West Africa: Wilmar and Olam International ambitious expansion plans for palm oil

 

An article in June’s WRM Bulletin highlighted Unilever’s role in the threat to Tanoe Swamps Forest, one of the last remaining forest blocks in Cote d’Ivoire.  Following international protests, Unilever now ‘promises’ an Environmental Impact Assessment but has given no guarantee that the forest will be protected.  Instead, they have publicised their long-standing plans to sell shares in PALM-CI, which holds the concession for Tanoe, although they will remain a major PALM-CI customer.  Behind the announcement, and possibly behind the plans to destroy Tanoe Forest, lie far-reaching changes in the region’s palm oil industry.

 

In November 2007, Singapore-based Wilmar International and Olam International announced plans for aggressive expansion into West Africa.  They formed a 50:50 joint venture, Nauvu, which acquired shares in Palm-CI, in the West African agribusiness firm SIFCA (also a major investor in Palm-CI) and in a new refining business set up by SIFCA and Unilever.(1) The Ivorian government has sold its shares to SIFCA.  Since Wilmar International acquired the Kuok Group last year and became the world’s largest palm oil trader, they have been looking at expanding into new regions, including in West Africa.  Their plans are ambitious: Palm-CI, the largest palm oil and palm oil mill owner in Cote d’Ivoire, plan to more than treble their production by 2020.  Wilmar, Olam and SIFCA seek to expand palm oil, sugar and rubber production, not just in Cote d’Ivoire but across the region, including in Guinea, Liberia and Nigeria, Africa’s largest palm oil producer.  An initial trial for producing palm oil biodiesel in Cote d’Ivoire has been held.(2)

 

The new Wilmar-Olam partnership and investment in West Africa is worrying news because both companies have been implicated in deforestation and disregarding the rights of communities.  Wilmar’s concessions are in Indonesia, where palm oil expansion has been closely tied to deforestation. Companies routinely clear the forest area than they actually plant with oil palms and make extra profits from, commonly illegal, timber sales. A 2007 report by Friends of the Earth Netherlands, Kontak Rakyat Borneo and Lembaga Gemawan (3) exposed Wilmar’s involvement in rainforest destruction, in ignoring national laws and the rights of communities and in forest fires in Sambas District, Kalimantan.  The Greenpeace Report ‘Cooking the Climate’ (4) reveals a large number of Wilmar concessions on rainforest land as well as a large number of fire hotspots during the dry season.  Unilever is involved as a customer rather than as a plantation company, just as they now aim to do in West Africa.  Olam, on the other hand, has obtained timber concessions in DR Congo in breach of a moratorium, and has had shipments of illegal logs seized.(5) Both Unilever and Wilmar are members of the Roundtable for Sustainable Palm Oil, with Unilever as a founding member and also holding the presidency of the RSPO Executive Board.  There is no evidence that their RSPO membership has translated into anything other than a PR-coup. 

 

Wilmar’s record in Uganda, the only African country where the company has held oil palm concessions so far, has followed the Indonesian ‘model’: Their subsidiary, Bidco, was granted permissions to destroy forests, including in Ssese Islands, for palm oil (see WRM bulletin, August 2006). 

 

Tanoe Swamps Forest could well be the first of many forests in West Africa targeted by this new business partnership.

 

By Almuth Ernsting, Biofuelwatch, http://www.biofuelwatch.org.uk, e-mail: almuthbernstinguk@yahoo.co.uk

 

References:

1) www.wilmar-international.com/news/press_releases/News_Release_15Nov07.pdf

2) www.jeuneafrique.com/jeune_afrique/article_
jeune_afrique.asp?art_cle=LIN30038sifcaseuqit0

3) www.foei.org/en/publications/pdfs/Wilmar_Palm_Oil_Environmental_
Social_Impact.pdf/view?searchterm=Wilmar

4) www.greenpeace.org/international/press/reports/cooking-the-climate-full

5) http://www.greenpeace.org/international/news/world-bank-congo-forest_300807