PZ Wilmar and palm oil expansion to West Africa

Abstract

Synopsis In 2014, PZ Wilmar announced a new oil palm business worth $650 million in Cross River State, which would aggressively expand Nigeria’s palm oil production. In July 2015, a year after the plan was announced, a report jointly released by Friends of the Earth US and Environmental Rights Action Nigeria alleged that Wilmar was not complying with Nigerian laws, and accused them of human rights violations, environmental destruction, fraud, and land grabbing. The multifaceted nature of the “Cross River State crisis” permits “close-ups” from different vantage points to analyze the economic, environmental, social, and governance implications of palm oil expansion from a corporate sustainability perspective. Research methodology The case was researched utilizing secondary data, all materials are readily available to the public. There is no disguise of any actual person or entity and no relationship between the authors and the organizations or individuals mentioned in the case. Relevant courses and levels The case is best used at graduate level. It is very well suited for a MBA-level sustainability, business and society, or corporate social responsibility, or business ethics courses. Theoretical bases The case is grounded on the stakeholder theory, yet offering a fresh perspective, leveraging on the uniqueness of the Nigerian context. The authors argue that, while the assessment of the stakeholder salience of environmental groups operating in Nigeria might be different vis-à-vis other countries with sounder institutional environments, the normative question on whether the company should address these claims persists. The authors also draw from the social movements literature and bring forth the idea that the characteristics of the Nigerian context may jeopardize the prospects of success of adversarial tactics such as the issuing of lawsuits and extensive media exposure, which have been deemed effective elsewhere.