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Herakles Farms Cameroon Heading Towards Financial Crush

May 28, 2013

Sithe Global Sustainable Oils Cameroon Limited, SG SOC a subsidiary of Herakles Farms was already as heading towards a cash crush says a Greenpeace nine point report titled “The Truth behind Herakles Farms False Promises in Cameroon”.

The company signed a convention with the Cameroon government on September 17, 2009 to create a big industrial plantation of palm oil and refinery on 73,086 hectares of land.

Herakles Farms has recently suspended its activities in Cameroon following an order from the Cameroon Ministry of Forestry to suspend logging in Talangaye in the Nguti region, a release from the company reads.

However, the Ministry suspended the felling of trees until the company fulfills the conditions after certain administrative tolerance for them to get the required authorizations.

The Ministry suspended logging following denunciations in the implementation of the project such as non-respect of forest regulation and complaints from the riverine population.

Irene Wabiwa in charge of Greenpeace Forest Campaign exposed the financial situation of the company besides the other discrepancies of what the company is and what it presents to the world.

Comparing information gotten from inside the company and what is made public; Wabiwa says the company lied to investors and Cameroonians, local communities and the public.

Herakles Farms has been using the Ghana pilot project to project its image. But, Wabiwa says this project is in the being sold in the market for a value less that the investment, 12m dollars against 25m dollars to pay some of the financiers.

She opines that if the company is not capable of operating a pilot centre like that in Ghana it would be impossible to manage 73,086 hectares.

SG SOC told investors it “has obtained a 99 year lease and also received the required permits and approvals to commence field operation”.

But, the convention does not exempt the company from acquiring the necessary legal document, Wabiwa argues.

Herakles according to the Cameroon law was supposed to obtain a presidential decree for any concession above 50 hectares to carry on its operations which till date, they have not obtained.

The wood form the trees felled was government property, Herakles had said, but, it was revealed that in reality, the company was planning to sell the wood estimated at 60-90 m dollars.

Also, it was discovered that the company used bribes and fraudulent means to corrupt actors to get government support.
Against this backdrop, Greenpeace demanded for a moratorium on attribution of concessions in Cameroon.

Reacting to the Greenpeace report, Samuel Nguiffo, Executive Secretary, Centre for Environment and Development, CED, identified the lessons to be learnt from the Herakles story.

He said it was interesting to find internal data from the company stating that the government and civil society organizations lack experience in dealing a company of such magnitude, in a forest area.

“The suspension letter of the Minister of Forestry and Wild Life was a courageous decision”, he averred.

The communique of Herakles was also interesting to read, he says, arguing that when government says stop logging until…, does not mean the company should stop operations as they did and paid off about 700 hundred workers.

Nguiffo concluded that SG SOC does not wish to develop Cameroon, but make money by depriving the country of land and resource.

Hailing the suspension, World Wildlife Fund said it had raised concerns on the impacts of SG SOC’s activities in a biodiversity hotspot, thereby destroying high conservation value forests and habitat for several endangered species.

WWF regretted that Herakles completely disregarded the existence of land use structures in the area such as farmlands, buffer zones and wildlife corridors liking protected areas, and tree felling in a forest without prior authorization from the ministry of forestry.

“Herakles Farms activities in in the Southwest region of Cameroon were and remain illegal. They do not have all necessary permits required to operate in this high biodiversity area,” Hanson Njiforti, WWF Cameroon Country Director says.