IN-DEPTH: One year after Coming Storm, temporary halt in deforestation not an end to Congo basin’s threats

Thursday, April 4th, 2019

One year ago Earthsight published Coming Storm, showing that a toxic mix of dodgy firms, impunity and collusion in the plantation sector threatened to consign Congo rainforests to the same fate as Southeast Asia and the Amazon. Since then, Earthsight’s report has helped trigger some positive action by companies, though the persistence of low palm and rubber prices have been the main factor preventing an acceleration of the destruction. Our new research shows that a number of firms have halted clearing, with one company pressured to do so following divestment by the world’s largest sovereign wealth fund. On the other hand, Earthsight has found new links between a palm firm in the Central African Republic and a warlord facing trial for crimes against humanity. And the underlying secrecy and lack of government transparency remain as bad as ever.

Earthsight’s shocking report, published in March 2018, revealed evidence of collusion by top government officials with illegal rubber and palm oil plantation developers. It exposed how rights to clear pristine forest three times the size of London had been sold off to an opaque offshore shell company, its true beneficial owners deliberately obscured. The research also showed that logging firms with reputations for illegalities and human rights abuses were now connected to deforestation for palm and rubber plantations in a number of Congo basin countries.

The report found that corruption was being aided by an almost total failure of governments to meet their promises to publish contracts. It claimed that the international donors whose money helps bankroll the region’s agriculture ministries have made little effort to use their influence to crack open the ‘black box’ in which a disaster is developing, and argued that all it would take to ignite a rapid acceleration of the destruction was a modest increase in the price of rubber or palm oil.

Since the publication of Coming Storm, Earthsight has followed the reported cases carefully. A few positive steps have been taken by some of the companies, and forest clearing for large plantations in the region has slowed appreciably, to perhaps its lowest level in a decade.

But part of the reason for this slowdown in deforestation is the persistence of depressed rubber and palm prices. The underlying problems of corruption, collusion and lack of transparency remain unchanged.

Our report identified the Cameroonian company Sudcam – a subsidiary of Singaporean Halcyon Agri, an international rubber giant supplying many of the most famous global tyre companies – as the largest deforester in the Congo Basin at the time of publication. Sudcam has cleared almost 10,000 hectares of dense tropical forest in Cameroon in an area directly adjacent to the Dja Faunal Reserve, a World Heritage Site. NGOs and local communities had alleged that the company’s license had been illegally issued, had dispossessed local inhabitants of their community lands, and that government authorities had reacted to their protests with threats and intimidation.

In April 2018, Halcyon responded to Coming Storm[1] and allegations made by Greenpeace and conservation NGO Mighty Earth, saying that they had not cleared forests outside concession boundaries or violated community land rights under Cameroonian law, and that they complied with the 100-200 metre buffer zone around Dja Faunal Reserve as detailed in the environmental impact assessment approved by the government in 2011.[2]

Map showing locations of oil palm and rubber plantation projects mentioned in Coming Storm.

In the wake of our and others’ evidence, the Council on Ethics of the Norwegian Government Pension Fund Global – the world’s largest sovereign wealth fund, which held shares in Halcyon Agri – carried out its own investigation into Sudcam’s activities in Cameroon, and concluded that the company was guilty of serious environmental damage. It found that Sudcam had cleared over 48 square kilometres of forest in its concession area since the end of 2015, of which 16 square kilometres were high conservation value (HCV) forest. The Council also found that the environmental impact assessment carried out did not mention that the forests the company were converting were home to critically endangered species, and that while there was a risk to the Dja Faunal Reserve, no appropriate measures were put in place to address this risk.[3]

As a result of these findings, in March 2019 Norges Bank announced the decision to exclude Halcyon Agri from the Government Pension Fund Global based on a recommendation by the Council on Ethics.[4]

This led to a major U-turn by the company, which declared in early December 2018 that it had halted all forest clearing in Cameroon and would desist from further such activities until its recently established ‘Sustainability Commission for Cameroon’ has had “sufficient time to orientate itself and conduct the necessary inquiries.”[5] Earthsight’s careful analysis of the latest high-resolution satellite images from March 2019 has confirmed that the destruction has now halted.

Other projects on which our report focused have also paused plantation development, most likely for lack of financing. Earthsight’s review of the latest satellite images from February 2019 reveals that there has been no fresh logging or forest clearance at the Lexus Agric rubber plantation or the Atama oil palm plantation in the Republic of Congo. Coming Storm revealed that both projects were mired in high-level corruption in the country and were implicated in illegal logging and fraud.

There has also been no fresh forest conversion by Greenfil in Cameroon, which had been bulldozing at a rapid rate just before publication. In DRC, satellite images show no further forests cleared by the Compagnie de Commerce et Plantation (CCP) in the last year. CCP is a subsidiary of Groupe Blattner Elwyn (GBE), one of DRC’s largest agribusiness and timber firms, which has been accused of illegal logging.

The news is not all good however. While CCP has not cleared any forests, we have heard nothing to suggest that past illegalities have been addressed or local communities compensated by the company over the reported illegal occupation of their customary land. Meanwhile at Feronia, another large palm company active in DRC, communities protesting against the company have been violently suppressed. As recently reported by IDM, tensions between the Canadian company – which has been financed by some of the world’s largest development banks and agencies – and local communities have escalated since a complaint presented late last year to Feronia’s financial backers alleged land theft and human rights violations.

Although the plantations in the Republic of Congo – including the giant carbon bomb posed by Atama – may have been mothballed for now, to our knowledge the licenses have not been revoked.

In the Central African Republic, ‘blood timber’-linked Palme d’Or’s development continues. While the project – owned by a Lebanese family implicated in illegal logging – has continued to avoid the densest pockets of forest, a further 735 hectares of mixed woodland and savannah have been cleared since our report was published. The latest satellite images show that some areas of denser forest bordering the new development have been destroyed by fire in the last few weeks, possibly as a result of fires used to clear the land extending beyond the areas intended.

 

Clearance of natural vegetation for palm at Palme D’Or, Central African Republic, June 2018 to March 2019, showing how fire was used to clear land and burned some areas of dense forest.

Meanwhile, a report for the UN Security Council has revealed that in 2017 Palme d’Or hired a security company owned by a renowned local (ex)warlord, despite him being under UN sanctions.[6] Alfred Yekatom, known locally as ‘Rambo’, has since been jailed for life for crimes committed during the civil conflict in 2013-14, and has recently been transferred to the International Criminal Court to face charges of crimes against humanity.[7] He stands accused of overseeing mass murder, torture and mutilation of civilians by the forces under his control, which included numerous child soldiers.[8] When questioned by the UN, Palme d’Or stated that Yekatom’s company had all the necessary authorisations to operate, and “indicated that the responsibility of implementing the UN sanctions rested on the Government rather than on companies”.

None of this appears to have done Palme d’Or any harm. While other palm and rubber developments have been slowed for lack of finance, in late 2018 Palme d’Or received another tranche of 16.5 million USD from a group of African banks, led by the multilateral Central African Development Bank (BDEAC), for the development of its palm plantation and associated mills.[9]

Sudcam’s deforestation lull is also only a temporary measure. The company has yet to commit to no further clearance in the future. Its new ‘Sustainability Policy’ commits only to zero ‘net’ deforestation, which means it can clear natural forests so long as it replaces them with monoculture rubber trees.

Most worryingly, the underlying problem of secrecy remains unchanged. Earthsight has reviewed various government websites and other sources, and found that governments in the region continue to utterly fail to abide by their promises with regard to transparency of information about major land deals for plantations.

While there are examples of individual companies – such as SOCFIN, active in Cameroon – which have taken it upon themselves to voluntarily release additional relevant information since last year, these are the exception, not the rule.

Although Sudcam has announced new policies and committees, it has yet to publish critical documents regarding its concession in Cameroon. An international WWF team it brought to inspect its concession in August 2018 complained that the firm had failed to show them a wide range of key documents, including impact assessments and land lease agreements (Halcyon’s ‘Sustainability Commission for Cameroon’ was established in November following a recommendation by WWF).[10]

There are apparent reasons for this secrecy: after finally getting access to the environmental impact assessment, the Council on Ethics of the Norwegian Government Pension Fund Global found it ‘astonishing’ that it failed to address key issues, such as the existence of critically endangered species in the forests slated for development.[11]

The continued murkiness in relation to the project extends much further. Coming Storm highlighted allegations that the Cameroonian firm which holds a 20 percent stake in the Sudcam development is owned by very senior government officials, perhaps even President Paul Biya’s own family. Confronted with this evidence, Halcyon’s CEO made a shocking confession in September 2018 that he simply did not know whether his junior partner in the concession development had ties to the government.[12] Greenpeace has recently called for Halcyon to publish all relevant company ownership and project and land acquisition documents.[13] The firm has yet to accede to this demand. It continues to insist that its plantation development in Cameroon complies with all local laws.[14]

The winds have calmed, but the evidence indicates that this remains only the lull in the storm. Palm and rubber prices have continued to decline since our report was published. However, a new in-depth market analysis released in March 2019 makes a strong case that palm oil prices will strengthen before long, as demand – driven by consumption in major emerging markets – is expected to pick up soon and grow rapidly in the next few years.[15] Similar predictions are being made by analysts about the rubber industry.[16] The Congo Basin region and the global forest policy community remain unprepared for the consequences if these predictions do come to pass.

Image on homepage shows bulldozed forest within the Sudhevea rubber plantation in Cameroon, January 2016 (WV2 image from Google Earth).

 

_____________

[1] While working on Coming Storm, Earthsight wrote to Sudcam to offer the company a chance to reply to our findings, but did not receive a response before publication.

[2] Halcyon Agri, Press Release, ‘Halcyon Agri’s response to Greenpeace and Earthsight reports on our SUDCAM operations next to the Dja Faunal Reserve in Cameroon, West Africa’, 27th April 2018, https://www.halcyonagri.com/wp-content/uploads/2018/05/Halcyon_Response-to-Greenpeace-and-Earthsight-reports-news-release.pdf

[3] Council on Ethics, The Government Pension Fund Global, Recommendation to exclude Halcyon Agri Corp Ltd from the Government Pension Fund Global (GPFG), 24th October, https://etikkradet.no/files/2019/03/Recommendation-Halcyon-24.10.18.pdf

[4] Norges Bank, Decision to exclude company from the Government Pension Fund Global, 18th March 2019, https://www.norges-bank.no/en/Published/News-archive/2019/2019-03-18-spu/

[5] Halcyon Agri, Message from Robert Meyer on Sudcam and Hevecam clearing activities, 6th December 2018, https://www.halcyonagri.com/wp-content/uploads/2018/12/Message-from-Robert-Meyer-on-Sudcam-and-Hevecam-clearing-activities.pdf

[6] UN Security Council, ‘Letter dated 6 December 2017 from the Panel of Experts on the Central African Republic extended pursuant to resolution 2339 (2017) addressed to the President of the Security Council’, paragraphs 36-38, 6th December 2017, https://reliefweb.int/sites/reliefweb.int/files/resources/N1738138.pdf

[7] FIDH (World Movement for Human Rights), Press Release, ‘Un chef anti-balaka transféré à la CPI : un nouveau souffle pour la lutte contre l’impunité?’, 17th November 2018, https://www.fidh.org/en/region/Africa/central-african-republic/in-the-central-african-republic-an-anti-balaka-leader-transferred-to

[8] International Criminal Court, Press Release, ‘Situation in Central African Republic II: Alfred Yekatom surrendered to the ICC for crimes against humanity and war crimes’, 17th November 2018, https://www.icc-cpi.int/Pages/item.aspx?name=pr1418

[9] BDEAC, Press Release, ‘Quatre milliards cinq cent millions de Francs CFA en faveur de la Société Palme d’Or en République Centrafricaine’, 20th December 2018, https://www.bdeac.org/jcms/pre_23954/fr/quatre-milliards-cinq-cent-millions-de-francs-cfa-en-faveur-de-la-societe-palme-d-or-en-republique-centrafricaine

[10] Halcyon Agri, Press Release, ‘Halcyon Agri announces Sustainable Natural Rubber Supply Chain Policy and launches Sustainability Commission for Cameroon’, 19th November 2018, https://www.halcyonagri.com/wp-content/uploads/2018/11/Sustainable-Natural-Rubber-Supply-Chain-Policy-and-Sustainability-Commission-for-Cameroon.pdf

[11] Council on Ethics, Op. cit.

[12] Email sent by Halcyon Agri CEO Robert Meyer to forest corruption researcher Arnaud Labrousse on 13th September 2018, to which Earthsight has had access.

[13] Greenpeace Africa, Letter to Robert Meyer CEO of Halcyon Agri Corp Ltd, 23rd March 2019.

[14] Halcyon Agri, Letter from Robert Meyer to Greenpeace Africa, 13th March 2019, https://www.halcyonagri.com/wp-content/uploads/2019/03/HAC-Letter-to-Greenpeace-Africa_13March2019.docx.pdf

[15] AP, Global Palm Oil Market Analysis & Outlook (2019-2023), 21st March 2019, https://www.apnews.com/Business%20Wire/43c1e0ac683b4f0298903d09e0fae800

[16] https://www.gminsights.com/industry-analysis/rubber-market