SE Asian corporations – Golden Agri-Resources, Kuala Lumpur Kepong, Sime Darby, Olam International, Wilmar International, and Felda Global Ventures – are seeking to expand their palm oil business in West and Central Africa. Palm oil has been identified as a driver of both tropical deforestation and climate change, and this expansion also often has financial risks due to concerns about negligence of communities’ rights and environmental impacts. At the same time, countries supporting palm oil expansion are often post-conflict, fragile states seeking development and investments, dealing with weak governance and legal systems and lack instruments to stimulate and regulate responsible management practices.
Chain Reaction Research looked at investments in Africa since 2008, and found that they illustrate both systemic and company-specific material financial risks. For example, the experiences of investors and corporations expanding into Liberia illustrate that it is important to absorb lessons from previous SE Asian investments regarding specific social and environmental risks and opportunities.