DRC communities turn up heat on EU lenders funding palm oil giant PHC

 

 

By Didier Makal, via Mongabay

 

On May 24, 2024, clashes broke out between members of a local community and security guards at an oil palm plantation in the northeast of the Democratic Republic of Congo (DRC), the latest such incident in a long-running dispute over some 58,000 hectares, or 143,000 acres, of land.

A source in the town of Lokutu said the community members were protesting the decision by the company, Plantations et Huileries du Congo (PHC), to appoint someone from another community as team leader of plantation security.

“The protestors refused … given that outsiders are cruel and mistreat them,” the source told Mongabay.

According to a press release published on PHC’s website, nine people were arrested and taken to the police station for questioning following the incident.

Clashes between local communities and PHC’s guards are common at its plantations in the DRC, and have even led to the deaths of several villagers in recent years.

Communities living near PHC plantations are demanding the return of just over 58,000 hectares of land, and are seeking access to the company’s land titles to determine the boundaries of its concessions. PHC, part of the investment fund Straight KKM2 (KKM) and owned by New York-based investment management company Kuramo Capital Management, holds more than 100,000 hectares (250,000 acres) of land in the areas of Lokutu, Yaligimba and Boteka, in the northern part of the DRC.

Inhabitants of communities near the Boteka, Lokutu and Yaligimba plantations, which are managed by Plantations et Huileries du Congo (PHC), claim their ancestors’ lands were taken by Belgian colonial authorities to establish huge oil palm plantations.

Spread over three different areas, oil palm concessions cover more than 107,000 hectares (264,000 acres) across the country. Local populations say their land rights and livelihoods continue to be sacrificed in return for company and foreign investor profit. A Human Rights Watch investigation published in 2019 reported harsh and dangerous working conditions for underpaid workers, such as constant exposure to the pesticides used to ensure intensive oilseed production.

Plantation waste flowing into Congo River tributaries is also a cause for concern. Another report, published in 2021 by U.S.-based think tank the Oakland Institute, exposed several foundations, pension funds and international trusts that have continued to finance PHC despite allegations of serious human rights and environmental violations.

The communities are protesting against what they see as the illegal occupation of their land for more than a century, following Anglo-Dutch multinational Unilever’s acquisition of large-scale plantations from the Belgian colonial administration in the Congo in the early 1900s.

RIAO-RDC, an information and support network bringing together more than 250 organizations and more than 330 farmers’ associations, has been working to defend the rights of communities affected by these concessions.

Jean-François Mombia Atuku, head of the RIAO-RDC, told Mongabay that community rights have never been respected since Unilever arrived in 1911. “The land was captured, and to this day, it is still seen as a conquest,” he said.

“Unilever gave way to PHC. These companies have grown richer, and we’ve been left increasingly poor. Nothing works, nothing improves. There are no roads, no schools, the workers live in very poor conditions and are paid very low wages. The strategy is not to recruit natives [from local communities] to key roles in the company. The communities’ rights are not respected, and they are arrested all the time. Now they’ve taken over their land,” he told Mongabay in a phone interview.

Devlin Kuyek, a researcher at GRAIN, a nonprofit that advocates for small farmers rights, said a mediation process, underway since 2020 and supported financially by the same European development banks funding PHC, has done nothing to resolve the fundamental claim of land grabbing in Lokutu, Boteka and Yaligimba.

“There can be no fair and effective mediation in this land dispute without communities at least having access to official land concession documents and independent legal support to assess these documents,” Kuyek told Mongabay in an email. “Communities also need access to the company’s financial records from recent years so they can understand how the money generated by the use of their land is being spent.”

GRAIN was part of a civil society coalition that published a report in 2021 concerning investments made in PHC by Europe’s largest development banks amounting to almost $150 million, despite long-standing conflicts between the company and local communities. The NGO was also a signatory of a letter sent in April by a group of civil society organizations to European Union governments. The letter called for the mediation process to be suspended, so that communities could access PHC’s land documents evidencing the boundaries of its plantations, and so they could secure legal support to continue protecting their interests.

Local communities have always maintained that this was a colonial deception orchestrated by Unilever to strip their ancestors of their land, and skillfully perpetuated by PHC. As part of efforts to reclaim their lands and forests, in 2018 they filed a complaint with German development bank DEG, challenging a $49 million loan facility it and a consortium of European lenders granted to PHC in December 2015.

According to the letter, these institutes — DEG, Dutch development bank FMO, Belgian development bank BIO, and the U.K.-based Emerging Africa Infrastructure Fund (EAIF) — struck this deal in violation of their own loan agreement principles. These required PHC to return some 60,000 hectares (148,000 acres) of land it was not using to the communities, as a precondition for granting the $49 million loan.

The information was kept under wraps by the lenders and PHC, and only recently uncovered by civil society, which is now questioning the mediation process led by the banks’ independent complaints mechanism (ICM).

The mediation process at a crossroads

But DEG is against suspending the mediation process. It has pointed out that the process, which was completed in February and brought together all stakeholders, including RIAO-RDC, is making good progress in the search for solutions to the communities’ complaints.

Commenting by email on the subject of its financial support for PHC in 2015, despite allegations of environmental crimes and rights violations, Barbara Schrahe-Timera, corporate communications manager at DEG, said the bank’s investment was part of a broader commitment to increase the value of PHC’s corporate social responsibility activities.

“The lenders’ commitment was intended to help secure many jobs in one of the world’s poorest countries, under difficult conditions. In addition, it helped improve the supply of an essential staple food to the local population, as well as employee welfare at the plantation sites,” she wrote.

Schrahe-Timera said DEG ended its commitment with PHC at the beginning of 2022, but didn’t state the reason.

The mediation is being led by the Independent Complaints Mechanism, a platform that DEG created and that FMO has also joined. In a press release published April 18, 2024, in response to the NGO coalition’s letter, the ICM criticized the RIAO-RDC for having hastily published what it considered to be a draft report of the latest ICM meetings, when the document had not yet been finalized. “The publication of a non-public report constitutes a violation of the Code of Conduct that was signed by all parties and participants to the mediation,” the ICM said. It added it was nevertheless committed to producing a final report in May to present the results of the mediation, though it still hadn’t published this as of the start of July.

On May 11, PHC celebrated its 113th anniversary of activity in the DRC, where it expressed pride over its performance over the years. While allegations of environmental crimes, human rights violations, financial malfeasance and tax evasion remain unresolved, and although its shareholders have recently been engaged in trench warfare for control of the company, PHC said it boosted its employment figures from 6,500 to almost 10,000 employees in its plantations and factories between 2021 and 2024. The company also boasted an increase in palm oil production of around 20% over the last three years.

Mongabay sought comment from the company about the allegations against it, but received no response.

Banner Image: Mindonga residents stand on the banks of a stream contaminated by effluent from PHC’s palm oil production plant in Yaligimba in 2019. Image © Luciana Tellez/Human Rights Watch.