Commodities, Corporate  |  FEBRUARY 7, 2013 7:59AM

Sime Darby to slow operations in Liberia

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liberian-palm-oilMalaysia’s Sime Darby Plantations (SDPL), one of the world’s biggest palm oil producers, said that it was prepared to slow its 15-year plan to develop palm oil estates in Liberia if locals are strongly against it. The company also plans to stick to the fair development goals for Africa, set by a high level UN Panel, which met Feb 1 in Monrovia.

“We are clear: if the populace objects, we will not develop the land,” a Sime Darby spokesperson said.

The spokesperson said that the company was now refining its Free, Prior and Informed Consent (FPIC) investment process, based on feedback from communities in Liberia. A FPIC review was one of the demands made last November by some 150 Grand Cape Mount county community representatives in Liberia who met and protested Sime Darby’s plans.

“This is a major part of our development work, we are not rushing with planting,” the spokesperson said, in an email reply to KiniBiz queries.

In 2009, SDPL signed a 63-year concession agreement with Liberia’s government for 220,000 hectares of land to be developed into oil palm and rubber plantations. Unconfirmed reports said SDPL agreed to pay US$5 per hectare per year to the Liberian government for the land in north and west Liberia, which included heavily forested regions. In return, SDPL would give jobs to over 30,000 Liberians under the export-oriented palm oil development scheme.

The company declined to confirm whether its earlier stated plan to spend US$3.1 billion in Liberia over 15 years was intact.

It has thus far planted just over 5,000 ha of land, from the 12,594 ha of rubber concessions held by Guthrie, SDPL’s predecessor, before the onset of the civil war in Liberia, SDPL said.
There are also no plans for a refinery until 100,000 ha of plantations are reached.

Friends of the Earth (FOE), who calls itself the world’s largest grassroots environmental network, has recently said Sime Darby has forcefully taken land from local Liberians, ruining livelihoods and destroying virgin forests. FOE said that locals want a renegotiation of Sime Darby’s lopsided concession.

In response, Sime Darby issued a press statement on Jan 31 saying that FOE did not fully represent Liberia’s local interest. They said that FOE’s reports were inaccurate and after complaints, have already been removed from their website.

FOE claims concern over large scale deforestation and conversion of primary and secondary forests in Gbarpolu county. SDPL said in the statement that it was not involved in any deforestation of any sort and has not entered into Gbarpolu.

“Sime Darby has carried out FPIC meetings in communities where the people have rejected the company’s overtures. We respected their wishes and did not develop their areas,” Sime Darby told KiniBiz.

SDPL which started planting palm oil in Liberia in 2011, currently employs nearly 4,000 people in Liberia, which is about eight times more than required under the agreement, the company said.

The company has built schools, medical facilities, day care centres and provides transportation for local communities. It has also agreed to pay US$1 million into a Cultural Endowment Fund in Cape Mount County, according to the Sime Darby spokesperson.

Sime Darby is operating according to UN guidelines for Liberia. Its spokesperson said : “As a founding member of the Roundtable for Sustainable Palm Oil, Sime Darby abides by the policies of the organisation, which is in line with the UN development goals.”

On February 1, UK Prime Minister David Cameron co-chaired a United Nations meeting with UN Secretary General Ban Ki Moon in Liberia’s capital Monrovia, to discuss what targets to set for Africa after the Millennium Development Goals in 2015.

The grouping issued a communique calling for “ transformational agenda that should create jobs, develop infrastructure, raise productivity, improve competitiveness and promote sustainable production and consumption.”

The Liberia landbank at 220,00ha is Sime Darby’s third largest, after its landbank in Malaysia and Indonesia totalling over 600,000 ha, which are 80 per cent planted with palm oil. Liberia is the company’s maiden foray into Africa.

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