UNDER THE CANOPY

February 2013

THE RAINFOREST FOUNDATION UK 233A Kentish Town Road, London NW5 2JT, United Kingdom

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[email protected] Registered Charity No. 1138287 rainforestfoundationuk.org Registered Company No. 7391285 mappingforrights.org youtube.com/theRFUK Design by 999design.com DESTRUCTION Printed on 100% recycled paper EXPANSION OF INDUSTRIAL OIL PALM IN THE CONGO BASIN: facebook.com/rainforestfoundationuk Cover photo credit: Area of Olam twitter.com/RFUK – @RFUK plantation, Gabon, Alexander De Marcq POTENTIAL IMPACTS ON FORESTS AND PEOPLE UNDER THE CANOPY

A series of special reports by The Rainforest Foundation UK.

These reports closely examine issues affecting indigenous peoples and traditional populations of the rainforest. Under the Canopy reports provide recommendations for international and local governments, the private sector, institutions and NGOs to innovate for positive change. www.rainforestfoundatiouk.org/ underthecanopy CONTENTS

KEY MESSAGES 5 Confirmed and potential oil palm developments in the Congo Basin 6 - 7 EXECUTIVE SUMMARY 8 - 10 Box1: Pygmies’ & Bantus – the people of the Congo Basin rainforest 10 SECTION 1: Background on oil palm and palm oil 11 - 12 Box 2: Who owns the Congo Basin rainforest? 12 SECTION 2: OIL PALM IN THE CONGO BASIN: RECENT DEVELOPMENTS 13 - 21 & FUTURE POTENTIAL 2.1 Historic & current extent of development 13 2.2 Planned expansion 15 SECTION 3: CASE STUDIES OF NEW OIL PALM DEVELOPMENTS 22 - 44 iN THE CONGO BASIN 3.1 Atama Plantation (Republic of Congo) 24 - 31 3.2 Olam (Gabon) 32 - 38 3.3 Herakles/SGSOC (Cameroon) 39 - 43 3.4 Conclusions from case studies 44 SECTION 4: POTENTIAL SOCIAL & ENVIRONMENTAL IMPACTS 45 - 54 OF OIL PALM DEVELOPMENT IN THE CONGO BASIN 4.1 Environmental impacts 46 - 47 4.2 Social impacts 48 - 50 4.3 Attempts to address the negative impacts of oil palm 51 - 53 Box 3: Challenges of smallholder / out-grower palm oil schemes 54 SECTION 5: CONCLUSIONS & RECOMMENDATIONS 55 - 59 5.1 Conclusions 55 5.2 Recommendations 56 - 59 ANNEX 1: SUMMARY INFORMATION ON KNOWN OIL PALM EXPANSION PROJECTS IN THE CONGO BASIN 60 ANNEX 2: FREE, PRIOR AND INFORMED CONSENT (FPIC) AND CONSULTATION 63 acronyms 64 references 65

This report is based on research by Earthsight Investigations on behalf of Rainforest Foundation UK (RFUK). Earthsight specialises in using in-depth research, investigations, undercover work and filming to document environmental and social crime and injustice. The conclusions and recommendations and any views expressed within the report are those of RFUK only.

www.earthsight.org.uk

3 KEY MESSAGES KEY MESSAGES

HUGE FUTURE DEVELOPMENT PLANNED RISK OF MAJOR SOCIAL AND New industrial oil palm expansion projects ENVIRONMENTAL PROBLEMS currently underway cover 0.5 million hectares There is a real and growing risk that some of in the Congo Basin, which will result in a fivefold the serious, negative environmental and social increase in the area of active large-scale palm impacts resulting from rapid expansion of palm plantations in the region. The area of projects oil production in Indonesia and Malaysia, such IMAGE announced since 2009, but not necessarily as widespread deforestation, social conflict and underway, covers 1.6 million hectares and dispossession, could be repeated in the Congo palm oil companies are searching for larger Basin. However, practical steps can be taken to areas. Approximately two-thirds of the total minimise such impacts if action is taken quickly forest area of the Congo Basin’s forests – 115 (see Recommendations). million hectares – has suitable soil and climate for growing oil palms. Some of the projects INFORMATION GAPS are associated with wider agro-industrial Details of many of the new oil palm developments, such as for rubber production developments – including even geographical or biofuels. locations and agreements/contracts – are LACK OF TRANSPARENCY missing from publicly available information sources. Governments and investing The terms of the agreements between palm companies may not have records of the oil companies and Congo Basin governments presence of local and indigenous communities have mostly been conducted and concluded in or important natural resources within the secrecy. Those agreements and contracts that concessions earmarked for development. A have found their way into the public domain key recommendation of this report is that this indicate that very generous investment terms information needs to be collected as a matter are being offered; the potential benefits to local of urgency, and incorporated into government and national economies are much less clear. planning of new developments in order to PROJECTED INCREASE OF EXPORTS increase transparency and minimise negative impacts on people and the environment. Although current exports of Congo Basin palm oil to major global markets are minimal, they ABSENCE OF STATE PLANNING may increase markedly from 2020. For most of the new projects included in this report, there is little evidence that they form part of national land-use plans or socio-economic development strategies, or that alternative development options have been considered.

4 THE RAINFOREST FOUNDATION UK SEEDS OF DESTRUCTION FEBRUARY 2013 Oil palm saplings, ePhotia - Shutterstock 5 CONFIRMED AND POTENTIAL PALM OIL DEVELOPMENTS

“Approximately two-thirds of the total forest CONFIRMED AND POTENTIAL area of the Congo Basin’s forests – 115 million OIL PALM DEVELOPMENTS IN hectares – has suitable soil and climate for THE CONGO BASIN growing oil palms.”

THE CONGO BASIN

CAMEROON GABON CONGO CENTRAL AFRICAN REPUBLIC

PALM CO OLAM BIOCONGO GLOBAL PALMEX CHAD Reportedly seeking 100, 000 ha of TRADING Agreement to SUDAN 100,000 ha planting started 24,200 ha planted as develop 8,701 ha part of a 60,000 ha, CDC See Case Study 3.2, US$150m deal Started planting Section 3 NIGERIA 6,000 ha in 2009 FRI-EL GREEN SIAT 40,000 ha agreed for SMART HOLDINGS In possession of biofuel production CENTRAL AFRICAN Seeking 25,000 ha 6,000 ha for expansion REPUBLIC of current operation ENI CARGILL 70,000 ha ‘protocol’ CAMEROON US$390m deal close to agreement signed signature, 50,000 ha EQUATORIAL GUINEA UGANDA ATAMA PLANTATIONS RWANDA GOOD HOPE 180,000 ha to be developed GABON BURUNDI DEMOCRATIC Believed to be looking in a 470,000 ha deal REPUBLIC OF for 6,000 ha, plan to invest CONGO ‘hundreds of millions’ See Case Study 3.1, CONGO of dollars Section 3 TANZANIA BIOPALM ENERGY Secured 53,000 ha, seeking at least 200,000 ha

ANGOLA HERAKLES FARMS Agreement for 73,000 ha, ZAMBIA 60,000 ha to be planted

See Case Study 3.3, Section 3

SIME DARBY KEY Reportedly seeking Figures listed in hectares (ha) up to 600,000 ha *For more detailed information on each development, Please see Annex 1

6 THE RAINFOREST FOUNDATION UK SEEDS OF DESTRUCTION FEBRUARY 2013 7 EXECUTIVE SUMMARY

“CONFIRMED PROJECTS IDENTIFIED WILL RESULT IN 0.5 MILLION HECTARES OF NEW PLANTING IN EXECUTIVE THE CONGO BASIN - A STARK NEW THREAT TO THE SUMMARY SECOND LARGEST RAINFOREST IN THE WORLD.”

The cultivation of palm oil at an industrial- the second largest contiguous rainforest the potential to boost growth and generate farming. These are likely to be significantly scale has wreaked havoc with the rainforests in the world. foreign exchange earnings, this needs to be impacted by the development. and forest peoples of South-East Asia balanced against the cost to the environment and is now threatening rainforests in the The projects surveyed in this report are and the replacement of diverse farming and Most developments appear to be progressing Congo Basin. significant. They include a project to create forest-based livelihoods with an export- without an overall vision or national plan for the largest oil palm plantation in the Congo orientated monoculture. In practice, the the total area of land to be allocated to oil In Malaysia and Indonesia, the Basin, which would catapult its owners, contracts signed between governments and palm, what proportion of that land will or (often illegal) expansion of oil palm oil palm developers are being kept secret, could be dedicated to smallholder production, between 1990 and 2005 resulted in the reducing transparency and democratic and how to balance the demands for land deforestation of 1.1m hectares and 1.7m “THE HUMAN COST OF PALM accountability. Those contracts that have for local community subsistence, mining, hectares respectively. Fifty to sixty per cent come to light show that governments have logging, and other agriculture. Furthermore, of all oil palm expansion in the two countries OIL PRODUCTION HAS BEEN already signed away some of the potential all countries in the region are engaged in during this time occurred at the expense economic benefits, by granting developers the ‘Reducing Emissions from Deforestation of natural forests. The human cost of palm ALIENATION OF FOREST extremely generous tax breaks of 10 to and Degradation’ (REDD) process, but it oil production has been alienation of forest 16 years and land for “free” or at highly- is not clear how any ambitions to reduce peoples from their land, land conflicts and discounted rates. It is far from clear that greenhouse gas emissions can be reconciled the pollution or over-use of water sources. PEOPLES FROM THEIR LAND, national economic benefits of palm oil will with ambitions to become significant palm Oil palm expansion on peat forests has be shared equitably or compensate for local oil producers. been a major contributor to increased LAND CONFLICTS AND livelihoods lost by communities in the Congo climate change emissions. Oil palm Basin due to development, or that granting This report, the result of original research companies in Indonesia have cleared POLLUTION OF WATER.” large land concessions to foreign companies commissioned by The Rainforest Foundation habitat of endangered Orang-utans and is a real solution to rural poverty and food UK (RFUK), lifts the lid on the new expansion Sumatran tiger. a Malaysian ‘pipe-coating specialist’ firm, insecurity in the region. There is little or of oil palm developments in the Congo Basin. into the top ten global palm oil producers, no evidence that host governments have It demonstrates that the negative impacts This report shows that some of the same and another that would increase the area undertaken such ‘cost-benefit’ analyses, of oil palm developments seen in South-East major players behind oil palm production of large-scale agriculture by 85 per cent and they certainly haven’t allowed any Asia over the last twenty years are already in South-East Asia (such as Sime Darby, in one country, while doubling its annual such analysis to be subject to public debate. starting to be felt in the countries of Central Goodhope, Wilmar and FELDA) are now greenhouse-gas emissions. The projects Africa. After providing a detailed overview of turning their attention to Africa. In addition, featured are financed or serviced by regional Areas newly allocated for conversion to oil all projects announced in recent years, this new players - some with questionable development banks, high-street banks, major palm plantations include habitats for rare, report focuses on three major projects, in backgrounds - are entering the market along investment funds and sovereign wealth threatened or endangered species. For the Republic of Congo, Gabon and Cameroon with agricultural commodity traders seeking funds, and often implemented by firms example, studies have shown the presence respectively, which are among the most to break into the industry. Whilst new oil that have found to be in breach of national of great apes (including chimpanzees advanced. Though all are at an early stage palm investments in Liberia have received regulations in other countries related to and gorillas), forest elephant, buffalo and of development, these three plantation attention, developments in the Congo Basin logging or plantation development. manatees in one palm oil concession or developments already demonstrate the have been largely unremarked. Confirmed adjacent wetland ecosystems. Another potential environmental destruction and projects alone identified by this study will Congo Basin governments are welcoming concession even overlaps with a National social conflict that the expansion of oil palm result in 0.5 million hectares of new planting oil palm developers with open arms, seeing Park. The areas allocated also often play an development in the Congo Basin is likely to in the Congo Basin - a fivefold increase in the them as potential new sources of prosperity important part in local peoples’ livelihoods, bring unless lessons from elsewhere current area of productive industrial oil palm and jobs in one of the world’s poorest including hunting, collection of important are learned. in the region. This is a stark new threat to regions. Although palm oil production has ‘non-timber forest products’, and subsistence

8 THE RAINFOREST FOUNDATION UK SEEDS OF DESTRUCTION FEBRUARY 2013 9 THE PEOPLE OF THE CONGO BASIN RAINFOREST SECTION 1: BACKGROUND ON OIL PALM AND PALM OIL

‘PYGMIES’ AND BANTUS Box 1 BACKGROUND ON OIL ‘Pygmy’ is the term used (sometimes In forest areas, Bantu people generally practice pejoratively) in relation to a number of different subsistence rotational farming systems in small but related groups of indigenous peoples ‘forest gardens’, which are temporarily cleared that inhabit various parts of the Congo Basin of lower vegetation by slashing and burning and PALM AND PALM OIL rainforest. They were originally fully nomadic planted with short rotation crops, accompanied hunting-gathering people, but in recent decades by selection and retention from the natural many have become at least partly sedentarised, vegetation of plants producing fruits, nuts, partly as a result of government policies. rattans and medicines. Because land might need FIGURE 1 15 to be left fallow for 15-20 years, it can sometimes Growth of oil palm Indonesia Malaysia Other Countries Western Bantu farming people migrated into appear ‘unoccupied’ or unused, even if it is part planted area in the Congo Basin, where ‘Pygmy’ people were of an integral farming system. Bantu people are Indonesia, Malaysia 3.0 probably already present, 3,000-4,000 years ago. also responsible for almost all of the farming of and other countries, 10 Bantu people, which are sub-divided into many permanent cash crops, such as cocoa, within the 1995-20102 different ethnic groups, represent the dominant forest zone. 2.0 population in all the region’s countries. 4.1 1.6 Typically, Pygmy ‘camps’, consisting of around 3.6 5 100 people from two to three large ‘family clans’ 1.4 are located at the edge of, or nearby, a larger 2.9 Bantu village. Very few of these settlements 2.2 3.7 5.7 (usually termed ‘campements’) are officially 2.2 recognised. Because of the lack of documents 1.2 0 such as birth certificates or ID papers, and the 1995 2000 2005 2010 lack of formal title to the land they occupy, (Preliminary) Pygmy people and their settlements may be ISTA Mielke 2010, in MVO (2010). Fact sheet Palm Oil, Productschap Margarine, Vetten en Oliën, November 2011 completely absent from government censuses, maps and planning documents. For more on the The oil palm (Elaesis guineensis) is native ingredient in a vast array of processed food environmental, climate to tropical Africa and its fruit has provided and pharmaceutical products such as soap, It is believed that there are around 500,000- and human cost of useful edible oils for local people there for chocolate, ice-cream and cosmetics. Over 700,000 Pygmies throughout the Congo Basin. expansion of industrial many centuries. During the 20th century the last few years, driven by increased crude Although they have been present within the oil palm plantations however, governments and large companies oil prices and government policies intended Congo Basin for many millennia, they are in Indonesia and began planting oil palms on an industrial scale to reduce greenhouse gas emissions from universally landless, heavily discriminated Malaysia, and some in monoculture plantations. Though such vehicles, an increasing (though still relatively against, are victims of violence and racism, attempts to mitigate plantations have been established in many small) proportion of palm oil has been and often living in conditions of ‘indentured’ those impacts, see tropical countries, by far the largest growth destined for use as biodiesel. labour to their Bantu farming neighbours. Section 4. has taken place over the last twenty years in Aka woman in a village in the Central African Republic, RFUK Malaysia and Indonesia. At present, 85 per cent of global palm oil production happens in Indonesia and Oil palms produce a much greater yield of Malaysia3.There are wide expectations oil per hectare than other oil seeds such as that global demand will continue to grow soy or rapeseed, and have therefore been substantially for the foreseeable future, but increasingly favoured by producers. In the there is limited new capacity for expansion of “There are an estimated 500,000 ten years from 1999-2009, for example, the oil palm plantations in Malaysia, and growth area of oil palm plantations in Indonesia more in Indonesia has slowed. Whilst there is indigenous forest peoples in the than doubled (see Figure 1).1 Much of the believed to be the potential for substantial expansion in South-East Asia has taken place increases in yields from existing (or renewed) Congo Basin.” at the expense of forests, and it has resulted in plantations (such as through better plantation dramatic negative impacts on the environment management practices, and selection of and on local people (see Section 4). planting stock, for example4), palm oil developers are looking farther afield for The primary consumers of palm oil include large-scale expansion - including to Africa China, India and the European Union. Palm oil (see Section 2.2). is mostly used as a frying oil, but is also an

10 THE RAINFOREST FOUNDATION UK SEEDS OF DESTRUCTION FEBRUARY 2013 Kate Eshelby 11 SECTION 1: BACKGROUND ON OIL PALM AND PALM OIL SECTION 2: OIL PALM IN THE CONGO BASIN: RECENT DEVELOPMENTS AND TRENDS

WHO OWNS THE CONGO BASIN RAINFOREST? Box 2 OIL PALM IN THE CONGO BASIN:

exist through very long occupation, custom and practice. They are often recorded only in verbal CONGO BASIN history and agreements between communities RECENT DEVELOPMENTS AND TRENDS and have mostly not been formally recorded or 2. officially recognised. Large areas of land inhabited 1. by forest-dependent communities and claimed that in Gabon has increased – but the overall by them under customary regimes have been 2.1 HISTORIC & CURRENT EXTENT picture has been static and at a relatively low 3. allocated to other forest users and exploiters OF PALM OIL PRODUCTION level, until now5. 5. - a continuing high level of conflict between 4. customary forest ‘rights-holders’ and those Figures for the current area of productive 6. Most existing oil palm concessions in the allocated new rights, such as logging companies, Congo Basin were originally developed many plantations, collated from information on is a consequence. decades ago. Large areas date back to the individual companies identified in this 1. Cameroon report, are provided in Table 1. This table 2. Central African Republic colonial or early independent governments. 3. Equatorial Guinea As oil palms become commercially does not include the area of planting within 4. Gabon “LARGE AREAS OF LAND unproductive about 20-25 years after new developments, which is addressed in 5. Republic of Congo planting, many have now fallen into disrepair the following section. The data in Table 1 6. Democratic Republic of Congo INHABITED BY FOREST- or are past prime production. As a result, the suggests that productive industrial total area of commercially operated oil palm plantations in the Congo Basin, excluding All forest land in all countries of the Congo in the Congo Basin was at about the same dilapidated large-scale plantations and Basin region is considered to be the property DEPENDENT COMMUNITIES level in 2010 as it was 50 years earlier. There community oil palm plots, currently cover of the state. HAVE BEEN ALLOCATED TO are some regional variations: the area in the approximately 100,000 hectares. Parcels of land are leased out for specific DRC has declined since colonial times and purposes over defined periods of time (typically, OTHER FOREST USERS AND for timber extraction, over 20-30 years) under concession agreements. Such agreements should TABLE 1 COUNTRY EXISTING PRODUCTIVE OIL PALM COMPANIES accord with both the national forest/land zoning EXPLOITERS.” Existing large-scale PLANTATION AREA (HECTARES) plan, where this exists, and also with national commercial oil palm The absence of formal (written) land ownership forest legislation, which usually determines plantations in the Cameroon 57,520 Pamol, CDC, Bollore Group titles over any land does not necessarily indicate different types of forest land, in particular Congo Basin6. that the land is unoccupied, unused, or is CAR 1,000 Centrapalm whether they are part of the ‘permanent’ forest unclaimed by communities. Government agencies DR Congo 28,127 Feronia Inc, SOCFIN estate, or are convertible to other uses. Even responsible for confirming agreements with oil (Brabanta), Groupe Agro at official zoning level, forest land allocations palm developers may have few or no records Pastorale (Blattner Group) can be erratic and inconsistent with national of such customary rights and claims, though policies; overlaps and multiple allocations are Gabon 7, 3 0 0 SIAT some legislative frameworks, such as in the not uncommon, such as between different Democratic Republic of Congo (DRC), in principle Republic of Congo 4,000 Fri-El-Green types of commercial concessions, or between recognise customary possession and oblige all such concessions and, for example, designated investors to undertake prior consultation with Total 97,947 national parks or other protected areas. indigenous peoples and other local communities, Another major problem in ensuring clear and and to compensate for any loss of customary uncontested land rights is that probably the vast usage rights. ‘Pygmies’ have been excluded from Source: Earthsight Investigations for Rainforest Foundation UK majority of forest land in the Congo Basin region legal processes determining rights to land, and is claimed under customary ‘ownership’ of usage sedentarisation has often meant settling on land rights by at least one ethnic group or community that is already either claimed, owned or used by (see Box 1 on Pygmies and Bantus). Such claims settled Bantu farmers.

12 THE RAINFOREST FOUNDATION UK SEEDS OF DESTRUCTION FEBRUARY 2013 Oil palm saplings, ePhotia - Shutterstock 13 SECTION 2: OIL PALM IN THE CONGO BASIN: RECENT DEVELOPMENTS & FUTURE TRENDS

The Congo Basin is thus currently a the largest producer in the Congo Basin, 2.2 PLANNED EXPANSION small player globally in terms of palm oil but domestic consumption in the country ”LAND AVAILABLE FOR EXPANSION IN MALAYSIA production. The region has less than 2 per exceeds this.8 Some have used this argument cent of the world’s oil palm-planted land and to justify the development of new industrial AND INDONESIA – WHICH ACCOUNTS FOR 85% OF accounts for less than 0.5 per cent of global palm oil plantations in the Congo Basin, but 2.2.1 POTENTIAL & DRIVERS 7 palm oil production. Even within Africa, as this report argues, the business models Since as early as 2009, media reports GLOBAL PRODUCTION – IS RAPIDLY DIMINISHING, Nigeria, Ivory Coast and Ghana are larger behind new developments seem to be based on the oil palm industry have been palm oil producers than any Congo Basin on exports to lucrative markets, similar to noting increased attention by major WHILE DEMAND FOR PALM OIL IS EXPECTED TO country. Both Malaysia and Indonesia dwarf the region’s timber industry. companies to tropical Africa for the entire region’s production. future expansion.11 There are various Currently, nearly all palm oil exports from reasons for this. The principal one is CONTINUE TO GROW.” Cameroon, DRC and Gabon all currently DRC and Gabon go to other countries in that the amount of land available for export palm oil, but up to now the amounts Central Africa. Just 60 tonnes of palm oil expansion in the two main producing Labour costs are increasing in commodity development, especially have remained very small in global terms were exported by Congo Basin countries to countries - Malaysia and Indonesia, Malaysia and Indonesia – and in the minerals), which is opening new areas (see Table 2). The largest exporter in the Europe in 2010, with Belgium (34 tonnes), which between them account for same way that this became a limiting to possible investment. Land is cheap region, Cameroon, exported just 4,000 France (13 tonnes) and the UK (9 tonnes) 85% of global production - is rapidly factor for the rubber industry, so it and seemingly plentiful, and taxes low. 10 tonnes in 2010, worth $7.4 million. Most the largest European destinations. Exports diminishing, while demand for will affect palm oil production. As Recent investments indicate that land existing palm oil produced in the Congo Basin from the region to the UK represented less palm oil is expected to continue to well as plentiful and cheap labour, which typically costs up to $500 per is consumed domestically. Significantly, all than 0.01 per cent of the UK’s total palm oil grow. Investment bank Nomura has West and Central Africa also have hectare in Indonesia can be obtained countries in the region are net importers imports. Almost all of these exports were predicted that these countries will the advantage of being closer to for free (at least in terms of officially (see Table 2). Cameroon, for instance, is from Cameroon. run out of suitable land by 2020- key palm oil markets in Europe and declared and recorded payments) from 2022.12 By the end of the current the Middle East, reducing shipping pliant African governments, along with decade, assuming ‘business as usual’, costs. There is also growing domestic incredibly generous tax breaks. TABLE 2 COUNTRY PALM OIL PRODUCTION PALM OIL EXPORTS 2009 PALM OIL IMPORTS 2009 and continued expansion in both demand in Africa itself, which (see case studies in Section 3). countries, it is expected that global imported 3 million tonnes of palm Summary data on 2010 (TONNES) (TONNES) (TONNES) demand for palm oil will significantly oil in 2010, an increase of 15 per commercial palm oil in Cameroon 111,440 6,052 29,847 outstrip supply.13 It is estimated that cent on the previous year.16 Oil palm Congo Basin countries.9 to meet anticipated demand will development in the Congo Basin is Central African Republic No Data 0 5,188 require around 7 million hectares of being encouraged by new investments Democratic Republic of Congo 187,000 500 74,000 additional planting14, and $20 billion in road and port infrastructure in key 15 Gabon 2,800 1,684 23,606 in investment . countries (often linked with other Republic of Congo 25,500 0 9,250

Total 326,740 8,236 141,891 FIGURE 2 What’s driving oil palm production in the Congo Basin? Source: Earthsight Investigations for The Rainforest Foundation UK

Tristan tan - Shutterstock

14 THE RAINFOREST FOUNDATION UK SEEDS OF DESTRUCTION FEBRUARY 2013 15 SECTION 2: OIL PALM IN THE CONGO BASIN: RECENT DEVELOPMENTS & FUTURE TRENDS

37 TABLE 3 COUNTRY TOTAL FOREST AREA POTENTIALLY SUITABLE FOR OIL OTHER DATA/ESTIMATES In DRC, a new agricultural code indirectly, but drawing other edible oils There are four broad categories PALM PRODUCTION (MILLIONS OF HECTARES)25 passed in December 2011 prohibits (such as rape seed) into biofuels and of company involved. Forest areas potentially foreign individuals or companies hence providing a gap in the market suitable for oil-palm Cameroon 8.3 from owning farms in the country for palm oil to replace these oils in 1. First, there are existing plantation production in the outright, and may serve to restrict food and cosmetics. While production companies looking to expand (e.g. Congo Basin. CAR 14.5 64% of forests potentially agricultural investment in forest areas. from new plantations planned or under CDC, SIAT). These represent a very convertible to oil palm26 At least three large-scale agricultural development may be targeted towards small percentage of the potential DR Congo 77.8 Potential conversion of forest investment plans have reportedly the European market, it will however total expansion, their focus largely to oil palm in ‘near future’ been abandoned as a result of the be some years before imports into being on re-planting abandoned 38 estimated at 1.6 – 3m ha27 new law , though Feronia (which is the EU from the Congo Basin increase colonial-era plantations. currently re-planting 107,892 hectares substantially. It takes 3-4 years for oil 2. Second, there are large Asian Gabon 8.1 5m ha of potentially ‘farmable’ of oil palm in DRC) has claimed that its palms to become productive, so even 28 companies already producing palm land legal analysis and discussions with the limited new planting which has already oil that are looking to expand government suggest that the law does taken place will not result in increased Republic of Congo 6.6 92% of forests potentially into Africa. This group includes 29 not apply in cases where developments trade before 2016 at the earliest. convertible to oil palm two of the three largest oil palm are leased concessions on land still Significant increases are unlikely companies in the world: Sime owned by the government.39 before 2020, though thereafter there Total 115.3 Darby, which is already developing is the potential for Congo Basin palm a large new plantation in Liberia Exports to European Union (EU) oil exports to Europe to increase Source: Earthsight Investigations for The Rainforest Foundation UK and is negotiating another in dramatically. Congo Basin countries Cameroon; and Wilmar, which has Given that all Congo Basin countries have one additional advantage over not announced any specific new The potential for expansion of oil palm The analysis in this report shows that are net importers of palm oil and Malaysia and Indonesia, that they are planned developments in the Congo production in the Congo Basin is undoubtedly the area of planned planting covered by consume more than they produce, part of the African, Caribbean and Basin but is reported to be seeking very large. It has been estimated that up announced projects in the Congo Basin has one might expect that much new Pacific Group of States (ACP), which large deals in the region.41 to 115 million hectares of the Congo Basin’s risen sharply in recent years (see Section development production would be have preferential access to the EU, forests have the necessary soils and climate 2.2.3). This expansion can be expected to consumed domestically. However, including import duty exemptions. 3. Third, there are new and relatively for growing oil palm17 – or almost two thirds continue, since numerous other companies as with the timber industry in the unknown companies moving into oil of the total forest area18 (see Table 3). are known to be seeking similar investments region, it is likely that production from palm for the first time, usually with Consultancy company McKinsey & Co has in the region. For example, the Singapore- large-scale commercial operations 2.2.2 SUMMARY INFORMATION Asian backing. Examples include claimed that there are 5 million hectares based palm oil company Biopalm has listed will be destined for more lucrative ON KEY ACTORS INVOLVED Biopalm in Cameroon and Atama of farmable land in Gabon19, and estimates DRC as one country which it is targeting export markets, despite a dearth of Malaysian, French, Belgian, Italian, in Congo. that 1.6-3 million hectares of forested lands for large-scale oil palm expansion31. World- supplies for domestic use. Anecdotal Chinese, Singaporean, US, Canadian in the DRC could be converted to industrial leading oil palm company Wilmar is reported evidence suggests that one of the 4. Fourth, there are global agricultural and Spanish companies are involved oil palm in the near future.20 In its 2009 to be scoping out various African countries drivers behind the expansion of palm commodity traders which are in operating existing oil palm ‘REDD+ strategy’ for DRC, McKinsey & for expansion opportunities.32 Olam, which oil production in Africa is the expected seeking to break into the top ranks plantations or planning new ones Company suggested that large amounts already has a large oil palm project in Gabon, growth of demand for biofuels in of oil palm producers through in the Congo Basin. of carbon emissions could be avoided if oil is reported to be negotiating with the DRC European markets (even though development of plantations palm companies in the country were paid government over a large-scale agricultural such markets now appear to be less in Africa. This group includes to develop on non-forested land instead.21 investment33, and has also expressed interest promising than they were five years agricultural giants Olam and Cargill. Governments of Congo Basin countries are in developing oil palm in The Republic of ago) 40. The twenty-seven member actively promoting large-scale expansion of Congo.34 Malaysian state-owned plantation states of the EU have committed to oil palm, which they see as a key potential company FELDA, the third largest oil palm sourcing 10% of transport energy driver of economic growth. Gabon, for company in the world by planted area35, is from biofuels by 2020, which is likely “It is likely that production from large-scale instance, is aiming to have 200,000 hectares targeting large scale expansion in Cameroon to include bio-diesel from palm oil. In planted by 201722, while Cameroon is looking but has yet to announce any specific deals. the face of concerns about negative to double palm oil production by 202023. The Cameroonian government officials told WWF/ environmental and social impacts, commercial operations will be destined for Republic of Congo has a target of one million CIFOR recently that there are a number of they have adopted a ‘Sustainability hectares of new tree plantations, including companies negotiating large oil palm deals Criteria’ for biofuels, which may more lucrative export markets.” an unspecified area of oil palms.24 in the country, in addition to those already exclude the produce of ‘greenfield’ announced36, and the same is also very developments in the Congo Basin. (See endnote30 for information on areas of likely the case in Gabon, Republic of Congo However, the EU biofuels target might forest in the tropics with suitable climate for and DRC. still increase demand for palm oil growing oil palm across the world.)

16 THE RAINFOREST FOUNDATION UK SEEDS OF DESTRUCTION FEBRUARY 2013 17 SECTION 2: OIL PALM IN THE CONGO BASIN: RECENT DEVELOPMENTS & FUTURE TRENDS

Various government entities are involved in the expansion of oil “FOREIGN GOVERNMENTS ARE ALSO INVOLVED, palm in each Congo Basin country. Agriculture or Forest ministries do not ALBEIT INDIRECTLY. MALAYSIA’S STATE-OWNED always take the lead. In Congo, the Minister of Industrial Development has signed large oil palm deals42, while in OIL PALM PLANTATION COMPANY, FELDA, IS Cameroon the Minister of Economy, Planning and Regional Development INVOLVED IN PROMOTING EXPANSION OF OIL has been a signatory.43 In Gabon, the Ministry of Agriculture and PALM IN CAMEROON.” Rural Development has led, but the President’s office has had significant that the government had already had Olam has borrowed $228 million involvement.44 Often an ‘investment some engagement with existing oil from the Central African States promotion agency’ is involved palm developments in Congo, Liberia Development Bank (BDEAC in French) alongside relevant ministries. and Sierra Leone involving Malaysian to fund its 300,000 hectare oil palm companies.47 Singapore’s sovereign and rubber plantation development Foreign governments are also wealth fund, Temasek Holdings, is a in Gabon.49 The World Bank lifted involved, albeit indirectly. Malaysia’s major shareholder of Olam, which is its short-lived suspension of oil state-owned oil palm plantation developing a large new plantation in palm investments in 2011, but has company, FELDA, is involved in Gabon. (see Section 3.2) yet to make any such loans in the promoting expansion of oil palm in Congo Basin. The large new oil Cameroon, having dropped plans The development of large-scale oil palm plantation in Cameroon being for expansion in Brazil in the face of palm plantations is capital intensive, established by the SG Sustainable Oils opposition from environmentalists.45 with zero cash-flows in the initial Cameroon (SGSOC) is being funded The company floated on the stock years (apart from sales of timber with capital from US investment house market in June 2012, and was from cleared forests), so most Herakles Capital. expecting to use US$680 million of new developments are dependent the proceeds to help fund new palm on outside finance, either through It is very likely that a number of planting, including in Africa.46 commercial loans, investments from major international commercial wealth funds or assistance from banks are providing finance for oil At an industry conference in 2011, multilateral development banks. palm developments in the region, Malaysia’s Plantation Industries and Belgian company SIAT received a but hard evidence is difficult to come Commodities Minister made a public €10 million loan from the African by. Citibank, for instance, is listed as offer of assistance to African countries Development Bank in 2007 to improve a ‘principal banker’ for Wah Seong in expanding oil palm plantations, and expand its oil palm & rubber Corporation50, which is in the process including through the Malaysian Palm developments in Gabon, including the of purchasing a majority stake in a new Oil Board, a government agency which planting of a new 4,250 hectare oil plantation development in the Republic promotes and supports oil palm within palm plantation at Bindo.48 of Congo, with half the purchase cost the country. The Minister implied funded through debt (see Section 3.1), but it is not clear whether Citi or “LARGE ASIAN COMPANIES ALREADY PRODUCING another bank is providing the funds. PALM OIL ARE LOOKING TO EXPAND INTO AFRICA. THIS GROUP INCLUDES TWO OF THE THREE LARGEST OIL PALM COMPANIES IN THE WORLD.”

Kate Eshelby

18 THE RAINFOREST FOUNDATION UK SEEDS OF DESTRUCTION FEBRUARY 2013 19 SECTION 2: OIL PALM IN THE CONGO BASIN: RECENT DEVELOPMENTS & FUTURE TRENDS

2.2.3 SUMMARY INFORMATION ON Many of the announced development In terms of geographical distribution of new Additional details on these cases and the SPECIFIC DOCUMENTED PROJECTS projects are still at an early stage, and very plantings, the largest announced expansion companies involved, plus two projects which few have broken ground. Some remain in plans are in Cameroon, while Gabon and have apparently expired, are provided in Specific planned new palm oil development negotiation. The agreement covering at Republic of Congo also have significant a table in Annex 1. projects announced thus far in the Congo least one large potential investment (by ZTE expansions underway. The only new investment Basin cover an area of over 1.6 million in DR Congo) appears to have expired.56 announced for DRC covered a smaller area than Of the companies which have been identified hectares, of which planned planting Even once agreements are finalised, it can originally stated, and has now expired. So far as being behind specific developments, or are confirmed under signed agreements take a long time to identify suitable land, there is only one small project in CAR, which otherwise known to be seeking oil palm land in represents around 0.5 million hectares. carry out environmental and social impacts also has a very limited existing planted area. the Congo Basin, three – Cargill, Sime Darby (see summary figures in Table 4). assessments, bring in equipment and hire and Wilmar – have been found in the past to workers.57 As a result, the rate of actual Summary data on the 15 oil palm plantation be involved in illegal and destructive oil palm new planting is advancing more slowly than expansion projects in the Congo Basin identified development in Indonesia.59 planned growth in planting (see Figure 3 for this study is provided in Table 5 below. and Table 5).

TABLE 5 Summary data on oil palm plantation expansion plans in the Congo Basin, by company58 FIGURE 3 Area encompassed by announced projects, * EXP - Expansion 2 (including those still under negotiation). Planned and planted hectares of commercial COMPANY COUNTRY TYPE NEGOTIATIONS DEAL SIGNED AREA (TOTAL) AREA AGREEMENT LAND GROUND AREA Plantations (productive only) oil palm in the Congo ANNOUNCED HECTARES (PLANNED SIGNED IDENTIFIED BROKEN PLANTED Basin51. 1.5 PLANTING) TO DATE HECTARES (EST) HECTARES

CDC Cameroon EXP* 2008? 6,000 6,000 Yes Yes Yes 2,000 1.0 SGSOC Cameroon New Sept 09 73,086 60,000 Yes Yes Yes 500 (Herakles)

0.5 Biopalm (Sive) Cameroon New Aug 11 200,000 ? ? No No 0

Sime Darby Cameroon New May 11 N/A 300,000 ? No No No 0 Goodhope Cameroon New Aug 11 N/A 6,000 ? No ? No 0 0 Cargill Cameroon New May 12 N/A 50,000 ? No No No 0

Palm Co Cameroon New 2012? 100,000 ? No No No 0

TABLE 4 COUNTRY EXISTING (PRE 2006) AREA COVERED BY OF WHICH SIGNED DECLARED TARGETS Smart Holding Cameroon New 25,000 ? No No No 0 Summary data on PRODUCTIVE AREAS ONLY ANNOUNCED EXPANSION AGREEMENTS ARE IN PLANS (includes EFFECT, EXCLUDING existing and planned Palmex CAR New May 12 8,701 ? Yes ? No 0 unplantable areas, UNPLANTED AREAS WITHIN industrial oil palm in the deals still under Congo Basin, by country. negotiation or CONCESSIONS which may have ENI (technical Republic of ? May 08 70,000 ? Yes ? ? 0 expired) consultant) Congo Cameroon 57,520 760,086 66,000 Plans to double palm oil production by 202052; Fre-El-Green Republic of New July 08 40,000 ? Yes ? ? 0 investment proposals already Congo cover 1.2 million hectares53 CAR 1,000 8,701 8,701 – Atama Republic of New Dec 10 470,000 180,000 Yes Yes Yes 0 DRC 28,127 100,000 0 – Plantation Congo

Gabon 7, 3 0 0 206,000 106,000 200,000 ha planned by 2017 Biocongo Republic of New March 12 24,280 ? Yes ? No 4,000 Republic of 4,000 604,280 314,280 Area currently sought 1.054 - Global Training Congo 55 Congo 1.75 m ha Olam Gabon New Nov 10 200,000 100,000 Yes Yes Yes 6,000 Total 97,9 47 1,679,067 494,981

Figure 3, Table 4 and Table 5 Source: Earthsight Investigations for The Rainforest Foundation UK SIAT Gabon EXP* Sep 07 6,000 6,000 Yes Yes ?

TOTAL 1,579,067 352,000 12,500

20 THE RAINFOREST FOUNDATION UK SEEDS OF DESTRUCTION FEBRUARY 2013 21 SECTION 3: CASE STUDIES OF NEW OIL PALM DEVELOPMENTS IN THE CONGO BASIN

“THESE PLANNED OIL PALM DEVELOPMENTS DEMONSTRATE WORRYING SIGNS OF THE SAME NEGATIVE IMPACTS OBSERVED IN SOUTH-EAST ASIA.”

CASE STUDIES OF NEW OIL PALM DEVELOPMENTS IN THE CONGO BASIN

There is a lack of publicly available information little actual clearance and planting has yet occurred about most new oil palm developments in the in any of them, and what has occurred has not Congo Basin. This makes an assessment of actual been assessed through field work, these three oil and potential impacts difficult. For the purposes of palm developments (in three different countries this study, RFUK has examined in detail three of - Republic of Congo, Gabon and Cameroon) the largest projects for which some information is nevertheless already demonstrate worrying signs available, and written to, and received replies from, of the same sort of negative impacts seen with oil companies behind the three developments. Though palm in South-East Asia.

22 THE RAINFOREST FOUNDATION UK SEEDS OF DESTRUCTION FEBRUARY 2013 Samuel Nguiffo 23 SECTION 3: CASE STUDIES OF NEW OIL PALM DEVELOPMENTS IN THE CONGO BASIN

3.1.1 BACKGROUND expects to develop this over a period nursery in one area of 5,000 hectares of 15 years, commencing in early at Epoma in Sangha65, while a second 3.1 CASE STUDY: ATAMA On 17 December 2010, after 19 2013. It is possible the final area of the 5,000 hectare section of forest in the months of negotiations, the Minister plantation may be larger, if additional concession in Cuvette has also been of Agriculture and the Minister of suitable land is found.63 signed off for logging and clearance.66 PLANTATIONS, REPUBLIC OF CONGO Land Affairs and Public Domain in the Republic of Congo signed a concession Atama is owned through a complex 3.1.2 WAH SEONG PURCHASE agreement with a company called chain of companies registered in Atama Plantations to ‘occupy’ 470,000 various secretive tax-havens (see In February 2012, Wah Seong A Malaysian corporation known as a ‘pipe- and some of it may fall inside, a planned hectares of federal land for the Figure 5 for a representation of the Corporation, a Bursa Malaysia coating specialist’ is purchasing Atama National Park and Ramsar site. There is development of an oil palm plantation company’s corporate structure). (formerly the Kuala Lumpur stock Plantations SARL, which has a concession no evidence of social and environmental and associated industrial complexes.60 The Congolese licensee, Atama exchange) listed company, announced agreement to occupy 470,000 hectares of assessments having been carried out, yet The majority of the land (402,637 Plantation SARL, which was registered its intended purchase of a majority mostly forested land in northern Congo. It logging of the area has started. Official hectares) is in Cuvette Province, while in June 2008, is wholly owned by 51% stake in Atama Resources Inc, plans to develop at least 180,000 hectares inspectors uncovered numerous breaches of the remaining 67,363 hectares are in an associated company registered thus becoming majority owners of the for oil palm, which would be the largest regulations in the logging which has occurred Mokeko District in Sangha Province.61 in Mauritius in July 2011, Atama oil palm plantation project in Congo.67 oil palm plantation in the Congo Basin. No to date. The identity of Atama’s original Eventual palm oil production is Resources Inc, which until recently Previously, Wah Seong has principally publicly available maps of the concession owners (who retain a large stake) is shielded expected to be 900,000 tonnes was wholly owned by a company been involved in the manufacturing are available, but evidence suggests that through a web of ‘shell’ companies registered per year. called Silvermark Resources Inc, of specialist metal pipes for the oil the forests designated for clearance mostly in secretive tax havens. Some of the same registered in the British Virgin and gas industry. The company’s only appear to be virgin rainforest that is habitat shell companies have been used in the past The concession agreement is for an Islands (BVI) in 2007. Silvermark is, previous connection to oil palm in for numerous endangered species, including to mask illicit activity. initial, extendable, period of 30 years. in turn, wholly owned by a company Africa was the supply of equipment chimpanzees and gorillas. The area borders, The licensee has to pay royalties of called Tanaldi Ltd, of which there is for palm oil refineries,68 and this will CFA 2,500 (US$5) per hectare of almost no information. In addition, be its first venture into the oil palm planted land (half the rate which will Atama Resources Inc owns a second plantation industry. Even if only the eventually be paid by Olam in Gabon, company, Signet Plus SB, registered initial 180,000 hectares are planted, Atama Plantations’ oil palm concession, Republic of Congo see section 3.2), from when palm oil in Malaysia in December 2011, which this new project would be the largest production starts, but is exempted provides ‘management and accounting oil palm plantation in the Congo Basin from customs duties or VAT on imports services’ for the Congolese plantation and would catapult Wah Seong into Sangha 64 FIGURE 4 Congo of equipment, and from all taxes company. A number of questions are the top ten largest oil palm growers Sangha on profits for the first five years of raised in the following text about the in the world. production. Thus far, feasibility studies Location of ongoing clearance, ultimate ownership of Atama. near Epoma, Sangha province have identified 180,000 hectares of The $25 million purchase of Atama by plantable land, which is an area 17 To date, Atama has begun clearfelling Wah Seong is almost as complicated times the size of Paris.62 The company forests for roads and an oil palm as the web of companies behind Atama. When the purchase is completed, Wah Seong will, through a specially formed subsidiary WS Agro Industries Pte Ltd, own 51% of Makoua Atama’s shares, while the original owner (Silvermark/Tanaldi) will retain Makoua 39% and another BVI-registered Cuvette-Ouest company named Giant Dragon Group Cuvette-Ouest 69 Cuvette will hold the remaining 10%. As of Manga Cuvette December 2012, the first phase of the purchase was complete, with Wah Owando 70 Manga Seong holding 41.7% of the shares. More detail on the purchase and the Owando BVI companies involved is provided in Google Maps Satellite view section 3.1.6 below.

KEY Atama concession area First areas licensed for clearfelling Proposed national park

Aka man, statement community forest, Samuel Dieval

24 THE RAINFOREST FOUNDATION UK SEEDS OF DESTRUCTION FEBRUARY 2013 25 SECTION 3: CASE STUDIES OF NEW OIL PALM DEVELOPMENTS IN THE CONGO BASIN

3.1.3 POTENTIAL ‘TIMBER GRAB’? The overall concession is split into two areas. The northern area, in Sangha province, is Stock-watchers have questioned how Wah a 67,000 hectare zone of mixed forest and Seong can afford the costs of developing savannah between a logging concession and the massive new oil palm plantation, which a major river. The much larger southern they estimate at US$650 million. One analyst area, in Cuvette, covers 520,000 hectares has suggested that the cost “could be partly and is almost entirely made up of primary offset by forest clearance such as sale of forest, most of it swamp forest75 (see logs”.71 This has often happened in the past Figure 4). Of this second area, large parts in Indonesia72. Evidence obtained by RFUK are flooded, so only the licensed 402,000 suggests that the forests Atama is planning hectares is expected to be available for to convert are indeed primary forests with the plantation.76 significant timber stocks. The potential profits from harvesting this timber may According to official reports, by October Far left: Signing ceremony for the Atama plantation development, Dec 2010 | Middle: Atama Director Chua Seng Yong be one of the main driving factors behind 2012 the company had already harvested at second signing ceremony, July 2011 | Right: Atama oil palm nursery, July 2012: JTV Congo the development. almost 15,000 cubic metres of timber at its first development in Epoma in Sangha, yet No maps are publicly available for the had thus far only cleared 120 hectares.77 If 3.1.4 HUGE POTENTIAL FOR NEGATIVE hydrological balance of the Congo instead told RFUK that it was “invited “The forests Atama Atama concession. Wah Seong declined to most of it is primary forest, by a rough yet ENVIRONMENTAL AND SOCIAL IMPACTS Basin’ and its, ‘great cultural, historical by the Government of The Republic provide these documents when requested conservative estimate, the 180,000 hectares and religious value to the resident of Congo” to cultivate oil palm in the 85 plans to clear by RFUK, citing commercial confidentiality. the company plans to convert could yield As explained above, documents population’. Aside from the obvious country, that it seeks to “alleviate rural could yield timber RFUK has, however, obtained copies of timber worth more than $500 million.78 obtained by RFUK indicate that devastating environmental impacts for poverty through meaningful long term official government reports which describe the majority of the area slated for biodiversity which would stem from employment”, and that it is helping “an worth more than the boundaries of the concession73 and Wah Seong has admitted to RFUK that, conversion for the Atama plantation is destruction of the forest inside the emerging economy to be self-sufficient the boundaries of the two 5,000 hectare “timber extraction is a necessary part of virgin rainforest. Much of this forest concession, the improved transport in food and energy supply without $500 million.” areas for which the company has obtained the process to make available land for an would almost certainly be classified network and migration of workers to trampling on the hopes and rights 86 authorisation to log and clear.74 The most oil palm plantation”79. The company has as being of ‘high conservation the area associated with of the Congolese people”. Given Wah recent available forest maps and satellite stated to RFUK that it has considered “the value’ (HCV) according to standard the plantation development Seong’s failure to provide evidence imagery suggest that the majority of the sustainability criterion” before deciding to definitions. Evidence from IUCN bring further threats to wildlife in to the contrary, it is likely that there broader area the company plans to convert become involved in the Atama plantation (International Union for Conservation neighbouring areas (including the has been little or no consultation with is untouched, primary, closed-canopy tropical project, but has not provided further detail of Nature) suggests it is also habitat for rest of the new National Park) from local forest communities or indigenous forest, much of it swamp forest. of what this involves.80 large numbers of endangered species, increased commercial poaching. peoples. including western lowland gorillas, classified as ‘Critically Endangered’, Congolese law requires an chimpanzees, and elephants.81 The environmental impact assessment to intact swamp forests which make up be carried out for a project such as “WAH SEONG DID NOT the majority of the larger southern Atama’s, yet Wah Seong declined to section of the concession are part of confirm in response to queries from PROVIDE EVIDENCE TO the Western Congolian Swamp Forests RFUK whether any such assessment Ecoregion, identified by WWF as one had been conducted. The company of the most outstanding areas of instead stated that it believed it was RFUK THAT THE FREE, biodiversity on the planet.82 the responsibility of the Congolese government to ensure that the impacts PRIOR, INFORMED Around 28,000 hectares of the of the plantation were considered allocated concession land appears to before issuing the licence to operate. CONSENT OF THE LOCAL overlap with a proposed new National Park, Ntokou-Pikounda, which was Wah Seong also did not provide any PEOPLE HAD BEEN announced in 2006 and is in the last evidence to RFUK that the social stage of formal establishment.83 The impacts of the project had been OBTAINED.” park is believed to contain one of the properly considered and addressed or highest concentrations of great apes the free, prior, informed consent (FPIC) anywhere in the world.84 The Republic of local people sought or obtained. It of Congo has recently designated the should be noted that the Republic of Ntokou-Pikounda area as a Ramsar Congo passed progressive legislation (wetlands of international importance) on the promotion and protection of site, noting its rich biodiversity, its indigenous peoples in 2011, which may importance ‘in maintaining the general be of direct relevance here. Wah Seong Atama logs from forest clearance for oil palm, December 2012

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3.1.5 ILLEGAL LOGGING 3.1.6 COMPANIES REGISTERED IN THE BRITISH VIRGIN The second British Virgin Island The best documented example Tanaldi Ltd as being owned by Rizvi, ISLANDS (BVI): UNCLEAR ULTIMATE OWNERSHIP registered company is Giant Dragon comes from UK court papers from and also mentions that a company In October 2012, a team from the Sangha Group Limited, registered in May 2008, which relate to a case in which called Greenland Ltd is connected to “THE INSPECTORS province forest department made an As stated above, Wah Seong will purchase 2006. Once the purchase is complete, a British man was found guilty of him.96 In addition, a Singapore stock- inspection visit to the first 5,000 hectare a 51% majority stake in Atama, while two it is due to hold 10% of the shares falsely claiming an inheritance and exchange filing from 2007 relating to FOUND NUMEROUS area in which Atama had been licensed to companies registered in the British Virgin in Atama (worth US$5 million), even holding the proceeds in a British Virgin another company, states that Brunei- BREACHES OF clearfell, at Epoma. The team found that Islands will, once the purchase is completed, though there is no evidence that it Islands registered company named registered Tanaldi Ltd is “ultimately Atama had subcontracted the logging to a own 39% and 10% respectively of the was connected to Atama prior to Trixilis. The sole shareholder of Trixilis beneficially owned by Mr Rafat A. REGULATIONS IN second company, Lawoncongo SARL, and Congolese plantation company. the purchase agreement and there was Tanaldi Limited, and the sole Rizvi”.97 Wah Seong strongly denies had set up a sawmill at the site. By the is no mention of it contributing to director a company called Greenland that there is any link between Atama THE LOGGING BEING time of the visit, the company had cleared The first of these two companies, Silvermark the cost of the Wah Seong purchase Limited91 (the same names identified Resources or Atama Plantations around 80 hectares for roads (including in a Resources Inc, was registered in the British from which it will benefit. The official as ultimately controlling Atama and Mr. Rafat Ali Rizvi. However, CARRIED OUT BY neighbouring part of the concession, outside Virgin Islands in November 2007 and prior stock exchange announcement by through Silvermark Resources Inc). the company declined to answer a Atama.” the initial 5,000 hectares), plus a further 40 to the Wah Seong investment was the Wah Seong states that Giant Dragon According to the court documents for request from RFUK to identify the hectares for the sawmill, log storage yards sole owner of Atama. Silvermark stands to Group is owned by a company called this case, the defendant was “shown current ultimate beneficial owners 87 and an oil palm nursery. receive $25 million from Wah Seong for its Marston International Ltd, and lists a list of available companies” by a of Atama (through Silvermark and shares in Atama. The official stock exchange another company - Eastern Sky Ltd Singaporean firm which specialises in Tanaldi) or Giant Dragon Group. The inspectors found numerous breaches of announcement for shareholders published by - as its sole director. Wah Seong’s setting up offshore structures, and regulations in the logging being carried out. Wah Seong states that Silvermark Resources stock exchange announcement of the one was selected.92 There was also a More than 350 trees had been cut but not Inc is owned by Tanaldi Ltd and lists another intended purchase of Atama does separate formal document through “THE SAME COMPANIES recorded in official felling reports. Records company, Greenland Limited, as its sole not provide further details of either which Greenland gave the defendant were found to have been altered with tip-ex director. The stock exchange announcement Marston International or Eastern Sky. full authority to operate the British WHICH CONTROLLED and there was evidence that multiple logs provides proper details on the intermediary Virgin Islands registered company had been given the same log numbers (a companies, but it does not state where or Wah Seong has, for the interest of through his Swiss bank account.93 method often used to launder illegal logs). when Tanaldi was registered, who owns it, its shareholders, published detailed This allowed the defendant to control ATAMA PRIOR TO WAH The inspectors concluded that Atama was in or the identify of its directors.89 Tanaldi and information about the proposed the funds without being named at breach of the terms of the forest clearance Greenland are noteworthy, as explained purchase, but the information stops all in official records. Although there SEONG’S INVOLVEMENT license, and issued official forestry infraction further below. short of actually identifying the ultimate is certainly no direct link between a notices to the company.88 current owners of the plantation, UK inheritance case and a Malaysian- HAVE BEEN USED TO (through Silvermark Resources/Tanaldi) Congo palm oil development, the or the ultimate owners of Giant Dragon similarities in the names and functions SHIELD THE IDENTITY Group. This information is arguably of the shareholder and director appear of material interest to Wah Seong’s too striking to be a coincidence. In OF INDIVIDUALS FOUND shareholders. However, Wah Seong has another case, a British Virgin Islands stated to RFUK that it has, “made all registered company investigated necessary disclosures to Bursa Malaysia by Thai authorities in 2006-07 for GUILTY OF SERIOUS under the Bursa’s Listing Requirements criminal offences was also controlled in respect of its venture into the through a company called “Green OFFENCES.” Republic of Congo”.90 Land Ltd” in Brunei, and set up by the In summary, the evidence from the same Singaporean offshore services above cases suggests that Tanaldi is a Research for this report suggests provider involved in the 2008 British shelf company used by more than one that Atama’s ownership structure fraud case.94 person, on more than one occasion, may have been deliberately created and that it has been used specifically in order to shield the identity of its Other sources suggest that Tanaldi for the purpose of hiding the identity ultimate owner or owners. There Ltd might also at one time have been of beneficial owners of assets. may be legitimate reasons for this connected to a Mr. Rafat Ali Rizvi, a structure, but RFUK has found British-Singaporean businessman, evidence that the same companies who has been convicted in Indonesia which controlled Atama prior to Wah for grand corruption and is wanted by Seong’s involvement (and continue Interpol.95 An article, from 2010, on the to hold a large minority stake) have website of the respected Indonesian been used on more than one occasion news magazine Tempo lists a Brunei- to shield the identity of individuals registered company by the name of found guilty of serious offences.

Western Lowland Gorilla, Sergey Uryadnikov-Shutterstock

28 THE RAINFOREST FOUNDATION UK SEEDS OF DESTRUCTION FEBRUARY 2013 29 SECTION 3: CASE STUDIES OF NEW OIL PALM DEVELOPMENTS IN THE CONGO BASIN

FIGURE 5 Wah Seong Corporation Unknown ultimate owner Unknown ultimate owner Atama Plantation Oil & gas infrastructure Ownership Structure. supplier Malaysia 100% Chairman & Majority shareholder - Robert Tan MD/CEO & Minority Tanaldi Ltd Marston International Ltd shareholder - Chan Cheu (Poss registered in Brunei* (Location and date of Long date of unknown) registration unknown)

100% 100% 100%

WS Agro Ind Pte Ltd Silvermark Resources Inc Giant Dragon Group Holding Company Holding company Holding company Singapore British Virgin Islands British Virgin Islands Nov 2011 Nov 2007 May 2006 Dir - Greenland Ltd Dir - Eastern Sky Ltd

39% (100%) 51% 10% (0%) Atama Resources Inc (0%) Holding company Mauritius July 2011 Dir - York S Lim Voon Kee Notes: - Tommy Lo Seen Chong Countries represent countries - Chua Seng Yong of registration (incorporation) Dates are registration dates 100% Dir = directors of relevant company 100% (in some cases companies are listed as directors) Atama Plantation SARL Signet Plus SB Percentages represent ownership proportions: Atama oil palm nursery, Epoma, 2012 Percentages in brackets are those prior to Wah Plantation licensee Mgmt & acc services Seong purchase; Percentages in orange are those (License issued May 10) for licensee which will exist once the WSC purchase is Republic of Congo Malaysia 3.1.7 CONCLUSION populations has been sought. the identity of its ultimate owners completed (as of December 2012, the purchase June 2008 Dec 2011 The evidence which is available – even potentially from its current was half complete, with Wah Seong owning 41.7%) Dir - Chua Seng Yong Dir - Chew Weng Leong A company with no significant suggests that high conservation purchasers, Wah Seong. It could be - Ma Lai Wah relevant previous experience has value, intact primary forests are that there are legitimate reasons Sources: begun felling tropical forests in the being converted, including habitat for this structure, but the past For information with asterisks, see report text and Republic of Congo to make way for for endangered great-apes and circumstances noted above raise associated references; information on Wah Seong what could be the region’s largest forest elephants. And while Atama sufficient suspicions for this to be a ownership and directors from Wah Seong Annual Report, ever oil palm plantation. Almost no has only just started clearing forests, matter of potentially serious concern 2012; all other information from official Wah Seong public information is available about announcements to KLSE, February 2012’ its contractors have already been to the Congolese government, to the project, and its new owners have found to be breaching regulations. Atama’s purchasers, to Wah Seong, declined to provide even the most and to Wah Seong’s shareholders. basic information, such as concession In addition to the serious issues maps. There is no evidence of any regarding potential social and environmental or social impact environmental impacts, questions assessments having been carried must also be raised as to why out for the plantation, or that the Atama appears originally to have free, prior informed consent of local been deliberately structured to hide

30 THE RAINFOREST FOUNDATION UK SEEDS OF DESTRUCTION FEBRUARY 2013 31 SECTION 3: CASE STUDIES OF NEW OIL PALM DEVELOPMENTS IN THE CONGO BASIN

In November 2010, Olam announced where it costs US$250 - $500 per tonnes of crude palm oil (CPO) per a large new oil palm investment hectare. The project will benefit year, which would make the country CASE STUDY 3.2: OLAM, GABON in Gabon. The President of Gabon from a 16-year income tax holiday, Africa’s second largest palm oil was in Singapore for the signing and exemptions on payment of producer. The McKinsey study claims ceremony of the agreement with the duties or tax on machinery, gas, the project will lead to an 85 per cent CEO of Olam99, part of a larger deal oil, fertilisers and other inputs. In increase in the area of commercial Olam, the Singaporean agricultural 3.2.1 BACKGROUND that also involved a joint venture response to questions from RFUK, agriculture in Gabon by 2022, and commodities trading giant, has entered for the building of a urea fertiliser Olam claims that it will pay a lease that the combined Olam investments into a joint agreement with the Gabonese The official website of Gabon’s President plant and a Special Economic Zone rent of CFA Franc 5,000 (US$10) per will lead to a 1.1 per cent per annum government to greatly expand palm oil has stated that the country is aiming to focusing on timber processing.100 hectare from the 17th year and that boost to non-oil GDP.108 It also notes plantations in this forest-rich country. develop oil palms on “hundreds of thousands The oil palm plantation agreement these tax benefits are “available the potential that, “social tensions Olam has committed to set aside from of square kilometres” of land (although the is a joint venture with the Gabonese to all investors under the relevant could arise from possible community development areas of high environmental surface area of Gabon is 270,000 square government, in which the former has law and not just limited to Olam’s claims to land and a major influx of and social worth, but still plans to develop kilometres in total) and to become Africa’s a 30% stake and commits Gabon projects in Gabon.”105 Olam aims for labor” as well as the “potential risk 130,000 hectares of palm oil in the country, largest producer of palm oil.98 to providing a 300,000 hectare the concessions to be RSPO certified, of ecosystem damage from the with potential for significant environmental land bank for oil palm and rubber and that planting would not begin erosion of soil, water pollution and impacts, and uncertain social consequences, plantation development. This is an until social and environmental impact land clearance”.109 especially for traditional forest communities. area over four times the total land and high conservation value forest area of Singapore.101 The potential assessments had been completed. The initial phase of the oil palm future investment is estimated at It did not expect these assessments development is in Kango, in the US$236 million.102 to present any problems, because Estuaire region, about 60km from Olam’s Kango and Mouila oil palm concessions, Gabon it claimed the plantation is “entirely Libreville, and in another area slightly Traditionally, Olam has been located on degraded land”.106 The further south in Mouila. Other areas principally involved in downstream company also claims that there is a in Ngouine and Nyanga have been Libreville FIGURE 6 Gabon shipping, trading and processing of “minimal threat from local community allocated for oil palm plantations but agricultural commodities, including or land rights issues” due to Gabon’s have not yet been assessed by Olam timber, palm oil, cocoa and others. low population density. for potential development.110 According Recently, however, it has expanded to Olam’s figures, it has already been Kango OP Plantation its role in the production of these Of the total 300,000 hectares of allocated 209,334 hectares of land commodities, through a strategy of land allocation by the Gabonese for commercial oil palm development “Gabon is aiming ‘vertical integration’. Olam is part- Government, Olam is planning to in Gabon, of which 63,780 hectares Moyen-Ogooue to become Africa’s owned by the Singapore government develop at least 180,000 hectares has so far been returned to the through its sovereign wealth fund by 2018 or 2019, including 100,000 government as ‘unsuitable’ and other largest producer Temasek Holdings. News reports hectares of industrial palm oil areas have been set aside because state that many major investment plantations (in two phases) and up of social or environmental value.111 of palm oil.” funds hold shares in Olam, including to 30,000 hectares of smallholder With the assistance of African banks BlackRock, Hartford, Prudential, palm plantations and 50,000 Ecobank, Afreximbank and BGFI Vanguard and Fidelity.103 Norway’s hectares of rubber plantations.107 A Bank Gabon, Olam secured a loan Pension Fund Global also holds shares McKinsey study on Olam’s investment of $228 million from the Central Ngounie 104 Ogooue-Maritime in the company. portfolio in Gabon states that, when African States Development Bank completed, it would be “Africa’s to fund the plantation development, Olam’s presentation at the launch biggest oil palm plantation”, with which Olam expects to draw upon in 112 Mouila 1 of the agreement stated that the production of just under 0.5 million December 2012. palm oil would mostly be exported

Google Maps Satellite view to Europe, and that it expected the project to be competitive in terms of KEY Olam concession area Protected areas costs with Indonesia and Malaysia, “OLAM IS PLANNING TO DEVELOP AT LEAST because of reduced shipping costs and lower taxes. The presentation 100,000 HECTARES OF INDUSTRIAL PALM OIL noted that the land in Gabon was “free”, in comparison to Indonesia PLANTATIONS BY 2018/19.”

Satellite view

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3.2.2 OLAM’S PREVIOUS TRACK RECORD IN TIMBER logs seized by the DRC forest authorities they brought in labour from outside in 2007 for alleged failure to pay taxes.120 Gabon; SIAT has had similar problems Following major acquisitions in 2011, Olam states that it subsequently “exited the in Gabon in recent years.125 Olam has Olam now has 1.8 million hectares of wood business entirely in DRC” following told RFUK that the vast majority of its logging concessions in the Congo Basin,113 this incident, which it claims was due to workforce is recruited locally and that making it one of the region’s largest suppliers delivering cargoes in contravention “we do not believe we will have to logging companies. The company began of Olam’s internal documentation systems.121 import foreign labour to keep to our trading timber in Gabon in 1998, and In 2005, Olam’s Gabon branch was also planting timetable”.126 Beyond Olam’s started operating timber concessions in reported to owe nearly US$12,000 in promise to abide by RSPO standards, the country in 2006. It has two sawmills in forestry back-taxes, but now says that it is it is not yet possible to judge the Gabon with a combined capacity of 70,000 up to date with the relevant taxes.122 potential impact of the majority of cubic metres114, fed with logs from over this massive conversion project, since 555,000 hectares of logging concessions 3.2.3 THE START OF OLAM’S OIL PALM OPERATIONS clearance has only recently begun the company has in the north-east.115 and most of the land has yet to be Thus far, Olam’s plans for palm oil identified. However, some of the Olam has a number of blemishes on its track development in Gabon under the agreement lessons from the first two oil palm record in forestry. The company previously with the government involve two 50,000 areas identified are sobering. had logging concessions in DRC, which it is hectare phases, to be completed by alleged were issued in contravention of a 2018/19. Information from Olam states 3.2.4 KANGO OIL PALM PLANTATION – 2002 moratorium.116 Though Olam’s non- that planting began in February 2012 and operational concessions were relinquished that 12,134 hectares (7,134 hectares in ENVIRONMENTAL, SOCIAL AND CARBON IMPACTS 117 in late 2007 , it continued to buy and sell Kango and 5,000 hectares in Mouila) will The first 51,920 hectares identified by 123 timber from third parties for some time be planted by June 2013. This is an area the Gabonese government for oil palm 118 thereafter. In August 2007, allegedly over 35 times the size of New York’s Central development under the agreement 124 illegal timber shipments from Olam Park. Gert Vandersmissen, Director of with Olam are spread across three International were seized in the remote the only previous commercial vegetable oil ‘lots’ or areas in Estuaire & Moyen- province of Bandundu; the area’s Forestry and rubber plantation company operating in Ogooue provinces, just to the south chief, Coco Pembe, allegedly accused the Gabon (SIAT), has said it would be relatively of the capital, Libreville. How these FIGURE 7 company of trading illegal timber cut by easy for Olam to clear the amount of forest areas were first identified is open to Landsat ETM7 satellite image showing forest clearance (red) within Block 8 of Olam’s local companies whose logging permits had needed, but has cast doubt on the ability question, since the High Conservation 119 Kango oil palm concession in Gabon, April 2012’ expired. Olam also had US$0.5 million of of Olam to meet its planting targets unless Value (HCV) assessment undertaken for the areas found that two of the three lots were entirely within a key The first two lots were not pursued emissions are not considered in HCV “By June 2013, Olam Ramsar-listed wetland populated by Olam for further development, and assessments – see Section 4.3 on the by endangered manatees, one of in the third lot Olam set aside areas flaws in RSPO standards). According will have planted which was also mostly untouched identified as HCV forest and areas of to the environmental assessment for 12,134 hectares of primary forest within an area of particular use to local communities Olam’s development in Kango, the Intact Forest Landscape.127 Evidence (for example, where vines are used estimated carbon stock in the forests oil palm, an area of the presence of chimpanzees for making baskets), and was only planned for clearance is 160 tonnes of 133 and forest elephants was found in able to identify 7,134 hectares as carbon per hectare. This is almost over 35 times the a large part of the final lot, much suitable for planting - just 14 per cent five times the maximum allowed by of which was also found to be too of the initial land allocation. Olam another major oil palm firm’s forest size of New York’s steep for clearance to occur without states that it will allow fishing, but conservation policy, which commits 130 Central Park.” potentially serious erosion and not hunting, in the area. While the them to avoiding new development pollution of rivers which flow into the area the company does plan to clear on ‘High Carbon Stock’ forests, nearby Pongara National Park and the does not meet the strict definition defined as those with over 35 tonnes 134 adjacent Komo estuary.128 The study of HCV, converting it will still involve of carbon per hectare. Satellite also noted that the livelihoods of the clear-felling of secondary forest images obtained by RFUK confirm people living in the earmarked areas and will bring about significant that extensive clearance of secondary were “inextricably linked” to natural changes to local livelihoods, some of forest in the Kango plantation area resources in the landscape, including which are likely to be negative. The had already taken place by the end hunting, collection of non-timber carbon impacts of the development of April 2012 (see Figure 7 and aerial 135 forest products, and artisanal timber are also significant: it is estimated photos in this case study.). harvesting.129 Any such potential that it will result in the release of livelihood values are completely lost around 4 million tonnes of carbon 131 Recent forest clearance for oil palm by Olam, Kango, Gabon. Alexander De Marcq in areas which are converted dioxide – almost double Gabon’s 132 to oil palm. current annual emissions (carbon

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3.2.5 MOUILA OIL PALM PLANTATION – COMMUNITY NEEDS its high environmental value, and further 3.2.6 OTHER JOINT VENTURES BETWEEN OLAM AND RARE AND THREATENED ECOSYSTEMS AND SPECIES areas of HCV still need to be established AND THE GOVERNMENT OF GABON “OLAM’S DEVELOPMENTS WILL INVOLVE THE for livelihood and cultural purposes.137 Olam The second area earmarked by the Gabonese has stated that it is carrying out “further As well as an 80/20 joint venture with CLEARANCE OF LARGE AREAS OF SECONDARY authorities for oil palm development by Olam faunal surveys” in the area.138 Related to the government to develop 28,000 is at Mouila in Ngounie province. Olam has community rights, many serious concerns hectares of rubber plantations, which been allocated 67,154 hectares of land for were raised during the social impact is beyond the scope of this report, TROPICAL FORESTS, RESULTING IN HUGE potential industrial oil palm development in assessment consultations.139 Olam claims to there is also a 60/40 joint venture two lots. The HCV assessment for the 35,354 have identified a particular concern related between Olam and the Gabonese CARBON DIOXIDE EMISSIONS.” hectare concession of ‘Mouila 1’ found large to subsistence agriculture activities, as part government for the creation of a areas of high conservation value forests, of a free, prior and informed consent (FPIC) Special Economic Zone focusing health check-ups for workers and voluntary commitments as Olam, including rare, threatened or endangered process, and set aside two areas totalling on timber processing, and another are “commencing the construction of and hence clear forests with high ecosystems and species, and forest areas 950 hectares for this purpose.140 related to an urea fertiliser plant. worker housing”.145 Olam also claims environmental or social value. The critical to water catchment, fundamental to be investing in roads, schools, choices of land made so far suggest to meeting the needs of local communities The second area in Mouila to be allocated RFUK is not aware of any information a small-scale agriculture support either that very little truly ‘suitable’ and critical to local communities’ cultural by the government for Olam’s palm oil in the public domain about how any programme, solar light panels and land is available in the country, or identity. One large area in the north of the plantations (‘Mouila 2’) is 31,800 hectares beneficiary earnings from these wells.146 These claims could be that there has been insufficient effort concession is a habitat for forest buffalo and and the suitability of the area has yet to joint-ventures would be used by verified through local NGO or other invested to identify suitable land. elephants, while populations of great apes be assessed by the company.141 The exact the state.142 A document provided independent third-party monitoring, have also been identified.136 Forty-two per location and boundary of this second by Olam setting out the ownership preferably on an on-going basis. cent of the concession, 14,994 hectares, has area has not yet been made public, so no arrangements of Olam Palm Gabon already had to be set aside on the basis of independent assessment is possible. only states that the 30 per cent Even if this is taken at face value, share is owned by “La République large questions still remain about the Gabonaise”, represented by the broader social and environmental Minister of Economy, Commerce, impacts of Olam’s developments in Industry and Tourism.143 Olam states Gabon. They will involve the clearance that the government is aiming to of large areas of secondary tropical diversify from oil, gas and timber forests, resulting in huge carbon and holds stakes in other timber and dioxide emissions. It is possible that mining companies.144 despite the company’s efforts, there will be significant negative impacts 3.2.7 SUMMARY - OLAM’S RESPONSE TO on local livelihoods. Indirect social CONCERNS, AND BROADER IMPACTS OF and environmental impacts have DEVELOPMENTS not been assessed or addressed and could be significant. There is a Olam has shown greater transparency lack of transparency regarding the than many palm oil companies in the government’s role in the project. region and has conducted and made available HCV forest assessments Perhaps most worrying is the fact for its developments and set aside that almost 70 per cent of the identified areas. Olam also claims first 87,000 hectares allocated by to carry out FPIC and long term the Gabonese government for the community engagement procedures. planting of oil palm by Olam was This demonstrates that the company found to be extremely valuable is attempting to address some forest, including areas of intact Recent forest clearance for oil palm by Olam, Kango, Gabon. Alexander De Marcq of the potential major negative forest landscape, Ramsar wetlands, environmental and social impacts of great ape and elephant habitat, “THE HCV ASSESSMENT FOUND LARGE AREAS INCLUDING RARE, THREATENED industrial palm oil development. In and areas with crucial livelihood general, Olam states that it is helping functions. While Olam has committed OR ENDANGERED SPECIES, AND FOREST AREAS CRITICAL TO WATER CATCHMENT, to develop the agricultural sector in not to develop such areas, this is a Gabon, providing paid jobs mainly voluntary commitment. Other oil palm FUNDAMENTAL TO MEETING THE NEEDS OF LOCAL COMMUNITIES AND CRITICAL TO taken up by Gabonese citizens with companies to whom the Gabonese a minimum wage of CFA 150,000 authorities may issue licences in LOCAL COMMUNITIES’ CULTURAL IDENTITY.” (approximately US$300) per month, the future may not make the same

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The indirect impacts of the creation of large- Olam has voluntarily committed to do so. “Almost 70 per cent scale plantations in remote and previously Local communities – especially traditional of the first 87,000 forested areas should be taken into account. hunter-gatherer communities – therefore 3.3 CASE STUDY: HERAKLES FARMS/SG Large projects attract workers into the have no formal land rights and, in general, hectares allocated area who often bring their families, sharply have limited political voice and influence. increasing the local population and hence The asymmetry in political power between SUSTAINABLE OILS CAMEROON by the Gabonese pressure on surrounding flora and fauna. the different actors is particularly stark government Olam claims to have a “robust process to when the project is partly owned by the manage HCV areas”, although details of government. This is likely to play a role in was found to be this have not been provided.147 Once a new determining which actors will benefit or be (SGSOC), CAMEROON plantation has been established, expansion negatively impacted by the project. extremely valuable of that plantation or new developments in the area by other companies becomes more forest including likely. Newly renovated or opened up roads New York-based Herakles Farms, FIGURE 8 Herakles’ oil palm concession, Cameroon allow easier access to outsiders into forest founded by investment group great ape and Herakles Capital, is developing 60,000 areas, which can lead to an increase in Cameroon “HERAKLES IS elephant habitat artisanal logging and commercial bushmeat hectares of oil palm plantations in hunting and poaching. Cameroon, an area ten times the DEVELOPING 60,000 and areas crucial size of Manhattan,148 near several key wildlife sanctuaries and protected HECTARES OF OIL for livelihoods.” The broader political context of these developments cannot be ignored either. areas. The development, which has PALM PLANTATIONS All land in Gabon is formally owned by the received generous tax breaks from state, and customary use of forest areas the Cameroonian government, has IN CAMEROON, AN mostly remains unmapped and usually not been controversial locally, nationally recognised in law or respected - although and internationally, and has faced AREA TEN TIMES THE questions as to its legality. The company recently has decided not to SIZE OF MANHATTEN, proceed with certification under the NEAR KEY WILDLIFE Roundtable on Sustainable Palm Oil (RSPO) scheme. SANCTUARIES AND PROTECTED AREAS.” 3.3.1 BACKGROUND In September 2009, an agreement was signed between Sithe Global Ejagham Forest Reserve Sustainable Oils Cameroon (SGSOC, a subsidiary of the New York-based Banyang Mbo Sithe Global Corporation) and the Protected area Korup National Park Cameroon government, whereby 73,086 hectares of land were to be leased for a period of 99 years for the development of an oil palm plantation. Shortly after, SGSOC was sold by Southwest Sithe Global, part of the Blackstone Group, to US company Herakles Farms, which was founded by the investment group Herakles Capital. The project is located in the Kupe,

Manengula and Ndian divisions of the Mundemba Southwest region of Cameroon, about 250km from the port town of Douala. Rumpi Hills Protected area

Recent forest clearance for oil palm by Olam, Kango, Gabon. Alexander De Marcq The site consists mostly of logged- Google Maps Satellite view over forests, but is surrounded by five KEY separate protected areas, including Herakles concession area the globally significant Korup National Park, home to forest elephants, chimpanzees and gorillas.149

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3.3.2 RSPO CERTIFICATION PLANS DROPPED figures from the German development cut for conversion to oil palm”.165 agency GIZ, which has stated that it Curiously, in its initial response to Herakles originally planned to obtain RSPO believes that at least 23,115 hectares questions from RFUK in November certification for its Cameroon plantation of the concession is HCV forest, while a 2012, Herakles claimed that its and carried out an Environmental and further 31,576 hectares needs to be set development would “not be clearfelling Social Impact Assessment (ESIA), as is aside for local agriculture.152 any forests”, even though plentiful required under Cameroonian law. This ESIA, evidence, including aerial photographs published in August 2011, states that the The consultant recruited by Herakles to and the company’s own official company will exclude from development conduct its HCV assessment published a documents and statements, clearly areas of high conservation value (HCV) summary in February 2012.153 Independent shows this to be incorrect forest, steep slope areas (over 30 degrees experts published a damning critique of this (see Figure 9). incline), areas sacred to local communities, HCV assessment two months later, which river buffers and land currently used by concluded that it was “extremely weak and local people for agriculture.150 Herakles completely inadequate”.154 The independent “THE CONVERSION WILL “Experts state that stated that the actual area to be cleared review of Herakles HCV assessment also and planted within the concession will be stated that, “The review team did not 23,115 hectares of 60,000 hectares, implying that a total of believe that the company has clear tenure DESTROY EXISTING 13,086 hectares (18 per cent) will be set rights for the plantation development, and the concession is aside from palm oil production. However, that traditional tenure and customary use BIODIVERSITY IN 75% HCV forest, and the ESIA makes clear that almost all of this rights have been recognized... it is clear ‘set aside’ area is made up of buffer zones that hunting grounds and other areas where OF THE CONCESSION.” 31,576 hectares is where the concession shares a boundary collection activities currently take place will with protected areas, as well as all land over 155 be impacted by plantation development”. The ESIA for the project states that the needed for local a 650 metre altitude.151 Careful reading of Herakles has stated to RFUK that its HCV Oil Palm Nursery in Cameroon, © Jan-Joseph Stok / Greenpeace company plans to develop the 60,000 the ESIA shows the company is actually agriculture. In assessment was confirmed as complete hectares of palms over just four years, only proposing to set aside 1,969 hectares and in compliance with RSPO by the British with 7,500 hectares planted in the first for riparian reserves, HCV forest and local 156 contrast, Herakles Standards Institute (BSI). In August 2012, Herakles dropped surrounding protected areas163 – the year, 21,000 hectares in the following people’s agriculture. This contrasts with is setting aside only its plans to obtain RSPO certification implication being that these migration two years and 10,500 hectares in of the concession.157 The company routes, which can be critical in the final year.166 This is a very rapid 1,969 hectares for claims that this decision was due to elephant populations’ survival, would planting schedule in comparison to the delays to the project which were be destroyed by the development. most oil palm plantation developments riparian reserves, likely to occur as a result of following Environmentalists have expressed in Africa and Asia, which typically aim RSPO grievance procedures, but that particular concern that the influx of for between 2,000 and 5,000 hectares HCV forest and it nevertheless intends to meet RSPO workers into the plantation will lead of new clearance and planting a year. local people’s standards.158 When questioned by to increased bushmeat hunting in the RFUK as to its reasons for dropping neighbouring protected areas. ‘All for Africa’, an NGO with strong agriculture.” RSPO, Herakles responded that it links to Herakles, has stated that it will “did not withdraw from the RSPO in Herakles claims that it will adopt fund development projects in the area, order to proceed without having to “best practices for protecting the but has been seen by campaigners follow the sustainable requirements of [elephant migration] route” and concerned about the development the RSPO”, and that it had to quickly that “pre-clearing environmental as a vehicle for helping to ‘market’ a begin planting because its palm studies” will be carried out prior controversial project and downplay seedlings were starting to take root in to clearance and planting, which social and environmental concerns. the nursery.159 may identify additional areas for All for Africa posted misleading protection beyond those noted in the claims on its website, which were The ESIA for the project admits that, HCV assessment.164 The company subsequently taken down, that the “the conversion [to oil palm] will also claims to be “looking into inter- project would be carbon positive.167 In destroy existing biodiversity in 75% cropping” (growing two or more crops fact, no assessment appears to have of the concession”160 and that it will in proximity, although this is usually been carried out by the company of “result in an overall loss of fauna”161. only practical in the early years of the carbon stocking of the secondary It concluded that there will be major oil palm plantation establishment forests which the project plans to adverse impacts on livelihoods, whilst the palms are still small). As a convert, and the company has made flora, fauna and biodiversity.162 The result of these additional measures, no public commitment to avoiding ESIA found specifically that forest the company told RFUK that, “it is clearance of high carbon stock forests elephants regularly pass through the certainly not expected that an entire in the concession. concession when moving between the 60,000 ha [hectares] will be clear- FIGURE 9 Oil Palm Nursery in Cameroon, © Greenpeace / Alex Yallop

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3.3.3 QUESTION-MARKS OVER LEGALITY hectares in advance of the ESIA and claims that the findings of the official As of June 2012, the company had 3.3.4 LOCAL OPPOSITION associated environment permit required inspection in April 2012 were not cleared 30 hectares for oil palm The Herakles oil palm project has been under Cameroon law,169 but a local court enforced and assumes from this that nurseries, and carried out a pre- The development is meeting dogged by allegations of illegality from thought otherwise and suspended the it was a result of a misunderstanding clearance assessment, but not yet with increasing opposition locally, the start. While local groups allege that company’s operations in February 2012 between Ministry of Forestry officers clearance or planting, of an initial nationally and internationally. the concession agreement with the after a case was brought by a local NGO.170 in the region and the capital about area of 2,000 hectares.179 Greenpeace has documented the Cameroonian government was in breach The suspension was overturned by the what permits the company had frustrations and opposition of of legislation, the company has also been court in April 2012171, however, as by the been issued.175 A report on Herakles’ development numerous local villagers to the accused by official inspectors of various time the original court decision was handed by Cameroonian non-governmental development.187 Young people from breaches of regulations in its initial land down, the company had obtained the However, documents obtained by organisation Centre for Environment the village of Fabe are reported to clearance at the site. environmental permit in question.172 RFUK show that in May 2012, a joint and Development (CED) alleges that have tried to intervene directly to follow-up mission to the SGSOC the concession agreement breaches prevent bulldozers clearing land for During the summer of 2011, prior to the The existence of an ESIA and associated concession by the official Cameroon both the spirit and the letter of the palm nursery;188 Herakles has issuance of the ESIA, Herakles began environment permit does not appear to Independent Observer of Forest Cameroon law.180 CED claims that the stated to RFUK that this was related clearance and planting in at least one have been the only legal problem with the Law Enforcement and Governance process followed for the approval of to the dismissal of young employees nursery area.168 The company claimed clearance for the nursery, however, and the (OI-FLEG) and government forestry the ESIA may have failed to comply who had misbehaved.189 Cameroonian to have permission to clear up to 100 local court decision in April did not spell the officials confirmed that the company with relevant regulations, and the NGO the Centre for Environment end of the legal issues. An official April 2012 had cleared forest which had not agreement itself also does so, since and Development is now pursuing a report from Cameroon’s Ministry of Forestry yet been officially excised from the it did not obtain the necessary challenge to the agreement through states that a government inspection Presidential approval and exceeds the political and legal avenues “THE HERAKLES OIL 190 team found the company had breached the maximum five years allowed possible in Cameroon. regulations and seized two bulldozers which “A GOVERNMENT by law for initial leases.181 The PALM PROJECT HAS BEEN had been used in the clearance.173 Herakles agreement also poses significant legal initially told RFUK that it had “no knowledge INSPECTION TEAM questions by allegedly contradicting DOGGED BY ALLEGATIONS OF of the Ministry of Forestry report you other Cameroonian legislation in mention”174 and has continued to assert that FOUND THE COMPANY its provision of tax exemptions.182 ILLEGALITY FROM THE START.” no equipment was ever seized. Herakles As with other such investments elsewhere in Central and West Africa, HAD BREACHED the agreement includes extremely generous investment terms, including REGULATIONS.” a total exemption from all taxes and duties for ten years.183 In response, Permanent Forest Estate, as legally Herakles has vigorously denied required. It concluded that SGSOC allegations of illegality, and stated had illegally felled 220 cubic metres of to RFUK that it is, “not receiving any logs, and reported that the company special treatment that puts us above had been served with a “notification the law”, but that, “the details of the primitive” to pay 24.5 million CFA agreement with the government of (US$48,000) in fines and damages by Cameroon cannot be discussed as it the National Control Brigade (Brigade is confidential.”184 Nationale de Contrôle - BNC).176 Though the area of forest destroyed The only payment required by this apparently illegal felling is under the oil palm concession not large, it indicates a worrying agreement between Herakles and the and early ignorance or disregard Cameroonian government is an annual by Herakles for the due process of ‘area rent’, which will provide just the law, in an area where, as noted US$66,000 a year to the government above, the potential for causing major once all of the land is planted. environmental damage is great. Herakles has countered this by stating In response to questions on this that “millions of dollars” of additional issue, the company told RFUK that, revenue will be generated by sale of “Herakles Farms never received a timber on the land which Herakles will fine, penalty or order to stop work”.177 cut, trim and stack ready for auction The company continues to cite the by the Cameroonian government.185 April 2012 decision of the local court Herakles has claimed, in its defence, Oil Palm Nursery in Cameroon, © Greenpeace / Alex Yallop (regarding the environment permit) that it is bringing paid employment as evidence that the clearance for the to the area, as well as medical nursery was legal.178 services, university scholarships and farming programmes.186

42 THE RAINFOREST FOUNDATION UK SEEDS OF DESTRUCTION FEBRUARY 2013 43 SECTION 3: CASE STUDIES OF NEW OIL PALM DEVELOPMENTS IN THE CONGO BASIN SECTION 4: POTENTIAL SOCIAL & ENVIRONMENTAL IMPACTS OF PALM OIL IN THE CONGO BASIN

3.4 LESSONS FROM CASE STUDIES POTENTIAL SOCIAL & ENVIRONMENTAL IMPACTS OF PALM OIL IN THE CONGO BASIN In addition to the three case studies above, suggests that some of the ambitious planting a brief summary of other active projects targets already set out by governments will in the region is given in Annex 1. Taken only avoid very large-scale environmental together, this information illustrates damage and social disruption if much greater numerous reasons for concern regarding effort is put into site selection, assessment FIGURE 10 the new wave of expansion of industrial and mitigation measures. Social and oil palm plantations in the Congo Basin. Environmental In two of the three main case studies, impacts Natural Subsistence Biodiversity Local Culture and Of the seventeen projects identified, at companies with existing logging and timber Forest Livelihoods people’s land rights Medicines least three are connected in some way interests in the country concerned are to companies which have been found to involved in some way, raising the possibility have breached national regulations in that developments may aim to boost profits Carbon Dioxide other countries, involving timber-felling or through commercial timber felling. plantation development. All three main case In both case studies where clearance has Endangered Water Building Food studies involve conversion of forests and actually begun, there has been opposition Wildlife Materials Security potentially large-scale carbon emissions. In from local NGOs. There is a consistent lack at least two and probably all three cases, of transparency in the projects identified, the land allocated by the governments especially with regard to the details of encompass areas of high conservation value, contracts signed with governments, or Oil palm is native to the Congo Basin and developments in Indonesia have already been including primary forest, great ape and concession maps showing the areas planned is widely cultivated on a small-scale by well documented at one of the most advanced elephant habitat, or internationally-listed for conversion. subsistence farmers, with many important new oil palm developments in Africa, Sime wetlands. Without appropriate assessment local uses. Lessons on the dramatic negative Darby’s concession in Liberia. Some impacts are and mitigation measures, all three are The case studies also expose the flaws environmental and social impacts often also already beginning to be felt at the handful likely to have negatively impacted on local in RSPO certification (see section 4.3 associated with expansion of large-scale of new Congo Basin oil palm developments people’s farms and areas of forest needed for below for more on RSPO). For a start, it is industrial oil palm plantations in the tropics which have already broken ground. subsistence livelihoods. At a minimum, this voluntary: of the seventeen new planting come mainly from the two countries with the suggests that potential environmental and projects identified, just two have committed greatest experience - Malaysia and Indonesia. Though some Congo Basin projects have social impacts have so far been very much to meeting RSPO standards, and one of There are plentiful examples from these and committed to meeting Roundtable on Sustainable a secondary consideration in site selection them has since decided to drop its bid for other countries of oil palm developments Palm Oil (RSPO) standards - most have not - for new oil palm developments. It further certification. Whilst Olam has embarked on leading to the destruction of tropical rainforests those which have made such a commitment may a process to achieve RSPO certification, the (mostly secondary logged forests, but also change their minds when faced with difficulties, huge carbon emissions likely to result from primary forests) and consequently having major as Herakles has already done so in Cameroon “There is a consistent lack of forest clearance for the Olam plantation negative impacts on biodiversity, watersheds, (see section 3.3). demonstrate the flaws in RSPO standards, climate change emissions and local livelihoods. transparency in the projects which do not require high carbon stock forest Even if demand for oil palm were to remain The laxity of RSPO’s standard-setting and to be set aside. Meanwhile the Herakles case static, these effects would continue to be felt, enforcement, together with the system’s lack of identified, especially with demonstrates the difficulty in ensuring that since plantations are often abandoned after one experience and expertise in Africa, may mean regards to contracts signed RSPO standards are meaningfully met: not 25-year cycle because of soil exhaustion, that the certification is not a guarantee of strong, all cases will meet with the same level of and are replaced by new greenfield planting.191 social and environmental performance by oil palm with governments.” NGO attention, and without such attention it projects in the region. is unlikely the flaws in HCV assessments and With the exception of climate change emissions local consultations would have been exposed. from oil palm planting on peat-lands, there The following sections look at the negative is every reason to believe that the same environmental and social impacts already In the case of Atama Plantations in the negative impacts seen as a result of oil palm documented in oil palm plantations in South-East Republic of Congo, Rainforest Foundation UK development in Indonesia and Malaysia will Asia, as well as some of the measures used to has not been able to find evidence that any be repeated in the Congo Basin. Negative try to avoid or mitigate such impacts. environmental and social assessments have environmental and social impacts typical of been carried out.

44 THE RAINFOREST FOUNDATION UK SEEDS OF DESTRUCTION FEBRUARY 2013 Susan Schulman 45 SECTION 4: POTENTIAL SOCIAL & ENVIRONMENTAL IMPACTS OF PALM OIL IN THE CONGO BASIN

Where the natural biomass is buried, piled up to rot or used as timber, the emissions will take place over some time, but if the land is cleared by fire or woody material used for charcoal or cooking fires this will occur more rapidly.

In Indonesia and Malaysia, even larger climate change emissions come from below-ground, since much of the oil palm has been developed on peat- lands. When these are drained or burned, vast amounts of carbon are released. According to a Greenpeace analysis, one tonne of palm oil produced on deep peat can lead to nearly 20 times the emissions of burning a tonne of crude oil.201

A third and more commonly overlooked source of emissions from the industry are methane emissions which occur during the processing of Oil Palm Plantations in Kalimantan, Indonesian Borneo. Oil palm plantations and the processing plant in a totally deforested area at Pundu. 24/07/2009 © Daniel Beltrá / Greenpeace palm fruit and waste.

within concessions such as river buffers and 4.1 ENVIRONMENTAL IMPACTS areas of deep peat.198 Oil palm companies in Indonesia have cleared habitats of endangered “OIL PALM PLANTATIONS Orang-utans and Sumatran tigers.199 ARE A VERY LARGE 4.1.1 DEFORESTATION & BIODIVERSITY LOSS Oil palm companies almost always defend Forest clearance of oil palm, Kalimantan, Indonesian Borneo, © Ulet Ifansasti / Greenpeace green-field operations on the basis that There is a direct relationship between the CONTRIBUTOR TO their new planting is on ‘degraded’ land, livelihood and watershed functions. can also lead to increased small-scale growth of oil palm estates and deforestation but this term is widely abused and is often Palm oil planting has often been illegal logging, bush-meat hunting and in Malaysia and Indonesia.192 Between 1990 CLIMATE-CHANGING used to refer to areas of forest which have linked with timber extraction, with agricultural clearance. Where fire is and 2005, 1.1 million hectares of forest in been selectively logged but retain significant different parts of the same industrial used to clear degraded land, they can Malaysia and 1.7 million hectares of forest in biodiversity values, carbon stocks and conglomerates first pulling out all the spread beyond concession areas into EMISSIONS.” Indonesia were cleared to make way for oil most valuable timber species, then the neighbouring forests. palm. Between 50 and 60 per cent of all oil ‘degraded’ forest being clear-felled for palm expansion in those countries during the palm plantations. 15-year period occurred at the expense of 4.1.2 CLIMATE-CHANGE EMISSIONS natural forests.193 Where oil palm developments target Oil palm plantations are a very large primary forest areas, this is often contributor to climate-changing gas Much of this destruction has been illegal. simply a cover for accessing valuable emissions. Emissions result from the Licenses are often issued in breach of timber resources: once these are above-ground biomass cleared to regulations, sometimes as a result of taken, the land is abandoned and no make way for the plantations, which corruption. For example, the governor of planting ever takes place. Even where even in heavily degraded forests East Kalimantan province in Borneo was plantations are developed on genuinely exceeds the biomass of the oil palms jailed for 4 years for illegally issuing oil palm ‘degraded’, or un-forested land, they which replace them. Studies in plantation permits covering 1 million hectares can have indirect negative effects Indonesia found oil palm plantations between 2003 and 2008.194 It is common in on neighbouring forests. Where local had an above-ground carbon store Indonesia for oil palm companies to begin people’s subsistence agricultural land is of 39 tonnes of carbon per hectare clearance before all the necessary permits are planted, farmers may be forced to cut (C/ha), while logged-over forest in place.195 There are numerous examples of down neighbouring forests in order to areas which they typically replace oil palm companies illegally using fire to clear replace the lost land. The large influx had above-ground carbon stores of land196, clearing forest outside of concession of people needed for the planting and between 175 and 250 tonnes C/ha.200 boundaries197 and clearing in prohibited areas operation of an oil palm plantation © Jiri jura

46 THE RAINFOREST FOUNDATION UK SEEDS OF DESTRUCTION FEBRUARY 2013 47 SECTION 4: POTENTIAL SOCIAL & ENVIRONMENTAL IMPACTS OF PALM OIL IN THE CONGO BASIN

developers. Where formal regulations do 4.2.3 CULTURAL IMPACTS 4.2 SOCIAL IMPACTS provide for consultation with communities or require some form of consent, these Oil palm developments have dramatic regulations are regularly breached by negative impacts on indigenous and 4.2.1 LAND RIGHTS & CONFLICT companies and governments. Even local cultures and customs. Many where consultations are conducted, customs are related to traditions of Written laws in tropical countries often false information is provided and false working and using the land, including do not recognise customary land rights of promises are made in order to obtain subsistence agriculture, hunting and indigenous or other local peoples, and all local people’s consent.202 gathering of forest products and ‘vacant’ land is formally ‘owned’ by the state. for spiritual and cultural purposes. In such instances, governments are able The painstaking work of NGOs such as Indigenous peoples in particular have to hand people’s ancestral land to oil palm Sawit Watch (which translates as ‘Oil palm a profound relationship with the land companies without consultation or their free, watch’) has demonstrated beyond doubt and its resources. The loss of land prior, informed consent (FPIC) and without that the rapid expansion of oil palm for subsistence agriculture, the loss suitable compensation. In most countries plantations in Indonesia has led to “hundreds of forest resources, and the shift to where large-scale oil palm plantations of disputes and conflicts over land, involving working as wage labourers in oil palm have been developed, this has led to the demonstrations, land occupations, displaced plantations all serve to undermine and loss of customary lands and resulted in persons, arrests, beatings, torture ultimately destroy these traditions, conflicts between local people and oil palm and deaths’.203 and the cultural practices which accompany them.

More direct impacts include numerous Kate Eshelby well-documented instances in Indonesia and Malaysia of oil palm Sawit Watch was aware of 513 active 4.2.2 LIVELIHOOD IMPACTS companies desecrating indigenous conflicts between companies and people’s ancestral grave sites. communities in the oil palm plantation The conversion of community Ultimately, the disruption caused by sector in Indonesia in 2008, and agricultural lands and forests can conversion of local people’s land to oil believed that, in total, there may have have dramatic negative impacts on palm can lead to communities losing been as many as 1,000 conflicts in local livelihoods. Forests which are the very things which make them the country. It has been estimated destroyed to make way for oil palm communities: their self-respect, pride that between 1998 and 2002, 479 plantations can no longer provide and identity, their independence, and local people and activists defending subsistence foods, medicines and their collective spirit.206 community rights were tortured, 12 building materials. Where insufficient were killed, and 936 were arrested; land is left for subsistence agriculture, at least 284 houses or huts were it can be impossible to grow enough burned down or destroyed and 307,954 food. Villages can find that they have hectares of “peasants’ land was become ‘islands’ in a sea of oil palm affected by crop damage, destruction plantations. The new opportunities and burning”.204 for income from formal employment within the oil palm plantations often fail to fully counter the loss of “IN MOST COUNTRIES LARGE- subsistence incomes and leave people worse off than they were before.205 SCALE OIL PALM PLANTATIONS HAVE LED TO LOSS OF CUSTOMARY LANDS, RESULTING IN CONFLICTS BETWEEN LOCAL PEOPLE AND OIL PALM DEVELOPERS.” Kate Eshelby

48 THE RAINFOREST FOUNDATION UK SEEDS OF DESTRUCTION FEBRUARY 2013 49 SECTION 4: POTENTIAL SOCIAL & ENVIRONMENTAL IMPACTS OF PALM OIL IN THE CONGO BASIN

4.2.4 WATER QUALITY AND AVAILABILITY saps oxygen from water, killing fish. A palm oil mill serving a concession of around 4.3 ATTEMPTS TO ADDRESS Studies in Indonesia have shown how oil 8,000 hectares can produce 1,200 cubic palm developments can have serious, metres of liquid waste per day, equivalent NEGATIVE IMPACTS OF OIL detrimental impacts on local people’s access to the sewage produced by a city of 75,000 PALM DEVELOPMENT to clean water. Concession agreements often people.208 Examples of water pollution in the define new plantations as private property, Congo already exist: a press report in March and give the oil palm company the right to 2010 claimed that SIAT’s oil palm processing refuse access, including access to rivers and facilities in Lambaréné and Makokou, Gabon 4.3.1 CERTIFICATION streams within the concession area, to local had caused significant pollution of rivers.209 In response to consumer campaigning people. At least some of the new concessions by NGOs, in 2004 the Roundtable for being allocated in the Congo Basin countries 4.2.5 POOR LABOUR CONDITIONS Sustainable Palm Oil (RSPO) was set have similar provisions.207 up. The RSPO has established a set of Oil palm companies, including those involved standards for independent, voluntary in developments in the Congo Basin, seek certification of ‘sustainable’ palm oil. “OIL PALM DEVELOPMENTS to justify inevitable negative environmental An increasing number of major impacts by highlighting the numbers of jobs corporate buyers of palm oil are OFTEN HAVE DRAMATIC which will be created. Where the permission demanding certified supplies, and of local communities is sought, the promise companies can choose to have their NEGATIVE IMPACTS ON of employment is a key incentive. Paid plantations RSPO certified in order employment in most rural areas of the Congo to sell to these more discerning INDIGENOUS AND LOCAL Basin is in very high demand, as these are customers (in theory, at a premium some of the poorest countries and regions price). As of September 2012, CULTURES AND CUSTOMS.” anywhere. The experience in Indonesia 1.5 million hectares of oil palm however, is that existing communities in the plantations had been certified to vicinity of new oil palm plantations often RSPO standards.212 An RSPO Africa The planting of oil palm monocultures has end up disappointed. Many of the promised Roadshow “aimed at supporting best dramatic effects on local hydrology. Local jobs are only temporary, since plantation practice in the planning and expansion communities surveyed in Indonesia found establishment is much more labour intensive of oil palm plantations in West and that rivers and streams dried out following than plantation maintenance. One study Central Africa” kicked off with events Oil palm replacing tropical forest in Sarawak, Malaysia. © Earthsight Investigations the planting of oil palm, while conversely found that plantation establishment required in Liberia and Gabon in May and June floods also became more common. Even 542 person-days per hectare, whereas scheme. Most plantations (and most while continuing to develop new 210 2012. The roadshow was funded by where communities are still able to access operation required just 85 days. Most jobs the International Finance Corporation, importantly, most new plantations) plantations illegally or unsustainably water sources, and these have not dried are for casual workers, with little or no job a member of the World Bank Group, are still not certified or seeking to elsewhere.216 out, they are often polluted. Pesticides and security. Wages are very low - at or below and Sime Darby, Olam International be certified, and even for those other agrochemicals are leached from fields the minimum wage, which is itself not a and Unilever. 213 plantations which are certified, 211 4.3.2 THE ‘DEGRADED LAND’ STRATEGY into streams, and increased erosion leads liveable wage. The quality of work found in there are serious problems with the to increased turbidity and sedimentation. palm oil plantations is often also very poor For a plantation to meet RSPO standards used, as well as with their A lot of attention is now being paid Even worse pollution comes from the oil - harvesting palm fruits is physically difficult standards, it is supposed (among enforcement. RSPO standards still by international agencies and NGOs palm processing facilities, which release and results in many injuries. other things) to meet all local and allow companies to clear natural to the idea that deforestation can be large amounts of organic liquid waste which national legislation, only diminish tropical forests, including areas of reduced significantly by shifting new customary rights of local land users high carbon stock, provided that these oil palm development from forest with their free, prior, informed forests have previously been slightly areas on to degraded land. The World consent, and must avoid planting on degraded by logging. Plantations Resources Institute (WRI), for instance, areas of ‘high conservation value’, established prior to 2005 can even has calculated that there is already such as primary forests or forests with be certified in cases where they sufficient suitable degraded land in important populations of endangered replaced primary forests.215 RSPO Indonesia to cater for continued oil species.214 Importantly, this does not certification does not address potential palm expansion through to 2020, prevent RSPO certified plantations indirect impacts on neighbouring without any more forests needing clearing natural forest. forests of displacing local people from to be felled. farmed land. Multiple case studies While RSPO can help bring greater have also demonstrated how RSPO- transparency to the palm oil industry member companies are able to obtain and has served as a forum for RSPO certification for some of their discussion, it is only a voluntary plantations (usually the older ones),

50 THE RAINFOREST FOUNDATION UK SEEDS OF DESTRUCTION FEBRUARY 2013 51 SECTION 4: POTENTIAL SOCIAL & ENVIRONMENTAL IMPACTS OF PALM OIL IN THE CONGO BASIN

NGOs like WRI and WWF are working with The third, larger, but less well documented donors, national governments and major problem is that the whole strategy could be oil palm companies to try to encourage counterproductive, because it is not being oil palm development on degraded land, sufficiently coupled with parallel actions to by helping identify land and minimise any prevent continued new planting on ‘non- administrative hurdles. Such initiatives are degraded’ forest land. Given the huge also linked to potential funding for REDD, profits and massive demand for palm oil, such as in the financial agreement between as well as the tempting cash-flows offered the governments of Norway and Indonesia. by timber clearance and sale, it is entirely possible that oil palm companies will take Although the basic concept is sound, there the degraded land offered to them, and then are a number of potential challenges with plant on that and the forested land they the degraded land strategy as currently were originally planning to plant on. The implemented. The first is that land rights reality is that, in Indonesia and other Asian and tenure issues on ‘degraded land’ may countries, palm oil companies have built up be as or even more significant than they are substantial ‘land banks’ which, if utilised, on forested land. The second relates to how would require further forest clearance, ‘degraded land’ is defined; the term has and they have been strongly reluctant been widely abused and often used to refer to relinquish such land reserves even if to areas of forest that have been selectively suitable ‘degraded land’ is on offer. logged but still retain significant biodiversity values, carbon stocks and livelihood and watershed functions.

“The term ‘degraded land’ has been often used to refer to areas of forest that still Farmer’s house, Cameroon, POZZO DI BORGO Thomas - Shutterstock retain significant 4.3.3 SMALLHOLDER/ labour from these small plantations – and possibly even to help secure biodiversity, carbon ’OUT-GROWER’ SCHEMES are at least ten times higher than, for community ownership over land. example, dry-land rice production (in In an idealistic vision, it might be stocks and livelihood Because of its perennial, year- Indonesia, earnings for smallholder possible to locate small-scale palm round production, oil palm has production are seven times higher oil production in degraded portions functions.” proven favourable for smallholder than the average net income of of community-managed forest land production in Asia. Roughly two-fifths subsistence farmers219). (though legal provisions for such of oil palm plantations in Indonesia community forests exist only in one are controlled by smallholders, a Such figures can indicate, country so far, Cameroon), thus proportion that looks set to grow.217 superficially, that smallholder palm providing both sustainable cash The area of large-scale plantations in oil production, which is already income whilst protecting natural Cameroon is believed to be at least widespread, may offer a compromise forests for other non-cash needs, matched by the area of smaller scale between the desire of palm oil and providing greater security of or village plantations218. Typically producers to expand production in ownership. However, this vision these are between 10-15 hectares the Congo Basin, and the need to presents numerous challenges in extent, though up to 50 hectares, ensure that such expansion advances (see Box 3). and occasionally more. Earnings local community well-being and per hectare and per person/day of efforts to achieve rural development Oil palm plantation, Malaysia, © Kimpin - Fotolia.com

52 THE RAINFOREST FOUNDATION UK SEEDS OF DESTRUCTION FEBRUARY 2013 53 SECTION 4: POTENTIAL SOCIAL & ENVIRONMENTAL IMPACTS OF PALM OIL IN THE CONGO BASIN SECTION 5: CONCLUSIONS AND RECOMMENDATIONS

CHALLENGES OF SMALLHOLDER / OUT-GROWER PALM OIL SCHEMES Box 3 CONCLUSIONS AND RECOMMENDATIONS

PRODUCTIVITY LOGISTICAL PROBLEMS 5.1 CONCLUSIONS RFUK has carried out an initial consultation with key non-governmental organisations in the Even in more advanced, export-orientated Palm fruit has to be processed within two days This report has shown that the expansion of Congo Basin on these recommendations, but smallholder production in South-East Asia, of harvesting, so access to mills is important. commercial palm oil production poses a new and much more needs to be done to inform and open yields are typically lower, by around 50%, Efficient small-scale equipment for each of growing threat to the forests of the Congo Basin, public debate within the region. Substantive than those of large-scale producers. In the stages of palm fruit processing does exist Cameroon, though the data is vague, the in Africa223, though is probably not widely as well as to people who depend on those forests recommendations about palm oil development figure seems to be closer to only 40%220, available (see above), and in the absence of for their livelihoods and culture. This expansion is in some specific countries, especially Cameroon, though this includes all ‘village plantations’ this, smallholders cannot compete with larger likely to have negative environmental and social have already been made by national NGOs; the which are mostly used to satisfy local mills benefiting from economies of scale. Palm impacts unless national governments, palm oil more general recommendations offered here are demand and have had little or no fruit buyers who do have access to mills tend developers, international agencies, investors and intended to complement those recommendations, investment in, for example, planting to control fruit prices. palm oil buyers adopt practices that radically not serve as an alternative to them224. stock or management techniques. improve on those typically seen in Indonesia WHAT IS THE BEST TYPE OF SMALLHOLDER FOR THE and Malaysia. Further studies in the field are needed, as well as wider consultation and engagement with ELITE CAPTURE CONGO BASIN CONTEXT? The following are provisional recommendations relevant non-governmental organisations, palm As in community forestry and smallholder that are designed to be a starting point for oil developers and governments of the region. Smallholders can be: agriculture in Cameroon, small-scale palm discussion among all relevant stakeholders. oil production may be prone to domination • Fully independent - the grower typically by either local or non-local elites, whereby fully owns or leases the land, but is not benefits flow to small numbers of typically provided with extension services, credit or older/retired ex-government officials or guaranteed markets by a large corporate “THE EXPANSION OF OIL PALM POSES A GROWING THREAT TO employees of larger corporations, with processor; or; an urban background and advanced THE FORESTS OF THE CONGO BASIN, AS WELL AS TO PEOPLE education, rather than member of poor • ‘Supported’- contractual obligations rural communities.221 will exist between producer and buyer/ WHO DEPEND ON THOSE FORESTS.” processor, and technical/market support ENVIRONMENTAL DAMAGE offered, but land may be held through joint or sub-leasing arrangements. There is little or no evidence that smallholder palm oil production is inherently less Both options have advantages and damaging than large-scale production, disadvantages for each party, though the though in Cameroon there is some evidence latter would seem to present the greater that land acquired for smallholder palm challenges in terms of being able to be developments tends to be ‘secondary forest’ accommodated within typical Congo Basin or old plantations and agricultural land, ownership systems, both of a customary rather than primary forest.222 kind and more formal designations such as community forests. ACCESS TO CAPITAL AND TECHNOLOGY Indigenous peoples The nature of smallholder production, especially in remote rural areas with little It seems highly unlikely that even smallholder physical infrastructure and banking facilities, palm oil production is likely to benefit the and particularly with typical conditions of region’s indigenous forest communities, insecure land title, means that investment who are primarily semi-nomadic, and who and technical improvements can be very have typically benefited very poorly from hard to secure. Targeted aid programmes permanent agriculture of any description, and could help overcome this disadvantage. indeed have tended to be harshly exploited for very cheap or effectively ‘indentured’ labour (see Box 1).

54 THE RAINFOREST FOUNDATION UK SEEDS OF DESTRUCTION FEBRUARY 2013 Kate Eshelby 55 SECTION 5: CONCLUSIONS AND RECOMMENDATIONS

subject to formal land title. Efforts to in consultation with all relevant 5.2 RECOMMENDATIONS promote developments on degraded land stakeholders. Large-scale agro- must be coupled with parallel measures to investments should be developed in prevent developments on forested land. harmony with national land-use plans and poverty reduction strategies. 5.2.1 GENERAL RECOMMENDATIONS • Indirect impacts need to be taken Governments should avoid signing into account: Assessments of the likely agreements with oil palm developers • Greater transparency needed: environmental and social impacts of large- that include restrictive confidentiality There is a need for transparency in scale oil palm developments in the Congo clauses and all such contracts and the industry, specifically in dealings Basin need to take account of potentially agreements should be available to between palm oil investors and Congo major indirect impacts, such as through the public. The public auctioning of Basin governments. All contracts and new infrastructure increasing accessibility oil palm development licenses should agreements between governments and to nearby forested areas, in-migration be explored. palm oil developers should be made public, of employment-seekers, displacement of to enable proper public debate, reduce the subsistence farmers into adjacent areas • Governments should make potential for corruption and enable local and potential increase in social conflicts. high environmental and consultation and participation prior to social standards compulsory: development. Other relevant documents, • Congo Basin NGOs have a crucial role: Governments should legislate strict including SEIAs and official concession Non-governmental organisations in the standards to ensure that high- maps and planting plans, should also be region can play critical roles in minimising conservation value (HCV) forests made public. negative impacts of the expansion of large- and high carbon stock (HCS) scale oil palm in the Congo Basin. They forests are not allocated to oil palm “All contracts and • Small holder cultivation should can provide independent assessments of developments, and that an obligation be prioritised: Small holder palm oil land ownership rights and environmental to obtain free, prior and informed agreements between production may help address the need for and socio-economic conditions in proposed consent (FPIC) is obtained (see next investments in the Congo Basin countries planting sites, help local and indigenous recommendation). Companies with a governments and and provide long-term sustainable communities articulate their concerns, poor track record elsewhere should palm oil developers development opportunities for rural people, convene relevant stakeholders to seek be excluded from developing oil provided that it respects and ensures formal consensus around proposed developments, palm plantations. should be made recognition of customary rights. New palm and act as independent monitors. However, oil developments should, in consultation sustained technical and human capacity • Customary tenure and user public.” with local and indigenous communities, aim building will be needed to ensure that they rights should be mapped and to maximise local, household and/or farm can fully fulfil these roles. recognised, and free prior family production, as well as agro-forestry and informed consent sought: techniques, where oil palms are grown 5.2.2 RECOMMENDATIONS FOR CONGO BASIN Government agencies should develop together with other crops and species GOVERNMENTS, PALM OIL PLANTATION DEVELOPERS, the means to systematically record or integrated into community forestry. and recognise both the formal and However, much further consideration and INVESTORS AND INTERNATIONAL ORGANISATIONS: customary tenure conditions within exploration needs to be given as to any potential palm oil development how some of the potential challenges Recommendations for governments in the area, prior to approval of projects. and disadvantages of smallholder palm Congo Basin: Careful analysis of existing oil production in the Congo Basin could livelihoods systems, especially those be overcome. • Information on impacts of oil palm that rely heavily on subsistence in South-East Asia should be made (non-cash) use of natural forest • Rehabilitation of old plantations available in the Congo Basin: Decision- resources which may be largely and use of degraded land should be makers and other stakeholders in Congo invisible to standard cost-benefit prioritised: In countries with dilapidated Basin countries should have access to analyses, need to be made prior to oil palm plantations, any development reliable information on large-scale oil approval of projects. should focus on these areas instead of palm expansion in Indonesia and Malaysia expanding into natural forest areas. The in order to learn lessons to avoid major The free, prior and informed consent planning of new oil palm developments cultural, social and environmental damage. (FPIC) of local and indigenous should include a presumption in favour communities should be obtained of utilisation of land which can be • Governments should develop clear before any development is Kate Eshelby assessed as ‘degraded’ (in relation to, for and transparent policies on oil negotiated with palm oil developers. example, previous forest or other natural palm development: Governments ecosystems) – while bearing in mind that should develop and implement clear and such areas may be particularly important transparent policies on the allocation in local livelihoods, even if they are not and management of oil palm plantations,

56 THE RAINFOREST FOUNDATION UK SEEDS OF DESTRUCTION FEBRUARY 2013 57 SECTION 5: CONCLUSIONS AND RECOMMENDATIONS

Recommendations for palm oil developers: • RSPO alone will not be enough: Recommendations for international • Scrutinise how oil palm making concerning palm oil Standards and certification through the organisations: expansion fits with national developments. Consideration • Customary land rights of communities Roundtable on Sustainable Palm Oil (RSPO) commitments on forest should be given as to whether must be respected: Palm oil developers have been strongly criticised in South-East • Greater technical assistance management and conservation: the kind of international timber need to be aware of, and respect, Asia and are unlikely be easily adapted needed on mapping customary Donor governments and agencies trade controls mutually agreed customary land tenure and usage rights to the Congo Basin, or robust enough to land tenure: Assistance will need should scrutinise how current and to through VPA agreements could of forest communities and ensure that ensure that conflicts over land tenure or to be given to most governments planned expansion of large-scale usefully be extended to agricultural local and indigenous communities are social and environmental impacts will be within the region to ensure that oil palm plantations fits with Congo commodities such as palm oil, genuinely able to exercise the principle avoided. Palm oil developers will need to they have adequate capacity to Basin governments’ commitments where the production of these of free, prior and informed consent ensure that due diligence goes beyond properly assess, record and legally and engagements with international affects forests. (FPIC) and their right to be consulted application of the RSPO’s standards, and recognise local (customary) land processes concerning the improved over developments affecting their lands. should be wary of the quality of third- tenure regimes and traditional conservation and management As large-scale palm oil This would require, as a minimum, a party assessments for RSPO certification forest utilisation patterns in areas of forests, especially countries developments in the Congo Basin participatory process involving all sections compliance in the Congo Basin, due to the earmarked for oil palm development, which have signed a Voluntary are likely to cause significant levels of local and indigenous communities lack of adequate, independent, reliable as well as to ensure that they have Partnership Agreement (VPA) as of emissions of climate-changing through which the areas under customary and easily obtainable information on the the resources and skills necessary to part of the European Union’s Forest gases from land-use developments, rights and usage regimes are clearly socio-economic, tenure and livelihoods monitor oil palm developments and Law Enforcement, Governance as well as shaping wider patterns of identified and mapped, that communities conditions of proposed development sites, ensure compliance with the relevant and Trade (FLEGT) programme, or forest loss or conservation, donors are made fully aware of the consequences and weak capacity of both governmental laws and norms. are receiving official development of REDD funding should seek to of the conversion of these lands for palm and non-governmental organisations. funding related to REDD. The address such developments through oil development, and that any expressed • Support capacity building multi-stakeholder approaches and both ‘REDD-readiness’ programmes collective demand to exclude these lands Recommendations for investors: of in-country civil society forest governance-strengthening and/or REDD ‘payments for from future development is respected. organisations: Donors should embedded in the FLEGT processes achievements’ agreements. Some companies included in this report • Banks and other investors must abide help strengthen the capacity of should be extended to decision- have taken positive steps in this direction, by responsible investment standards: local civil society organisations to but more needs to be done. As stated Large-scale oil palm development usually raise awareness of, and monitor requires substantial up-front investment the expansion of, oil palm – and and support from banks and other financial other large-scale plantations – in “PALM OIL DEVELOPERS NEED services providers. To avoid bankrolling the Congo Basin. In addition, destruction in the Congo Basin, investors donors could support programmes should sign up to and abide by the to accompany local and indigenous TO RESPECT CUSTOMARY Equator Principles for project financing, in communities in the formulation, particular Principles 2 and 3 on social and implementation and evaluation of RIGHTS OF FOREST environmental assessments and standards, community projects, in order that and Principle 5 on consultation and communities benefit from any oil 225 COMMUNITIES.” transparency. palm development.

In addition, financial institutions should above, governments would preferably • Financial and technical introduce specific forest policies, which record and legally recognise customary assistance on smallholder (among other things) preclude them from tenure and usage regimes in the relevant production: Financial, technical engaging with agricultural plantation areas before any FPIC consultations are and market assistance/incentives developments on forested land with high undertaken, and would make FPIC a legal may be required to ensure that carbon stocks or high conservation value, requirement. smallholder production offers a or without the free, prior, informed consent viable and attractive proposition of local people. to local communities, governments and investors.

Kate Eshelby

58 THE RAINFOREST FOUNDATION UK SEEDS OF DESTRUCTION FEBRUARY 2013 59 ANNEX 1: SUMMARY INFORMATION ON KNOWN OIL PALM EXPANSION PROJECTS IN THE CONGO BASIN (INCLUDING INFORMATION ON OPERATIONS ELSEWHERE OF THE COMPANIES CONCERNED)

COUNTRY INVESTOR HECTARES NOTES Cameroon Cargill 50,000 Announced by Director of Cameroon’s Investment Promotion Agency May 2012, said to be worth $390 million; deal not yet signed; Cargill has declined to comment.237 Not clear whether a location has been identified. Cargill has been found to have Cameroon CDC 6,000 Already has around 12,000 ha of oil palm in Cameroon.226 As of 2009, had just cleared tropical forests in Indonesia for oil palm without all the necessary permits, started planting on new 6,000 ha estate at Boa Plain, Iloani (in SW); work was while local people have complained of pollution. The company has also cleared expected to take 5 years.227 As of April 2011, 1000 hectares had been planted.228 forest on peatlands, and fire hotspots were found in its concessions during No information available on nature of land involved. clearance in 2006.238

Cameroon SG 73,086 99-year lease, signed in 2009. Land is selectively logged forest, adjacent to four Cameroon Palm Co 100,000 This company is reported to be requesting at least 100,000ha in Nkam area of 239 Sustainable protected primary forest areas in Ndian and Kupe-Manenguba Divisions of SW Littoral ; no other information available. Oils Cameroon. Env & soc impact assessment says only 60,000ha will be planted. Cameroon Dropped plans to obtain RSPO certification after HCV assessments were heavily Cameroon Smart 25,000 Company of this name said to be trying to acquire 25,000ha in an unknown 240 (SGSOC) criticised. Owned by Herakles Farms, a US company. Widespread NGO attention and Holdings destination. Not clear if it is connected to giant palm oil company PT SMART / (Herakles) opposition. Ground broken for nursery during 2011, not clear if wider planting has Golden Agri in Indonesia (which has a new oil palm plantation in Liberia already, begun or if so how far it has progressed. For references and additional information and which in the past has been found to be clearing illegally on deep peat, clearing 241 see Section 3.3. orangutan habitat and clearing forest without EIAs in Indonesia ). No other information.

Cameroon Biopalm 200,000 Announced in Aug 2011. In South-East Cameroon. 3,000ha signed off for nursery, CAR Palmex 8,701 Revealed in May 2012, planting planned for Pissa in Lobaye Mbaiki sub-prefecture. Energy not clear if remaining areas fully signed off or just under memorandum of Announced at a launch ceremony attended by Minister Pascal Koyamene.242 understanding with the authorities. No Free Prior and Informed Consent for local Bagyeli indigenous people. Biopalm is subsidiary of Singapore-based Siva Group, Republic of Eni 70,000 Italian oil & gas firm. Has had presence in Congo since 1968243; ‘protocol which is owned by an Indian billionaire. Will be jointly developed with Cameroon’s Congo agreement’ signed with governent Nov 2008; MoU signed in 2009; Niari in NW National Investment Corporation. No reports that ground has yet been broken. Congo. Eni says its role is as technical consultant to MinAg to help identify most Expect to produce 60,000 tpa by 2016. Kribi, Loukondje, Bipindi, Lolordof and suitable areas and create a consortium to implement the project, in which it will Mvengue regions. The company is said to be seeking ‘at least’ 200,000 ha in have a maximum stake of 10%.244 Eni website says feasibility studies are ongoing, Cameroon, not in one block, and has reportedly ‘already been accorded 50,000ha and plan is to do environmental and social impact assessment and follow RSPO.245 in Ocean Division, with authority to develop 10,000ha yearly’. One site Siva is trying In Feb 2009 a special FAO mission visited Congo to evaluate the project’s potential. to secure is UFA 00-003, a Forest Management Unit (logging concession, part of This included a visit to the site at Mbé, in Pool region.246 Congo environmental the ‘Permanent Forest Estate’) managed by MMG.229 Biopalm is also a joint venture legislation requires ESIAs to be made public. Eni is also working with Congo partner in new oil palm plantations in Liberia, and targeting oil palm investments government on developing tar sands and building a gas-fired power station. The in DRC.230 tar sands area of exploration is 70% primary forest, so could impact forests more than the proposed oil palm plantation.247 Status of investment unclear - since Eni was only advising, it could be that part or all of this 70,000ha is the same land later Cameroon Sime Darby 300,000 Still in negotiation with government; would be in south-west (Yingui, Nkam provided to Fri-El-Green or Biocongo (see below) Division, adjacent to Ebo NP). The company wants to develop 5,000-15,000ha per year, and is reported to have recently rejected a site offered to it (an intact Republic of Fri-El Green 40,000 Italian bioenergy company, 50% owned by German energy utility RWE, purchased primary forest near Mintom) because of its high conservation value. Sime Darby Congo 4,000ha of existing plantations in Cuvette province in the north of the Congo is reportedly searching for up to 600,000ha of land in total for oil palm and from two state-owned firms (Sangha Palm and Congo National Palm Plantations rubber in Cameroon; in addition to the 300,000 of oil palm they are currently Authority -RNPC), in July 2008, and agreed 40,000ha expansion, with all the palm also proposing a further 150,000 ha of rubber (100,000 in Efoulan, Mvila and oil intended for the production of biofuel.248 The Sangha Palm land is in Etoumbi 231 50,000 in Meyomessi, Dja et Lobo Division). Sime is one of the largest oil district, the RNPC land in Owando. The new planting is to be in Sangha (30,000ha), palm companies in the world. It has been found to have been clearing orangutan La Cuvette (5000ha) and La Cuvette-Ouest (5000ha).249 Fri-El also signed a deal 232 habitat and clearing forest illegally without the necessary permits in Indonesia. for 30,000ha for OP in Ethiopia in 2008, but half this area was recently cancelled At Sime Darby’s new oil palm plantation in Liberia, villagers have complained that by the government there due to a failure to meet targets for starting development the company had thrown people off their land, illegally cleared forest and filled in of the land.250 Also took over 11,000ha of dormant state-owned plants in Nigeria in 233 wetlands. In 2011, Sime Darby was fined $50,000 by the Liberian authorities for 2007, with rights to expand to 100,000ha.251 Fri-El also announced deal in 2007 for 234 breaches of environmental requirements during forest clearance. investing in 180,000ha OP dev in Indonesia.

Cameroon GoodHope 6,000 Company announced in August 2011 a plan to invest ‘hundreds of millions of Republic of Atama 180,000 Concession agreement signed in December 2010. Total area covered is 470,000ha, (est.) dollars’ in oil palm in Cameroon, and said to be searching for ‘an unknown quantity Congo Plantations of which 180,000ha of suitable land has thus far been identified. Land is in Cuvette of land’ for oil palm development in Ocean Division, Southern Region.235 News and Sangha provinces. Planting expected to begin in spring 2013. Malaysian-run reports say only 50ha approved, but also say investment is $200m and will produce company currently being purchased by a Kuala Lumpur publicly listed firm. For 30,000tpa236, which would represent around 6,000ha. Goodhope are a very large references and additional information see Section 3.1 Malaysian oil palm company.

60 THE RAINFOREST FOUNDATION UK SEEDS OF DESTRUCTION FEBRUARY 2013 61 ANNEX 1: SUMMARY INFORMATION ON KNOWN OIL PALM EXPANSION PROJECTS IN THE CONGO BASIN ANNEX 2: FPIC AND CONSULTATION

COUNTRY INVESTOR HECTARES NOTES WHAT IS ‘FREE, PRIOR AND INFORMED CONSENT’ own freely chosen representatives and administrative measures that will have (FPIC)?261 customary or other institutions. The an impact on indigenous peoples are inclusion of a gender perspective and being considered. This is very broad Republic of Biocongo 24,280 News reports in February 2012 said deal signed that month by Agriculture Minister ‘Free, prior and informed consent’ the participation of indigenous women and means that it applies not only to Congo Global for 60,000 acres. Plantations to be in La Cuvette and Cuvette-Ouest in NW of country. as referred to in the UN Declaration are essential, as well as participation projects but also to legal and policy Trading $150 million investment.252 on the Rights of Indigenous Peoples of children and youth as appropriate. development or implementation. can be understood as follows: This process may include the option of withholding consent. As such, it should follow the following Republic of Aurantia Unknown Spanish company Aurantia was reported in 2007 to be planning to build four palm • Free should imply no coercion, Consent to any agreement should be principles, as outlined in these two laws. Congo oil mills and a plantation covering ‘thousands of hectares’, with the aim of producing intimidation or manipulation; interpreted as indigenous peoples have 253 biofuel. Feasibility studies on possible sites for the development were underway. No reasonably understood it. • It should have the objective of new information since, and many such projects planned during the biofuel boom year • Prior should imply consent has been achieving agreement or consent; of 2007 have been shelved around the world, so it is possible that this project never sought sufficiently in advance of any FPIC should be sought sufficiently came to fruition. authorisation or commencement in advance of commencement or • The process of consultation should of activities, and respect time authorization of activities, or legislative allow for those concerned to express DRC ZTE 100,000 Announced 2007, but as of 2010 development had not begun.254 Original target area requirements of indigenous or administrative measures likely to themselves freely, in a fully informed was Equateur province, but later rumours named Mbandaka. Original news reports consultation/consensus processes; have an impact on IPs taking into manner; mentioned much larger area.255 Deal expired in 2011, by which time ZTE had only account indigenous peoples’ own • It should be conducted in a form 600ha of actual land holdings.256 ZTE has 10,000ha of oil palm in Indonesia and is in • Informed should imply that decision-making processes, in the appropriate to the circumstances. process of acquiring much larger land bank there for future expansion.257 information is provided that covers phases of assessment, planning, (at least) the following aspects: implementation, monitoring, evaluation This means that the consultation Gabon Olam 100,000 Deal signed Nov 2010. 70/30 joint venture with government; to be planted at Kango and closure of a project. process should: & Mouila. Part of broader programme of investment which also includes a special zone a) The nature, size, pace, reversibility for wood processing and a large fertiliser factory. Recently announced additional joint and scope of any proposed project Indigenous peoples should specify - Take into account indigenous venture for 28,000ha of rubber at Bitam in the north. 2,000 hectares of oil palm planted or activity; which, if any, representative institutions peoples’ own ways of making by end of 2011, aiming for a further 12,000ha by end of 2012. Company committed to b) The reason/s or purpose of the are entitled to express consent on behalf decisions, allowing sufficient time meeting RSPO standards, including setting aside all areas of High Conservation Value project and/or activity; of the affected peoples or communities. to be able to do this (HCV). The majority of the areas allocated to the company thus far for oil palm in Kango c) The duration of the above; In FPIC processes, indigenous peoples, - Consider the location of the & Mouila have been found to be HCV, including primary forest, intact forest landscapes, d) The locality of areas that will UN Agencies and governments should consultation as this should Ramsar sites and great ape and elephant habitat Oil production production to start in be affected; ensure a gender balance and take into be appropriate for the people 2015, for export to Europe. Olam is one of the largest logging companies in the Congo e) A preliminary assessment of the account the views of children and youth concerned basin. Until recently the company had logging concessions in the Democratic Republic of likely economic, social, cultural and as relevant. - Be in an appropriate language Congo (DRC). It was alleged that these concessions were obtained in breach of the 2002 environmental impact, including - Provide all information, in a form moratorium on issuance of logging titles in the country. Olam also had $0.5 million of potential risks and fair and equitable Information should be accurate that is understandable to those logs seized by the DRC forest authorities in 2007 for failure to pay taxes. benefit sharing in a context that and in a form that is accessible and concerned, on the potential positive (For references and additional information see Section 3.2). respects the precautionary principle; understandable, including in a language f) Personnel likely to be involved in the that the indigenous peoples will fully and negative impacts of a proposed execution of the proposed project understand. The format in which action; Gabon SIAT 6,000 Received loan in 2008 from African Development Bank for oil palm expansion.258 (including indigenous peoples, private information is distributed should take Existing plantations located around Lambarene and Makouke, comprises 6,500ha sector staff, research institutions, into account the oral traditions of • Consultation should be through mature, 800ha immature, with production mainly for domestic market. New planting government employees and others); indigenous peoples and their languages. the representative institutions of of 6,000ha was to be at Bindo.259 Status of planting unclear, but company has and indigenous peoples – representatives complained about difficulties it has experienced finding sufficient labour. A press g) Procedures that the project should be chosen by the groups report in March 2010 claimed that SIAT’s oil palm processing facilities in Lambaréné WHAT IS ‘CONSULTATION’? may entail. concerned and not hand-picked and Makokou had caused significant pollution of rivers.260 The right to consultation constitutes by those doing the consultation. Consent, timing, representation and part of the legal framework in two Representation is fundamental; and accessibility countries in the Congo Basin: the Republic of Congo (through the national • Consultation should be in good faith. Consultation and participation are crucial Indigenous Populations Law) and the components of a consent process. Central African Republic (through the An information meeting does not Consultation should be undertaken in ratification of ILO Convention No. constitute a consultation. Consultation good faith. The parties should establish 169). In both these contexts, there is is a process, giving indigenous peoples a dialogue allowing them to find therefore a legal obligation to consult enough information and time to be able appropriate solutions in an atmosphere with indigenous peoples. to understand the proposed actions of mutual respect in good faith, and full and make a decision through their own and equitable participation. Consultation The right to consultation outlined decision making processes. requires time and an effective system in these two instruments is similar for communication among interest to the principle of Free, Prior and holders. Indigenous peoples should Informed consent (FPIC). It should be able to participate through their be undertaken whenever legal or

62 THE RAINFOREST FOUNDATION UK SEEDS OF DESTRUCTION FEBRUARY 2013 63 acronyms AND ABBREVIATIONS REFERENCES

1 The area planted rose from 3.9 million to 7.2 million hectares. 22 AFP, 2012, “Le Gabon veut produire de l’huile de palme Acronym FULL NAME PwC Indonesia, 2010, “Overview of palm oil industry landscape “durable””, Agence France Presse, 6 June 2012 in Indonesia”, Indonesia, 2010.  http://www.pwc.com/id/en/ 23 Hoyle, D and Levang, P, 2012, WWF/IRD/CIFOR, op. cit. publications/assets/Palm-Oil-Plantation.pdf BVI British Virgin Islands 24 Reuters, 2011, “Congo Republic wants $2.6 billion to replant 2 ISTA Mielke 2010, in MVO (2010). Fact sheet Palm Oil, forest”, Reuters, Brazzaville, 5 August 2011 Productschap Margarine, Vetten en Oliën, November 2011 C Carbon 25 Statistics for areas of forest in Congo Basin countries found to be 3 FAOSTAT, http://faostat.fao.org/, accessed 2012 CAR Central African Republic ‘suitable’ for oil palm based on climate and soil type. Stickler, C., 4 See for example, Sheil, D. et al, 2009, “The impacts and et al., 2007, op. cit. opportunities of oil palm in Southeast Asia”, Occasional paper no. CED Centre for Environment and Development, Cameroon 26 Martinet, A., et al., 2009, “‘REDD Reference Levels and Drivers 51. CIFOR, Bogor, Indonesia, http://www.cifor.org/online- of Deforestation in Congo Basin Countries”, The World Bank, CEO Chief Executive Officer library/browse/view-publication/publication/2792.html November 2009, http://www.comifac.org/Members/ CFA (FRANC) African Finance Community Franc (the unit of currency in 5 FAOSTAT, http://faostat.fao.org/ tvtchuante/technical-note-on-redd-reference-levels-and- drivers-of-deforestation-in-congo-basin-countries, p. 8 Cameroon, Gabon, CAR and Republic of Congo) 6 Carrere, R, 2010, “Oil palm in Africa: Past, present and future scenarios”, World Rainforest Movement, December 2010, 27 MECNT, 2009, op. cit. CIFOR Center for International Forestry Research http://wrm.org.uy/countries/Africa/Oil_Palm_in_Africa. 28 McKinsey & Company, 2012, op. cit. CPO Crude Palm Oil pdf; Hoyle, D and Levang, P, 2012, “Oil Palm Development in Cameroon”, WWF, IRD, CIFOR, April 2012,  http://www. 29 Martinet, A., et al., 2009, op. cit.

DRC Democratic Republic of Congo cifor.org/online-library/browse/view-publication/ 30 publication/3793.html. And company websites and annual Stickler, C., et al., 2007, op. cit. ESIA Environmental and Social Impact Assessment reports. 31 Biopalm Energy Limited, 2012, “Activities: Target countries”, FELDA Federal Land Development Authority, Malaysia 7 Calculated from FAOSTAT data, http://faostat.fao.org/ Biopalm website, http://www.biopalmenergy.com/target. html#target, accessed December 2012 8 MyPaper, 2011, “Palm oil players look to Africa”, MyPaper FLEGT Forest Law Enforcement, Governance and Trade 32 (Singapore), 3 May 2011 Nikkei Weekly, 2010, “SE Asian agribusiness goes global”, 15 FPIC Free, Prior and Informed Consent March 2010, http://e.nikkei.com/e/app/fr/tnw/weekly_ 9 FAOSTAT, http://faostat.fao.org/ index.aspx?Keisai_dt=20100315&g_id=11 (requires subscription) GDP Gross Domestic Product 10 UNCOMTRADE, http://comtrade.un.org/, data, based on importer country figures, accessed 2012. 33 Reuters, 2012a, “Congo farm law seen hurting foreign investment”, 5 March 2012, http://www.reuters.com/ ha Hectares 11 For example, Reuters, 2009, “‘Malaysia eyes Africa for oil palm article/2012/03/05/congo-democratic-agriculture- expansion – report”, Reuters, Kuala Lumpur, 21 December 2009, idAFL5E8E237T20120305 HCS High Carbon Stock http://www.reuters.com/article/2009/12/21/malaysia- 34 HCV High Conservation Value palmoil-felda-idAFSGE5BK02X20091221 TV-Congo, 2011, “Le Journal du 20h”, 21 June 2011, http:// www.dailymotion.com/video/xjhywk_le-directeur- 12 MyPaper, 2011, op cit. NGO Non-Governmental Organisation general-decib-recu-en-audience-par-le-chef-de-l-etat_ 13 Olam, 2010, “Investment in Greenfield Oil Palm Plantations in news REDD Reducing Emissions from Deforestation and Degradation Gabon”, Presentation by Olam International Limited, Singapore, 35 The Star, 2012, “Felda Global plans selective purchases November 2010, http://olamonline.com/wp-content/files_ in South-East Asia and Africa”, 30 April 2012, http:// RFUK Rainforest Foundation UK mf/132195973320101115_greenfiled_oilpalm.pdf thestar.com.my/news/story.asp?file=/2012/4/30/ RSPO Roundtable on Sustainable Palm Oil 14 Assuming typical average yields of around 3.5 tonnes of CPO business/11192254&sec= (crude palm oil) per hectare per year. SGSOC SG Sustainable Oils Cameroon 36 Hoyle, D and Levang, P, 2012, op. cit. 15 Olam, 2010, op. cit. 37 SIAT Société d’Investissement pour l’Agriculture Tropicale LOI N° 11/022 PORTANT PRINCIPES FONDAMENTAUX RELATIFS A 16 MyPaper, 2011, op cit. L’AGRICULTURE, 24 December 2011 VAT Value Added Tax 17 Summed from figures for the five major Congo Basin forest 38 Reuters, 2012a , op. cit. countries from Stickler, C., et al., 2007, “Readiness for REDD: VPA Voluntary Partnership Agreement 39 Feronia, 2012, “Feronia Inc. Comments on New DRC Agriculture A Preliminary Global Assessment of Tropical Forested Land Law”, Toronto, March 2012, http://feronia.com/Investors/ Suitability for Agriculture”, Woods Hole Research Center, 2007, WRI World Resources Institute News-Releases/News-Release-Details/2012/Feronia-Inc- http://bibapp.mbl.edu/works/35876 Comments-on-New-DRC-Agriculture-Law1128552/default. $ US Dollars 18 Compared against figures for total forest areas in the five major aspx Congo Basin countries from de Wasseige, C et al. (eds.), 2012, 40 Personal communication with palm oil investors, July 2011 “The Forests of the Congo Basin - State of the Forest 2010”, Publications Office of the European Union. Luxembourg, http:// 41 Nikkei Weekly, 2010, op. cit. www.observatoire-comifac.net/edf2010.php?l=en 42 Congolese Minister of Industrial Development and Promotion of 19 McKinsey & Company, 2012, “Assessment and maximization of the Private Sector, Rodolphe Adada, signed the Biocongo deal in the socio-economic impact of OLAM’s strategic investments in March 2012 Gabon”, Final Presentation, May 2012 43 Cameroon’s Minister of Economy, Planning and Regional 20 MECNT (Ministère de l’Environnement, de la Conservation de Development, Louis Pail Motaze, signed the Herakles deal in la Nature et du Tourisme), 2009, “Potentiel REDD+ de la RDC”. September 2009 Kinshasa, DRC: December 2009 44 See section 3.3.2 21 Ibid. 45 Reuters, 2009, op. cit.

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46 Profundo, 2012, “Felda Global Ventures Holdings, Initiating 61 Les Dépêches De Brazzaville, 2010, “Les Malaisiens investissent 83 Based on a map of the National Park in Ikoli, Par Florent, 2011, 103 Barron’s, 2011, “Asia’s Hungry Agribusinesses”, 10 January 2011, Coverage”, 13 June 2012, http://www.profundo.nl/files/ dans l’huile de palme”, 18 December 2010, http://www. “Situation des Gorilles de Plaine de l’Ouest en République du http://online.barrons.com/article/SB5000142405297020 download/FGVH1206.pdf brazzaville-adiac.com/index.php?action=depeche&dep_ Congo”, Kigali, March 2011, http://www.cms.int/species/ 3439404576062121066954588.html# id=45019&cat_id=4&oldaction=home®pay_id=0, gorillas/gor_tc1_documents/presentation_congo.pdf, 47 Bernama, 2011, “Malaysia Ready To Share Expertise In Palm Oil 104 Norwegian Government Pension Fund Global, 2011, “Annual accessed December 2012 p. 27 Industry With African Countries”, 6 June 2011, http://www. Report 2011: Holding of equities at 31 December 2011”, http:// bernama.com/bernama/v6/newsbusiness.php?id=591785 62 The area of Paris is 105.4km2 or 10,540 hectares, which goes 84 Mongabay, 2006, “War-torn Congo Announces Two New www.nbim.no/Global/Documents/Holdings/2011%20 (subscription required) 17.07 times into 180,000 hectares. Parks”, 18 September 2006, http://news.mongabay. EQ_holdings_SPU.pdf com/2006/0918-wcs.html#ttlbKLo2LuvssyLc.99 48 BAD, 2007, “Le Secteur privé de la BAD soutient la production de 63 Wah Seong Corporation, 2012a, op. cit. 105 Olam, 2012, “Response from Olam to Rainforest Foundation UK l’huile de Palme et de l’Hévéa au Gabon”, African Development 85 Ramsar, 2012, “Congo designates three large new sites”, 9 statements for report on industrial palm oil in Congo Basin”, 26 64 Ibid Bank, 14 Sept 2007, http://www.icilome.com/nouvelles/ October 2012, http://www.ramsar.org/cda/en/ramsar- November 2012 news.asp?id=45&idnews=8735 65 news-archives-2012-congo-3/main/ramsar/1-26-45- DDEFS, 2012, “Rapport de mission d’inspection de chantier 106 Olam, 2010, op. cit. Atama Plantation SARL, du 5-8 Octobre 2012, Zone 4, Epoma- 520%5E25940_4000_0__ 49 Ecobank, 2012, “Ecobank Capital raises USD228 million to close Mambili, UFA Ngombe, Departement de La Sangha”, Direction 107 Olam, 2012, op. cit. first tranche of loan syndication on behalf of Olam Palm Gabon”, 86 Ibid. Departementale de l’Economie Forestiere de la Sangha, October Ecobank Press Release, Lomé, 25 July 2012, http://www. 108 McKinsey & Company, 2012, op. cit. 2012 87 DDEFS, 2012, op. cit. ecobank.com/upload/20120725125627478317HxNZEEr 109 Ibid, p. 19 rW7.pdf 66 Ministere du Developpement Durable, de l’Economie Forestière et 88 Ibid. de l’Environnement, 2012, “Certificat d’Agrément”, 26 April 2012 110 Olam, 2012, op. cit. 50 Wah Seong Corporation, 2011, “Harnessing Opportunities: 89 Wah Seong, 2012b, op. cit. Defining New Growth. 2011 Annual Report”, http://www. 67 Wah Seong Corporation, 2012a, op. cit. 111 Ibid. 90 Ibid. wahseong.com/pdf/annual2011/ar2011.pdf 68 Ibid. 112 Ecobank, 2012, op. cit. 91 High Court of Justice, 2008, “The Solicitor for the Affairs of 51 Calculated by Earthsight, based on research for this report on 69 HM Treasury v Doveton & Anor [2008] EWHC 2812 (Ch)”, 13 113 existing plantations, individual expansion projects and available Ibid. Olam, undated, “Products & Services: Natural Forests”, http:// November 2008, http://judgmental.org.uk/judgments/ olamonline.com/products-services/industrial-raw- or estimated information on their progress with planting. 70 Ibid. EWHC-Ch/2008/%5B2008%5D_EWHC_2812_%28Ch%29. materials/wood/natural-forests, accessed December 2012. 52 Hoyle, D and Levang, P, 2012, op. cit. 71 The Sun Daily, 2012, “Mixed reaction to Wah Seong’s big html, accessed 9th Nov 2012 Figures adjusted as per Olam, 2012, op. cit. plantation ambition”, 9 February 2012, http://www. 53 Reuters, 2012b, “Africa Palm-Oil Plan Pits Activists 92 Ibid. 114 Olam, undated, “Locations: West & Central Africa”, http:// thesundaily.my/news/289774 Against New York Investors”, 18 July 2012, http://www. olamonline.com/locations/central-west-africa, accessed 93 Ibid. reuters.com/article/2012/07/18/us-africa-palm- 72 Manurung, E.G.T., 2001, “Analisis Valuasi Ekonomi Investasi December 2012 idUSBRE86H09320120718 Perkebunan Kelapa Sawit di Indonesia. (Economic Valuation 94 The Nation, 2007, “Surin faces questioning over Kularb”, 22 115 McKinsey & Company, 2012, op. cit. March 2007, Thailand, http://www.nationmultimedia. 54 Reuters, 2011, op cit. states that Congo plans to “reforest” 1 Analysis of Palm Oil Investment in Indonesia)”. USAID/Natural com/2007/03/21/national/national_30029846.php; The 116 million hectares over ten years, including an unspecified portion Resources Management Program. (English Translation 2002.) Greenpeace, 2007, “‘Carving Up the Congo”, April 2007, http:// Nation Weblog, 2007, “Who is the Client? Temasek or Thaksin”, of oil palm. Jakarta, Indonesia. www.greenpeace.org.uk/files/pdfs/forests/carving_ 73 Blog post by Korbsak Sabhavasu, 26 August 2007, http://blog. congo_3.pdf, pp.38-39 55 MAE, 2010, “Rapport de Mission de Bornage de la zone du Projet African Press Agency, 2008, “Italian Fri-el Green power to nationmultimedia.com/korbsak/2007/08/26/entry-1 117 Produce Biofuel in Congo”, 23 July 2008, http://www. Atama Plantation dans les departements de la Cuvette et de la Olam, 2007, “News Release: Olam International Affirms 95 The Telegraph, 2010, “‘Wanted’ man issues legal threat to netnewspublisher.com/italian-fri-el-greenpower-to- Sangha”, Ministere de l’Agriculture et de l’Elevage, Republique du Commitment to Sustainable Forestry in DRC”, 31 Interpol”, 10 April 2010, http://www.telegraph.co.uk/ produce-biofuel-in-congo/. States that Fri-el Green is one of Congo, November 2010 August 2007, http://olamonline.com/wp-content/ finance/globalbusiness/7575088/Wanted-man-issues- three external partners seeking 1.75 million hectares for oil palm 74 uploads/2011/12/20070831_release.pdf Ministere du Developpement Durable, de l’Economie Forestière et legal-threat-to-Interpol.html# ; See also the current Interpol cultivation. 118 de l’Environnement, 2012, op. cit. wanted file for Rizvi at http://www.interpol.int/Wanted- Greenpeace, 2007, “World Bank cuts forest destruction 56 funding”, 12 December 2007, http://www.greenpeace.org/ Reuters, 2012a, “Congo farm law seen hurting foreign 75 Based on Global Forest Watch, 2007, “Atlas Forestier Interactif Persons/(wanted_id)/2009-17465, accessed December international/en/news/features/world-bank-cuts-olam- investment”, op. cit. du Congo, Document de Synthèse”, 2007, http://pdf.wri.org/ 2012. funding-121207/ 57 It is likely that a significant proportion of the contracted areas gfw_congo_atlas_v1_francais.pdf 96 Tempo Online, 2010, “Dari Rafat Untuk Rafat”, 20 Sept 2010, 119 Greenpeace, 2007, “World Bank Group finances company will be excluded from planting at the time of development, 76 MAE, 2010, op. cit. accessed via web archive - http://web.archive.org/ due to regulatory controls, land ownership challenges or RSPO involved in the illegal destruction of the Congo rainforest”, 29 77 web/20100922054854/http://majalah.tempointeraktif. certification requirements. DDEFS, 2012, op. cit. com/id/arsip/2010/09/20/LU/mbm.20100920. August 2007, http://www.greenpeace.org.uk/media/press- releases/world-bank-group-finances-company-involved- 78 LU134627.id.html 58 See Annex 1 for sources. Note that the cases of Aurantia in Assuming that 140,000 hectares of the 180,000 hectares is in-illegal-destruction-of-congo-rainforest-200708029 primary forest, with at least 20 cubic metres of saleable logs per 97 Republic of Congo and ZTE in Democratic Republic of Congo are Filing by 1st Software Corporation regarding the proposed 120 included in Annex 1 but excluded from Table 5, because the ZTE hectare. This would give a total potential commercial log harvest purchase of Eresma Assets, 2007 (from Google index) Greenpeace, 2007, “How the World Bank and HSBC are investing deal is known to have expired, and the Aurantia deal appears to of 2.8 million cubic metres, which at $180 per cubic metre in deforestation”, 30 August 2007, http://www.greenpeace. 98 President of Gabon website, 2010, “SIGNATURE D’UN CONTRAT have also expired, without any planting taking place. average value would be worth $504 million. It should be noted org/international/en/news/features/world-bank-congo- that official documents show that Atama harvested more than AVEC OLAM POUR LE DÉVELOPPEMENT DE LA CULTURE DU forest_300807/ 59 See RAN, 2010, “Cargill’s Problems with Palm Oil: A Burning 15,000 cubic metres of timber from just the first 120 hectares PALMIER À HUILE : DES MILLIERS D’EMPLOIS À LA CLÉ”, 15 121 Olam, 2012, op. cit. Threat to Borneo”, Rainforest Action Network, http:// cleared at Epoma – a rate of 125 cubic metres per hectare. October 2010, http://www.presidentalibongo.com/l- understory.ran.org/wp-content/uploads/2010/05/ This suggests the $500 million figure may be a significant actualite/l-actualite/846/signature-d-un-contrat-avec- 122 Greenpeace, 2007, “‘Carving Up the Congo”, op. cit. Cargills_Problems_With_Palm_Oil_low.pdf; Greenpeace, underestimate. olam-pour-le-developpement-de-la-culture-du, accessed 123 Olam, 2012, op. cit. 2008, “How Unilever Palm Oil Suppliers are Burning Up Borneo”, 79 December 2012. Translation from French. April 2008,  http://www.greenpeace.org.uk/media/reports/ Wah Seong Corporation, 2012c, Email to RFUK from CEO, 124 99 The Edge Singapore, 2010, “Corporate: Olam makes boldest The area of Central Park is 341 hectares, which goes 35.6 times burning-up-borneo; and, AidEnvironment, 2009, “Verification Plantation Division, Wah Seong Corporation, 3 December 2012 upstream move yet with investments in Gabon”, 22 November into 12,134 hectares. of the Greenpeace Report ‘Burning Up Borneo’”, April 2009, see 80 Wah Seong, 2012b, “Response to Letter from Rainforest 2010 125 Gabon Libre, 2012, “Gabon : Nouvelles inquiétudes sur le http://www.aidenvironment.org/projects/. Foundation UK” 100 Republic of Gabon SEZ website, 2011, “Gabon SEZ: Project projet Woleu-Ntemois d’Olam”, 30 March 2012, http://www. 60 Wah Seong Corporation, 2012a, “Proposed subscriptions 81 IUCN, 2012, “Red List Maps”, available at http://maps. Overview”, http://www.gabonadvance.com/HTML- gabonlibre.com/Gabon-Nouvelles-inquietudes-sur-le- of up to 51% equity stake in Atama Resources Inc by iucnredlist.org, accessed December 2012 Website/project-overview.html, accessed December 2012 projet-Woleu-Ntemois-d-Olam_a15748.html WS Agro Industries”, 3 February 2012, http://www. 82 126 bursamalaysia.com/market/listed-companies/company- WWF, date unknown, “Central Africa: Congo and Democratic 101 The area of Singapore is 710 km2 or 71,000 hectares, which goes Olam, 2012, op. cit. announcements/168144 Republic of Congo”, http://worldwildlife.org/ecoregions/ 4.2 times into 300,000 hectares. at0129, accessed December 2012 102 Ibid.

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134 Panel Peer Review of Assessment of High Conservation Value Rapport de mission No040/OI/AGRECO-CEW”, June 2012, dfw1-1.websitetestlink.com/wp-content/uploads/up- See Forest Conservation Policy of Golden Agri Resources, one of on the SGSOC Concession for Oil Palm Development in South- http://www.oicameroun.org/index.php?option=com_ for-grabs.pdf; EIA/Telapak, 2011, “Caught REDD handed, how the world’s largest oil palm companies, in GAR, 2011, “Golden Western Cameroon”, April 2012, http://www.hcvnetwork. docman&task=doc_download&gid=131&Itemid=33 Indonesia’s Logging Moratorium was Criminally Compromised Agri-Resources Initiates Industry Engagement for Forest org/resources/assessments/SGSOC%20review_HCV%20 on Day One and Norway Will Profit”, June 2011, http://www. 177 Herakles Farms, 2012c, Statement in response to Rainforest Conservation”, 9 February 2011, http://www.goldenagri. 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Forest%20Conservation.pdf 196 Such as the case of Malaysian-owned firm PT Adei Plantation, 156 Herakles Farms, 2012d, Email from Herakles Farms to Rainforest 179 Herakles Farms, 2012a, “Herakles Farms Announces Update on which was convicted in 2003 – AFP, 2003, “Malaysian plantation 135 Landsat, 2012, “Landsat ETM 7 satellite image”, 24 April Foundation UK, 28 November 2012 Its Cameroon Palm Oil Subsidiary SGSOC”, PR Newswire, 12 firm to pay 1.1 million dlrs over Indonesia haze”, Agence France 2012; overlay with maps of land status from HCV assessment 157 Herakles Farms, 2012b, Letter from Herakles to RSPO, 24 June 2012, http://www.prnewswire.com/news-releases/ Press, 1 May 2003, http://www.rainforestportal.org/ (Proforest/TEREA, op. cit.) August 2012, http://heraklesfarms.com/docs/NPP%20 herakles-farms-announces-update-on-its-cameroon-palm- shared/reader/welcome.aspx?linkid=22229 136 RSPO, 2012, “RSPO New Planting Procedures: Summary Report APPLICATION%20LETTER.pdf oil-subsidiary-sgsoc-158594925.html 197 Friends of the Earth Europe, 2010, “ Too Green to be True: IOI of SEIA and HCV Assessments” for Olam Mouila plantation, May 158 Ibid. 180 CED, 2012, op. cit. Corporation in Ketapang District, West Kalimantan”, March 2010, 2012, http://www.rspo.org/files/NPP_Summary_of_ http://www.foeeurope.org/publications/2010/Too_ 159 181 SEIA_and_HCV_Report_Mouila_1.pdf Herakles Farms, 2012c, Statement in response to Rainforest Ibid. 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February 27 2012, available at http://www. 148 The total land area of Manhattan is 59.5 km2 or 5,950 hectares, http://www.greenpeace.org.uk/files/pdfs/forests/ expansion in Indonesia”, available at http://www.foe.co.uk/ oaklandinstitute.org/sites/oaklandinstitute.org/files/ which goes 10.1 times into 60,000 hectares. hidden-carbon-liability-of-palm-oil.pdf resource/reports/losingground.pdf CourtRulingFebruary2012.pdf 203 149 Oakland Institute,2012, “Understanding land investment 192 Clay, J., 2004, “World agriculture and the environment: a Ibid. 171 High Court at Mundemba, 2012, suit no. HCN/03/0S/2011, deals in Africa: Massive deforestation portrayed a sustainable commodity-by commodity guide to impacts and practices”, 204 Struggle to Economise Future Environment v. SGSOC Ltd. 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Borneo”, op. cit.; Greenpeace, 2009, “Illegal forest clearance certified-d.pdf; and Friends of the Earth, 2010, “Too Green to and RSPO greenwash: Case studies of Sinar Mas”, December 259 SIAT, 2012, “Siat Gabon”, SIAT website, http://www.siat.be/ be True: IOI Corporation in Ketapang District, West Kalimantan”, 2009, http://www.greenpeace.org.uk/files/pdfs/forests/ index.cfm/page:siat-gabon, accessed December 2012 op. cit. sinarmasRSPOgreenwash.pdf; Greenpeace, 2010, “Caught 260 Carrere, R, 2010, op. cit., p. 39 217 Sheil, D. et al, 2009, op. cit. red-handed: How Nestle’s use of palm oil is having a devastating impact on rainforest, the climate and orang-utans”, March 261 This text is taken from Accra Caucus, 2010, “Realising 218 Hoyle, D and Levang, P, 2012, op. cit. 2010,  http://www.greenpeace.org/international/Global/ rights, protecting forests: An alternative vision for reducing 219 Sheil, D. et al, 2009, op. cit. international/planet-2/report/2010/3/caught-red- deforestation”, Accra Caucus on Forests and Climate Change, handed-how-nestle.pdf June 2010, http://www.rainforestfoundationuk.org/files/ 220 Hoyle, D and Levang, P, 2012, op. cit. 242 Accra_Report_English.pdf 221 Journal de Bangui, 2012, “Centrafrique: PALMEX lance Ibid officiellement ses activités à Pissa”, 24 May 2012, http://www. 222 Ibid journaldebangui.com/article.php?aid=2706 223 Poku, K, 2002, “Small-Scale Palm Oil Processing in Africa”, FAO 243 Eni, 2011, “Annual Report 2011”, Rome, http://www.eni.com/ AGRICULTURAL SERVICES BULLETIN 148, FAO, Rome, ftp://ftp. en_IT/attachments/publications/reports/reports-2011/ fao.org/docrep/fao/005/y4355E/y4355E00.pdf Annual_Report_2011.pdf 224 CED, 2012, “Herakles 13th Labour? A study of SGSOC’s 244 Eni, 2012, Republic of Congo website pages, http://www.eni. Land Concession in South-West Cameroon”, Centre pour com/en_IT/sustainability/pages/eni-republic-congo. l’Environnement et le Developpement, February 2012, http:// shtml#a_erapetrolioff, accessed 1 Oct 2012 www.cedcameroun.org/images/documents/Heracles_13_ 245 Ibid. en.pdf; and Hoyle, D and Levang, P, 2012, op. cit. 246 Ibid. 225 Equator Principles, 2006, “The Equator Principles”, June 2006, http://www.equator-principles.com/resources/equator_ 247 Heinrich Boll Foundation, 2009, “Energy Futures? Eni’s principles.pdf investments in tar sands and palm oil in the Congo Basin”,

226 November 2009, http://www.boell.de/ecology/climate/ CDC, 2012, website of the Cameroon Development Corporation, climate-energy-7775.html http://www.cdc-cameroon.com/#, accessed 1 October 2012 248 227 Reuters, 2008, “RWE’s Fri-el Green buys Congo palm All Africa, 2008, “Cameroon: CDC Begins Planting Boa Plain Oil farms for biofuel”, 23 July 2008, http://in.reuters. Palms Next April”, 22 December 2008, http://allafrica.com/ com/article/2008/07/23/biofuels-congo-italy- stories/200812230290.html idINL23101125320080723 228 Cameroon Tribune, 2011, “MINADER Gets Pulse of CDC Giant 249 Carrere, R, 2010, op. cit., p56 Projects”, 14 April 2011, http://tinyurl.com/cwmg4u9 250 229 The Indian Ocean Newsletter, 2012, “Land leases under control”, Hoyle, D and Levang, P, 2012, op. cit. 25 February 2012 230 Biopalm Energy Limited, 2012, op. cit.

70 THE RAINFOREST FOUNDATION UK SEEDS OF DESTRUCTION FEBRUARY 2013 71 This research has been generously supported by Synchronicity Earth and The Anthony Rae Foundation.

72 THE RAINFOREST FOUNDATION UK SEEDS OF DESTRUCTION FEBRUARY 2013