In Liberia, a battered palm oil industry adjusts to new rules

But Sime Darby wasn’t as lucky. According to a study by the Washington D.C.-based consultancy firm Chain Reaction Research, at least 45 percent of the company’s concession area in Liberia would be off limits under the HCS approach.

The report recommends a series of options for Sime Darby to maintain the profitability of its Liberian operation. On the one hand, the report notes, the company could completely disregard its environmental and social obligations – a risky strategy that it is almost certain not to pursue. On the other hand, the report suggests Sime Darby could move toward contract farming, in which the company would act as a buyer for palm fruit farmed by communities on their own land. It warned that Sime Darby’s share price could decline once its investors realize how unlikely it is that the company will be able to clear and develop its entire concession area.

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