Industrial palm oil investors struggle to gain foothold in Africa

by Ashoka Mukpo | 25 Sep 2019
Oil palm kernels: evidence suggests the promised benefits of monoculture plantations are a mirage for most of the people affected by their development. Photo: Carsten Ten Brink/Flickr (CC-ND 2.0)


  • Twenty-seven concessions intended for industrial oil palm plantations in West and Central Africa have either failed or been abandoned in the last decade.
  • Of the 49 that remain, less than 20 percent of the allocated land has been developed.
  • Malaysian palm oil giant Sime Darby recently announced its intention to withdraw from Liberia after years of conflict with communities and environmental groups.
It was the “next new frontier” for palm oil. A “mutually beneficial relationship” that would be a win-win for struggling nations in Africa and multinational producers running out of land in Southeast Asia. “The time for that continent has come,” some palm oil executives declared. Others said the lucrative commodity was simply “coming home to Africa.” And for a while, everyone wanted in on the action.

But a new report, by a collection of local and international groups working with affected communities, says that palm oil’s homecoming hasn’t gone as smoothly as its architects hoped. After years of fierce resistance by communities living inside areas demarcated for oil palm plantations, at least 27 new plantations have either failed or been abandoned. Of the 49 that remain in West and Central Africa, less than 20 percent of the 2.74 million hectares (6.77 million acres) of land allocated to them has been developed.

“A lot of the bigger companies had no experience in Africa,” said Devlin Kuyek, one of the report’s authors. “It’s not the same environment they’re used to.”

Industrial oil palm cultivation has been a driver of the economies — and deforestation — of Malaysia and Indonesia for decades. But after years of expansion, the amount of suitable land available to producers in those countries has nearly run out. During the late 2000s and early 2010s, some African governments were quick to propose their forested regions as the solution. In what was dubbed the “great African land rush,” some of the world’s largest palm oil producers signed deals across the continent. Many of those deals were massive; in Liberia, for example, concession agreements held by just two companies covered nearly 600,000 hectares (1.5 million acres).

Supporters promised they would bring in desperately needed revenue for host governments, along with local benefits in the form of jobs, health care and housing for workers, and other services. Critics decried the wave of investments as a “land grab” and pointed out that large-scale oil palm plantations threaten endangered species in the region, particularly primates.

A decade later, GRAIN’s report says many of those deals subsequently collapsed or failed to materialize. Some of the land was leased to companies that lacked the capacity to develop plantations on their own, instead hoping to sell their concessions to bigger, more well-established producers down the line.

But the key factor, the report says, is pushback by communities affected by the projects.

Few of the companies that wanted to move into Africa had a plan for a fundamental problem: tens of thousands of people already lived on the land they’d leased. The land deals were often negotiated in near-secrecy and few local communities were consulted by their governments before their territory was offered up to investors; when the bulldozers arrived, trouble followed.

In Cameroon, villagers affected by a Wall Street-backed plantation, Herakles, organized demonstrations against its expansion plans; local activists supporting them were arrested by military police. Land clearing by Sime Darby and Golden Veroleum in Liberia prompted community-led complaints filed to the Roundtable on Sustainable Palm Oil, an industry body. In 2015, a riot by people living inside the Golden Veroleum concession led to dozens of arrests, and paramilitary police beat villagers participating in a march against a different plantation nearby.

Often initially warm to the idea that oil palm plantations will bring development and jobs, communities have turned to civil society groups for help as the reality of the plantations becomes apparent.

James Otto is a project director at the Sustainable Development Institute in Liberia. He says that in order to acquire land, some investors made expansive promises to communities that generated discontent when they weren’t fulfilled. [Editor’s note: The author of this article was a staff member at SDI between 2012 and 2014.]

“They created huge expectations that they couldn’t meet,” he said. “And that showed communities that it wasn’t sustainable, so they decided to insist that expansion stop until those promises were met.”

Evidence suggests the promised benefits are a mirage for most of the people affected by oil palm expansion. An assessment of Golden Veroleum’s massive holdings in southeast Liberia found that most of the 14,000 people living in the concession area would lose access to farmland and forest they rely on for additional food, fuel and building supplies; this in exchange for jobs for only around 1,650 community members. Attempting to put a monetary value on the trade-off, the consultants calculated a net loss to the community of $7.3 million per year.

Studies of long-term impacts of plantations in Indonesia bear this out. Researchers found that while many communities already strongly integrated into market economies did enjoy overall benefits with the expansion of corporate oil palm plantations, subsistence-based communities suffered declining health, nutrition, and living standards.
Author: Ashoka Mukpo
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