UK-based Equatorial Palm Oil under fire for alleged malpractice in Liberia

31.01.2020

Traidcraft Exchange report calls for UK due diligence legislation outlawing environmental and human rights abuses by UK-registered firms operating overseas

Equatorial Palm Oil has more than 14,000 hectares of plantations in Liberia. Photo: Shutterstock

The activities of a UK-headquartered palm oil firm operating in Liberia are once more in the spotlight after allegations of human rights and environmental abuses were made in a damning new report.

Equatorial Palm Oil (EPO) is accused of illegally clearing land and failing to consult effected locals on its 14,000 hectare (ha) palm oil developments in the West African country.

The report published by Traidcraft Exchange highlights a string of suspect practices by EPO since its arrival in 2012 to set up the Palm Bay plantation, one of its two sites in Liberia, and where 6,470ha of oil palm is planted.

Traidcraft allege that although five villages gave their land to EPO no contracts were signed and the company failed to receive the necessary Free, Prior and Informed Consent (FPIC) from communities.

“Without land, villagers have been left without the means of growing food or earning an income,” the January report stated. “Many are reduced to working the fields in nearby villages for a small wage and have lost food security and self-sufficiency.”

The compensation promised also reportedly failed to materialise, and villagers told Traidcraft researchers during a November visit to the area that additional guarantees of development have not arrived.

“At the time they said if we agreed to give the land in return they would build hospital and school for us… it has not happened,” Marie Menyon, a local community member, said.

The report states that 40% of Liberians live on land that has been signed over to foreign investors: either mining or agriculture firms that are setting up plantations for timber, rubber and palm oil.

Villagers did acknowledge the potential benefit of foreign investment in the region but said that the jobs created by EPO for locals have been nominal and that life has become more difficult for many.

“The level we are living in is very deplorable,” resident G Hilary Gbah said. “We are starving to death. We can only survive when we go to our neighbour and work for them. They give us a small thing – that’s the only way we can eat.”

EPO is 62.8% owned by the Malaysian palm oil giant Kuala Lumpur Kepong Berhad (KLK); a firm that has been mired in allegations of wrongdoing over projects in Papua New Guinea and Indonesia. A further 10% of EPO is owned by one individual KLK executive.

EPO is headquartered in London’s Piccadilly and registered on the Alternative Investment Market (AIM), a higher-risk and lesser regulated sub-market of the London Stock Exchange. 

The firm has a 50% share in Liberian Palm Development Limited which through subsidiaries holds palm oil concessions in Liberia, according to EPO’s most recent annual accounts.

EPO has long faced allegations of land grabbing over its activities in Liberia and the country’s palm oil sector has been under scrutiny for years. 

Golden Veroleum Liberia, a subsidiary of Sinar Mas, had its RSPO certificate revoked in 2018 after an investigation found the firm committed a litany of social abuses at its plantations.

Now Traidcraft believe the UK government should put in place new legislation that ensures environmental and human rights abuses like those alleged against EPO in Liberia and others elsewhere are prevented.

“The people we spoke to in Liberia told us how they had suffered at the hands of this UK-listed company,” Tom Wills, Traidcraft’s senior policy advisor, said

“But we’re aware that this is just one instance and there are many other similar situations in other poor countries

“New legislation is needed that requires British companies to take action to prevent these kinds of abuses and hold them to account if they fail. It would respond to public concern – and provide a level playing field for businesses which do play by the rules.”

Tradecraft’s call for legislation echoes similar demands for mandatory human rights due diligence legislation in the UK, issued by a coalition of NGOs in April 2019.

In response to Traidcraft’s report, EPO said: "As a company, EPO believes it is fundamental that we respect human rights in everything we do. Our Sustainability Policy commits us to respecting, supporting and upholding fundamental human rights, and we encourage the application of our policy amongst our business partners including contractors, suppliers, trading and joint venture partners.

“In 2016, after a year-long consultation process including the local Jogbahn clan communities on Palm Bay estate, Liberian government, SDI (local NGO), other international NGOs a Memorandum of Understanding was signed such that EPO would seek to respect the customary rights of the local communities to their land and respect their wishes to develop, or not develop, as the case may be.”

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