Building a scalable approach to inclusive, zero deforestation greenfield oil palm development

Our Western landscape in Liberia is centered around the oil palm and rubber concession areas held by Sime Darby. This lies in the border with Sierra Leone and consists of dense HCV forests. IDH aims to support Sime Darby, the Liberian government and the local community to protect the HCV forests and develop outgrower oil palm models that improve community livelihoods.

North western Liberia is rich in biodiversity and high conservation value forests. Sime Darby’s concession is surrounded by protected areas including Gola National Park, Kpo mountains, and Lake Piso. As per its concession agreement, the company needs to conserve high carbon value/stock (HCV/HCS) areas within its own concessions. It also needs to establish outgrower oil palm farms, whereby the community is supported in growing oil palm, which is then sold to Sime Darby.

Our landscape program aims to ensure that forests beyond Sime Darby concession are protected and the outgrower scheme both supports community livelihoods and incentivizes the community to protect the forest.

To do so, IDH, the government of Liberia and Sime Darby are collaborating to develop inclusive community outgrower schemes with benefit sharing structures for communities and tying these to forest protection. IDH’s role includes, but is not limited to the following:

  1. Co-develop the community oil palm outgrower model with strong production, protection and inclusion elements.
  2. Build a national-level multi stakeholder coalition made up of the relevant public, private and civil society actors that will support the program.
  3. Attract funding from PPI Fund and development finance institutions, contract implementing partners
Why the program

Due to the recent Ebola crisis as well as the past civil wars, poverty rate in Liberia is high. But in recent years, the economy has slowly begun to grow, as have the palm oil and mining industries. The government of Liberia has granted concessions to a number of international companies to grow oil palm, for instance to GVL with concessions in south eastern Liberia near Sapo National Park. To ensure that the people of Liberia benefit from these developments, the government requires that palm oil companies operating in Liberia support the communities around their plantations to grow palm oil. As per the concession agreements, for every five hectares of palm oil plantation that a company develops, it has to help develop one hectare of outgrower plantation. This requires investment and capacity building among others. The concession agreement also stipulates that the government needs to raise the funding needed for these outgrower developments. It is critical to develop the outgrower program in such a way that it raises the communities’ living standards and it is environmentally sustainable.

The benefits

Our inclusive approach benefits all stakeholders. These include

  • Communities benefit from income and employment; green, inclusive growth; and land-use planning and forest protection that secure their livelihoods.
  • The government benefits because the program helps achieve Liberia’s 30 percent forest cover target. It also helps develop the outgrower scheme and fundraise for the program.
  • Palm oil companies benefit by working with communities for expanding production, improving community relations and delivering on deforestation free commitments such as meeting global palm oil sustainability standards.
  • Development investors benefit because the program’s funding structure can be used for REDD+ payments.
The sustainable outgrower model

The program supports local communities in developing their own oil palm farms and selling their produce to GVL. This requires capacity building as well as financing. Sime Darby will provide capacity building for the community to become oil palm farmers. The community needs to take a loan and invest in their farms. IDH is building the financing structure, where  international impact investors can provide funding for communities to take these loans. Norway’s International Climate and Forest Initiative (NICFI) is currently providing first loss guarantee for these loans. An important condition for receiving the trainings and loans is that the community must protect five hectares of forest for every hectare of oil palm farm. They will then receive additional, conditional income for forest protection. This funding will come from the international investment.
Aside from becoming outgrowers and receiving forest protection income, the community receives trainings on alternative income options, such as growing vegetables.
IDH and partners use the free, prior, informed concent (FPIC) method before getting the community involved in the program. Read more here.
This Outgrower scheme has the potential to become the leading model for concession development in Liberia and an example for RSPO.

 

Initiatives

  • Community Oil Palm Outgrowers Liberia

    The Oil Palm Outgrower Scheme in Liberia is anchored in the Liberian oil palm concessions, as a joint program between oil palm companies, the government of Liberia (GoL) and the local community with the goal to improve community livelihoods.

    Read more
    Community Oil Palm Outgrowers Liberia

News

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