Press Release: A Cautionary Tale: Tanzanian Villagers Pay for Biofuel Investment Disaster

Tuesday, September 25, 2012

A new brief examines the situation on the ground a year after Sun Biofuels bankruptcy

Oakland, CA--A new brief from the Oakland Institute examining the case of now defunct UK-based Sun Biofuels project in Tanzania shows how the "development" dream can quickly turn into a nightmare when a country hands over its future welfare and development to foreign investors, unaccountable to anyone.

Sun Biofuels secured a concession for 8,211 hectares and started operations in 2009 in the Kisarawe District.The land acquired by the company was collectively held forest and bush land that belonged to 11 villages and was essential to the livelihoods of thousands of rural Tanzanians. Two years into the project, the company declared bankruptcy and dismissed the 600 employees it had hired locally. Sun Biofuels had promised employment for 1,500 people, infrastructure development, hospitals, roads, and more in exchange for the land it needed to grow jatropha.

Based on field work conducted by Oakland Institute Fellow Mikael Bergius in early 2012, the brief shows the dire situation people are in because of the bankruptcy. People have lost their land and their supply of fresh water as well as access to essential natural resources, while the promises of development and better life never materialized. In 2011, what was left of Sun Biofuels was acquired by 30 Degrees East, an investment company registered in the tax haven of Mauritius. At the time of our field research, the project had not resumed. The new company only employed 35 staff, mostly security guards, who ban villagers from accessing their land and natural resources.

Detailing the detrimental impact of the project, both prior to and after the bankruptcy, the brief dispels myths of how foreign investment in agriculture will bring development and food security.

The Sun Biofuels case is a powerful cautionary tale for the four million peasant families in Tanzania whose livelihoods rely on small-scale farming, and who stand threatened by plans to develop large-scale commercial agriculture under the "kilimo kwanza" initiative (agriculture first), which has been touted as the way forward to promote food security and economic growth by the current government.