I would like to welcome you to Feronia’s inaugural Sustainability Report.
A visit to one of our three plantations in the DRC quickly makes clear the enormous challenges our company faces – but also the positive impact that it is already having on people’s lives. It brings you to a part of Africa where the remoteness is overwhelming, with the Congo River the only link to the nearest cities; where poverty is rampant and access to basic education and crucial healthcare is scarce. We are here to try and rebuild a business that was once one of the most important contributors to the country’s economy – and in doing so, we believe that we can transform prospects for one of the poorest places on earth.
When Feronia acquired its palm oil business, Plantations et Huilleries du Congo (PHC), in 2009, it was fully aware of the challenges and responsibilities rebuilding its operations entailed. PHC had been isolated and deprived of finance for many years and was on the verge of extinction. Its plantations were at risk and, if they had disappeared, with them would have gone the jobs, social infrastructure, hope and opportunities that this business once represented.
We believed in the commercial and financial logic of these plantations. Their legacy included many challenges but also many strengths, and with over half of the palm oil consumed in the DRC now imported, the commercial opportunity was obvious. Moreover, we recognised from the start the positive impact that rehabilitating them could have on the lives and livelihoods of many thousands of people in our surrounding communities. Our resolve has always been to rebuild PHC into a sustainable business that creates jobs and opportunities. We have a unique opportunity to operate profitably and achieve our objectives while following a policy of zero deforestation, and avoiding the environmental damage associated with the palm oil business in other countries. This is exactly what we are doing.
Rebuilding PHC has not been an easy journey so far. The remoteness of our operations and poor infrastructure in the DRC mean that the cost and effort of rebuilding the business have been significantly higher than anticipated. However, we are succeeding. We now have a strong management team in place, our business is rapidly moving towards profitability, and we are delivering on our environmental and sustainability obligations and commitments. We have also secured the support of European government Development Finance Institutions, in recognition of our broad social development role.
For me, one statistic brings home the importance of this role. Our company’s hospitals undertook more than 95,000 medical consultations and more than 2,100 births in 2016, and a large proportion of these consultations and births involved people with no connection to our company. If our plantations were not here, that vital medical support would not have been available since the nearest government hospitals are a considerable distance away and more expensive than the service that we provide.
That said, we acknowledge that salaries, working conditions and social infrastructure are currently adequate at best, but they are improving and will continue to improve as the Company’s finances and operational capabilities strengthen. This improvement cannot come quickly enough for the communities living on and around our operations, but social sustainability is equally critical for our commercial success. It is a sentiment we and our Development Finance Institution stakeholders very much share.
The centrality of sustainability to our vision is the reason we are producing our first Sustainability Report at this early stage in our evolution. We have a strong desire for greater understanding of our operations, including the challenges that we face. This report is the start of a process that will chart our progress towards our corporate, social and environmental objectives transparently.
This report also underscores that we do not ask for a free pass from those who doubt our intentions or our achievements. We want, and expect, to be held to a very high standard. However, we ask for a willingness to engage directly with us, offer us a fair hearing that recognises the complexity of the issues we face, and work with us as we continue rebuilding something which is already having a considerable positive impact on the lives of many tens of thousands of people.
Frank Braeken, Chairman
Feronia Inc.
April 2017
