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Herakles Exposed, Press Statement by Anuradha Mittal, Executive Director of the Oakland Institute

Wednesday, May 22, 2013

The Oakland Institute is a policy think tank that has been studying land investment deals in Africa over the last 5 years to assess the development potential of agricultural investments. 

For the last 2 years, we maintained a focus on Herakles Farms’ 73,000 ha palm oil project in the southwest region of Cameroon.

Despite facing local opposition from the very start, Herakles Farms’ public site misleadingly brands its forthcoming plantation with phrases such as “sustainable,” “poverty reduction,” and “environmentally benign.”

Today, we release a new report, Herakles Exposed, along with the company’s own internal documents, in order to expose the truth. Examined together, the evidence and accompanying analysis bring into focus a familiar tale of greed and deceit wrapped in the packaging of international development work and green consumerism.

The report highlights 9 lies and inaccuracies about the HF palm oil project in Cameroon. This new evidence obtained by Oakland Institute and Greenpeace International reveals that Herakles Farms has been seriously misrepresenting the nature of its project to potential investors, the Cameroonian government, and Cameroonian communities. We are making these confidential and internal documents available online to better inform the public and government authorities in Cameroon and the US about the project.

A few highlights:

1. Herakles Farms is operating without a proper land lease, a move that is illegal under Cameroonian law. More important, Herakles Farms seems to have been well aware that they do not have the necessary permits to operate legally--and yet have proceeded with deforestation operations and palm cultivation.

2. Not only is Herakles Farms cutting down prime trees within a delicate ecosystem, but the company assures investors that it will go on to sell the timber, which it believes will result in “a potential upside of $60 to $90 million over the next seven years.”  Yet Bruce Wrobel, CEO of Herakles Farms, indicated the opposite in an open letter he wrote last September in an attempt to pacify the project’s growing number of critics following the release of a report from the Oakland Institute in collaboration with Greenpeace International. He stated, “we surrendered the timber to the government [for] a lower lease rate”–-this is actually a requirement under Cameroonian law, and Herakles’ promises to investors fly in the face of the rule of law.

3. GPI and OI have also obtained evidence alleging that Herakles Farms is using coercion and corruption in the land acquisition process. Evidence obtained suggests that employees of Herakles Farms' have used bribery, cash gifts, and promises of employment to get support for their project. These allegations are backed by what Germany and the Cameroon ministry of wildlife found in their recent PSMNR report (Program for Sustainable Management of Natural Resources in the South West Province of Cameroon)

4. As we speak, the Herakles Farms project is suspended, which provides further evidence that the project is riddled with issues and legal controversies. The suspension follows an instruction sent in April 2013 by the Cameroon Minister of Forestry and Wildlife to Herakles Farms to halt all logging operations in the Talangaye area, the main worksite of HF.

5. The new documents reveal more about the company’s viability and financial health. The company is, according to one senior employee, “in a cash crunch.” The fact is that Wrobel and his cohorts are in over their heads and are desperate to cover their shortfalls.  

6. Herakles has marketed its plantation as a long-term development project to address food security and provide employment and social benefits in Cameroon. However, the company’s Value Drivers document reveals that Herakles actually estimates the land (for which it will pay just $1 per ha per year) to be worth $4,500 per ha and that the company keeps the option open to exit as early as 2017. Although HF's financial model lacks credibility, these projections confirm HF's intention to make huge profits on the transfer of an asset it acquired on the cheap.

 

In conclusion

The acts of Herakles Farms, though particularly egregious, are not an anomaly in the world of “green investments,” and should serve as a reminder that the land rush by foreign investors into African nations is not philanthropically driven, despite claims to the contrary.  

It is time to call on those who initially bought into Wrobel’s multi-tiered façade of the perfect “sustainable” investment that promised mega returns, to help the Cameroonian people free themselves from Herakles’s greenwashed snare by demanding accountability.

This is not a rebuke to the very real efforts to bring infrastructure and development to Africa.  However it must serve as an imperative for the international community to proceed only with the understanding that Africa is open for business, not for theft.