- Twenty-seven concessions intended for industrial oil palm plantations in West and Central Africa have either failed or been abandoned in the last decade.
- Of the 49 that remain, less than 20 percent of the allocated land has been developed.
- Malaysian palm oil giant Sime Darby recently announced its intention to withdraw from Liberia after years of conflict with communities and environmental groups.
It was the “next new frontier” for palm oil. A “mutually beneficial relationship” that would be a win-win for struggling nations in Africa and multinational producers running out of land in Southeast Asia. “The time for that continent has come,” some palm oil executives declared. Others said the lucrative commodity was simply “coming home to Africa.” And for a while, everyone wanted in on the action.
But a new report, by a collection of local and international groups working with affected communities, says that palm oil’s homecoming hasn’t gone as smoothly as its architects hoped. After years of fierce resistance by communities living inside areas demarcated for oil palm plantations, at least 27 new plantations have either failed or been abandoned. Of the 49 that remain in West and Central Africa, less than 20 percent of the 2.74 million hectares (6.77 million acres) of land allocated to them has been developed.
“A lot of the bigger companies had no experience in Africa,” said Devlin Kuyek, one of the report’s authors. “It’s not the same environment they’re used to.”
Industrial oil palm cultivation has been a driver of the economies — and deforestation — of Malaysia and Indonesia for decades. But after years of expansion, the amount of suitable land available to producers in those countries has nearly run out. During the late 2000s and early 2010s, some African governments were quick to propose their forested regions as the solution. In what was dubbed the “great African land rush,” some of the world’s largest palm oil producers signed deals across the continent. Many of those deals were massive; in Liberia, for example, concession agreements held by just two companies covered nearly 600,000 hectares (1.5 million acres).
Supporters promised they would bring in desperately needed revenue for host governments, along with local benefits in the form of jobs, health care and housing for workers, and other services. Critics decried the wave of investments as a “land grab” and pointed out that large-scale oil palm plantations threaten endangered species in the region, particularly primates.
A decade later, GRAIN’s report says many of those deals subsequently collapsed or failed to materialize. Some of the land was leased to companies that lacked the capacity to develop plantations on their own, instead hoping to sell their concessions to bigger, more well-established producers down the line.
But the key factor, the report says, is pushback by communities affected by the projects.
Few of the companies that wanted to move into Africa had a plan for a fundamental problem: tens of thousands of people already lived on the land they’d leased. The land deals were often negotiated in near-secrecy and few local communities were consulted by their governments before their territory was offered up to investors; when the bulldozers arrived, trouble followed.
In Cameroon, villagers affected by a Wall Street-backed plantation, Herakles, organized demonstrations against its expansion plans; local activists supporting them were arrested by military police. Land clearing by Sime Darby and Golden Veroleum in Liberia prompted community-led complaints filed to the Roundtable on Sustainable Palm Oil, an industry body. In 2015, a riot by people living inside the Golden Veroleum concession led to dozens of arrests, and paramilitary police beat villagers participating in a march against a different plantation nearby.
Often initially warm to the idea that oil palm plantations will bring development and jobs, communities have turned to civil society groups for help as the reality of the plantations becomes apparent.
James Otto is a project director at the Sustainable Development Institute in Liberia. He says that in order to acquire land, some investors made expansive promises to communities that generated discontent when they weren’t fulfilled.
“They created huge expectations that they couldn’t meet,” he said. “And that showed communities that it wasn’t sustainable, so they decided to insist that expansion stop until those promises were met.”
Evidence suggests the promised benefits are a mirage for most of the people affected by oil palm expansion. An assessment of Golden Veroleum’s massive holdings in southeast Liberia found that most of the 14,000 people living in the concession area would lose access to farmland and forest they rely on for additional food, fuel and building supplies; this in exchange for jobs for only around 1,650 community members. Attempting to put a monetary value on the trade-off, the consultants calculated a net loss to the community of $7.3 million per year.
Studies of long-term impacts of plantations in Indonesia bear this out. Researchers found that while many communities already strongly integrated into market economies did enjoy overall benefits with the expansion of corporate oil palm plantations, subsistence-based communities suffered declining health, nutrition, and living standards.
After a troubled start in Liberia, Sime Darby pulls out
Faced with resistance on the ground, palm oil producers are also finding West and Central Africa to be other than the promised land.
Sime Darby was one of the first major investors to roll the dice on Africa. A Malaysian company with a market capitalization of nearly $5 billion, in 2009 it signed a 63-year lease to develop a 220,000-hectare (544,000-acre) plantation in western Liberia. Almost immediately, the concession ran into trouble. Local activists accused the company of failing to secure consent from community members, undercompensating them for destroyed crops, and clearing areas used for religious rituals. Environmental groups pointed out that the company’s plans to expand into “high conservation value” forests would have devastating effects on biodiversity.
In response, Sime Darby agreed to rework its procedures for acquiring and developing land. In 2014, wary of further damage to its international image, it agreed to abide by strict “no deforestation” standards. But executives warned that they were losing money, with one saying that the company “never realized land would be this painful to secure.”
Last month, Sime Darby announced its plans to exit Liberia by the end of this year, saying it was actively looking to sell its concession to another company. According to GRAIN’s report, in the decade since Sime Darby signed its deal with the Liberian government, it managed to plant only 10,401 hectares (25,701 acres) of its 220,000-hectare concession.
“They realized it wasn’t going to be profitable, and the output is a lot lower than they ever expected,” said Matthew Piotrowski of Chain Reaction Research, a publication that provides sustainability risk assessments for investors. “A lot of this land isn’t able to be developed, so they’d be continuing to operate at a loss.”
Similar events have played out in other high-profile concessions in the region. After sustained resistance and campaigning by communities in Cameroon, U.S.-based Herakles Farms had the size of its concession reduced from 73,000 to 19,843 hectares (180,400 to 49,033 acres). The investors backing the project subsequently sold their stake, and reports indicate its new owners are struggling to develop an even smaller area.
Kuyek says that some companies likely expected that the governments who offered them the deals would be more aggressive in helping them secure land from communities:
“If they’re going from the Indonesia context, the expectation they probably had was the government and army would ensure they had access to the land.”
With the unexpectedly high costs of acquiring land piling up, other companies are likely to follow Sime Darby’s lead. Some advocates fear they could be replaced by investors who are less concerned about their international image and more willing to flout social and environmental regulations. But Kuyek says that as the bigger players withdraw, smaller companies will struggle to raise the capital they need to develop the massive tracts of land.
“A lot of them now understand how difficult it is to set up these large-scale plantations in Africa, and that’s a good thing,” he said.
by Ashoka Mukpo was a staff member at SDI between 2012 and 2014. (Mongabay)