Archived press release

UK Government Faces Legal Threat Over Palm Oil Investments

16 August 2004

The British Government stands accused of damaging the environment and polluting watercourses in Papua New Guinea, as well as the abuse of workers' rights, in a letter sent by landowners on the island to the International Development Secretary Hilary Benn. Working with Friends of the Earth, the local land owners are calling for compensation for the damage done by Government-funded palm oil plantations on the island.

The traditional landowners from Oro Province are demanding 310 million kina (about 50 million) for the loss and pollution of their lands resulting from the activities of Higaturu oil palms, which is partially owned by CDC (formerly known as the Commonwealth Development Corporation), a company owned by the UK Government.

Palm oil is a vegetable oil largely produced for export on estate plantations in South East Asia. Its spread is currently driving massive deforestation in Indonesia and it is feared that the same pattern will be repeated in Papua New Guinea, which supports some of the world's last rainforests. The UK Government invests in palm oil through CDC.

Lawyers acting for the landowners detail the health impacts of watercourses polluted by chemicals and sewage runoff from the plantations in the letters sent to Hilary Benn. The watercourses are used by about 10,000 people for their daily needs.

Workers on the plantations are paid about 2.40 a day, without protection, sick pay or benefits. In contrast, CDC's chief executive earns an annual 200,000.

CDC, which has been active in PNG for 26 years, has a remit to "create wealth in emerging markets" through "responsible investment." Damien Ase, lawyer for the Centre for Environmental Law and Community Rights in PNG, calls CDC's activities "a clear case of disregard of national laws by a multinational corporation."

Friends of the Earth Corporates Campaigner Robin Webster said:

"It's shocking that any UK company is involved in environmental destruction and human rights abuses abroad, let alone one that funds its operations with British tax-payers' money. The British Government must face up to the responsibilities of such investments and ensure that all UK companies, and especially those operating in the Government's name, are not destroying the environment or damaging local communities."

Friends of the Earth and the communities are calling on the UK Government to fund an independent environmental and social review of the impacts of Higaturu oil palms in Papua New Guinea.

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Published by Friends of the Earth Trust