02 Sep 20 | Podcast
The example of palm oil producer Golden Veroleum in Liberia shows that when setting up in a location where levels of development are low, and expectations high, business can’t be too prepared for the challenges that will arise
Golden Veroleum is a member of the Roundtable on Sustainable Palm Oil (RSPO). It operates a policy of not clearing high carbon-stock forest for palm oil plantations and is careful to emphasise its ethical values.
But problems have arisen nonetheless – with lessons for any company investing in the world’s poorest communities.
The stop was triggered by community complaints about Golden Veroleum practices. In particular, the company was accused of failing to implement the principle of free prior and informed consent (FPIC) under which communities should be able to object to projects on their traditional lands, of shortcomings in its employment practices and of being too close to the Liberian police.
Trouble then flared again in May 2015 when a protest in Butaw about insufficient job creation turned violent, culminating in a raid by locals on company premises, with two Golden Veroleum officials badly hurt. Golden Veroleum was also spotlighted by a July 2015 Global Witness report, which accused the company of riding rough-shod over local community interests and of taking advantage of the Ebola outbreak in Liberia to obtain more land.
For example, Golden Veroleum admits that when it started operating in Liberia it was not sufficiently sensitive to local needs. Liberia is a “post-conflict society and still quite fractured” with “limited depth and capacity in government”, and “we made early-stage learning mistakes,” Golden Veroleum director David Rothschild says. The company has found operating in Liberia tougher than it expected.
With the help of TFT, Golden Veroleum says it has put in place better processes for management of community issues. And the just-published RSPO report on the 2013 complaint says that the company has largely addressed shortcomings, while some of the complaints against it were vexatious.
Solution to all problems?
Some people in Butaw District seem to have expected the company to solve all of the community’s problems. One part of the complaint to the RSPO, for example, was that jobs should only be given to locals and other Liberians should be excluded. As the RSPO concluded, this would be discriminatory and unrealistic because the company might need to bring in skills from outside and “economic development is meant for all Liberians”.
Meanwhile, the May 2015 attack on Golden Veroleum’s premises seems to have originated in the grievance of a particular group in Butaw District, rather than in widespread disaffection with Golden Veroleum. There is common agreement that almost all locals want the development the company can help bring.
The lesson therefore would seem to be that in operating in a poor country such as Liberia, which has minimal infrastructure, poor levels of education and many other social problems, no company can be too prepared.
More sustainable and sensitive operations can then be developed – with benefits for the forests and local communities alike.