Chinese Investment in Rubber Plantations in Cameroon: A Contrasted Picture

S.Assembe-Mvondo, L. Putzel, P. Cerutti, & R. Eba’a Atyi,CIFOR, Forests & Governance Program

Background of Case 1 on Rubber Production in Cameroon

China’s investment in Africa’s agricultural sector have increased over the past 10 years, and one of the modalities of investment is the acquisition of pre-existing corporate holdings:

One Chinese transnational Company has became the main shareholder of the Singaporean based transnational company in 2008;

Then, a subsidiary of the main rubber company in Cameroon has also become a part of Chinese Company;

The Cameroonian subsidiary share: 87% to Chinese; 3% to employees (last year agreement); 10% to State;

State (1975-1997); Singaporean ownership (1997-2008);Chinese (2008- today);

THINKING beyond the canopy

Background of Case 2 on Rubber expansion in Cameroon

The Chinese investments in rubber strategy in Cameroon is materialized by:

The expansion of rubber plantation of the existing estates into 18,000 ha (Subsidiary No 1) operates in Ocean Division;

Set up of the new Subsidiary (No 2), with the conversion into rubber plantation of some 40, 000 ha of natural forest located next to a World Heritage Conservation site (the Dja) in the Dja & Lobo Divison: 80% share to Chinese and 20% to Cameroonian;

Both areas are rich in biodiversity, including many protected species

Research Question

How does geographic origin of investment affect the performance and the corporate social responsibility (CSR) of the company?

THINKING beyond the canopy

Summary of management evolution of a rubber company

State of Cameroon ownership (1975- 1997 )

Singaporean (1997- 2008)

Chinese (2008- today)

CSR No CSR, especially land conflict with local communities;Claims of local communities on their land and financial compensationSalaries were acceptable ; No internal environmental strategy

No CSR, conflicts with local communities on customary land;Worse work conditions for employees; Salaries conditions were bad;Reduction of number of employeesNo internal environmental strategy

Yes, existence of CSR;Improved salaries , security and health conditions of employees; adopted the internal security and environmental policy;Dialogue with local communitiesISO 9001 certificate3% share to employee

Performance 10 000 tons of latex production in 1992

26 000 tons of latex production in 2002 no plantation extension

30. 000 tons of latex (2010);49% of the global profits in 2010

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Towards Chinese investment Management New Strategy

Towards socioeconomic benefits for new investmentsCameroonian subsidiary has just started the expansion rubber

Plantations, areas will be increased to 18 300 ha, with creation of 3 000 jobs;

Chinese Transnational company has just created another subsidiary in Cameroon, with 40, 000 ha land concession for planting rubber,

with more than 8 000 expected jobs ;Damage to biodiversity stocks and local people livelihoodsLost of a rich flora and wildlife species in both sites;Threats of the Dja Wildlife Reserve biodiversity stocks;Conflicts/ competition on agro-lands;Lost of NTFPs for local communities;Disrupt of socio-equilibrium of local communities with new

migrants/employees

THINKING beyond the canopy

Rubber exports Cameroon to China

Employment conditions and relations between local communities and a Cameroonian have often been confrontational.

Conflict based on sense of perceived injustice, inequity and unfair treatment of the local communities and the workers.

Causes of conflicts and the degree of violence varied with time.

Insufficient remuneration and employment conditions can be traced back to the first owner (State of Cameroon), to the Singaporean group at the time of privatization.

However, the subsidiary company under the management of a new Chinese investor management seems determined to adopt, implement and improve social strategy.

ConclusionIn summary, the case of two –phased privatization of rubber company in Cameroon, challenges a number of prevailing assumptions:

First, it challenges the notion upon which the privatization was based i.e. Would bring new employment to sector and improve working conditions;

Second, it challenges the common perception in the Western media that investment of China will result less satisfactory corporate social practices than non-Asian companies.

Socioecological impacts seem to be worst in the new rubber investment

cifor.orgCifor.org/China-Africa

blog.cifor.org

Support for this work was provided by:

The CGIAR Consortium Program on Forests, Trees and

Agroforestry- Theme 5 on Trade and Investment (CRP6.5)

CRP6.5 is led by CIFOR, in collaboration with the World

Agroforestry Center

Photo credits: Front slide– Flickr/10btraveling

Bricks – Flickr/Joriel JimenezCivet –

Flickr/Paul WilliamRice

demonstration – Flickr/AfricaRiceCommunity tree

planting – Flickr/World Agroforestry Center