Palm oil giant’s industry-beating ESG score hides razed forests

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Golden Veroleum Liberia is accused of doing little to compensate residents for practices such as destroying part of a rich biodiversity region

Palm oil industry labourers at work. Picture: 123RF/TAN KIAN YONG

“This is an example of a common problem with ESG ratings,” says Andrew King, professor of management at Boston University’s Questrom School of Business, who focuses on environmental, social and governance measurement and corporate sustainability. “Their inaccuracy can protect bad actors by impeding pressure for real improvement.”

“GVL cleared the land of the Lower Kulu people called Blogbo land without our consent,” says Russels Kumon, a retired teacher who returned to Wiah’s Town a few years after his country’s second civil war ended in 2003. “The whole place has been enclaved. We are just in the enclaved area, making farming and any other things difficult for us. The land has been destroyed.”

The HCSA has a system to investigate such complaints and in February it concluded that GVL failed to conduct a proper consent process with local communities before clearing land and setting up its operation, and hadn’t done enough to remediate the misconduct and compensate residents. The HCSA said the palm oil company must halt land development until conflicts with communities are resolved, provide new biodiverse forest and adopt policies to prevent further rights violations.

Since the HCSA ruling, Friends of the Earth said that local communities hadn’t been consulted about the sustainability plan. GVL said it has consulted communities, investigated complaints when they were made, followed the law with regard to land acquisition and met the water quality standards of the nation’s regulator.

BlackRock, without disclosing the company’s name, said in a quarterly stewardship report in May that it had engaged with a Singapore-listed palm oil producer and its unit in Africa to discuss environmental and social controversies related to that business. It referenced the HCSA’s February report and said it was told about remediation steps the unnamed company had taken and that it had commissioned a third party to investigate the extent of deforestation.

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