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Thursday, January 26, 2017

The battle over palm oil in Gabon.

There is a battle over palm oil in Gabon presently,the environmental agencies are pitched against the producers and investors sighting logging/deforestation as an issue. Firstly, the new Gabonese operations of agricultural trading company Olam International was heavily criticized by US environmental NGO Mighty Earth in December. Then Dimensional Fund Advisors, a big US investment firm that had previously been criticized for continuing to invest in palm oil companies, decided to divest two of its portfolios of all such assets, including equity in Wilmar International and Olam. The campaign against palm oil could have profound implications for the sector’s development in Africa. Palm oil cultivation has become controversial because ecologically diverse areas of rain forest are often cut down to allow cultivation to take place. Huge areas of forest have been felled in Indonesia and Malaysia, affecting flora and fauna, and producing air pollution caused by forest fires when land is being cleared for palm oil plantation. According to Friends of the Earth and numerous other environmental NGOs, palm oil plantations are the fastest growing cause of rain forest destruction and an increasingly important cause of climate change. Palm oil produces almost quadruple oil yeild compared to sunflower or rapeseed oil, and the majority of the palm oil is produced in Indonesia and Malaysia. However, African countries have also been targeted for cultivation more recently. Olam is a major player in the global palm oil sector and a big investor in African agri-business. The company currently sources more than 99% of its palm oil from third-party suppliers. In 2011, it set up a palm oil and rubber cultivation joint venture with the government of Gabon, with equity shared 60:40 in favour of the Singaporean firm. Mighty Earth’s ‘Palm oil’s black box’ report claims that environmentally important forest areas have been cleared and the report is accompanied by video footage of tall trees being felled. A spokesperson for Mighty argued: “These forests are the last place any company should be looking to develop plantation agriculture.” continue