Abstract

SIPA-13-0003.0 This case provides a detailed description of a foreign direct investment (FDI) in Liberia. Students are asked to decide whether the project amounts to a land grab or is a legitimate development project. In 2009, a Malaysian firm (Sime Darby) signed a contract allowing it to develop a large-scale palm oil plantation in a remote part of Liberia. The government of President Ellen Sirleaf Johnson had made FDI an integral part of a comprehensive development plan for the impoverished African nation. As part of the contract, the government guaranteed unimpeded access to hundreds of thousands of hectares of land. But villagers lived on the land. A central question of this case is whether the process of obtaining their free and informed consent to its development was flawed.

Students will gain insight into the challenges on both sides of this dilemma. On the one hand, Sime Darby faces difficulties in signing a contract with a country where legal norms are still in recovery from a bitter civil war. On the other, villagers have ancestral land rights but not necessarily any legal documents to prove land ownership. The company promises to bring improvements to a poverty-stricken area, but the price may be the subsistence farming which has meant survival to residents. Ask students to consider the trade-offs, and how to promote development without threatening livelihoods.

Use this case in a course/class on natural resource development policy, negotiations, land policy or rural communities.