The colonial network of palm oil plantations Democratic Republic of the Congo Democratic Republic of Congo, the colonial network of palm oil plantations

The planet preserves three major tropical forests: the Amazon, Southeast Asia, and the Congo Basin. But the best preserved is the third. Its jungles, the size of seven Spains, feed rivers in the sky: colossal flows of water vapor that emanate from the leaves and act as a natural thermostat, regulating the climate of the region and the world. However, these areas of vital importance for climate and biodiversity are also the most propitious lands for the expansion of crops such as oil palm, which is native to central and western Africa.

Most of the land suitable for the production of palm oil, known as orange gold, is in the Democratic Republic of Congo (DRC, 90 million inhabitants), a rich country with poor people, with the deepest river in the world, the largest tropical forest in Africa and ideal soils for rubber and cocoa. It has the world's largest production of cobalt, essential for electric car and mobile phone batteries, and the second largest in diamonds. And its riches have been attracting foreigners since the 15th century. The Belgians colonized the area between 1885 and 1960, eventually reducing the Congolese population in half. The DRC conquered its sovereignty, but today it is among the most opaque and corrupt countries in the world, according to the International Transparency Index. With 2,345 million square kilometres, it is an area of ​​more than half the size of the European Union.

And there, in the jungles of central Africa, on the banks of these waters, lies one of the oldest and largest oil palm plantations on the continent. In 1911, an English viscount acquired 750,000 hectares in the Belgian Congo, coming to control an area the size of 50 times the city of London. I wanted to make soap. William H. Lever thus founded Plantations et Huileries du Congo Belge (PHC) and died thinking of his macro crops, origin of the food giant Unilever, as an example of moral capitalism. More than a hundred years later, PHC gloated over quadrupling wages in a decade in an advertorial titled Socioeconomic Salvation in the DRC.

In reality, PHC's colonial plantations prospered for decades thanks to forced labor, and what they even paid after the wage increase in 2019 was barely one euro a day. Between 2013 and 2020, agribusiness was controlled by European development banks, owned by governments like Spain's. These bilateral funders invest in the private sector in low- and middle-income countries at below-market rates. And they have a triple objective: earn money, promote economic growth and apply the Cooperation policy of their respective States.

Development banks invested more than 130 million euros in the PHC between 2013 and 2020 when, bankrupt and riddled with social conflicts, it went bankrupt and was taken over by private equity firms. Spain lost the money it had invested through the African Fund for Agriculture, to which it contributed 35 million euros. The British Government said goodbye to more than 65 million euros in shares. However, Europe remains linked to the Congolese plantations.

The PHC owes 43 million euros to a consortium of creditors from Germany, Belgium, the Netherlands and the United Kingdom, whose members are among the ten largest bilateral development funders in the world. To settle the issue, the consortium has decided to forgive up to 80% of the debt on one condition: that the PHC respects the environment and the human rights of both its 8,500 workers and the 100,000 people who live inside or next to its concessions. . But things are not going as expected, neither with one nor with the other, as EL PAÍS has been able to verify live in the African country.

Exposure to toxic, dangerous and radioactive products

The current PHC controls 107,000 hectares. The company is 76% owned by private equity firms domiciled in the Cayman Islands, Mauritius and Delaware and the remainder by the Congolese government. PHC's main client is Groupe Rawji, a family-owned conglomerate that, in addition to processing food and detergents in the DRC, controls the country's largest bank and runs motley businesses in places like Germany, Dubai, India and China.

The largest of PHC's three plantations, about the size of the city of Madrid, is 13 hours from Kisangani, the Tshopo capital, by motorized canoe or five by speedboat. Like a green desert, the Lokutu palm grove extends from the immensity of the Congo River to the confines of the second largest tropical forest on the planet, encircling villages, schools and graves.

In June 2021, the company and two senior officials from the Congolese provincial government collaborated in the "destruction of 20 tons of expired phytosanitary, toxic, dangerous, and radioactive products," according to a report from the province's Environmental Coordination of Tshopo to which EL PAÍS had access. Pesticides, chemical fertilizers, caustic soda, and lead-cadmium-nickel batteries were gathering dust in seven warehouses and a laboratory on the plantation in Lokutu; in some cases, from the time of Unilever, which controlled the plantations until 2009.

The company chose a piece of land next to a road, cleared it and transported the waste in open trucks. In the presence of the delegation, the workers doused solid waste with gasoline, set it on fire, and buried it in direct contact with the ground. Diluted liquids corrosive to the eye. Then they left. All. They left without informing anyone, leaving the lot unfenced, unguarded, and unmarked. Who would know?

Intrigued, locals probed the land with sticks and dug up what they could in hopes of selling or reusing it. It's not difficult: the place is just a kilometer from the Yalikito workers' neighborhood, 900 meters from its water source, and next to the shortcut that leads to the corn orchards and the neighboring neighborhood. Then it rained, the plants regrowth and girls began to go to gather cassava leaves for the family meal, wandering barefoot among stinking chemical oozes, cracked powdered acid drums and chipped lead batteries.

“I am always here,” says the elderly Yalikito chief, Jean Buinga Ilanga, sitting under a shed made of mud and palm fronds. “I saw the trucks and the delegation go by, but no one came to inform me and I did not dare to ask. What can we do? We live in his concession and we are his tenants” he wonders, pointing to some blackened and cracked houses from the time of the Lever empire.

Dumping industrial waste into open fires and uncontrolled landfills contaminates water and soil, and exposes people to toxic products. "In countries with weak governance, [economic] operators are more responsible than ever for following good practices," says Guy, an expert in sanitation and hygiene from the World Health Organization (WHO), from Brazzaville (Republic of Congo). Mbayo Kakumbi. "Informing communities about the destination of the waste, alerting them to the risks and acting ethically is the minimum."

The company maintains that it did not destroy or inactivate anything, but simply entrusted the management of the waste to the Provincial Coordination of Environment and Sustainable Development. "All the procedures in force have been respected," the manager of Environmental, Social and Governance Programs of the PHC, Fanny Salmon, responded to EL PAÍS last November. “PHC regrets to note that the local population has not respected the area and has gone to dig up batteries to recover lead and other [materials]. Measures will be taken immediately to strengthen security."

Lead is a highly toxic heavy metal when ingested or inhaled. It breaks down very slowly, so contaminated sites can be dangerous for decades. According to the WHO, there is no known safe level of exposure to lead, the effects of which are especially serious in children and pregnant women.

“Both the Congolese authorities and the company have a duty to ensure that toxic lead-containing waste is disposed of in a safe manner that does not infringe communities' right to health and a healthy environment,” he says from New York Human Rights Watch (HRW) expert Luciana Téllez Chávez. Likewise, “development banks have an obligation to uphold their countries' international commitments on human rights, also abroad,” she remarks.

PHC answered all but two questions. One was whether the transport and destruction of the products, which she herself facilitated and witnessed, complies with the international principles with which she says she aligns, including those of the Environmental and Social Plan that she agreed to with European creditors. The second was what technical standards the methods used followed. The company did not respond.

The heads of the Congolese Administration in charge of supervision who traveled to Lokutu on behalf of the company, neither.

98% of the inspectors, without salary

The process that culminated in this episode had begun a year earlier, in 2020, when the judicial police sealed off the warehouses and the laboratory during a routine inspection by house expired products for more than a decade.

This June, the then provincial environment coordinator, Félicien Malu, and the political advisor on the matter, Dieu Merci Assumani, went to unseal the facilities, coinciding with the absence of the new governor, Maurice Abibu Sakapela. When he found out, he ordered them to return immediately to Kisangani, the capital of Tshopo. In August, the two officials were relieved of their posts.

“Here there is no infrastructure to treat agro-industrial waste, and the appropriate thing would have been to take it to Uganda”, explains the director of the Congolese Environment Agency in Kisangani, Guy Mondele. “What happens is that the Provincial Coordination of the Environment is, above all, a service for hunting infractions and collection. What prioritizes is the collection ”.

The Coordination has 138 employees, of whom "only one or two earn a salary," according to sources. Like many other decentralized entities in the DRC, it does not receive funds from the national government for ordinary expenses, such as buying notepads or pens. Due to a lack of resources, employees are also unable to travel through Tshopo, a tapestry of primary tropical forests, bogs and peat bogs the size of half France that makes up the country's largest forested province.

“We are supposed to inspect agro-industrial and forestry concessions periodically,” explains a judicial police officer who prefers not to be named for fear of reprisals. “In practice, we can only go if the companies themselves take care of the transport and give us a daily payment: half of the money goes to us and the rest to our superiors. How can we make independent controls in these conditions?

And how do the European development banks monitor the environmental and social impact of their more than 2,000 investments, valued at billions of euros, in critical places for biodiversity and climate such as the Congo Basin?

Investments difficult to control

PHC closes the waste episode. It indicates that he paid the corresponding fine to the Provincial Collection Directorate in April 2021, showing the receipt of an amount equivalent to 28,000 euros. It also denies having made direct payments to any official.

European creditors were aware of the breach, the German Development Bank (DEG) said by email on behalf of the consortium. They also knew that, in the beginning, the authorities had tried to impose “abusive” fines on the PHC, in the words of the company itself. What the German (DEG), Belgian (BIO), Dutch (FMO) and British (CDC Group) banks did not know was the fate of the 20 tons of expired toxic, dangerous and radioactive phytosanitary products.

How could that be?

EL PAÍS asked these institutions how they supervise compliance with the Environmental and Social Action Plan, on which debt reduction depends. “We carry out regular monitoring and dialogue with the client about its implementation,” the German DEG added, noting that they take the issue of toxic waste very seriously and will look into it. According to the website of the Dutch entity (FMO), the banks also commission audits from local consultants and visit the plantations every two years.

On this occasion, dialogue with the client was not enough. "We at PHC did not feel the need to indicate to development finance institutions (DFIs) that the continuation of the process [the dumping of waste] had been carried out in compliance with national laws," the company said.

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In 2019, the Dutch FMO wondered “what happens when the company is truly committed to executing the Environmental and Social Action Plan, but lacks the budget because [palm oil] prices are rock bottom”. But informing local communities does not cost money. Signaling a dump of dangerous products, either.

Cases such as the PHC show how difficult it is for investors to control high-risk projects in countries with weak institutions. Countries where the funders themselves are not present to directly supervise the performance of clients to whom they have injected millions of euros.

The example of the PHC also highlights what is known as “responsibility distancing”, an idea that is beginning to sound, and worry, in forums such as the European Parliament.

The concept is simple: the more complex transnational investment networks are, the more intermediaries and jurisdictions there are, the more difficult it is to determine who is responsible for violations on the ground. Far away, in tropical forests on the banks of the Congo, the Sarawak or the Orinoco... Hours away by plane, boat and motorcycle taxi from Paseo de La Castellana, from the carpeted offices of The Hague and Fifth Avenue in New York... .

Six degrees of separation

In 2008, a study proved the hitherto urban legend of the six degrees of separation: every person on the planet is connected to another through an average of six intermediaries. The same is true in global financial webs.

Without the right firewalls, well-meaning investors can end up backing projects far removed from their principles: from deforestation of tropical forests to labor exploitation to tax optimization for the benefit of shadowy global elites.

The girls who work picking cassava leaves on the Congolese plantation dump have little idea who is at the other end of the investment chain.

For starters, there are the founders of some of the private equity firms that acquired PHC in 2020: Walé Adeosun, a former Obama adviser on US-Africa trade who manages capital for ultra-rich clients; Kalaa Mpinga, a Congolese gold and diamond magnate, nephew of a Kabila oil minister; and Larry Seruma, who ran a BBVA and Vega hedge fund, and who, like many others, began his career with Bernard Madoff, the architect of the biggest pyramid scam in history.

In turn, the flood of funds connected to the PHC has been fed by the capital of large North American universities such as Northwestern, Washington in Saint Louis and Michigan. It has also been nourished at certain times by the Gates Foundation and South African pension funds, as reflected in the tax returns of investors consulted by EL PAÍS and by the Oakland Institute.

Spain, France and the United States invested in the plantations through the African Agriculture Fund (AAF), and countries such as Switzerland and Sweden they entered through the Emerging Africa Infrastructure Fund (EAIF), to whose piggy bank the African Development Bank, the British bank Standard Chartered and the German multinational financial services Allianz contribute. Responsibilities are diluted as intermediaries increase.

Who is accountable?

When there is a problem with an investment, development banks call their fund managers. These transfer the responsibility to the directors of the company. The executive team blames the local authorities, who accuse the company. And start again. And in the case of the PHC, there is yet another twist.

Private equity firms are fighting in courts in Delaware and New York (United States), Toronto (Canada) and Kinshasa (DRC) over ownership of the company, which they value at 88 million euros. Hundreds of pages of judicial documents examined by EL PAÍS describe the maneuvers of these firms: mutual loans at 17.5% interest, accusations of reviving tax avoidance plans at the PHC and investments in mysterious agricultural companies.

Emails between creditors and funds even suggest it: the corporate fabric behind the PHC is so convoluted that even development banks are confused.

Public funds, opaque finances

Civil society (NGOs and other organizations) is a crucial watchdog for investments. However, "European development finance institutions (DFIs) are incredibly opaque: only three of them publish their sub-investments," explains an industry source who requested anonymity to avoid retaliation. "They compete with each other and with commercial banks, so the priority of those who work there is not always development."

This is corroborated by a recent report from the Publish What You Fund global campaign, the Development Finance Transparency Initiative (DFI): “Lack of transparency [about underinvestments] means that it is almost impossible to understand its impact on development. (...) This is unacceptable, especially when these institutions use public money and, in some cases, official development aid”.

NGOs, legislators, citizens and taxpayers find it difficult to follow the activities of development banks in their countries. The same is true for affected communities. "It is critical that financial institutions improve the provision of disaggregated information on each of their investments," says the Initiative's expert, Paul James.

Countries' commitments on climate, biodiversity and human rights – such as those announced at COP26 – depend on the ability to follow money from the pockets of international investors and consumers to places like Tshopo. As the lands of Southeast Asia become saturated with plantations, according to a study by the Center for International Forestry Research (CIFOR), agribusinesses are beginning to look for alternatives in the pristine forests of central Africa.

Agribusiness conquering Africa

Central Africa's forests are smaller than those of the Amazon, but they absorb more carbon dioxide. They are also home to the largest tropical peat bog on the planet, a carbon bomb the size of England. Peatlands are wetlands with a thick layer of organic matter that occupy only 3% of the earth's surface, but store 20% of the global soil carbon.

In Asia, millions of hectares of peatlands have already disappeared due to the advance of the palm and, in addition to the effects of deforestation, those of pollution and population growth around the macro plantations.

Indonesia and Malaysia produce 90% of an oil present in cosmetics, chocolates, animal feed and detergents. But rising global consumption, land scarcity in Asia and economic momentum in Africa point to the start of a new palm oil boom in the Congo Basin.

In 2009, the PHC declared that it would stop deforesting and limit itself to replanting, but there are another fifty industrial oil palm plantations in the region. Several of them have expansion plans. And others, such as Socfin, from Luxembourg, and Olam, from Singapore, are accused of land grabbing and clearing of community forests. Socfin benefited from funds from France (Proparco) and the World Bank, and Olam from the African Development Bank.

Over the past 30 years, the area devoted to palm oil in the Congo Basin and five other producing countries in the region has increased by 40%, according to CIFOR. And there are still 280 million hectares suitable for cultivation, most of them in the DRC, Cameroon and the Republic of Congo. "If there is no intervention, production increases will come from the expansion, rather than the intensification, of crops (...) possibly at the expense of the forest," warns Denis Sonwa, a CIFOR scientist.

What now?

In Lokutu, they don't know where to bury their dead. This year, Congolese police arrested a local man for trying to bury a body on a soccer field. “The houses are under the palms; the latrines are under the palms; even our graves are under palm trees”, explains neighbor Joseph Meia.

In the green bowels of the DRC, communities live off the jungle. “But here everything is imported. In the forest that surrounds the plantations there is no hunting anymore and even firewood for cooking is a problem”, laments Meia.

The PHC gobbled up ancestral lands that today correspond to seven local entities. In Bolesa, there are 23 towns that are islands in an ocean of palms. To get to the forest, you have to cross this sea. “In February, my brother Blaise Mokwe went out for branches to make a broom,” says Eddy Baitita. "Since he was carrying a machete, the guards thought he wanted to steal palm fruits and they killed him." He was 33 years old.

Manu Efolalofa, 20, disappeared the same month after being arrested by plantation guards. His mother, Ogeno Losana, has nine other mouths to feed: “I tried to grow a garden in the forest, and the local communities kicked me out. I moved to another plot, and the company put up palm trees. Now I sell bottles of oil to survive”. Losana hopes the company will at least one day make it up to her by employing one of her children.

According to the company, the population of Lokutu could be stealing the equivalent of 10,000 tons of oil a year from palm fruits. They calculate it based on a theoretical yield based on the age of the palms, their state of maintenance and the fertilization used. PHC Lokutu's current production is around 17,000 tonnes.

“If they paid the workers well, they wouldn't be forced to steal fruit or fuel,” says an employee. Despite his 30-year seniority, he only earns 1.4 euros a day, and his family subsists below the extreme poverty line. You have never seen the chocolate cream or moisturizing lotions produced with the fruits you harvest. None of her three children go to school.

In theory, the company could become an example to follow. “Rejuvenating existing plantations and improving their yield, rather than expanding them, is a good way to respond to the demand for palm oil and reduce deforestation,” says Rocío Díaz Chávez, the deputy director for Africa at the Stockholm Environment Institute (SEI). , a global leader in environmental research and policy. “But paying someone $30 a month isn't help; it is neocolonialism”.

Voracity. Opacity. Lack of control. Diluted responsibilities. When William H. Lever founded Plantations et Huileries du Congo in 1911, the so-called Napoleon of soap aspired to create a clean business. And yet, what PHC has ended up offering are a hundred years of lessons on the failures of agricultural, financial and governance systems in a globalized world.

These are mistakes that investors, governments and companies will have to correct.

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