Olam Palm Gabon S.A. (OPG) is a palm oil company in Gabon established in 2011 as a joint venture between food and agribusiness company Olam Global Holdings (60%) and the Republic of Gabon (40%) to develop and operate palm oil plantations and mills in Gabon.
OPG has developed six plantations covering 63,330 hectares of land, associated crude palm oil mills, a refinery, and related facilities–all part of the Project financed by IFC. These monoculture plantations consist of ca. 57,300 hectares in Awala, Mouila, and Ndende (west/southwest Gabon) developed from natural ecosystems and about 6,000 hectares in Makouke (central west Gabon), acquired in 2016 from SIAT Gabon, an agro-industrial firm headquartered in Brussels.
While no new deforestation is planned to be financed as part of the project, OPG is responsible for the loss of natural forests in the 57,300 hectares it acquired and planted with monoculture oil palm. OPG has sought to justify/offset this by setting aside about 106,000 hectares (50% of the total concessions Gabon awarded to OPG) for the protection of High Conservation Value (HCV) areas, including community use zones. While the offsets are welcome, how effectively and sustainably they will be implemented remains to be seen. Further, the ca. 42,700 hectares of the OPG concession that has not already been planted or set aside as offsets is vulnerable to deforestation/habitat loss unless steps are taken for its protection.
The palm oil operations will bring influxes of workers for harvesting, milling, processing, and transporting the palm oil, which raises environmental concerns as well as social risks, including loss of livelihoods and sexual exploitation, abuse, and harassment. Additionally, this is IFC’s first investment in palm oil since 2011, so IFC does not have recent experience overseeing this kind of investment.
The planned IFC investment is a project finance loan of up to US $350 million to Olam Palm Gabon, of which US $150 million will be from IFC’s own account. The remaining $200 million will be syndicated and financed by IFC’s parallel lenders.
BIC is working with an NGO based in Ngounié Province (southwestern Gabon), close to OPG’s plantations.
1. This is a Category A project. Its oversight requires a high degree of due diligence to ensure that a) the offsets are effectively and durably conserved and b) the environmental and social impacts are avoided or mitigated in line with IFC’s Performance Standards (PS). This means planning frequent on-site visits by both IFC staff and independent experts qualified to assess conformity with PS and offset requirements.
2. IFC should also work with OPG to clarify what will happen with the remaining concession territory that has neither been developed nor offset.
3. IFC should document and publicly report the impacts (positive and negative) of both the palm oil operations and the offsets at least annually for the duration of its financing and require continued reporting on the offsets post-exit/repayment.
