Deal #2236

Location #1

Spatial accuracy level
Administrative region
Location
Kango, Gabon

Target country
Gabon
Comment on location
First phase

Location #2

Spatial accuracy level
Coordinates
Location
Mouila, Gabon

Latitude
-1.5
Longitude
11
Target country
Gabon
Comment on location
First phase- Mouila Lot 1- 35300ha and Mouila Lot 2- 31800ha.

Location #3

Spatial accuracy level
Administrative region
Location
Nyanga, Gabon

Target country
Gabon
Comment on location
Other areas in Ngouine and Nyanga have been allocated for oil palm plantations but have not yet been assessed by Olam for potential development

Location #4

Spatial accuracy level
Approximate location
Location
Makouke, Gabon

Target country
Gabon

Location #5

Spatial accuracy level
Approximate location
Location
Lambarene, Gabon

Target country
Gabon

Land area

Intended size (in ha)
300000.0
Size under contract (leased or purchased area, in ha)
128000
[2010] 110864
[2016] 119830
Size in operation (production, in ha)
[2012] 3000
[2014] 7300
[2015] 21000
[2016] 44000
Comment on land area
In phase 1 only 50000 are cultivated. Olam is planning to develop at least 180,000 hectares by 2018 or 2019, including 100,000 hectares of industrial palm oil plantations (in two phases) and up to 30,000 hectares of smallholder palm plantations and 50,000 hectares of rubber plantations. Another sources states 50 000 hectares of oil palm over 4-5 years, and 28 000 hectares of rubber plantations over 6 years. A company source states that Olam Palm Gabon is setting aside more than 50% of the land to protect HCV areas, riparian buffers and wetlands. Following the SIAT acquisition in July 2016, OPG now manages an additional 8,411 ha, including 5,809 ha of plantation that were established in the 1980s, bringing the total size under contract up to 119 830ha (111419+8411). Company website states that the company is developing 128000ha (2017). Total leasehold land bank of 300,000 hectares- not all will be developed. One data source states Olam has taken over the SIAT (#3352) oil palm operations in Makouké and the refinery of Lambaréné (size unknown).

Intention of investment

Intention of investment
Non-food agricultural commodities, Agriculture unspecified, Conservation
Comment on intention of investment
oil palm activities started in 2012. Rubber initiative announced in 2012. Oil palm factory was inaugurated in August 2015. 50% of the land will be used for conservation - HCV (High Conservation Value) areas and riparian buffers.

Nature of the deal

Nature of the deal
Lease
Comment on nature of the deal
Olam Palm Gabon has entered into a sale of long term lease rights of land and a sale and lease-back of plantation and milling assets, comprising 20,030 hectares of total land area in Awala, Gabon and including 6,502 hectares of planted area, for a cash consideration of US$130.0 million with YCAP Asset Management (“YCAP”). Under this agreement, YCAP holds the rights to the long term leases on the land. The agreement is valid for a period of 18 years, extendable for another three years at the request of either party. OPG retains the right to operate the palm plantation and mill in Awala and will therefore continue to participate in the production economics of the palm plantation without the asset intensity. - See more at: http://olamgroup.com/news/olam-palm-gabon-enters-sale-long-term-lease-rights-land-sale-lease-back-plantation-milling-assets-awala-us130m/#sthash.QATp3sg6.dpuf

Negotiation status

Negotiation status
[2010] Concluded (Contract signed)

Implementation status

Implementation status
[2012] Startup phase (no production)
[2012] In operation (production)
Comment on implementation status
planting palms is expected to commence in early 2012 and be completed by 2016. Clearing of secondary forest in the Kango plantation had taken place by the end of April 2012. Another data sources mentions planting started in 2011.

Leasing fees

Annual leasing fee
5000
Annual leasing fee currency
CFA Franc BCEAO
Annual leasing fee type
per ha
Comment on leasing fees
Olam claims that it will pay a lease rent of CFA Franc 5,000 (US$10) per hectare from the 17th year. The first 16 years are free.

Contract farming

Contract farming
Yes
On leased / purchased area
Yes
On leased / purchased area (in ha)
30000
Comment on contract farming
One report states that Phase 1 development under this initiative has benefited more than 14,000 Gabonese farmers and the joint venture will also offer market access to these farmers through Olam’s distribution networks. Smallholder palm and food cash crop farming project called GRAINE. The GRAINE project will plant 30,000 ha of palm in Phase 1 and protect 28,000 ha of land within the concession.

Number of total jobs created

Jobs created (total)
Yes
Current number of employees (total)
[2015] 5200
Comment on jobs created (total)
Gabonese nationals make up 90% of our team and the balance are expatriates with high quality skills in this sector who provide the initial training to prepare the national team to run the operations independently at international standards. Our aim is to transition more national employees into managerial functions by 2020. 5,200 OPG employees have a stake in the project’s success. One data source states there is a workforce of 9,473 (permanent and temporary). There have been reports of unfair wages and harsh treatment of employees, however the company has responded that this is not the case.

Number of domestic jobs created

Jobs created (domestic)
Yes
Planned number of jobs (domestic)
7100
Current number of daily/seasonal workers (domestic)
4000
5365
Comment on jobs created (domestic)
The company has employed more than 4000 community members. The Awala plantation employs some 1,200 staff, more than 90% of whom are Gabonese nationals.

Operating company

Operating company
Comment on investment chain
Olam holds 80% in the rubber activities. Initially at 70:30 for oil palm, Olam:Republic of Gabon and subsequently reduced to 60:40. Sub-lease to YCAP, a Luxembourg-based independent boutique investment management firm offering tailor-made investment solutions to institutional investors. In July 2012, Olam Palm Gabon secured a $228 million syndicated loan to finance this development. The lead arranger of the deal was Ecobank Capital, the investment banking arm of Ecobank Transnational, which is an IFC financial intermediary in Africa.

 

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Data source #1

Data source type
Company sources
File

Data source #2

Data source type
Media report
File
Date
2015-03-03
Comment on data source
Farmland Grab- Africa to be the next frontier for oil palm

Data source #3

Data source type
Media report
File
Date
2015-08-17
Comment on data source
Farmland Grab - Le Gabon veut devenir le premier producteur africain d'huile de palme

Data source #4

Data source type
Company sources
File
Date
2016-10-04
Comment on data source
Olam Palm Gabon leads Africa’s sustainable plantation development with RSPO Certification of Awala, boosting Africa’s total certified production hectares by 30%

Data source #5

Data source type
Media report
File
Date
2016-04-07
Comment on data source
Mongabay- Lessons from Herakles: sorting out a road map for palm oil in Africa

Data source #6

Data source type
Company sources
File
Comment on data source
Olam Sustainable Palm Oil Policy, June 2015

Data source #7

Data source type
Company sources
File

Data source #8

Data source type
Research Paper / Policy Report
File
Comment on data source
Rainforest foundation - Seeds of destruction

Data source #9

Data source type
Company sources
File
Comment on data source
Olam- Upstream

Data source #10

Data source type
Company sources
File
Comment on data source
Olam Insights- Issue 1/2016: Olam Palm Gabon sets benchmark for sustainable, large-scale palm plantation in Africa

Data source #11

Data source type
Company sources
Date
2016-12-12
Comment on data source
Olam’s response to Mighty Earth and Brainforest report

Data source #12

Data source type
Media report
File
Date
2014-03-14
Comment on data source
Farm land Grab- Temasek subsidiary makes bid for Olam

Data source #13

Data source type
Media report
File
Date
2017-02-24
Comment on data source
rfi Afrique- Gabon: les promesses de la multinationale Olam pour l'environnement

Data source #14

Data source type
Research Paper / Policy Report
File
Comment on data source
Mighty Earth- Palm Oil’s Black Box, How Singapore’s national wealth fund has fueled a secret vehicle for deforestation from Gabon to Indonesia. December 2016.

Data source #15

Data source type
Company sources
File
Comment on data source
Olam annual report 2012

Data source #16

Data source type
Media report
File
Date
2014-01-27
Comment on data source
Farn Land Grab- Gabon : Olam va vendre 18 millions de dollars d'actifs forestiers à des investisseurs chinois

Data source #17

Data source type
Company sources
File
Date
2015-12-30
Comment on data source
Press release on sale of lease rights to YCAP

Data source #18

Data source type
Research Paper / Policy Report
File
Comment on data source
Unjust Enrichment: How the IFC Profits from Land Grabbing in Africa, April 2017.

Data source #19

Data source type
Research Paper / Policy Report
File
Comment on data source
Reducing Carbon Emissions from Forest Conversion for Oil Palm Agriculture in Gabon

Data source #20

Data source type
Media report
File
Date
2016-10-04
Comment on data source
Financial Afrik- Olam Palm Gabon : premier en Afrique à obtenir la certification RSPO

Data source #21

Data source type
Research Paper / Policy Report
File
Comment on data source
Forest Trends Report Series- Consumer Goods and Deforestation: An Analysis of the Extent and Nature of Illegality in Forest Conversion for Agriculture and Timber Plantations, September 2014. pg 97

Data source #22

Data source type
Research Paper / Policy Report
File
Comment on data source
Grain-Planet palm oil, September 2014

Data source #23

Data source type
Media report
File
Date
2017-04-11
Comment on data source
Gabon : l’ONG Brainforest dénonce l’accaparement des terres par OLAM

Data source #24

Data source type
Media report
File
Comment on data source
Olam inaugure mardi sa plus importante usine d’huile de palme d’Afrique

Data source #25

Data source type
Research Paper / Policy Report
File
Comment on data source
New Report Identifies Secret Market for Deforestation-Linked Palm Oil

Data source #26

Data source type
Company sources
File
Date
2018-01-15
Comment on data source
OLAM ACHIEVES SECOND RSPO CERTIFICATION FOR PALM PLANTATIONS IN GABON

Data source #27

Data source type
Research Paper / Policy Report
Publication title
Reducing Carbon Emissions from Forest Conversion for Oil Palm Agriculture in Gabon
Date
2016-05-31

Data source #28

Data source type
Media report
File
Publication title
Les huiles de Lambaréné au Gabon
Date
2018-02-05

Data source #29

Data source type
Media report
File
Publication title
Olam Palm décroche la certification RSPO, une distinction pour son respect de l’environnement
Date
2018-01-07

Data source #30

Data source type
Media report
File
Publication title
Olam revendique une production de 8 866 tonnes d’huile de palme au premier semestre 2017
Date
2017-11-14

Data source #31

Data source type
Media report
File
Publication title
Face aux revendications de meilleures conditions de travail, l’agro-industriel Olam Gabon se défend
Date
2019-06-07

Consultation of local community

Community consultation
Free, Prior and Informed Consent (FPIC)
Comment on consultation of local community
FPIC was obtained.

How did the community react?

Community reaction
Mixed reaction
Comment on community reaction
Across our palm plantations in Gabon (and also for rubber), Olam now has social contracts with 46 villages which include commitments to improve the lives of local people, based on their choices

Promised or received compensation

Promised compensation (e.g. for damages or resettlements)
If a proposed development is initially accepted, community representatives and Olam adopt procedures for consultation and identifying individuals or groups entitled to compensation.

Promised benefits for local communities

Promised benefits for local communities
Health
Education
Roads
Capacity Building
Other
Comment on promised benefits for local communities
Aside from giving priority to local employment, our engagement and management plans cover health, education, lighting, transport and village farming.

Materialized benefits for local communities

Materialized benefits for local communities
Health
Education
Productive infrastructure (e.g. irrigation, tractors, machinery...)
Other
Comment on materialized benefits for local communities
For example, since 2012 we have built or refurbished 14 schools and handed out 5,000 school kits; set up worker health centres and organised HIV awareness training at all our sites; drilled 60 village wells; and installed over 2,200 solar lamps for streets and homes. We have built two village cassava mills and trained small farmers to produce better yields with improved planting stock of banana, cassava and palm.

Former land owner (not by constitution)

Former land owner
State

Former land use

Former land use
Forestry
Comment on former land use
Olam committed to not convert high conservation value (HCV) forests, however the areas for development still contain significant timber and carbon value. A moratorium was signed on 31 January stopping the company from further deforestation.

Former land cover

Former land cover
Forest land
Comment on former land cover
The land is of high conservation value. A ramsar site is located within the land area granted to Olam.

Detailed crop, animal and mineral information

Crops area
Oil Palm, Rubber tree

Use of produce

Has domestic use
Yes
Has export
Yes
Comment on use of produce
Mostly for export to Europe

In country processing of produce

In country processing of produce
Yes
Comment on in country processing of produce
Palm oil production. The Olam oil palm factory was inaugurated on the 14th of August 2015. The factory is located in the heart of the Mboukou palm grove, 19 km from the town of Mouila.
Processing facilities / production infrastructure of the project (e.g. oil mill, ethanol distillery, biomass power plant etc.)
Olam Palm inaugurated in April 2017, the largest palm oil processing plant in Africa, Olam Palm Mouila, located in southern Gabon in the province of Ngounié.

Overall comment

Overall comment
Olam Palm Gabon (“OPG”), the 60/40 joint venture company between Olam International Limited and the Republic of Gabon, has entered into a sale of long term lease rights of land and a sale and lease-back of plantation and milling assets, comprising 20,030 hectares of total land area in Awala, Gabon and including 6,502 hectares of planted area, for a cash consideration of US$130.0 million with YCAP Asset Management. Under this agreement, YCAP holds the rights to the long term leases on the land. The agreement is valid for a period of 18 years, extendable for another three years at the request of either party. OPG retains the right to operate the palm plantation and mill in Awala and will therefore continue to participate in the production economics of the palm plantation without the asset intensity. A portion of the forestry assets are scheduled to be sold to an unnamed Chinese consortium in the fourth quarter of 2014. Following the SIAT acquisition in July 2016, OPG now manages an additional 8,411 ha, including 5,809 ha of plantation that were established in the 1980s. One of the main reasons that Olam chose to invest in Gabon initially was the West African nation’s political stability and the government’s desire to promote economic growth. The plantations have recently been certified as RSPO. The company promised to stop any acitivites which cause deforestation for one year from December 2016, following a report on the companies activities by Mighty Earth- Palm Oil’s Black Box.

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