Tesco Supply Chain Impact Assessment - Supplier: SCL, Senegal

Tesco Supply Chain Impact Assessment - Supplier: SCL, Senegal
Tesco Supply Chain
Impact Assessment
Supplier: SCL, Senegal
Tesco Supply Chain Impact Assessment - Supplier: SCL, Senegal
Date: 05 May 2011y 2011
Client Name: Tesco
Report Title: Supply Chain Impact Assessment , SCL Senegal

Supply Chain Community Impact
Assessment: SCL Farm in Senegal

Acona partnered with Africa Now to assess the impact that the trading
relationship between Tesco and a supplier in Senegal, SCL, had on the
community surrounding SCL’s site.
Africa Now putogether the team to carry out the on the ground
research. This team was led by Leonard Nawiri of Africa Now, who was
supported by two experienced local Senegalese social researchers.
This report represents the base-line study. Inevitably, whilst the report
provides many interesting insights in to how Tesco’s trading
relationship is impacting on the local community, it also raises some
further questions which could not be explored further in the time
available. On the final page of this report we’ve listed those issues
which we think warrent further investigation in subsequent reviews at the site.

SCL was set up in 2006 as a joint venture with a long-            Setting the context: Senegal is a net importer of food, particularly rice, but since the early
standing supplier to Tesco, Barfoots, who currently supply        1990s has focused heavily on developing its export market. Horticulture plays a central role in
70% of Tesco’s sweetcorn. Barfoots worked with SCL to set         this now representing the fourth largest export sector. Fresh and processed fruit and vegetable
up the site along the Senegal River, close to the                 (FFV) exports grew 450% between 1991 and 2005 alone.1
Mauritanian border, in order to help it maintain a quality
supply of sweetcorn to Tesco, and other customers, all year       The rise of the export market has resulted in an inevitable consolidation of the supply chain
round. Tesco has been working with SCL for the last two           with a shift towards large-scale integrated estates over contract-based smallholdings.
years during which time the farm has significantly increased      Although, despite this, it’s estimated that 45% of the industry’s largest commodity, french
the amount of land it uses for sweetcorn production from          beans, were still sourced from small holder farms in 2004/5.2
320 to 450 hectares in 2010. It also grows asparagus,
sweet potato, chillies and butternut squash.                      The horticulture export industry is based in two areas, which are the north coast of Dakar and
                                                                  the delta of the Senegal River valley close to the Mauritanian border.
The SCL site now comprises of 3 farms, which are located
west of St Louis closest to a border village, with Mauritania,    Reports would suggest that the development of the export market has had a positive impact on
called Diama. The area was previously dominated by                rural communities, creating employment opportunities for low-skilled workers with fewer
subsistance farming and the population is largely made up         existing resources, like land, and enabling those who gain employment in the industry to use
of pastoralists. There are around eight other villages            the skills learnt to improve the productivity of their family owned small holdings. Inevitably, it
around the farm from which most of the labourers are              has led to increasing income disparity between households with even just one person working
drawn.                                                            on an export farm and those with none.2

                                                                         Page 2 of 11                                                         Acona Partners LLP
Tesco Supply Chain Impact Assessment - Supplier: SCL, Senegal
Date: 05 May 2011y 2011
Client Name: Tesco
Report Title: Supply Chain Impact Assessment , SCL Senegal

As a condition for being granted a lease on the land, SCL and Barfoots agreed with local elders that they would positively contribute to local community
development including local infrastructure and educational projects. They have also incorporated local village concerns into the way in which they recruit
casual labour, making sure to spread the available work around all the neighbouring villages as far as possible.

The methodology used to carry out this assessment was developed by Acona and it’s
partners, CSR Asia and Africa Now. The methodology is based on the Sustainable
Livelihoods Framework, a framework widely used to assess the impact of development
projects on the people that they are supposed to benefit. Interviews were carried out
by Africa Now’s team across a range of stakeholders from the local area, from workers
to community health workers to find out what impact the SCL site had made on
development across the five areas described in the diagram to the right.
In order to put the interviews into context, researchers spent a day gathering data on
developmental issues and indicators in Senegal, both nationally and for the region in
which SCL is located, St Louis.
They also spent three days at the SCL site in Diama and in the surrounding area
      A sample of 20 workers
      4 managers
      1 on-site nurse and 3 other health workers (a local mid-wife, a regional health
       director and a local nurse)
      7 village leaders from 5 neighbouring villages (Diama, Demizine, El Ngouhene,
       Savoigne Befech, and Seydou)

The workforce at SCL
SCL employs over 600 people although it generally only needs around 300 people across its three farms. The
workforce is made up of a mix of local people, migrants from Mauritania or other parts of Senegal, and nomads.
Around two thirds of workers at the site are temporary.
On the day on which we visited the farm, there were 610 workers employed of which 210 were permanent. Of
these, it is estimated that around 70% were local people. The rest of the workers were made up of temporary
workers, who have contracts ranging from a month to three months, and casual labourers who work anything
from as little as six to twenty days a month as required by SCL.
SCL tries to offer temporary and casual workers permanent positions as they arise, but cannot always do so.
They recruit casual labour by alerting permanent workers that there is work available, as well as by contacting

                                                                         Page 3 of 11                                                        Acona Partners LLP
Tesco Supply Chain Impact Assessment - Supplier: SCL, Senegal
Date: 05 May 2011y 2011
Client Name: Tesco
Report Title: Supply Chain Impact Assessment , SCL Senegal

local village elders, and other local community hubs, such as the primary schools. They select workers from the pool that come to the site to apply for the
work, but also try to rotate work around the local villages.

EDUCATION                                                                                                              Two public primary schools have started in

Impact on the next generation of
                                                                                                                             15%         secondary school
                                                                                                                       neighbouring villages since SCL arrived
                                                                                                                            attendance nationally although
workers                                                                                                                      compulsory education is 6-16
                                                                                                                       and they have helped the local secondary
Senegal has a relatively low level of educational                                                                                          ●●●
attainment with literacy amongst the adult population                                                                      I have been promoted from
                                                                                                                       school construct two classrooms, Stock
and school attendance falling well below the African                                                                       office cleaner to tea girl. I have
average as well as that of its neighbours in West                                                                          been taught to operate the
Africa. In Senegal, children attend primary school                                                                         photo copier, which has enabled
from age 7 to 12 and secondary education from the                                                                          me to more than double my
age of 13. Until recently, education was only                                                                              monthly income,
compulsory at primary school level, although the law                                                                            Fulani Female Worker, 20
has now been amended to extend this to the age of                                                                                                   years old
16.3 Despite this, national statistics show that
secondary school attendance is only 15% as many                                                                            Site employees who are parents
                                                                                                                           of children do not attend school
children leave school early to
help their families to earn                                                                                                                            ●●●
                                                                                                                           meetings because they are busy
money.4                                                                                                                    at work,
                                                                                                                                     School Director, local
On a regional level,                                                                                                                       Primary School
educational statistics for the
St Louis area are far higher                                                                                               Until the site started operations,
than the national average in                                                                                               many girls would be married off
Senegal. Around the SCL                                                                                                    at an early age, today they and
site, primary school                                                                                                       their parents do value
attendance ranges from 92-                                                                                                 education. They see their
99%, and is particularly high                                                                                              neighbours who have attained
amongst girls. Elsewhere,                                                                                                  some level of education being
girls tend leave school                                                                                                    employed at SCL and this is a
several years before their                                                                                                 big motivating factor,
male peers. One Primary                                                                                                              School Director, local
School Director said that                                                                                                                    Primary School
since the arrival of SCL, local
families could see the value
in education for girls.
Local secondary school attendance among the schools surrounding SCL is far higher than the national average, but remains far lower than at primary school.

                                                                         Page 4 of 11                                                        Acona Partners LLP
Tesco Supply Chain Impact Assessment - Supplier: SCL, Senegal
Date: 05 May 2011y 2011
Client Name: Tesco
Report Title: Supply Chain Impact Assessment , SCL Senegal

In the past two years, SCL have helped schools in the local area to build classrooms, this has included a
computer classroom for a local secondary school. Schools still suffer from intermittent electricity supply,
and this has had an obvious effect on the working of the computer classroom.
                                                                                                                   of workers interviewed received formal
It was also reported by workers and community leaders that since SCL had arrived in the local area two                             training
new public primary schools had opened in neighbouring villages, which had made a direct impact on the                                ●●●
rise in local primary school attendance as there was less distance to travel. Children from villages across                    CASE STUDY
the border in Mauritania were also benefitting by coming across to attend the schools.                           El Ngourane Primary School is located half a
                                                                                                                 mile from the SCL site and has one mobile
                                                                                                                 classroom built by SCL and four permanent
Impact on vocational skills                                                                                      classrooms. Before SCL arrived in the local
                                                                                                                 area, the school, like many others in the
SCL offers both formal and informal, on the job, training to help workers develop their skills. Several of the   local area had poor access to clean water.
workers interviewed said they’d learnt a range of formal and informal skills through employment at the site,     The nearest water source was 3 miles away
in areas such as cash management, agriculture, and health and safety.                                            and teachers had to pay for water to be
                                                                                                                 transported to the school out of their own
One worker reported being able to save an
                                                                                                                 pockets, which was not only costly but also
additional £40 pounds a month (national
                                                                                                                 a stressful process that distracted them
minimum wage is £47/month) because he
                                                                                                                 from running the school. Despite this, the
was using agricultural skills learnt at SCL to
                                                                                                                 water    was    not    always   clean    and
improve the efficiency of his family small
                                                                                                                 absenteeism due to waterborne diseases
                                                                                                                 was high.
Local community elders report that                                                                               In February 2010, the school, with support
previously any local people who did manage                                                                       from the local village head, submitted a
to achieve a good level of schooling would                                                                       request to SCL for help in building a
leave the area for the capital city, Dakar, or                                                                   connection to a local water pipe, which they
other big towns, but are now choosing to                                                                         agreed to do.
stay in the area because they are being                                                                          The reduction in the stress around sourcing
absorbed by SCL. On the other hand,                                                                              clean water has helped the school become
managers at SCL also commented that they                                                                         more focused, which was reflected in the
tend to employ local people for unskilled                                                                        end of year results posted by the school,
labour and advertise skilled positions                                                                           which were much improved.
nationally, and even internationally,                                                                                                ●●●
because it is easier to fill the positions this                                                                  Learning conditions in the school have
way.                                                                                                             improved a lot. We are posting better results
                                                                                                                 in national exams than ever before. We are
                                                                                                                 very grateful to SCL,
                                                                                                                         Director, El Ngourane Primary School

                                                                           Page 5 of 11                                                     Acona Partners LLP
Tesco Supply Chain Impact Assessment - Supplier: SCL, Senegal
Date: 05 May 2011y 2011
Client Name: Tesco
Report Title: Supply Chain Impact Assessment , SCL Senegal

HEALTH                                                                                                                               80%
                                                                                                                          of workers now have a better
Three of the key indicators used in development to measure health levels are access to a clean water source,              understanding of health issues
access to sanitation facilities and infant mortality. Senegal performs better across these indicators than its
neighbours in West Africa and has been particularly praised for its rapid improvement in the provision of access to                  65%
clean water in urban areas, which is now at 92%. Whilst this is a very positive, the situation in rural areas still      % of workers now feel in better
lags far behind with access to clean water still only at 52% and sanitation coverage even poorer at 38%.3                           health

SCL has established an on-site health clinic for its workers staffed by a full-time nurse. A doctor also visits the                     ●●●
clinic once a week. Permanent workers as well as their dependents are covered by health insurance and receive a
50% discount on prescriptions. The cost of referral to specialist services is also covered.                           Due to sustained business with Tesco,
The St Louis region has a far higher level of water borne diseases than the national average although the             we have been able to hire a full time
government is currently investing in a huge project to improve this. Locally around the SCL site, nearly all the      nurse and engage the services of a
interviewees reported that the work carried out by SCL, including regularly dredging the Senegal river, had           visiting doctor one day in a week,
improved water quality and reduced incidences of water borne diseases although community health workers also
stated that these were still the biggest cause of health problems in the area. Workers at the site also reported                              Manager, SCL
being able to now afford water treatment
tablets.                                                                                                              I have gained a lot of knowledge on
                                                                                                                      Malaria. My child is frequently sick of
          Water Quality Score*                                                                                        malaria and when I go to the clinic I
      Before SCL’s arrival: Neutral (3)                                                                               am educated on how to protect her
           Now: Quite Good (4)                                                                                        from it.

Some workers also reported that air quality                                                                              Sorter at SCL, Female, 20 years
around the SCL site had degraded due to the                                                                                                          old
increase in the number of vehicles coming in
and out of the site.                                                                                                  The majority of the villagers cannot
                                                                                                                      afford healthcare. Those around the
           Air Quality Score*                                                                                         site, most of whom are workers do
     Before SCL’s arrival: Neutral (4)                                                                                afford it.
          Now: Quite Good (3)
                                                                                                                                 Regional Health Director
Some workers reported having respiratory
infections, especially during harvesting, and put
                                                                                                                      There were many cases of bilharzias
this down to the increased dust in the air.
                                                                                                                      and diarrhoea before the site started
                                     Local Nurse                                                                      operation but it is no more.
* We asked Community Leaders to rank issues on a 5
point scale before and after the arrival of SCL. 1                                                                                             Village Head
being Poor, and 5 being excellent

                                                                          Page 6 of 11                                                     Acona Partners LLP
Tesco Supply Chain Impact Assessment - Supplier: SCL, Senegal
Date: 05 May 2011y 2011
Client Name: Tesco
Report Title: Supply Chain Impact Assessment , SCL Senegal


Wages                                                                                                                                  60%
It is clear that employment at SCL has provided many workers at the site with a stable and regular income for the first     of Senegalese live on less than
time, which is important because the cost of living in the St Louis region, and around Diama, is particularly high (it is              $1/day
around four times higher than the national minimum wage).
A quarter of those that we interviewed had never had a regular income, if any at all, before joining SCL and 47% of
those with dependents were the only people earning an income in their household.                                             8   - average household size.
The average wage at SCL is above the local living wage. From the sample we took, it seems that there is a wide range        47% of workers interviewed
of salaries reflecting skill levels and time                                                                                 were the sole earners in their
spent working at the site.                                                                                                            household.
The only workers interviewed who were not
earning the monthly minimum wage were in                                                                                         £47 vs £163
fact casual workers who worked too few                                                                                         Min Wage vs Cost of Living
days that month.                                                                                                                          ●●●
65% of workers we interviewed were able to                                                                                  As a local female worker, I am
save some of their income and 35% had                                                                                       keen to keep up my job as it
used money they had earned to make home                                                                                     has given me financial
improvements. Only 30% of workers                                                                                           independence,
interviewed said they had opened a bank                                                                                          Quality Controller at SCL
account, although 40% said they had plans
to do so. And, 45% of workers had
managed to reduce their debt burden since                                                                                   My income has changed from
earning a regular income.                                                                                                   irregular daily earnings to a
                                                                                                                            more reliable monthly earning
                                                                                                                                   Stock Controller at SCL

                                                                          Page 7 of 11                                                    Acona Partners LLP
Tesco Supply Chain Impact Assessment - Supplier: SCL, Senegal
Date: 05 May 2011y 2011
Client Name: Tesco
Report Title: Supply Chain Impact Assessment , SCL Senegal

Impact of SCL on local suppliers and community members
                                                                                                     SCL is the backbone of my revenue. Without the
It would be fair to say that SCL has contributed to the development of other local businesses who    site, the business would close down.
provide services to workers from the site. One indirect supplier interviewed said that five other
shops had opened up in his village since SCL had established their operations and that 60% of his                          Local Direct Supplier to SCL
customers were employed at the
site. He employs four full time                                                                      20% of people local people not working at the site
members of staff.                                                                                    and those working on a casual basis, are not able
Managemers interviewed were                                                                          to pay full fees for their children so their children
only able to give an indicaiton of                                                                   are absent from school for between one and three
their own departnental spend on                                                                      months. These children perform poorly in exams,
local and national versus
international suppliers. From                                                                                   School Director, local Primary School
these reports we estimate that
overall spend on national or
regional suppliers was around                                                                                                 ●●●
60%. One local direct supplier to
the site confirmed that his                                                                                             CASE STUDY
business had grown substantially
since SCL arrived in the area.                                                                       Adjara is 45 years old and has eight children. In
                                                                                                     2007 her husband lost his job as a security guard
                                                                                                     due to ill health, so she was forced to cross the
                                                                                                     border to Mauritania to seek work as a home help.
                                                                                                     Her monthly income helped the family survive in a
Both local community health and education workers as well as village heads commented on this
                                                                                                     two bedroom semi permanent house made of mud.
commented that there is an increasing income disparity between households with at least one          However, in 2008 during a period of heavy rains,
family member working at SCL, and those with none. This is inevitable but we should look to see if
                                                                                                     the house was destroyed and the family had to
this income disparity leads to any serious conflict when we carry out subsequent reviews, none
                                                                                                     move in with some neighbours.
were witnessed during this assessment.
                                                                                                     One of these worked at SCL and helped Adjara gain
                                                                                                     temporary employment there earning £54 a
                                                                                                     month. Adjara explained her situation to SCL
                                                                                                     management who contributed some money to help
                                                                                                     her build a new house. A year later, they also
                                                                                                     managed to secure her a permanent position at the
                                                                                                     site, enabling her to double her monthly income.

                                                                                                     SCL restored hope for me and my family,

                                                                        Page 8 of 11                                                     Acona Partners LLP
Tesco Supply Chain Impact Assessment - Supplier: SCL, Senegal
Date: 05 May 2011y 2011
Client Name: Tesco
Report Title: Supply Chain Impact Assessment , SCL Senegal


In order to secure a 50 year lease on the land on which they have now developed their three farms, SCL agreed to
engage in community development activities with the villages surrounding the site. From Africa Now’s wide                             71%
experience of visiting other farms across Africa, it would seem that SCL has not only honoured this, but also made a    of Community Leaders feel SCL is
real effort to become a part of the local community.                                                                       part of the local community
Of the 7 community leaders interviewed, only one said he did not know how to constructively engage with SCL on                           ●●●
issues that affected his local community and only two did not feel that SCL was part of the local community.
Unsurprisingly, the head of the village furthest from the site was the least positive of the seven people we           What has been done is
interviewed.                                                                                                           commendable but we need more
Managers interviewed at SCL confirmed that they receive a number of requests for financial support for development     development especially electricity
projects, both formal and informal, from local community representatives. They review all of these, and have           supply in the village,
agreed to help with many of them.                                                                                          Village Head, Savoigne Bifech

Transport                                                                                                              SCL has connected piped water to
                                                                                                                       our village. Before this, we used to
The area that SCL appears to have had the biggest impact over is local roads. All community leaders said that SCL
had built new roads locally as well as maintaining or improving existing ones, which is unsurprising as improving      walk five kilometres to the river
access to the site would be key for them.                                                                              Senegal, a journey that took one
                                                                                                                       and a half hours for the round trip,
Workers we interviewed also confirmed that SCL provides a free bus service to help workers get to and from the site
as well as providing a travel allowance for those who cannot, or do not, use the bus service. One worker also said                 Village Head, Demizine
the company had paid for a bicycle for him to cycle to and from the site.
                                                                                                                         Impact on Transport Score*:
                                                                                                                         Before SC’s arrival: Neutral (2)
Access to Clean Water                                                                                                         Now: Quite Good (4)
Those we interviewed ranked access to clean water as being the second area where SCL had managed to bring
about most positive change. Many of the interviewees, including both community leaders and workers at the site                         ●●●
commented on the fact that SCL dredges the Senegal River every six-twelve months, which they feel has                       Water Quality Score*:
significantly improved local water quality. One Community Head also reported that SCL had facilitated the                Before SCL’s arrival: Neutral (3)
construction of a dam, which had improved the reliability of the local water supply.                                          Now: Quite Good (4)

Although local health workers and community leaders commented that local people still suffer from water borne           *We asked Community Leaders to rank
diseases, all the workers we interviewed also confirmed that they had access to clean drinking water on-site and        issues on a 5 point scale before & after
that SCL had also helped construct pipelines to their villages, although these were not always reliable.                 the arrival of SCL. 1 being poor and 5
Some also added that they were now also able to afford water treatment tablets for their families when required.

                                                                         Page 9 of 11                                                      Acona Partners LLP
Tesco Supply Chain Impact Assessment - Supplier: SCL, Senegal
Date: 05 May 2011y 2011
Client Name: Tesco
Report Title: Supply Chain Impact Assessment , SCL Senegal

The Environment
                                                                                                                           QUITE GOOD (4)*
We interviewed a representative from the Regional Environmental Bureau. The Bureau commented that it did         Average overall environmental score by
not have the necessary equipment to be able to monitor environmental impacts at the site such as air, water,     community leaders, which has not
or soil quality. Instead they relied on local stakeholders to raise issues of concern with them.                 changed since the arrival of SCL
Therefore, we had no environmental data by which to measure the impact of the site. Perhaps SCL themselves                         ●●●
could start to gather and report on such indicators? We know that SCL is intending to carry out a
comprehensive study looking at the operational impact it is having on the local watershed. The Bureau            There is a deliberate effort to plant more
mentioned that they would be particularly interested to measure whether fertiliser use has had any significant   trees through the site re-forestation
impact on soil fertility.                                                                                        program. This will contribute to
                                                                                                                 improved air quality.
From the interviews we carried out with both the Bureau and local community leaders the following noteworthy
points were raised in relation to the environmental impact of the site.                                                    Village Head, Savoigne Bifech
      There was a feeling from both the Bureau and certain community leaders that air quality had
                                                                                                                 Air quality has declined due to an
       deteriorated, due to increased levels of dust.
                                                                                                                 increase in the number of vehicles and
      One community leader commented that trees had been cut down in the local area; however, they also         rise in population seeking employment,
       commented that SCL had replanted trees elsewhere as part of a wider reforestation programme.              hence increasing human activities,
      Two community leaders commented on the fact that the pastoralists in their villages had less land for               Regional Environment Bureau
       animal grazing as SCL had bought up swathes of land around their villages.
      Local workers’ confirmed that farm waste is composted and used as manure.                                 The site has acquired large tracks of land
                                                                                                                 from the community. This has reduced
      And, two community representatives said SCL gave them rejected crops to use as feed for local             cattle grazing space and forced locals to
       livestock.                                                                                                reduce the number of livestock. We have
We think that subsequent studies should look in more detail at the environmental impacts of the site but to do   though seen new plants and crops that
so environmental data needs to be gathered and should cover water, air, soil, and biodiversity.                  we never knew before,

                                                                                                                               Village Head, El Ngouhene

                                                                                                                 *We asked Community Leaders to rank issues
                                                                                                                 on a 5 point scale before & after the arrival of
                                                                                                                 SCL. 1 being poor and 5 excellent.

                                                                         Page 10 of 11                                                      Acona Partners LLP
Date: 05 May 2011y 2011
Client Name: Tesco
Report Title: Supply Chain Impact Assessment , SCL Senegal

Summary of findings:
It is clear from our initial baseline review that SCL is proactively engaged in positive development projects in the community in which it is located. The site is
impacting on the local community in several ways:
       Physical Assets: building news schools, access to water for local villages, and repairing and extending roads.
       Financial Assets: increased income for those working at the site; and supporting local, regional and national businesses through procurement.
       Human Assets: transfer of new skills to enployees; increased opportunity for education of children due to increased worker incomes and new
        classrooms built with support from SCL; improved access to clean water and so reduced incidence of water borne diseases (though this remains a
        problem; greater awareness of health issues for employees, and improved access to health care for employees.

Future considerations:
This was a base-line assessment which gathered much useful base-line data – both qualitative and quantitative. For future assessments we would recommend
that the following issues are explored in more depth:
       SCL’s impact on the local environment
       The level of local employment at the site, particularly at the higher work levels. This would give an indication of whether skills are trully being
        developed both through on-site training, and improved local education.
       Income disparity between households with employees at the site and those with none, and whether there are any negative impacts of this.
       The actual spend on local, regional, national, and international suppliers.
       The ability of those working at the site to improve the additional income they get from their own family farms through improved agricultaral process
        learnt on site, or the use of agricultural inputs as a consquence of SCL’s activity.

1 Trade, Standards, and Poverty: Evidence from Senegal, Miet Martens and Johan F.M. Swinnen, World Development Vol. 37, No. 1, pp. 161–178, 2009
2 Horticulture Exports, Agro-industrialization and Farm-nonfarm Linkages with the Smallholder Farm Sector: Evidence from Senegal, Miet Maerens, LICOS
Discussion Paper Series 214/2008
3 http://unesdoc.unesco.org/images/0014/001480/148045e.pdf
4 Economic and Social Survey for St Louis Region, 2009 from The Senegalese National Agency for Demography and Statistics
5 http://www.devinfo.info/mdginfo2010/

                                                                            Page 11 of 11                                                         Acona Partners LLP
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