World Rainforest Movement

Congo, Republic: Thousands of hectares of land for eucalyptus, oil palm and mining

Between 1991 and 2001, Shell Renewables -a division of Shell Oil International- implemented a forestry operation based on the planting and harvesting of fast-growing cloned eucalyptus trees (see WRM Bulletin 46), with the aim of establishing a high-yield source of biomass for future energy generation.

Later on, Shell sold its plantations. Very recently MagForestry -the forestry division of MagIndustries, a Canadian company involved in industrial and energy projects in Central-Africa (most notably the Republic of Congo and the Democratic Republic of Congo)- took over control of the former Shell’s 68,000 hectare eucalyptus plantation through the acquisition of all the shares of Eucalyptus Fibre Congo S.A. (EFC), the lessee of the industrial plantation.

EFC currently holds an exclusive 50 year forestry concession agreement with the Government of the Republic of Congo, which is renewable by EFC for an additional 21 years. This enables MagForestry to appropriate thousands of hectares of land to carry out not only a forestry activity that produces very few jobs, but also to secure long term land rights for its mining branches: MagMining’s brine well mining field, MagMinerals’ potash plant and MagMetals’ magnesium smelter.

The eucalyptus plantations lay near the Congo’s Atlantic port city of Pointe-Noire, from where MagForestry can send its shipments to the seaports of Antwerp in Belgium and Rotterdam in the Netherlands, ready to be distributed all over Europe or to be re-exported to anywhere in the world.

Another budding business adds to the package. The biomass fuel boom prompted MagForestry to begin the construction of a 500,000 tonne per year wood chipping plant on those lands, aiming at becoming a major supplier for the rapidly growing global biomass market.

At the same time, the Spanish company Aurantia is investing in a cluster of palm plantations in the Republic of Congo with the aim of producing biodiesel from the oil. Feasibility studies are already underway to analyse the different plantation and mill sites, and to assess the state of the existing logistical infrastructure in the country.

The actual size of the investment has not been disclosed and the company did not offer any insights into how it sees itself within the context of sustainability and of the fragility of Congo’s environment, neither into how it would guarantee its palm oil is produced in an environmentally friendly manner.

Meanwhile, dangerous outcomes from a study commissioned by the EU and carried out by the CIRAD, announce that Congo “has around 12 million hectares of land suitable for the establishment of woody energy crop plantations (such as eucalyptus and acacia)”. This may entail that private groups take over those 12 million hectares of land to carry out their business.

Big business in the Congo’s lands… for big companies.

Article based on: “500,000 tonne mill for energy wood chips in the Republic of Congo”, Biopact, http://biopact.com/2006/11/500000-tonne-mill-for-energy-wood.html; “Une société espagnole veut investir dans l’exploitation de l’huile de palme au Congo”, Congoplus.info, http://www.congoplus.info/tout_larticle.php?id_article=2269; “Spanish company Aurantia to invest in Congo’s palm oil sector for biodiesel”, Biopact, http://biopact.com/2007/03/spanish-company-aurantia-to-invest-in.html
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– Indonesia: Agrofuel from oil palm –the poor pay with higher edible oil prices

Despite announcements from the authorities, the cooking oil price in the Indonesian domestic market has not gone down. On the contrary, the first week in June has passed and the price continued soaring.

A year ago, the world’s top palm-oil producers, Malaysia and Indonesia, decided to set aside nearly 40 percent –six million tonnes– of their crude palm oil output for biodiesel production. Industry analysts had warned that the move could further boost edible-oil prices, making it expensive for both food and energy users to buy vegetable oils.

Increased demand for fuel use as well as high prices of other vegetable oils like soybean oil in the US has also pulled palm oil prices. This has led poor households in Indonesia to consume waste oil –the oil that has been used for cooking and is later reused. Ironically, “biofuel” will feed cars.

The agrofuel boom does not prove to trickle down on local people. The cooking oil price jumped up until it reached the highest rate of Rp9.000/kg. And the most serious condition is the case of an Indonesian village of Tebo district, an oil palm plantation center in Jambi Province, where the cooking oil price reached Rp 10,000 (USD 250)/kg in June.

Oil palm companies are bound to send a proportion of crude palm oil for it to be processed as cooking oil. However, in Riau Province, around 18 companies never complied with the rule. In the Sumatra region, the company is more interested in selling crude palm oil to the international market than to sell it at the cheaper domestic price.

Cooking oil is one of nine staple foods in Indonesia. The soaring price of edible oil has undermined peoples’ livelihood, impacting on family industries like fried chips, fermented soybean cake, and tofu, which have started to go bankrupt.

Edible oil high prices have affected not only peoples’ income but also their health. Poor communities which cannot afford to buy palm cooking oil buy oplosan edible oil — cooking oil already used. In other cases, cooking oil sellers aiming at keeping their income levels mix the oil which has been used for cooking and will be reused with a chemical product to clear up the color of the oil. The result in both cases is far from health standards.

Indeed, it’s a high price the poor have to pay for the agrofuel fever.

Article based on: “Biofuel for machine, ‘Jelantah Oil’ for human”, SETARA, sent by Rivani Noor CAPPA, e-mail: rivani@cappa.or.id, www.cappa.or.id