In Liberia, a Battered Palm Oil Industry Adjusts to New Rules
MONROVIA – When Liberia signed a series of contracts with international palm oil producers in the years after its protracted civil war, the news was greeted by some as a welcome sign of national renewal. Despite criticism voiced by local and international advocacy groups that the massive deals amounted to “land grabs,” the prospect of tens of thousands of jobs, tax revenues for a cash-starved government, and repaired roads and ports was too much for Liberian officials to pass on.
But with nearly a decade having passed since the first of those contracts was signed with the Malaysian conglomerate Sime Darby in 2009, the industry has struggled to find stable footing in the small country, which contains almost half of the intact Upper Guinea forest, one of the most biodiverse ecosystems in the world. Rather than the smooth, profitable green pastures that the industry hoped to find in Liberia, company representatives and environmental advocates say they’ve instead run into a buzzsaw of human rights and environmental campaigning, forcing adjustments to their business practices and expectations for the future.
According to its concession agreement, Sime Darby initially set an ambitious goal for turning 75 percent of its “gross concession area” — 165,000 hectares, or nearly 650 square miles — into oil palm plantations within its first 15 years of operation in Liberia. After nearly eight years, the company has only managed to plant around 10,000 hectares, a tiny fraction of that figure, according to a recent study by Chain Reaction Research. Golden Veroleum, whose primary investor is the Indonesian multinational Golden-Agri Resources through its New York-based Verdant Fund LP, planned to have planted 30,000 hectares by now when it signed its contract in 2011, but according to company representatives only about half that amount has been planted so far.
For more information, please contact Annemieke Beekmans.