Taxpayer funds save Congo plantation paying workers $1/day

Published on, by Chris Arsenault, Nov 12, 2014.

ROME, Nov 12 (Thomson Reuters Foundation) – Development funds from European governments have helped to rescue a Canadian company that pays workers as little as $1 per day to toil on some of Africa’s largest palm oil plantations in the impoverished Democratic Republic of Congo (DRC).

Government-backed investment funds from Britain, France and Spain, designed to help poor countries develop, stepped in to buy 60 percent of Toronto-listed Feronia Inc for about $35 million in two separate investments in 2012 and 2013.  

The investments came after shareholders fled the Cayman Islands-registered company as its share price fell 700 percent.

Officials at the government-backed funds say this is an investment in African agriculture over the long-term, creating jobs in one of the world’s poorest and most unstable countries, and they expect private investors to eventually return.

But rights groups question whether the investment in the DRC is a suitable use of public funds, with the cash propping up a loss-making company shunned by private investors that has done little to help workers, paying them about half the minimum wage.

“Workers are living in crumbling homes, in severe disrepair. There is malnutrition in the communities near the plantations,” Jean Francois Mombia, a campaigner with RIAO-RDC, a non-governmental organisation that works with labourers at Feronia’s operations, told the Thomson Reuters Foundation. Devlin Kuyek, a researcher with GRAIN, a Spain-based land rights organisation following the DRC, raised similar concerns … //

Sood, Feronia’s CEO, agreed that wages are “too low” but stressed it was challenging to get the company into the black.
Mombia said unions are currently negotiating with the company over wages and benefits.

“They are not taking care of the workers … None of the schools (for the children of employees in the remote area) are functioning,” he said.

Part of CDC’s investment in Feronia is a ring-fenced $3.6 million to be invested in infrastructure but Easton said it could take a decade to upgrade and rebuild houses, clinics, schools and hospitals damaged before and during the conflict.

The DR Congo’s embassy in London did not return phone calls or emails seeking comment. (Reporting by Chris Arsenault; editing by Laurie Goering and Belinda Goldsmith).

(full text).

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