In western Liberia, the proposed landscape is centred on the palm oil and rubber concession area held by Sime Darby. This lies in the southwest corner of the country, towards the border with Sierra Leone.
Sime Darby’s concession agreement was signed in 2009 and runs for 63 years. The gross concession area is 311,187 ha, within which the company is entitled to identify a 220,000 ha. “Concession Area” plus 44,000 ha. for an outgrowers program. To date, the amount of land developed by Sime Darby is relatively small. By 2014, 10,035 ha. of oil palm and 107 ha of rubber had been planted (Sime Darby, 2014). This is around a third of what was planned because a number of problems have been encountered, delaying the planned expansion of the concession, including a complaint that was made to the RSPO, the outbreak of Ebola in 2014- 2015, and the current challenge to identify land that can be developed within the concession given the dense forest cover. As SDPL renews its operational strategy, expanding the planted area through an outgrowers scheme will be key.
To develop a community oil palm farm, the community needs funds. The Government of Liberia and IDH are working together with interested companies to make it easier for communities to access loans for this purpose. The government and IDH are also inviting investors to invest in community oil palm through a loan scheme, but they have to reassure investors that their investment will not contribute to forest and biodiversity loss because conserving and actively protecting the forest is important in the palm oil sector globally, as major buyers of crude palm oil are now demanding or prefer to only buy palm oil that has not contributed to deforestation or forest loss.
Therefore, the Fund will require a Production Protection Agreement or PPA as an investment condition. The PPA is an agreement to be signed by the Government of Liberia, the community and the palm oil concession holding company in which the parties will agree to conserve and actively protect and manage certain forest areas in the community or nearby in return for loans to establish the community oil palm. Signing a PPA will be the most important requirement for a community to access loan from the Fund to finance its community oil palm. The PPA will be a legally binding agreement, which will have to include clear enforcement arrangements and penalties for non-compliance.
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.
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