Why Herakles Farms Project Gets Gov't Suspension

 "If you think you’re going to go into an African country and do as you please to make some quick money, it now turns out you’re in over your head." -- Anuradha Mittal of the Oakland Oakland Institute . After coming under fire from environmental and social justice organisations for violations of land protection laws, Herakles Farms, a New York-based agricultural company, has suspended a large, controversial palm oil project in Cameroon. The announcement comes after the Cameroonian government ordered the company to halt its operations, saying the project had failed to obtain necessary permits. Critics of Herakles’s Cameroon plans are celebrating the decision as a victory for the power of local community activism, though the suspension is currently seen as merely temporary. 

“People on the ground are celebrating, and the suspension is being viewed as recognition of the [Forest] Ministry standing up for what is right,” Anuradha Mittal, executive director of the Oakland Institute, a U.S. watchdog group that has followed Herakles Farms’ Cameroon project for years, told IPS.“In fact, what it shows is that it’s communities on the ground that will make governments honourable – and that’s what democracy is supposed to look like. This is sending a strong message that African countries are open for business, but they’re not open for theft.”

In a 2009 agreement, the Cameroonian government authorised a Herakles Farms subsidiary to develop more than 73,000 hectares for new palm oil plantations. Much of this forestland has reportedly already been cleared, and the company says it is currently in the process of transporting saplings to the plantation areas from nurseries.

Yet local NGOs have increasingly accused Herakles Farms of ignoring community concerns and failing to comply with both court mandates and a government injunction. The company’s decision to suspend the operation now comes following a mid-April order from the Forest Ministry that the company halt a logging operation in the Cameroonian southwest. A request for comment from Herakles on Friday was not responded to by deadline. Ministry officials say Herakles has failed to attain two required permits, with Forestry Minister Ngole Philip Ngwesse noting Thursday that previous agreements between the company and government don’t “exempt” Herakles from following “legal procedure”.

Ngwesse said his office was forced to act following grievances lodged by local communities. Authorisation to resume operations is now based on a “declaration of public usefulness”, according to the ministry.

In announcing the suspension of work, Herakles stated that it “always has and will comply fully and transparently with government regulations in force” and that it “hopes to understand and resolve these actions” by the ministry. Noting that nearly 700 employees involved in the project could now be furloughed or laid off, Herakles said it “finds these events especially tragic”.

Need to “safeguard reputation”

Yet according to Mittal, newly released evidence of Herakles’s internal operations suggests that moving forward could be complicated for the company, which says it has invested some 350 million dollars in the Cameroon project.

“Given the other evidence that we have of the company’s mismanagement, it will be interesting to see how exactly they decide to handle this,” she says. “After all, this could now undermine a misconceived business plan. If you think you’re going to go into an African country and do as you please to make some quick money, it now turns out you’re in over your head – and there’s no way to fix that quickly.” Earlier this week, the Oakland Institute and Greenpeace International jointly released a report highlighting wide discrepancies between how Herakles was presenting its projects in Cameroon to investors and consumers and the environmental and social impacts on the ground.

At the heart of the issue is Herakles’s presentation of the Cameroon project in a way that emphasised its purported environmental sustainability and beneficial impact on local communities – the company even began its own development group, called All for Africa. Yet internal documents included in the report now show that executives at Herakles were aware of the legal holes in the investment.

One e-mail between company executives called the management situation in Cameroon “pathetic” with a “grossly overstaffed office”, and urged “formal approval from the government for land concession”. The e-mail also warned that the situation in Cameroon should be addressed “to safeguard Herakles investments and reputation”.

“What’s really unique about this [instance] is the web of lies and deceit,” Samel Ngiuffo, director of the Center for Environment and Development, a Cameroonian NGO, told reporters this week. “It’s not just to consumers … it’s to investors and the Cameroonian government.”

Chief among these allegations is that Herakles, despite denials to the contrary, began clearing forest and developing palm nurseries before obtaining certificates required by Cameroonian law. According to the report, some evidence suggests that the projects have been in violation of those laws since 2010.

Herakles has also touted the project’s employment potential. Its corporate website, for example, states that the company has developed a “staffing plan and will work closely with village leaders to identify and train candidates and employ as many of those seeking employment as possible.”

Yet a convention Herakles signed in 2009 allows the company to pay according to minimum wage scales “fixed on the basis of productivity and efficiency criteria”, rather than according to Cameroonian minimum wage laws.

“Small-scale farmers who are already producing cash crops like cocoa are making far more independently operating than they would be as labourers in a Herakles plantation,” Brendan Schwartz, a forest campaigner with Greenpeace International, told reporters this week.

Additionally, Herakles Capital, an affiliate company, is a member of the Roundtable on Sustainable Palm Oil, a group designed to set and monitor environmental standards for such investments. The group formally prohibits its members from using so-called high conservation value forests (HCVF), or forests designated as ecologically, economically or culturally vital, for palm plantations.

Despite this, the new report points out that the Germany Agency for International Cooperation (GIZ), among other monitoring groups, has indicated that “part of the [Herakles] concession area has to be considered as HCVF.”

Now, the Cameroonian government’s strong position on the Herakles project shouldn’t be read as an attempt to close the door on foreign investment, the Oakland Institute’s Mittal cautions. 

“The ministry is not saying that Cameroon is a bad place to invest,” she says. “It’s just saying that investors need to follow the proper regulations.”

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