to help conserve the unique biodiversity resources of South Africa’s Cape Floral Kingdom. Through an innovative fusion of conservation expertise, financial investment, business skills and long-term access to consumer markets, Shell, Flower Valley Conservation Trust and others have been working to conserve biodiversity, generate jobs and improve skills and the quality of life for local people through the sustainable harvesting and sale of flowers and associated products. Environmental education for children in the critical pre-school years has been a key part of the initiative to ensure continuation of the project by future generations.

 

The Partners

Shell International
Shell South Africa
Shell Foundation
Flower Valley Conservation Trust (Flower Valley)
Fauna and Flora International (FFI)
Fynsa (Pty) Ltd
Marks & Spencer

 

Background

South Africa’s Cape Floral Kingdom is one of the world’s most botanically rich habitats, and nearly 70% of the plant species there are not found anywhere else on Earth. It is home to the heath-like fynbosvegetation type, the global record holder for floral diversity. However, the fynbos is at great risk from agricultural (e.g. vineyards) and urban development, the planting of trees for commercial purposes and invasive plant species. Reducing the pressure on this unique habitat in a way that could also deliver social and economic progress in a low income, high unemployment area was the challenge that the Flower Valley Project sought to address.

Between 1999 and 2002, with the support of various donors, FFI purchased 1,338 hectares of globally important fynbos land (including a pre-existing flower harvesting operation – Flower Valley Farm) that could have otherwise been developed as vineyards. Following purchase of the land, the Flower Valley Conservation Trust (Flower Valley) was established by FFI to take on ownership and assess opportunities to link conservation and local economic development strategies through the sustainable use of natural resources. Shell was introduced to the project by FFI and quickly recognised the importance of a strong trading operation to support the conservation and community initiatives in Flower Valley.

 

Development of the Partnership with Flower Valley

There have been two distinct phases in the evolution of the project, involving two different, but overlapping, sets of partners (summarised in Table 1). In the first phase (started in 2002) Shell South Africa, Shell International and Flower Valley worked together to improve the flower production process and develop a business model that cultivated downstream retail outlet opportunities at Shell retail stations in South Africa and the UK while addressing conservation and local poverty issues. Shell also contributed £150,000 over three years to support the management of Flower Valley, to upgrade the packing shed and to purchase much needed equipment for the Flower Valley farm. An important contribution was the sponsoring of the Flower Valley team to host a stand at the World Parks Congress in September 2003.

Planning for the second phase began in 2003 when changes in South African tax legislation required Flower Valley to separate out its non-profit and commercial activities. This split was also necessary if the economic viability of sustainable harvesting in the absence of financial donors was to be conclusively proven. Fynsa (Pty) Ltd was created when a group of UK-based investors bought the commercial operations from Flower Valley.

Shell Foundation came into the project motivated by an opportunity to develop increased market access in an environmentally and socially sustainable fashion in an area with high unemployment rates. A grant agreement valued at US$300,000 for a project from 1 October 2005 – 31 March 2009 was signed between Flower Valley and the Shell Foundation in 2005.

 

Shell Foundation – M&S Partnership

The Foundation’s innovative partnership with Marks & Spencer (M&S) – part of the Shell Foundation’s Sustainable Communities Programme – was used to facilitate access to a much larger retail market. The Foundation has worked closely with Fynsa, building both its capacity and its ability to meet M&S supplier standards. Under the three-year grant, Shell Foundation helped fund about seven flower picking operations on 15 neighbouring farms, employing approximately 150 people to meet international labour standards and supply Fynsa with flowers in accordance with M&S standards and to meet best practice criteria for harvesting in the wild set by the South African conservation agency, CapeNature. Without this intervention to develop capacity in the wider supply network, these farmers may have considered sacrificing areas of the natural flora for other agricultural uses.

 

Table 1. Summary of the involvement and roles of the project partners

 

Organisation Phase 1 Phase 2
FFI Enabler – arranged the purchase of the land, established Flower Valley and brought the project to the attention of Shell. On the Board of the Trust.
Shell South Africa On the Board of the Trust to assist with the ongoing development of marketing strategy. Provided HSE experience, quality management skills, marketing expertise and access to the retail network in South Africa. On the Board of the Trust.
Shell International Invested capital and acted as an enabler, encouraging Shell UK’s flower buyer to facilitate UK market access to both Shell retail sites and other retailers in particular M&S.
Flower Valley Management of the overall project; brings to the project conservation, education and social development expertise through its staff and networks, access to government and corporate funding for social responsibility and conservation projects and takes an advisory role on auditing and social issues. Also instrumental in developing an industry body for the suppliers to provide best practice guidelines, marketing and research support.
Shell Foundation Increased access to capital, brought a neutral perspective regarding future improvements and an understanding of business in a development context. Through its relationship with M&S, the Foundation facilitated a major increase in access to retail markets in the UK. Continues to support and monitor developments of the project and markets.
Fynsa Runs the commercial operations of the project; provides business and marketing skills, access to markets and the capacity for product development. Has a partnership agreement with Flower Valley and in 2012 began to pay a royalty to Flower Valley equivalent to 1% of non-freight revenue.
Marks & Spencer Provides access to supply chain, a detailed knowledge of the retail supply chain and access for the other partners to a wealth of existing relevant processes, procedures and standards.

 

Progress and Lessons Learned

  1. Partnerships sometimes come together very quickly in response to an urgent issue (in this case dual conservation and poverty pressures) and there is not always time to develop solid foundations for the partnership before beginning work. For this project, there was a clear and immediate need for investment; the partnering arrangement and supply chain opportunities were only considered in detail as the project developed. In the absence of initial targets, greater attention to communication and governance was required by the partners to keep the project on track.
  2. In an ideal partnership: partners share a vision; aims, objectives, targets and action plans are agreed; partners have a deep sense of trust in each other; channels of communication are clear and open, there is full transparency; skill sets of the partners are complementary; respective roles are clearly defined; collectively the partners have sufficient human and financial resources; and monitoring and evaluation systems are agreed and in place to track progress. Meeting these criteria requires perseverance and an ongoing commitment to resolve issues in a timely fashion by all partners. The process of building a successful partnership should not be rushed or accelerated beyond its natural pace.
  3. The creation of Fynsa gave rise to new commercial opportunities. However, the split with the Trust also gave rise to some tensions between the philanthropic entity, Flower Valley, and the commercial entity, Fynsa. In resolving these tensions, a number of lessons were learned that are relevant to all those developing partnerships:
    1. The four- to six-month period between the start of the negotiations and the transfer of business aspect to Fynsa was too short and appropriate agreements and management processes were not in place. Sufficient preparation time and the time for a degree of trust to develop is necessary with future projects before partners move from negotiation to implementation.
    2. Successful rollout is as much about getting people with the right approach and style on board as it is about getting the management structure and plans in place before launching the partnership.

 

Conclusions

The Flower Valley project has demonstrated the viability of a business model for resource conservation and sustainable livelihoods with the potential for replication both within and beyond South Africa. Shell’s ability to leverage its brand to get the products to market, nationally and internationally, to see the bigger picture and provide strategic advice and to commit to a long-term involvement underpin its role in the partnership. The involvement of Shell has also helped demonstrate that the private sector can provide invaluable business skills to help the conservation community achieve its goals hand in hand with social and economic development.

The project has highlighted the strength of partnerships in developing and taking forward innovative approaches to conservation – alone, none of the partners had the capacity or skills to successfully deliver the desired conservation and livelihoods outcomes connected to a marketplace for sustainably produced goods.

 

The Future

The main financial requirement for Flower Valley for next 10 years is to secure funds to continue with the critical applied research and monitoring embarked upon 10 years ago. A sound research base is the foundation of the programme and of the claims that can be made by the sustainable harvesting programme. Using fire and the control of alien invasive plants as well as developing more ethical markets, the project will be following the impacts (social, economic and ecological) and doing adaptive management of the harvesting programme.

Securing funding in the region of R800,000 pa (approx. USD 100,000 pa) will give the project the opportunity to find answers to many complex questions that are key to sustaining local livelihoods, employment, community development as well as conserving the biodiversity of our unique biodiversity asset, the Cape fynbos.

 

Contact Information
Lesley Richardson
Executive Director
Flower Valley Conservation Trust
PO Box 354, Bredasdorp 7280, South Africa
lesley@flowervalley.co.za
Cell: +27 (0) 823290249
Tel: +27 (0)28 425 2218
Fax: +27 (0)28 425 2855
www.flowervalley.org.za

Tools
Flower Valley’s website for more information
Shell’s website featuring the Flower Valley project
M&S’s website features text and a short movie on the bouquets