CHINESE INVESTMENTS IN CAMEROONdtnac4dfluyw8.cloudfront.net/downloads/report_wwf_2014.pdf · 2020. 6. 12. · Report for WWF Cameroon - September 2014 4 Summary projects in Cameroon

Examining the trends, challengesand perspectives on the environment and communities

CHINESE INVESTMENTS IN CAMEROON

Examining the trends, challengesand perspectives on the environment

and communities

CHINESE INVESTMENTS IN CAMEROON

A Report for WWF Cameroon Country Programme Office

By

Martin Tsounkeu

International Consultant

Financing for Development and Emerging Economies Specialist

And

Durrel N. Halleson

Business & Industries Coordinator – WWF CCPO

September 2014

SUMMARY

PREFACE 8ACKNOWLEDGEMENT 9

0 EXECUTIVE SUMMARY 10

1 INTRODUCTION AND CONTEXT 121.1 The global context and Chinese cooperation model 14

1.2 South-South Cooperation and the new trend in Africa 14

1.3 Growing Chinese investments in Africa and Cameroon 15

1.4 New Development strategy in Cameroon

and cooperation with China 16

1.4.1 From relative prosperity to crisis: the impact of poverty 16

1.4.2 Economic and social adjustments and

the new agenda (Vision 2035) 17

1.4.3 International cooperation strategy and

relationship with China 18

1.5 Highlight on WWF-Cameroon’s work with China 19

1.6 Justification and objectives of the study 21

1.6.1 Justification 21

1.6.2 Objectives 22

1.7 Study approach and methodology 22

1.7.1 General approach 22

1.7.2 Stakeholder and documentation sampling 23

1.7.3 Field data collection and interpretation 24

2 CHINESE INVESTMENTS IN CAMEROON 262.1 Areas of interest for China in Cameroon 28

2.1.1 Chinese Foreign Direct Investment (FDI) 28

2.1.2 Partnerships and contracts 29

2.2 Chinese funded official development

Summary 3

Report for WWF Cameroon - September 2014


4 Summary

projects in Cameroon 29

2.2.1 Past projects and achievements 29

2.2.2 Current projects and interventions 30

2.2.3 Future projects and prospects 38

2.3 Mapping Chinese projects in Cameroon 38

2.3.1 Geographical and Sectorial distribution 38

2.3.2 Relevant stakeholders in projects with

Chinese investment 39

3 ANALYSIS OF CHINESE INVESTMENTS IN CAMEROON 423.1 Relevance to national strategy 44

3.1.1 Overall relevance 44

3.1.2 Volume analysis 44

3.1.3 Economic impact analysis 49

3.2 Environmental considerations 49

3.2.1 Specific environmental considerations about Chinese

projects in Cameroon 50

3.2.2 Legal framework relating to Chinese investment 53

3.2.3 State of conflicts relating to projects with Chinese investment 54

3.2.4 Field case presentations 58

3.2.4.1 The Lom Pargar Dam Construction Project 58

3.2.4.2 The Mekin Hydropower Dam Construction Project 61

4 CONCLUSION AND RECOMMENDATIONS 644.1 Conclusion 6

4.2 Recommendation 67

4.2.1 WWF engagement with Cameroon Government 67

4.2.2 WWF engagement with Chinese authorities 67

4.2.3 WWF engagement with other Chinese investment actors 68

ANNEX 70


Acronyms 5

ACRONYMSADF African Development Fund

AFD French Development Agency

AfDB African Development Bank

BDEAC Banque des Etats de l’Afrique Centrale (Central African

States Development Bank)

CAA Caisse Autonome d’Amortissement (Autonomous Sinking

Fund)

CAMTEL Cameroon Telecommunication Company

CBRC China Banking Regulatory Commission

CHEC China Harbor Engineering Company

CNEEC China National Electric Engineering Corporation

CRBC China Road and Bridge Corporation

CSAC Commonwealth Civil Society Advisory Committee

CWE China International Water and Electricity Corporation

EDC Cameroon Electricity Development Corporation

EIB European Investment Bank

EMP Environmental Management Plan

FDI Foreign Direct Investment

FOCAC Forum for China-Africa Cooperation

FMU Forest management units

GESP Growth and Employment Strategy Paper

GESP Growth and Employment Strategy Paper

HEVECAM Cameroon Rubber Company

HIPC Highly Indebted Poor Countries

IMF International Monetary Fund


6 Acronyms

JXTC Jiangxi Rare Metals Tungsten Holdings Group Company

Ltd

KDSPC Kribi Deep Sea and Industrial Port Complex

MDGs Millennium Development Goals

MDRI Multilateral Debt Relief Initiative

MEAs Multilateral Environmental Agreements

MINADER Ministry of Agriculture and Rural Development.

MINEE Ministry of Water Resources and Energy

MINEPDED Ministry of Environment, Nature Protection and Sustai-

nable Development

MINEPAT Ministry of Economy Planning and Regional Develop-

ment

MINTP Ministry of Public Works

PADY Projet d’Aménagement de la Ville de Yaoundé (Yaoundé

Development Project

PRECESSE Projet de Renforcement des Capacités Environnemen-

tales et Sociales pour le Secteur de l’Energie (Environ-

mental Capacity Building Project for the Energy Sector)

PRSP Poverty Reduction Strategy Paper

SME Small and Medium Size Enterprises

SNH National Hydrocarbon Company

UNDP United Nations for Development

WB World Bank

WWF World Wide Fund for Nature

MINEPDED Ministère de l’Environnement, de la protection de la na-

ture et du développement durable (Ministry of Environ-

ment, Nature Protection and Sustainable Development)

MINTP Ministère des Travaux Publics (Ministry of Public Works)

MINEE Ministère de l’Eau et de l’Energie (Ministry of Water

Resources and Energy)


Preface 7

MINADER Ministère de l’Agriculture et du Developpement Rural

(Ministry of Agriculture and Rural Development)

NEF National Employment Fund

EMC Environmental Management Conditions

ESIA Environmental Impact and Social Assessment

ESMP Environmental and Social Management Plan

SESE Special Environmental and Social Conditions

CRP Compensation and Resettlement Plan

PDR Regional Development Plan

CDP Community Development Plan


8 Preface

Cameroon, like most African countries, has a rich resource base withworld leading concentrations of strategic minerals like oil, uranium andiron ore. Unfortunately, these countries are all suffering from limitedcapacity (technical and financial) and infrastructure to exploit theseresources. It is no coincidence therefore that these two sectors haveattracted Chinese companies. The Chinese are currently financing and incertain cases undertaking the construction of several infrastructuredevelopment projects ranging from seaports, double carriage highways,hydropower dams, potable water supply systems, etc. in Cameroon. Apartfrom its engagement in infrastructure, Chinese companies are activelyinvolved in the extractive industries with focus on oil and mineral explora-tion as well as agro-industrial plantations. While these projects shall, indu-bitably, contribute to Cameroon attaining its 2035 development vision ofbecoming an emerging middle income economy, there is no doubt that theycould have irreversible negative impact on the country’s rich biodiversity.

To ensure that certain investments do not negatively affect the environ-ment and where such impacts cannot be avoided, the necessary correctivemeasures are considered, Cameroon has put in place an appropriate envi-ronmental legislation which requires that such projects are subjected to anenvironmental and social impact assessment (ESIA). However, companiesgenerally hardly comply with these requirements and in most cases theESIA are considered as mere box-ticking with no intention of actually im-plementing the measures envisaged in the accompanying environmentaland social management plan. It is difficult to single out Chinese companiesfrom this general trend. However, the peculiarity of Chinese companiesoperating in Cameroon goes beyond regulatory requirements to issues ofcultural complexity. This is one of the revealing findings of this study. It istherefore important that as Cameroon pursues its ambition of becoming anemerging economy by 2035 and considering that China like other emergingeconomies shall continue to support this development, efforts need to bemade to balance the observed gaps in the implementation of the currentlegislations and the cultural differences revealed in this report. The culturalcomplexity observed in some of the project sites visited is a potential sourceof conflict, either between the companies and staff or between the compa-nies and the local communities.

This study was carried out within the context of WWF China for a Glo-bal Shift Initiative aiming to make China's international trade and capitalflow a driving force in global conservation and footprint reduction. This isbased on engaging key decision-makers in governments and financial insti-tutions relevant to Chinese investments outside China and with an impacton WWF's priority places.

Hanson NJIFORTICountry Director

PREFACE


Acknowledgement 9

This study would not have been possible without the collaboration ofa number of key resource persons and institutions. The Ministry of Eco-nomy, Planning and Regional Development (MINEPAT), the Ministry ofEnvironment and Nature Protection (MINEPDED), the Autonomous Sin-king Fund of Cameroon, the Embassy of the People’s Republic of China inCameroon and the Dibombari Town Council were instrumental in ensu-ring access to useful information. We wish to thank all the resource per-sons especially for their patience.

WWF would like to particularly thank the following resource persons:

- Mr Essissima Pascal, Director of Cooperation, Emerging Countries atMINEPAT;

- Ms Mouahba Oliviere, Unit Head, Research, Projects and Coopera-tion at MINEPDED;

- Mr Joselin Modeste Ako’o, Chief Economist, Kribi Deep Sea Port andIndustrial Complex

- Ms Line Enanga, Debt Operation Director, CAA;

- Mr Richard Ndemenu of Cameroon Electricity Development Corpo-ration (EDC);

- Desiree Mengue, Environmental Site Controller, Lom Pangar Project,Cameroon Electricity Development Corporation (EDC) and his Col-leagues at the Project Site in Lom Pangar;

- Bai Quiang Director, Environment Management Department, ChinaInternational Water and Electricity Corporation (CWE - Lom PangarProjet);

- Mr. Philippe FANG, Economic Advisor, Embassy of the People’s Re-public of China;

- Mr Theophile Abel Mbaka Mouyeme, Technical Director, HYDRO-MEKIN;

- Mr Richard Selma Bala, Paramount Chief, MBETEN 1 Village;

- Mr Moundingo, Paramount Chief, Bassa village near Yato; and

- Mr Jean Marie Mvondo Ze, Paramount Chief, Mekin Village;

We would like to express our special thanks to the field research team:

- Thomas Roger Owounou;

- Pascal Kengne;

- Charles Bongwen Linjap; and

- Suzanne Ngono;.

ACKNOWLEDGEMENT

After decades of self-reliance, China has progressivelyopened up and grown to become the world’s second largesteconomy. The emergence of China as a key trading andeconomic partner for African countries has been inclusiveof Cameroon. Chinese investments in Cameroon areconcentrated in infrastructure development projects, mostof which are located in fragile ecological areas therebyheightening the risk of serious negative environmental andsocial impacts. The challenge therefore is to ensure thatoperations by investors including Chinese operators inte-grate environmental and social best practices in fullconformity with the existing national and international re-gulations on environmental protection.

China has become conscious of the need to promoteenvironmental protection. Therefore it is not surprisingthat China’s 12th five year development plan included en-vironmental protection and the promotion of green deve-lopment as one of its key pillars. This marks a turningpoint from the country’s previous emphasis on headlinegrowth, according to an overview of the plan provided byKPGM. The emphasis for China now is on strategies andmeasures to ensure long term prosperity for the entire na-tion. That new turn in China’s economic development stra-tegy translates the common goal of sustainabledevelopment enshrined in the 2009 FOCAC (Forum forChina-Africa Cooperation) Declaration. The issuance byMOFCOM in 2013 of Environmental guidelines in ForeignInvestment and Cooperation provides an impetus to Chi-nese companies going abroad, to give priority to environ-mental protection and adhere to the laws and regulationsof host countries, as well as proactively fulfil their socialresponsibilities.

This study on the trends of Chinese investments in Ca-meroon commissioned by WWF Cameroon Country Pro-gramme Office aimed at defining an approach that advisesthe Cameroon government, the Chinese companies opera-

EXECUTIVE SUMMARY10 Executive Summary


ting in Cameroon and local communities on how best to in-tegrate environmental and social aspects during projects’inception and implementation phases. The study also pro-vides an opportunity to identify relevant contacts withinthe different Chinese companies such as to permit mutualcollaboration. This however, remain one of the key chal-lenges because generally Chinese actors encountered du-ring the study remained cautious to openly speak abouttheir activities without clear instruction given by a duly au-thorized official from either the Government of Cameroonor the Chinese Government representative (Embassy ofChina).

In terms of lessons learnt, a better option to engage withChinese actors would be through Government designatedchannels as well as a situational analysis of the structuralorganization of each of the relevant companies. Such an op-tion provides for the possibility of establishing effective col-laboration with the companies, especially with regard tosocial and environmental issues. It is important in such anapproach to consider not all companies but only those thatare really relevant thanks to their business span and loca-tion. In this regard the following companies could be consi-dered China international Water and Electric Corporation(CWE), SINOHYDRO, China Harbour and EngineeringCorporation (CHEC) and SINOSTEEL.

In its engagement with the Cameroonian Government andother Public Authorities, WWF should seek collaboration inall key sectors, by trying to set up a collaboration schemethat consist in supporting the process of EnvironmentalCertificate deliverance and monitoring of the compliance toEnvironmental Management Plans during projects imple-mentation. Before engaging with Chinese Authorities, itwould be essential to be clear on what their prime interestis and to find out what the official pre-defined line is forChina on the issues at stake. WWF’s approach in connec-ting with relevant contact persons in Chinese companies,for environmental impact management, should then consi-der collaboration with key contact persons within the pro-ject owner and the supervising entity, as a way to access therelevant contact person in the Chinese company.

Executive Summary 11


I-INTRODUCTION AND CONTEXT

I.1 The global context and Chinese cooperation model

I.2 South-South Cooperation and the new trend in Africa

I.3 Growing Chinese investments in Africa and Cameroon

I.4 New Development strategy in Cameroon and coopera-tion with China

I.5 Highlight on WWF-Cameroon’s work with China

I.6 Justification of the study objectives and expected results

I.7 Study approach and methodology

I.1 The global context and Chinese cooperation modelChina is now becoming one of Africa’s cherished deve-

lopment and financial partner and it has declared its wil-lingness to champion a win-win cooperation model bydeveloping a pro-active strategy in its development assis-tance to Africa. In that respect, the very much needed in-frastructure in the continent are placed at the forefront.The Forum for China-Africa Cooperation (FOCAC), esta-blished in 2000, during its 2006 edition, was used as anopportunity by China to pledge US$ 20 billion assistance,with infrastructure as main target for a five year period.The Forum is now an important platform for dialoguewhere key decisions on trade and investment are made byChinese and African Leaders.

I.2 South-South Cooperation and the new trend in AfricaToday, traditional western donors due to their histori-

cal relationship with Africa are facing enormous chal-lenges from emerging countries like China, Brazil, Turkey,India and South Africa. The modus operandi of these newactors in Africa is quite different from that employed bythe continent’s former colonial masters and the USA. Theyseem to offer more attractive financing and cooperationopportunities for development without conditionalities.The Cameroon national development strategy as outlinedin both the 2035 Development Vision and the Growth andEmployment Strategy Paper (GESP) formally integratescooperation with these new donors as a pivotal in thecountry’s ambition of becoming an emerging economy by2035. In attaining this objective of fostering south-southcooperation, the Government of Cameroon decided to re-structure the Ministry of Economy, Planning and RegionalDevelopment (MINEPAT) which is responsible for inter-national development cooperation, by creating a specialDirectorate in charge of relations with Emerging Coun-tries1.

1 MINEPATOrganogramme2010

14 Introduction and context


1.3 Growing Chinese investments in Africa and CameroonAfter several decades of self-reliance, China since the

mid 70s has progressively opened up to the rest of theworld. In 1999 it adopted the “go global policy” which wasaimed at encouraging Chinese enterprises to begin inves-ting overseas. This policy has contributed to China’s emer-gence as a global economic power. The emergence of Chinaas a key trading and economic partner for African coun-tries is not specific to particular regions of the continent.Africa is seen as key to support China’s rapid growth stra-tegy by supplementing Chinese insufficient natural re-source base. Meanwhile Chinese foreign directinvestments and development assistance are providingAfrican states with financial and technical resources forthe realization of development and infrastructure projectsto help in the continent’s growth.

According to the information Office of China StateCouncil2, Chinese direct investments in Africa witnessed a20.5 % growth between 2009 and 2012, rising from US$1.44 billion to 2.52 billion. Chinese manufacturing enter-prises directly invested 1.33 billion U.S. dollars in Africancountries in the same period. At least 2,000 Chinese com-panies have invested in more than 50 countries and re-gions in Africa, in various areas including agriculture,mining, construction, manufacturing, finance, trade logis-tics and real estate.

The prospects for Chinese investment in Africa show apositive trend which was confirmed by Premier Li Keqiangof China, at the World Economic forum in Abuja, Nigeriain May 2014. He announced a $30 billion China-AfricaFund which China is ready to “deploy in an effort to givethe continent a new lease of life”. He said that "China, inorder to build infrastructure network in Africa, is ready toprovide financial, technical and human resources sup-port”. China will increase projects financing in Africa, ad-ding US$10 billion to be committed to the credit linesagreed at FOCAC, to reach a total of US$30 billion. China

2 The White Paper onEconomic Coopera-tion and China-Africa trade

Introduction and context 15


also intends to put another US$2 billion into the China-Africa Development Fund to make it US$5 billion.

In Cameroon, after the establishment of diplomaticand economic ties in 1971, China has progressively placeditself at the forefront of infrastructure development pro-jects, either by taking over western stakes, co-funding pro-jects3 or by simply undertaking constructions. TodayChina is emerging as one of the country’s major economicpartners, with an estimated annual investments portfolioamounting to around USD400 million since 2007.

I.4 New Development strategy in Cameroon and cooperation withChina1.4.1 From relative prosperity to crisis: the impact of poverty

The decade prior to 1986 was a period of prosperity forCameroon, with a booming economy yielding foreign ex-change revenue from petroleum, cocoa and coffee. The an-nual average growth based on the Gross Domestic Product(GDP) was 7%, from the late 1970s through 1985. Afterthat period, the country witnessed an economic crisis, cha-racterized by a dramatic fall in foreign exchange revenue,due to a decline in the world prices of oil, cocoa and coffee,and because of diminishing supplies of oil. From 1987 -1993, average annual Gross Domestic Product (GDP) va-riation was negative (-2.8%).

In 1989, the prices of cocoa and coffee paid to farmerswere halved whilst subsidies were reduced and eventuallycancelled. The economic crisis increased the level of po-verty (40.2 % in 1996)4 and created an important ruralexodus. A positive growth for almost a decade (4% from1994-2003, 2% in 2005, 3.8% in 2006) has not been highenough for a significant impact on poverty reduction. Po-verty level was in stagnation and still estimated at about40% in 2009, from 40.2% in 2001. Poverty level was stillestimated at about 40% in 2009, and from successive eva-luations by the Ministry of Economy, Planning and Regio-nal Programming (MINEPAT) in collaboration with theUNDP5, the country is not likely to achieve the Millennium


3 See Jean Paul Pou-gala, Les plus grosmensonges sur lacoopération entre laChine et l’Afrique,July 2013 onhttp://pougala.org/tag/jean-paul-pou-gala/ visited on29/04/2014.

4 Cameroon PRSP,2003.


Development Goals (MDGs) by 2015, despite some pro-gress in education and gender.

1.4.2 Economic and social adjustments: the new development agenda(Vision 2035)

Cameroon went through a Structural Adjustment Pro-gramme in the period 1987-1997, with the World Bank andthe International Monetary Fund (IMF). But afterward,external debt remained unsustainable with debt stock tota-ling US$ 7802 million in nominal terms by end of June1999. A Poverty Reduction Strategy Paper (PRSP) was des-igned for implementation as from 1997, after validation bythe Bretton Woods Institutions, within the framework ofthe Highly Indebted Poor Countries (HIPC) initiative towhich Cameroon was admitted in May 2000. HIPC deci-sion point was attained in October 2000 and the comple-tion point in April 2006, three years later than expected.The impact of the Heavily Indebted Poor Countries Initia-tive (HIPC) and the Multilateral Debt Relief Initiative(MDRI) resulted in a marked improvement in Cameroon’sdebt position. The public debt-to-GDP ratio declined from52 percent in 2005 to 10 percent in 2008. Since 2008, ho-wever, domestic and external borrowing has been risingagain6.

During the past years, Cameroon has faced a widerange of challenges including growing unemployment, po-verty, lingering corruption, public mismanagement, fragilesociopolitical environment and low pace of democracy im-plementation through, operationalization of relevant insti-tutions7. In fact, despite visible efforts, the putting in placeof all institutions constitutionally supposed to accompanythe democratization process is yet to be completed in2014. In February 2008, more than fifteen years after thepolitical turmoil that marked the transition from a singleparty system to political pluralism (1990-1992), the highcost of living resulted in social unrest (hunger riots).

In response to economic and social challenges, consi-dering the lack of success by previous development strate-

5 The more recent andimportant evalua-tion of MDGs achie-vement was madeduring the Post2015 sub-nationaland nationalconsultations in Ca-meroon (April –May 2013), whichresulted in a Post2015 National posi-tion report submit-ted to the UN inSeptember 2013.

6 IMF, country re-port No 11/116(June 2012)

7 The senate for ins-tance, an institutionprovided by the1996 Constitutionbecame operationalin 2013 and the on-going decentraliza-tion process hasalready taken thesame time.



gies, Cameroon adopted a new one, fully detailed in the“Vision 2035”. The Growth and Employment StrategyPaper (GESP) is the first stage of that vision aiming at ma-king Cameroon a “united, emerging, diversified and trulydemocratic country”. The pillars of that new strategy are:(1) poverty alleviation; (2) becoming a middle incomecountry, (3) becoming a newly industrialized country and(4) consolidating democracy and national unity while res-pecting the country’s diversity.

The Cameroon development strategy is anchored onthe following strategic pillars: (1) Increased investments ininfrastructure and rapid modernization of production, byimproving the business climate and governance; (2) Main-taining growth at high levels, in order to achieve the Mil-lennium Development Goals and ensure that thepopulation is entirely mobilized in the fight against climatechange effects; (3) Improvement of international coopera-tion by opening Cameroon more to the outside World andrelying on its production and export pattern essentiallybased on industries, and facilitating a better financial sys-tem that can mobilize domestic and foreign funding as wellas a promotion of the private sector.

Cameroon was among the countries chosen by the Uni-ted Nations for national consultations on the Post 2015that took place during the year 2013. Four major develop-ment priorities were identified by Cameroonian popula-tions: education, health, employment and environment.These were considered to be achievable only if a number ofcrosscutting issues are addressed: Human Rights, gender,good governance and infrastructure. In 2014 anotherphase of consultations were organized by the UN system incollaboration with the Ministry of Economy, Planning andRegional Programming (MINEPAT) on the localization ofthe post 2015 development agenda, in a view to determi-ning the best mechanisms to ensure transformationalchanges and better delivery of development services.

1.4.3 International cooperation strategy and relationship with ChinaThere is an emerging trend in the economic dynamics



of the relationship between China and Cameroon, whichare actually defined within a broader Chinese policy fra-mework, aiming at accelerating the opening of the Chineseeconomy to the outside world, to introduce foreign techno-logy and know-how as well as to develop foreign trade andsecure political alliances. This new Chinese policy orienta-tion is spelt out in the Chinese government’s “go globalstrategy” meant to encourage Chinese enterprises (prima-rily state-owned enterprises) to invest overseas. Chineseimports are observable on the Cameroon local market,through a great number of Chinese trading companies.However, for this study emphasis is on Chinese invest-ments in the infrastructure, natural resources and agribu-siness sectors.

Cameroon’s national development strategy as detailedin the “Vision 2035” Document and the Growth and Em-ployment Strategy Paper (GESP) provides justification ofhuge investments in the infrastructure sector. China is cur-rently financing at least a dozen projects in that line, ran-ging from the construction of low-cost houses, hydropowerdams, installation of optic fibres, double carriage high-ways, seaports, hospitals, schools and stadia. In the natu-ral resources sector, Chinese firms are involved in iron oreexploration in Kribi, and interested in the exploitation ofnickel and cobalt exploitation in Lomié, following the pur-chase in July 2013 of 60,5% of the USA GEOVIC Miningshares of the Cameroon Cobalt mining project by a theChinese provincial state corporation, Jiangxi Rare MetalsTungsten Holdings Group Company Ltd (JXTC)8.

I.5 The WWF China Shift InitiativeThe World Wide Fund for Nature (WWF) has introdu-

ced the concept of “ecological footprint” to China, in thecontext of the formulation of the 12th five-year plan. Ajoint report9 was published with the People’s Bank ofChina which has endorsed the need to improve environ-mental criteria in lending policies. The report stresses thegrowing importance of commercial banks in China’s effort

8 Paul Pougala, « Thebiggest lies on thecooperationbetween Africa andChina, Lesson 58 ofAfrican Geostra-tegy, July 2013 »http://pougala.org/wp-content/uploads/2013/12/Lecon_58,visited on 29 May2014.



to realize its national sustainable development strategyand provides specific recommendations on environmentalpolicy changes. It draws lessons from international stan-dards in the finance industry such as Equator Principles(EPs), as well as the experience of international banks in-cluding City Bank, Deutsch Bank and HSBC. The reportconcludes that many Chinese commercial banks have esta-blished their own environmental policies, but most havefailed to take concrete action. It thus calls on governments,non-governmental organizations, and the finance sector todrive commercial banks’ commitment into action10.

WWF has led international skill-share tours betweenEuropean, African and Chinese banking communities witha view to deepening the understanding of the opportuni-ties and challenges of sustainable banking. A green financeforum was created to bring together Chinese banks, acade-mics, the government and international financial institu-tions in a view to sharing information and experience onsustainable finance. WWF has cooperated with environ-mental NGOs and with the Chinese government to esta-blish guidelines for overseas timber operations. Dialoguewas thus facilitated between Tanzania, Mozambique, Ca-meroon and China’s State Forestry Administration to im-prove sustainability of the timber trade.

The WWF’s plans for the future are to: (1) contributeto sustainability of China’s demand for natural resourcesthrough raising awareness on ecological footprint and in-forming decisions at central local and sectorial level; (2)support the development of a system to measure “greendevelopment” in China, to help local authorities complywith environmental targets included in China’s 12th five-year plan; (3) engage Chinese and African delegates to en-sure inclusion of environmental sustainability in theForum for China-Africa Cooperation (FOCAC); (4) workwith the China Banking Regulatory Commission (CBRC)and the Ministry for Environmental Protection to developinvestment guidelines in environmentally sensitive sec-tors; (5) partner with Chinese banks to enhance their im-plementation of “green lending” policies; (6) keep


9 WWF - China Cen-tral Bank’s Finan-cial ResearchInstitute, “TowardsSustainable Deve-lopment: Reformand (the) Future ofChina’s Banking In-dustry”, Report onsustainable deve-lopment in China’sbanking sector,September 2008.

10 WWF – ChinaNewsletter, July –December, 2008


supporting Chinese timber companies to ensure that theirforest products from Africa come from responsibly harves-ted and verified sources; (7) study how countries in Africacan gain access to clean energy and production technolo-gies through solutions from China; (8) broker networksand partnerships, build constructive dialogue with strate-gic partners with the greatest impact.

I.6 Justification and objectives of the study1.6.1 Justification

The majority of the projects involving Chinese invest-ments in Cameroon are located in areas of ecological im-portance. Great attention should therefore be placed ontheir potential environmental and social impacts. Thechallenge however is to ensure that these investmentscontribute to poverty reduction and sustainable develop-ment while minimizing environmental degradation. WWFthrough its China for a Global Shift Initiative aims to makethe fundamental drivers of China’s development assistanceincluding trade and other investments environment-friendly. The ultimate purpose is to ensure that long-termbenefits are felt not only in China but also in partner coun-tries like Cameroon. The Forum on China-Africa Coopera-tion (FOCAC) provides an opportunity to discuss thequality of Chinese investments in Africa, through inclusionof environmental protection in the deliberations.

While there have been several reports11 on China-Ca-meroon relations, many of these reports have made littlereference to the environmental and social implications ofthe China-Cameroon cooperation. To engage with China, itbecomes pertinent to understand their current impacts onthe ground. WWF Cameroon Country Programme Officehas initiated a review of the literature on China-Cameroonrelationship in a view to provide the status and trends ofChinese investments in Cameroon. The findings and re-commendations from this critical literature review aremeant to inform WWF’s future engagement with China inCameroon, within the global framework of the “China for a

11 See consulted docu-ments in the annex



Global Shift Initiative”.

1.6.2 ObjectivesThe overall objective of the study is to assess the status

and trends of all Chinese investments in Cameroon (pastand current) looking at their direct implications on the en-vironment. Specifically the aims were to: (1) provide anup-to-date list of current projects with Chinese invest-ments; (2) list planned projects with confirmed or likelyChinese involvement; (3) compile an overview and briefdescription of the development and status of past and cur-rent conflicts associated with Chinese investments; (4) as-sess the literature on China-Cameroon relations and theextent to which it integrates concerns on environmentalprotection, biodiversity conservation and social safeguardsof Chinese investments in Cameroon; (5) examine the po-licy and regulatory framework for infrastructural and na-tural resource (extractive) investments with regard toChinese interests; (6) provide a list of recommendations toinform future WWF engagement with both government ofCameroon and the Chinese authorities on Chinese invest-ments in Cameroon

I.7 Study approach and methodologyI.7.1 General approach

The overall objective of the study was translated intoan assessment of the status and trends of all Chinese in-vestments in Cameroon (past and current), taking into ac-count direct implications on the environment. Thislogically led to the mapping and characterisation of thepattern of these investments, with special consideration ofenvironmental aspects, as regards the challenges, in termsof appraising the consistency and conformity with interna-tional and national standards or expectations. Beyond amere review of the literature on China-Cameroon rela-tions, the integration of concerns on environmental pro-tection was done through field work and verification tocomplement the theoretical approach and create a strongbase for recommendations to inform future WWF engage-



ment with Cameroon government, Chinese Governmentauthorities in Cameroon and Chinese investors and opera-tors.

Practically, in order to assess the extent to which Chi-nese investments in Cameroon integrate biodiversityconservation and social safeguards, this entailed field vi-sits to selected project sites. Without turning the researchinto an environmental impact study, a few project siteswere visited with the objective of getting a sense of howproject authorities handle environmental and social chal-lenges, as well as assessing the perception by communitiesof the management of these challenges.

The following projects’ sites were visited: Yato potablewater station, at the outskirt of the economic Capital,Douala, in Wouri Division (Littoral Region); Mekin damconstruction in the Dja & Lobo division (South Region);Lom Pangar dam construction in the Lom & Djerem Divi-sion (East Region); Nanga Eboko rice plantation in theUpper Sanaga Division (Centre Region); Kribi deep-seaport in the Ocean Division (South Region) and Memve’eledam construction in the Mvila Division (South Region).

I.7.2 Stakeholder and documentation samplingCollaborators for the study were identified at public

and private level, targeting Cameroonian and Chinese Au-thorities as official information sources in a sampling pro-cess that looked at sectorial Ministries, institutions such asthe Cameroon Autonomous Sinking Fund (CAA), the Mi-nistry of Economy Planning and Regional Development(MINEPAT) and the Chinese Embassy or Consular Ser-vices as well as projects authorities. Formal correspon-dences were sent to these potential collaborators andconsultations arranged with key resource persons in theseinstitutions on Chinese investments in Cameroon.

A first stage of consultations resulted in the identifica-tion, localising and broad characterisation of potential sta-keholders and relevant resource persons for the study. Inthat respect discussions and information sharing were ar-ranged with the Director in charge of Emerging Countries



and a few other Officials at the Ministry of Economy, Plan-ning and Regional Development (MINEPAT); the SeniorEconomic Expert of the Kribi Deep-sea Port; the Head ofthe Department for Studies, Projects and Cooperation atthe Ministry of Environment, Nature Protection and Sus-tainable Development (MINEPDED); Officials at the Divi-sion for Cooperation at the Ministry of Public Works(MINTP); the Management of the YATO Potable WaterStation and Officials at the Town Council in Dibombari;Officials at the Cameroon Autonomous Sinking Fund; Offi-cials at the Ministry of Water Resources and Energy(MINEE), Officials of the Ministry of Agriculture andRural Development (MINADER).

A preliminary desk research resulted in identifying anumber of relevant documents that were reviewed in-depth. A list of key relevant stakeholders with their loca-tions was then prepared, drawing from a matrix of Chineseinvestments stakeholders built from the information col-lected during the research: name, location, area of opera-tion, project, contact person, investment type, local workforce, environmental challenge, remarks for recommenda-tion. Time and other field constraints made it difficult toeffectively complete this matrix, but the resulting tablewhen fully completed will serve as a reference database ofrelevant counterparts for collaboration with WWF on envi-ronment, nature protection and sustainable developmentissues.

I.7.3 Field data collection and interpretationField data collection was based on interaction with a

number of stakeholders identified from the preliminarydocumentation review, focusing on reports and publica-tions on Chinese interventions in Africa and Cameroon.The main tool for data collection was a discussion andconsultation guide which was used either for “FocusedGroup Discussions (FGD) or interviews, in addition to tra-ditional means of desk research based upon note taking, inrelation to specific areas of concern. Considering that theultimate purpose was to draw a clear profile of Chinese in-vestments in Cameroon, emphasis was put on aspects cor-



responding to the same entries provided in the matrix ofChinese investments stakeholders, one of the outputs ex-pected from the study.

The study consultation guide thus targeted the follo-wing: stake with regard to Chinese investment; area ofoperation; project description; location; Chinese counter-part and type of collaboration; level of investments orshares; labour force structure; environment and develop-ment sustainability challenges; challenges mitigation ap-proach; recommended resource persons as counterpartsfor environmental issues; documents of reference. Theconsultation guide was made broad in its design so that itcould be used for all categories of stakeholders.



II- CHINESE INVESTMENTSIN CAMEROONI.1 Areas of interest for China

I.2 Projects with Chinese investment in Cameroon

I.3 Mapping Chinese projects in Cameroon

II.1 Areas of interest for China in CameroonPrime Minister Li Keqiang while leading a Chinese

strong delegation of 200 persons at the World EconomicForum in Abuja in May 2014, where China pledged 30 bil-lion US dollars for the creation of an African Fund, had thefollowing words: "Africa has high demand for infrastruc-ture and industrial development, while China has excesscapacity in infrastructure construction and production.The two economies are highly complementary, andconducting mutually beneficial cooperation will definitelyinject greater momentum into our economic and social de-velopment." That statement clearly expresses the areas to-wards which China orients its cooperation with Africancountries. This matches the reality in Cameroon and coin-cides with the national development priorities as describedby the Growth and Employment Strategy Paper (GESP) -infrastructure, education, energy, transportation, healthand telecommunication -.

II.1.1 Chinese Foreign Direct Investment (FDI)The Chinese direct investments relate to cases where

China takes direct interest in businesses or projects in Ca-meroon. In that pattern, financing from Chinese sources isinvested and generally accompanied by operation by a Chi-nese public or private entity, with or without Cameroonnational contribution. Most of the time, the setting is suchthat the Exim Bank provides a loan in an agreement struc-ture, whereby operations are under a Chinese companywhich runs the business or the project. A number of exam-ples exist in that line, particularly in the extractive sector.

Some glaring cases of such investment types include:the SINOPEC’s takeover of ADDAX Petroleum for offshoreoil exploitation in Cameroon; SINOSTEEL for explorationof iron ore permit situated at Mont Mamelles near Kribiand, within the periphery of the Campo Ma’an NationalPark; Yang Chang Logone Development Holding Com-pany, with two onshore oil exploration permits in the Nor-thern part of Cameroon. Other potential Chinese directinvestment could have included the failed attempt by Han-

28 Chinese investments in Cameroon


long Mining to takeover Sundance Resources shares in theMbalam iron ore project in the southeast of Cameroon.

II.1.2 Partnerships and contractsApart from directly engaging in projects in Cameroon,

other Chinese funded projects follow a pattern of partner-ship and contract. For such investment pattern, Chinesecompanies operate in implementing government identifiedprojects, which need not necessarily be financed by China.For example within the context of an African DevelopmentBank funded project (Yaoundé Sanitation Project – PADY)the China International Water and Electricity Corporation(CWE) won the bid to construct the Mfoundi River Canal.

The same company is responsible for the constructionof the Lom Pangar hydropower dam project under the su-pervision of “Coyn and Bellier”12, which is funded througha consortium of international financial institutions (IFIs);the African Development Fund (ADF 17.0%); the Develop-ment Bank of Central African States (BDEAC 10.5%); theWorld Bank (WB 20.8%); the French Development Agency(AFD 22.1%); the European Investment Bank (EIB 11.0%);the Government of Cameroon Counterpart Contribution(18.4%) and others (0.2%)13.

Another case in that pattern is the building of some1500 low-income housing units in Yaoundé, thanks to Chi-nese loans (China Exim-Bank) under a concessionalscheme through an agreement signed in 2010 with the Mi-nistry of Urban Development and Housing. That construc-tion project is part of the government’s Special EmergencyProgramme to build 10,000 homes and develop 50,000plots of land.

II.2 Chinese funded official development projects in CameroonII.2.1 Past projects and achievements

Cameroon and China signed a general trade agreementin 1972. Some of the major realizations from this agree-ment included the construction of the Yaoundé ConferenceCentre inaugurated in 1982 by President, Amadou Ahidjoand the Unity Palace, which is the official resident and of-

12 Cameroon Tribune,15 Février 2011

13 Lom-Pangar Hydro-electric Project Ap-praisal Report, 10November 2011

Chinese investments in Cameroon 29


fice of the President of the Republic. Another grant agree-ment from China was dedicated to the construction of theLagdo water reserve dam in Northern Cameroon, from1978 to 1984. Generally, in the period before 2000,China’s involvement in the economy was at small scale, inisolated initiatives. In the commodity production sectorfor instance, it was limited to the forestry business bysome local actors financially supported by Chinese impor-ting companies. After 2000, the engagement extended toother sectors, especially in the infrastructure sector butalso in sectors like oil and mining.

II.2.2 Some salient projects with Chinese ParticipationChinese presence in Cameroon today can be seen in al-

most all sectors in Cameroon. However some of the salientprojects are in the extractive and infrastructure sectors. Asmentioned earlier, there are some Chinese companies in-volved in the extractive sector – SINOSTEELCAM S.A withan iron ore exploration permit in the South, Yan ChangLogone Holding Development Company S.A for oil explo-ration in the north and SINOPEC ADDAX Petroleum foroil exploitation in the Rio del Rey basin.

In the infrastructure sector, Chinese companies havetaken the lead in the construction of some of the major in-frastructure projects earmarked in the national develop-ment Vision of 2035 and the Growth and EmploymentStrategy Paper (GESP). These include the Kribi Deep Seaand Industrial Port Complex constructed by the ChinaHarbour and Engineering Corporation (CHEC), theMemve’ele, Mekin and Lom Pangar dam projectsconstructed respectively by SINOHYDRO (for Memve’eleand Mekin) and the China International Water and Elec-tricity Corporation (CWE) for Lom Pangar. Chinese com-panies have also taken lead in the construction of some ofthe country’s modern sport infrastructures like theYaoundé multisport complex, inaugurated in 2009 by Pre-sident Paul Biya, which was built by a Chinese companywith a 14 billion FCFA grant from the Chinese govern-ment.



Other projects in the pipeline with already indicated Chi-nese participation interests include the 72 megawattsMenchum Hydropower dam and the construction of Kribi– Lolabe double carriage highway by the China HarborEngineering Company (CHEC). Other awarded projects toChinese companies include the Yaoundé – Nsimelen free-way to be constructed by a consortium of Chinese compa-nies (the China Communications Construction Company,the China Road and Bridge Corporation and SINOHY-DRO), as well as the Yaoundé – Douala double carriagehighway to be constructed by China First Highway Engi-neering Corporation (CFHEC).

Projects at an advanced stage with Chinese participa-tion include the Ngaoundere – Kousseri highway beingconstructed by SINOHYDRO. The Kumba – Mamfe roadwhich is part of the trans-African highway to link Came-roon with Nigeria, estimated to cost about 54.6 billion CFAFrancs and to be constructed by the China Communica-tions Construction Company (CCCC) and the Jiangsu Pro-vincial Transportation Engineering Group.

Apart from road and dams, China has also contributedin modernizing Cameroon’s modern telecommunicationsector. Some notable areas include the building of CTphone networks in collaboration with the Cameroon Tele-communication Company (CAMTEL). In the social andhealth sectors, China has contributed in the financing andconstruction of hospitals like the Douala Gynecological,Obstetric and Pediatric Hospital in Douala. the renovationand completion of the abandoned Ministerial BuildingNumber One in Yaoundé; the Soa-Yaoundé solar panelproject; and the low cost project in Yaoundé and Doualawhich is part of a Government larger low cost housing pro-ject comprising of 1800 housing units distributed, inYaoundé, Limbe, Bafoussam, Bamenda and Sangmelima.

There are other areas that have attracted Chinese in-vestments in Cameroon and one of such sectors is the agri-cultural sector especially in the domains of rice, cassava,oil palm, cotton and rubber. Shaanxi State Farms through



its subsidiary Sino - Cam IKO Ltd has a land bank of10,000 hectares to develop its agricultural operations inmaize, rice and cassava and possibly ostrich breeding inthe Upper Sanaga Division (Centre Region). The companysigned a US$ 120 million investment agreement with thegovernment of Cameroon in 2006 to acquire an existing120 hectare rice farm and develop a further 6,000 hec-tares: 1,000 ha in Mbanjdock for cassava, 2,000 ha inNanga-Eboko for rice, and another parcel of 3,000 ha forcassava. In August 2010 the company was complaining,however, that the land bank to expand its operations wasnot yet transferred14.

Another important Chinese investor in the agriculturalsector in Cameroon is SINOCHEM. The company throughits 51% owned subsidiary GMG Global in Singapore, ownstwo plantations in Cameroon - Sud-Cameroun Hevea SA(80% owned) and HEVECAM SA (90% owned). Hevecamwas already set up near Kribi in the 1970s with supportfrom the World Bank and produces 50,000 tons of rubberon acreage of 41,000 ha. Sud-Cameroun Hevea was set upin 2010 and is developing a rubber and oil palm plantationwith an acreage of 45,200 ha in Dja & Lobo division. InNovember 2011, GMG signed a contract with the govern-ment of Cameroun to invest US$ 400 million in develo-ping this acreage15.

In the oil sector, the Cameroon National HydrocarbonCorporation in April 2009 signed a US$18 million Part-nership Sharing Agreement (PSA) with Yan Chang LogoneHolding Development Company S.A for oil exploration ontwo onshore oil blocks (Zina and Makari) in northern Ca-meroon situated inside the Waza Logone Plain, a RAMSARdesignated wetland.

Jan Willem van Gelder et al., “Biodiversity Impacts ofChina in Africa: Selection of Case Studies” A ResearchPaper Prepared for WWF, PROFUNDO September 2013

In the forestry sector, the only related Chinese com-pany actively involved is the Hong Kong based Sino-French Company VICWOOD Group. This company

14 Jan Willem vanGelder et al., “Bio-diversity Impacts ofChina in Africa: Se-lection of Case Stu-dies” A ResearchPaper Prepared forWWF, PROFUNDOSeptember 2013

15 ibid



operates seven (7) Forest Management Units (FMUs) inCameroon through its different subsidiaries – CFC, SAB,CIBC, and SEBC. These subsidiaries globally cover an esti-mated total area of 429,069 hectares which is equal to7.6% of the total forest concession areas in Cameroon.However, there is undocumented evidence that several in-dependent Chinese individuals are involved in the sectoras timber traders16 .

16 See Putzel, L., As-sembe-Mvondo, S.,Bi Ndong, L.B., Ba-nioguila, R.P., Ce-rutti, P., Tieguhong,J.C., Djeukam, R.,Kabuyaya, N., Les-cuyer, G. and Mala,W. 2011 “Chinesetrade and invest-ment and the fo-rests of the CongoBasin: synthesis ofscoping studies inCameroon, Demo-cratic Republic ofCongo and Gabon”.Working Paper 67.CIFOR, Bogor, In-donesia



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II.2.3 Future projects and prospectsAccording to the Autonomous Sinking Fund (CAA),

responsible for managing Cameroon’s public debt, for thefirst quarter of 2014, several projects were in the pipelineto be funded by China. One of such project is the Yaoundépotable water supply (from the Sanaga river) project. Thefinancing of that project was expected to be signed in2014. It is anticipated that the project will improve thewater production capacity from 300,000 cubic metres to450,000 cubic metres at an estimated cost of 400 billionCFA Francs. The project is expected to be financed at thetune of USD 679.32 million through a non-concessionalloan from the China Exim Bank.

Exim Bank is also expected to finance, through aconcessional loan estimated at about 192.91 billion CFAFrancs, the construction of a 38.5 km highway betweenKribi and Lolabé. In addition, Exim Bank is expected to fi-nance the construction of 1050 housing units for Came-roon’s military personnel. The total amount of the loan isestimated at RMB 1.26 billion (USD 200,6 million) andthe total cost of this project is estimated at RMB 1.07 mil-lion (USD 171.2 million).

Other potential projects in the pipeline to be financedthrough financial assistance from China include the Kribi–Campo road estimated at 47 billion CFA Francs, the Ba-menda ring road in the Northwest Region estimated at200 billion CFA Francs, the Obala–Batchenga-Nanga–Eboko–Bouam road (Lots three and four) at an estimated70 billion CFA Francs and the rehabilitation of the Lagdohydroelectric dam in the North Region at an estimated 38billion francs CFA.

II.3 Mapping Chinese projects in CameroonII.3.1 Sectorial and Geographical distribution

While Chinese funded projects and investments are re-latively spread over the national territory, they are notablyconcentrated in the Littoral and South regions. In theSouth region for instance, one of the major project is the



Kribi deep sea and industrial port complex being construc-ted by CHEC. In the South as well as in the Central Re-gions, there are some major funded Chinese projects in theagro-industrial sector.

II.3.2 Relevant stakeholders in projects with Chinese investmentsThere are a lot of misconstrued conceptions on Chi-

nese related investments making it difficult sometimes toidentify the appropriate stakeholders. These misconcep-tions are generally due to the lack of openness, in relationto some of such investments. This may even be more so inareas likely to incur some environmental and social impli-

Geographical Mainstreaming of Chinese investmentsChinese investments’spread in Cameroonalongside poverty Inci-dence

Source : ECAM 3 andAuthor

NB:

The figures in brackets in-dicate the incidence of po-verty in the Region, ascalculated by the NationalInstitute of Statistics, fol-lowing the standard usedby the UN for the evalua-tion of the MillenniumDevelopment Goals(MDGs). In the AdamawaRegion for instance, 52.9% of the population liveunder the poverty line.



cations. Chinese companies generally criticized (probablywrongly), for not paying much attention to these aspects intheir operations. For a more appropriate collaborationwith Chinese investments stakeholders or companies, it isimportant to firstly understand their modus operandi,which is often aligned with a pre-defined official guidelinefrom the Chinese Government.

Therefore it is important to ensure that collaborationis aligned with such an identified and pre-defined Chineseofficial guideline. This, in a confidence building approach,could help facilitate collaboration with Chinese operatorsin Cameroon. In the context of this study, the followingwere identified as major interlocutors or stakeholderswhen dealing with Chinese related investment and deve-lopment assistance:

The Government of Cameroon with focus on the followingkey ministries:

- Economy, Planning and Regional Development (MINE-PAT);

- Public Works;

- Mines, Industry and Technological Development;

- Energy and Water;

- Environment, Nature Protection and Sustainable Deve-lopment;

The Chinese Embassy in Cameroon:

- The Political and Economic Office through the com-mercial attaché;

The Chinese companies:

- Companies with direct investments;

- Companies implementing pre-defined Governmentprojects.

The Cameroon Ministry of Economy, Planning and Re-gional Development (MINEPAT), especially through theDivision in charge of Emerging Countries is a key entry



point to facilitate engagement with the Chinese stakehol-ders. This Service is one of the official contact points withChinese stakeholders (both public officials and investors)and is responsible for managing or facilitating economiccooperation ties between Cameroon and China. It works inclose collaboration with the Economic and CommercialCounsellor’s Office (directly under the control of the Mi-nistry of Commerce – MOFCOM of China) at the ChineseEmbassy.

With regard to the specific collaboration on environ-mental issues related to the implementation of Chinese in-vestments and other related projects, a good analysis ofthe managing structure of each Chinese operator or com-pany would suggest the best way through. But it is essen-tial to target the highest hierarchy, through their nationalkey counterpart or partners i.e. the project owner or theproject supervising partner, when trying to connect withrelevant resource persons within a Chinese structure. Inthe case of the Lom Pangar Project, for instance, theconstruction firm (CWE) has a Chinese Director in chargeof environmental issues, assisted by a Cameroonian De-puty-Director. That structuring pattern is common in Chi-nese companies and applies to other issues thanenvironment protection. A number of Chinese companiescould be interesting for WWF to engage with, on environ-mental protection matters17.

17 See table in theannex that includessuggestions on how

to find a point ofcontact in these

companies.



III- ANALYSIS OF CHINESE INVESTMENTS IN CAMEROONIII.1 Relevance to national strategy

III.2 Environmental considerations

III.1 Relevance to national strategyIII.1.1 Overall relevance

The current era of Chinese assistance to Cameroonstarted in a context where the country had chosen a clearstrategic line for investment allocation, defined in its Po-verty Reduction Strategy Paper (PRSP), in 1997, as “a ne-cessary infrastructural build-up”. In that same period,China’s new cooperation strategy toward Africa was takingshape18, with a format of development assistance to Ca-meroon that includes low interest rates long term publicloans, grants and economic private loans through EXIM-Bank China. The twenty year planning in Cameroon’s na-tional strategy prescribed in the Growth and EmploymentStrategy Paper (GESP) places emphasis on infrastructureconstruction, specifically relying partly on the current Chi-nese option to assist Cameroon in that domain, as well ason partnership with other emerging countries like Brazil,Turkey or India.

In 1997 Cameroon adopted its Poverty Reduction Stra-tegy Paper (PRSP) with infrastructural development asone of the defined areas, which survived after the revisionof the national strategy in 2009. It is during the same pe-riod that China elaborated its new cooperation strategy forAfrica, adopted in 2006, and based on the following gene-ral principles: Sincerity, friendship and equality; Mutualbenefit, reciprocity and common prosperity; Mutual sup-port and close coordination; Learning from each other andseeking common development.

The current pattern of Chinese investments in Came-roon is therefore aligned to both the government develop-ment orientation policy outlined in the Growth andEmployment Strategy Paper (GESP), adopted in August2009 and the general principles outlined in the China Co-operation Strategy for Africa.

III.1.2 Volume analysisWhile it may be difficult to ascertain the amount of

Chinese investments and assistance to Cameroon, espe-

44 Analysis of chinese investments in Cameroon


cially in the private sector, there are however clear indica-tors of the role being played by China in Cameroon’s natio-nal economic development. These range from roadconstruction through fishing, poultry farming, confectio-neries, catering, medical care, forestry and retailing of awide variety of goods imported from China.

The total volume of Chinese investments in Camerooncan approximately be computed through Chinese grants,concessional and non-concessional loans figures obtainedfrom the Cameroon Autonomous Sinking Fund (CAA),which is responsible for the management of Cameroon’spublic debts. Most of this assistance has been channeledthrough China EXIMBANK. Chinese investors are gene-rally involved in specific foreign business promotionschemes set up by the government of China19, following acommon pattern for Africa. The major part of Chinese fi-nancial assistance, if not all or more, could thus corres-pond to Chinese investments. Based on that assumption,for the period 2007 to 2013, the total volume of Chineseoverall investments in Cameroon could be estimated atabout USD 2.2 billion with an annual average of USD 360million (see table).

The figures in this table are tabulated from the detailedfigure in the table in the next page that give details of Chi-nese financial assistance as registered by the CameroonAutonomous Sinking Fund (CAA) for the period 2007-2013.

18 Chinese Ministry ofForeign Affairs,China's African Po-licy, 2006

19 Marie-Hélène Poz-zar, “L’aide chinoiseà l’Afrique : la diffi-culté à penser la no-tion d’aide chinoiseau développement”,October 2009

Table 2:Volume

analysis of Chi-

nese invest-

ments in

Cameroon

(2007-2013)

Source: Author, tabu-

lated from CAA fi-

gures on the period

(2007-2013).

YEARCHINESE

INVESTMENTS USDTOTAL CHINESE

ASSISTANCE USD% OTHERS USD %

2007

2009

2010

2011

2012

2013

TOTAL

Annual average

83,360,000

193,980,000

67,920,000

1,105,846,018

994,608,715

472,990,000

2,918,704,733

486,450,789

27,360,000

193,980,000

53,920,000

1,036,566,018

651,100,000

196,640,000

2,159,566,018

359,927,670

33%

100%

79%

94%

65%

42%

74%

56,000,000

0

14,000,000

69,280,000

343,508,715

276,350,000

759,138,715

126,523,119

33%

100%

79%

94%

65%

42%

74%

Analysis of chinese investments in Cameroon 45


EXIM CHINA

EXIM CHINA

EXIM CHINA

EXIM CHINA

EXIM CHINA

EXIM CHINA

EXIM CHINA

EXIM CHINA

EXIM CHINA

EXIM CHINA

EXIM CHINA

EXIM CHINA

EXIM CHINA

EXIM CHINA

CHINA

CHINA

CHINA

CHINA

CHINA

EXIM CHINA

EXIM CHINE

CHINA

EXIM CHINA

CNY

CNY

USD

USD

CNY

CNY

USD

CNY

USD

CNY

USD

USD

USD

EUR

CNY

CNY

CNY

CNY

CNY

CNY

CNY

CNY

USD

350,000,000

171,000,000

52,050,000

97,130,000

280,000,000

337,000,000

14,000,000

450,000,000

423,000,000

433,000,000

541,566,018

482,800,000

168,300,000

252,450,000

4,500,000

100,000,000

70,000,000

100,000,000

5,500,000

1,059,000,000

430,000,000

215,000,000

155,550,000

2007

2007

2009

2009

2009

2010

2010

2011

2011

2011

2011

2012

2012

2012

2013

2013

2013

2013

2013

2013

2013

2013

2013

31/1/2007

13/11/2007

8/7/2009

5/11/2009

5/11/2009

7/1/2010

24/3/2010

12/1/2011

12/1/2011

21/7/2011

3/5/2011

8/3/2012

19/7/2012

24/5/2012

11/6/2013

11/6/2013

11/6/2013

11/6/2013

11/6/2013

9/9/2013

11/11/2013

11/11/2013

29/10/2013

20

23

31

20

20

20

20

19

20

33

15

20

20

10

-

-

19

19

-

20

20

-

20



1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

Loan agreement to be trans-fered to CAMTEL

Douala potable water supplyproject

Optical fibre transmissionbackbone project

Douala Potable Water SupplyImprovement Project

Bafoussam and Limbe Sta-dia Construction Project

Mekin Electric HydropowerConstrucrtion Project

Matgenie equipment rene-wal project

1500 Social Housingconstruction project

Kribi Deepsea port construc-

tion project

Cameroun e-Post Project

Memvele HydropowerConstruction De Project

Yaoundé Douala Highway

National broadcast networkproject

Military equipment supplyproject

Grants to forestry Institu-tions

Technical cooperation agree-ment

Various projects

Various projects

Conseils techniques et miseen œuvre de l'HGOPY,Buéa

et Mbyo

Potable water supply in thecities of Bafoussam, Ba-

menda, Kribi et Sangmelima

Project for the purchase of(02) aeroplane MA60

Project for the purchase of aMA60 aeroplane

Telecommunication emer-ging system project

N°FUNDING

SOURCESUBJECT CURRENCY AMOUNT YEAR

DATE OF

SIGNATURE

NUMBER

OF YEAR

Table 3: SYNTHESIS OF CHINESE ASSISTANCE TO CAMEROON SINCE 2007

So

urc

e: C

am

ero

on

Au

ton

om

ou

s S

ink

ing

Fu

n

III.1.3 Economic impact analysisDuring the World Economic Forum in Abuja in May

2014, in a key note address, the Chinese Premier Li Ke-qiang reiterated the importance of transport infrastruc-tures and pledged China’s support to improve on Africa’stransport infrastructure to connect countries and cities.Some of the earmarked infrastructures include the buil-ding of high-speed railways, expressways and civil airtransportation. Considering the current Chinese supportin domains such as telecommunication and power genera-ting facilities, it is believed that such development assis-tance will contribute in improving Africa’s economy. Butthis depends very much on the management structure ofeach country21 .

The average US$360 million annual Chinese invest-ments in Cameroon would necessarily have direct and in-direct impact on the national economy. Such level ofinvestment is likely to have considerable impact on thecountry’s national economy in terms of job creation orhousehold incomes improvement, and thereby contributeto poverty alleviation. The Lom Pangar dam constructionproject, for instance, was expected to create 800 directjobs, same as would the other projects of the same kind(Mekin, Memve’ele, Mentchum) even though in differentproportions. The other categories of infrastructureconstruction projects involving Chinese investments alsohave a potential for job creation. The scope of this studydid not allow calculation of the real scale of the direct in-come effect on the people, but there is a logical possibilitythat such effect exists.

It is also expected that other Chinese funded projectslike the one carried by SINOCHEM, current owner of tworubber plantations in Cameroon, with over 5000 em-ployees, will have similar impacts on the economy; impro-ving households’ incomes and alleviating poverty. Inaddition, considering that the company is one of the lar-gest state-owned company in China and the 168th largestcorporation in the world, it could bring an added value to



20 The item “VariousProjects” corres-ponds to amountspledged by Chinawithout targetingspecific project atthe time when theagreement is si-gned. The recipientcountry (Came-roon) will allocatethe money accor-ding its prioritiesafterward.

21http://paepard.blogspot.be/2014/05/china-announces-30bn-fund-for-africa.html(consulted on May9, 2014)

Cameroon’s international trade.

Apart from direct impacts on the population such asproviding employment and improving household incomes,it is expected that the different Chinese funded or imple-mented projects will consistently contribute in the coun-try’s industrialization. Looking at the six pillars of theagenda for structural transformation, in the African Com-mon Position (CAP)22 , drawn from the “African UnionAgenda 206323 , this would be essential for the kind ofstructural economic transformation, inclusive growth andsustainable development that Africa seeks to achieve.Sound cooperation with China on science, technology andinnovation could in fact result in technology transfer andboost industrialization, which the African Union reiteratedas a regional imperative and a key area for which Africaneeds to reinforce its collaboration with China.

The Lom Pangar dam for instance which is beingconstructed by the CWE is expected to bring an additional170 megawatts by improving the generating capacity of thedownstream dams on the Sanaga River (Nachtigal for 280megawatts and Song Mbengue dam for 900 megawatts).Such additional energy on the national grid will help to re-duce the energy deficit that has plagued the country forlong, and provide the much needed energy to industries.

The Kribi Deep Sea and Industrial Port Complex(KDSPC), another Chinese financed and constructed pro-ject is going to be the country’s largest port, capable of re-ceiving the world’s largest ships. The project has beenpresented as one of the linchpin of the country’s develop-ment strategy, which aims at reducing poverty to less than10 percent by 2035, and increasing the economic growthrate to 10 percent by 2017. But the project itself has attrac-ted criticism not only for its social and environmentalrisks, but also for what some CSOs see as questionable cor-relation between the project and the much heralded po-verty reduction objectives. Never-the-less, a residentialcommunity of more 100,000 inhabitants is expected to de-velop around that port complex by the year 204024 .



22 African CommonPosition (CAP) forthe Post 2015 Deve-lopment Agenda,AU Commission,February 2014. TheCAP is the referencefor the AfricanGroup at the UnitedNations in the ne-gotiations on thePost 2015 Sustaina-ble DevelopmentAgenda.

23 In 2013, the AfricanUnion adopted adevelopment stra-tegy strategic forthe next 50 yearswhich is embeddedin a document : the“African UnionAgenda 2063”

24 Cameroon “Vision2035”, WorkingPaper, Republic ofCameroon: Ministryof the Economy,Planning, and Re-gional Development(MINEPAT), 2009.

Considering the high level of poverty in Cameroon(around 40% in 2012), for many Cameroonians, it may notseem obvious to determine their direct economic gainfrom the Kribi Deep Sea Port or any of the other projectshighlighted in this study. But yet, as indicated in “Vision2035”, it certainly will somehow improve their lives indi-rectly. For some critics, it may be considered incongruousto build a multi-million dollar Port complex in a countrywhere many people lack access to clean water and ade-quate medical resources. But if this kind of project is ma-naged well, it could bring the much heralded benefits, willattract foreign investments, increase domestic resourcemobilization, through the tax system, and thus improvethe State’s capacity for delivery of development services tothe population. Above all, it is likely to generate secondaryand tertiary economic activities through the developmentof Small and Medium Size Enterprises (SME).

The extractive industry (mining, oil and gas) relatingto Chinese investments in particular will also be of benefitto the Cameroon economy. It will provide additional in-come, even though it can be argued that by their very na-ture extractive industries are not sustainable26 , becausenatural resources will eventually run out. Sustainability isa complex notion indeed, as it integrates risks relating toissues of pollution, legacies to future generations, waterscarcity, climate change, and the situation of local commu-nities. But it is possible in the mining sector and would de-rive from the government’s ability to efficiently allocateresources and reinvest related national income in sustai-nable development projects. Economic gains can thus lo-gically be expected from the Mbalam and Kribi iron oremining.

III.2 Environmental and social considerationsEvery investment project has its social and environ-

mental externalities. China’s investments, as that of anyother developed countries operating in countries like Ca-meroon, could have significant social and environmentalimpacts. As mentioned earlier, most of the Chinese funded



25 Fisken, Charlotte,"Vision 2035 and

the Kribi Deep Sea-port: An analysis of

the Economic Im-pacts for Came-

roon" (2013).Independent Study

Project (ISP)

or implemented projects in Cameroon are in areas consi-dered as ecologically fragile. China’s 12th five year plan(2011–2015) places emphasis on the challenges of promo-ting economic development without sacrificing the envi-ronment. It therefore seeks methods to promote economicdevelopment while protecting the environment.

In Cameroon, as required by the 1996 EnvironmentalManagement Framework Law and its 2005 implementingdecree amended in February 2013, all projects with poten-tial environmental and social risks are to be subjected toEnvironmental Impact Assessment (EIA). The designing ofalmost all these projects, at least those involving Came-roon’s Pubic Authorities, should thus integrate an Envi-ronmental Impact and Social Assessment (ESIA), anEnvironmental and Social Management Plan (ESMP), Spe-cial Environmental and Social Conditions (SESE), and aCompensation and Resettlement Plan (CRP). ). In addi-tion, these mechanisms are to be implemented along withRegional or Community Development Plans (PDR / CDP).

At least for all the public projects funded or implemen-ted by Chinese companies that were examined during thisstudy, legal environmental exigencies were complied with.The Memve’ele Hydropower Dam project, funded by theChina Exim bank, and implemented by SINOHYDRO, forinstance, complied in full with the legal requirements.Apart from the ESIA, the ESMP, and the Compensationand Resettlement Plan (CRP), the Project has an accompa-nying social and development plan (PASEM). While themajor challenge remains a full compliance by Chinesecompanies of these different tools to ensure an appropriatemitigation of environmental and social risks, some of suchtools like the PASEM are not dependent on the Chinesecontractor but on the contracting public authority which inthis case is the Ministry of Water and Energy.

III.2.1 Specific environmental considerations about Chinese projects inCameroon



Since the 1992 Earth Summit, sustainable develop-ment has become a reference for policy makers. Its impor-tance is now acknowledged at all level of the global society,and achieving it depends upon a balance between econo-mic, environmental and social objectives. This applieseven to private business as part of the sustainability oftheir core activities, and their corporate social responsibi-lity (CSR). Nowadays the commitment to environmentalsustainability is a performance factor. Specific institutionsare developed in many countries as well as new legisla-tions, policies or planning mechanisms, following ratifica-tion of Multilateral Environmental Agreements (MEAs).

As indicated in the WWF brief on 31 May 201326 , Go-vernments should require companies to produce andadhere to Biodiversity Action Plans that identify, monitorand address any risks to wildlife and habitats. Companiesshould in fact understand the local environment in whichthey operate. The operation typology of Chinese projects inCameroon which relates essentially to large scale infra-structure construction, involves clearing large portions ofland and creating access roads, with very high risks of ope-ning important migratory corridors, or of connectivity wi-thin ecosystems, as well as of new opportunities offered topoachers.

The Lom Pangar dam construction project located inthe East Cameroon is close to the Deng Deng forest reserveand considered a sensitive example that meets all catego-ries of risks, with the expected sinking of an importantpart of that forest, when the dam construction is comple-ted and it is operated. Additionally, the Memve’ele andMekin dam construction project as well as all the miningprospects in the southern and eastern part of Cameroonare a serious ecological threat. They are in the proximity ofthe gazetted national parks like the Campo Ma’an, and theBoumba Bek National Parks.

Another recurrent issue with these projects is the handlingof social related aspects like workers’ rights and relations-hip with local communities. In the cases of the



26 WWF: (Briefingnotes) How China

and Africa canachieve environ-

mental and socialresponsibility in the

mining sector

Mekin and Meve’ele dam or the Kribi deep-sea portconstruction projects, in the South Region of Cameroon,the local work force does not find Chinese conditions ofemployment attractive enough to compel them abandontheir traditional fishing or agricultural activities. Theconsequence of not getting localized labour has led to out-sourcing from other areas, especially where the incidenceof poverty is quite high, like from the Far North andNorthwest regions with poverty incidence rate of 65% and51% respectively27 .

This has led to the establishment of new communitiesin the different project location areas, with the potential ofgenerating social conflicts between the migrated and thelocal communities. Apart from these social conflicts, thefear expressed by some of the locals in Mekin is that oncethe dam goes operational, it shall destroy some of the im-portant vegetal species and introduce invasive fish speciesinto formerly undisturbed areas.

The Government of Cameroon, while acknowledgingthat Chinese investments generate social and economic be-nefits, considers however that the changes attached tothese may also, if left unchecked, have a negative impacton the environment as well as on local communities. Inthat respect, the Environmental and Social Capacity Buil-ding Project for the Energy Sector (PRECESSE) was esta-blished in February 2009, with the support of the WorldBank. That multi-sectoral project, involving both the Mi-nistries in charge of Environment and Social Affairs,aimed at taking into account environmental and social as-pects during the implementation of major developmentprojects.

The Ministry of Environment, Nature Protection andSustainable Development (MINEPDED) normally deliversa certificate of compliance to development projects ow-ners, after examination of the various environment mana-gement documents of the considered projects, resultingfrom the related Environmental Impact and Social Assess-ment (ESIA). Subsequently during the projects implemen-



27 Martin Tsounkeu-Pascal Kengne, Ca-meroon NationalPosition Report onthe Post 2015Consultations,UNDP-MINEPAT,2013

tation period, the Ministry (MINEPDED) monitors the ac-tivities to make sure that there is compliance with the En-vironmental and Social Management Plan (ESMP) andwith the Special Environmental and Social Conditions(SESE) where applicable.

China on its part has issued environmental protectionguidelines for Chinese companies to follow when investingoverseas, calling on them to pay more attention to pollu-tion and its impact on local communities. The guidelinescall on companies to follow local environmental laws, as-sess the environmental risks of their projects, minimizethe impact on local heritage and draft plans for handlingemergencies28 . Never-the-less operations by Chinese com-panies in very sensitive ecological areas raise a big chal-lenge for environmental management and natureprotection, because compliance is generally not necessarilyput at the forefront by these operators whose main priorityis the realisation of technical project outcomes.

For instance, for the Lom Pangar dam, the Chinesecompany constructing the dam began integrating environ-mental and social concerns in its field operations, onlyafter threats from the project supervisory authority EDC tohalt the project. Following a site visit made by the supervi-sory authority in October 2013, thirteen recommendationswere made to the Company with regard to environmentalprotection concerns. These recommendations identifiedduring an early field visit in June 2013 by the World Bank,were specifically made to improve: the wastes collection,transport and treatment system; wastewater analysis withconveyance of results to the Ministry in charge of Environ-ment; the maintenance of hazardous waste register; andsanitation in the workers’ housing.

III.2.2 Legal framework relating to Chinese investments in Cameroon At least 37 African countries including Cameroon have

made provisions on environment in their constitutions, inkeeping with the Rio Convention (1992) and the KyotoProtocol (2007), and particularly with agenda 21 of Rio.Many have gone further to adopt environmental frame-



28 Bloomberg, Beijing,Url:http://bloom.bg/13qjRfs, 28 February2013.

work laws. An environmental framework law may be defi-ned as an ordinary law, purpose and scope of which relateto environmental management problems and protection.It deals with all the enforcement prospects and the inte-gration of environmental management approaches in allsectors. It is a legal instrument that encourages centraliza-tion and coordination of various interventions pertainingto "environment protection".

An environmental framework law is the formal way toget an integrated environmental management system, bycollecting often autonomous regimes for each sector, in ageneralized system with interfaces between sectors. In agiven national context, it is meant to achieving a legal inte-gration of the environmental management approach. Sucha law presents a set of measures relating to the practicalapplication of integrated environmental management poli-cies in a given country29 .

In the case of Cameroon, Law No 96/12 on 15 August1996 applies for environmental management. Environ-mental protection aspects are elaborated also in other legalinstruments such as: the 1992 Labour code; the 1994 fo-restry, fauna and fishery law; the 1999 Petroleum Code;the 2001 Mining code; the law on safety regulations gover-ning modern biotechnology; the law No. 98-005 1998 onthe laying of water regime; the law No. 78-23 on the pro-tection of national parks; the law No. 89-27 on toxic anddangerous waste; the 2003 law on plant protection pro-ducts; the act No. 2001-014 on seed activities; or the 2003act on activities in the fertilizer sector.

III.2.3 Conflicts relating to projects with Chinese investmentThe areas of potential contention with regard to Chi-

nese investments in Cameroon are: (1) employment condi-tions offered by Chinese companies; (2) interaction withpeople living in the areas where the projects are imple-mented; and (3) environmental issues.

III.2.3.1 Employment conditions offered by Chinese companiesChinese companies operating in Cameroon are gene-



29 Emmanuel G. Mou-tondo, « Les lois-ca-dresenvironnementalesdans les pays franco-phones d'Afrique ».https://portals.iucn.org/library/efiles/html/EPLP-069/sec-tion7.html on18/06/2014

rally blamed for preferably employing labour from Chinaand imposing difficult working conditions on local wor-kers, with low wages. This allegation is refuted by Chinesecompanies who argue that all workers are subjected to thesame standards which correspond to the normal standardback in China. They believe that such allegations could berelated more to the cultural differences. This is further ac-centuated by the language and communication difficultiesbetween the Chinese contractor and the local employees.Majority of the Chinese employers have little mastery ofany of the official languages in Cameroon (English andFrench).

Technical documents are even sometimes only in Chi-nese and it takes too much time and effort for the Chineseemployers to explain the content to the local workers.These communication difficulties sometimes create realtension. This finding was confirmed during conversationswith a sample of local workers in some of the project siteslike Mekin, Memve’ele, Kribi, Yato and Lom Pangar pro-ject sites.

On the recruitment of workers locally to work on thedifferent project sites, the Cameroon Government as wellas some of the Chinese companies is making efforts to en-sure more locals are employed as workers in Chinese im-plemented projects. In June 2014, for instance, anemployment protocol was signed between the NationalEmployment Fund (NEF) and the China InternationalWater and Electricity Corporation (CWE) which isconstructing the Lom Pangar dam. One of the provisionsof this protocol is that the NEF during the constructionphase of the dam is to supply labour for an equivalent ofover 3500 local workers. These shall be mostly low andmiddle level technicians (carpenters, welders, bricklayersand truck drivers). To facilitate the implementation of thisprotocol, the NEF has opened a pilot office at the LomPangar dam construction site to ensure that the Chinesecompany is served with workers immediately the needarises.



III.2.3.2 Interaction with people living in the areas of projects imple-mentation

There is a direct interaction between the different Chi-nese funded or implemented projects and the local com-munities. Considering the communication difficulties andcultural differences, the relationships between these pro-jects and the local communities could be misinterpreted.While there is no denial that these projects have had somenegative impacts on the local population, like involuntarydisplacement, such impacts, especially in government ledprojects and implemented by Chinese contractors are wi-thin the purview of the government. The government istherefore responsible for resettlement and compensationof these communities if they are moved from their originalsites. Nearly all the projects examined for this study (LomPangar, Memve’ele and Kribi seaport) for instance havebeen subjected to problems of compensation and resettle-ment. While these problems are not directly associatedwith the projects contractors, the non-resolution has hadserious implications on the projects’ progress.

There has been serious controversy especially aroundcompensation measures for local communities affected bythe Kribi deep seaport project. In the absence of appro-priate measures and in the absence of information, thelocal communities easily blame the Chinese contractor forall of their mishaps. This in most of the projects examinedis one of the causes of tension and conflict between thelocal communities and the Chinese companies. The surveyconducted for this study through focused group discus-sions in a few of the communities around some of the pro-ject sites, there was serious resentment from thepopulation with regard to the manner in which the pro-jects were implemented.

The Chinese companies and their workers thereforebecome easy target for the populations to vent their anger.In Mekin for instance, there were resentment that somecommunities remote to the potential impacts of the projectwere awarded more in terms of monetary compensation,



whilst some others in the vicinity of the dam constructionsite were not even identified as potential recipients. Thesame type of complaint was expressed in Meve’ele andLom Pangar, and this has created tension between thecommunities. It is important to note that the identificationof beneficiaries for compensation is a government led pro-cess, as well as effective compensation. There is no denialthat during such exercises, corrupt practices easily becomeabound. The National Anti-Corruption Commission in its2011 report on the state of corruption in Cameroon remar-ked this, with regard to the amount of compensation to beawarded to communities and persons to be affected by theKribi deep Seaport project.

While these projects have been presented as overar-ching development opportunities with social benefits, forthe local communities, there is fear among the communi-ties that this may not be the case. A good illustration is theYato Potable Water Project. The two phases of the projectwhich begun in 2009 has been largely financed through aloan from Exim Bank of China (first phase 11 billion CFAand the second phase of 44 billion francs CFA. It is a150,000 cubic metres capacity water scheme that is expec-ted to pump, by the end of 2014, further 100,000 cubicmetres of drinking water to Douala. Unfortunately, com-munities around the water station in Yato do not have ac-cess to drinking water. While the provision of such anecessity is not the responsibility of the Chinese company,it could be a potential source of conflict with the local com-munities.

III.2.3.3 Environmental issuesEnvironment issues are a contention factor with regard

to Chinese investments related projects. Non-complianceto the environmental rules may lead to litigation betweenthe Chinese implementing company and the project owneror other stakeholders in the project, including fundingpartners. All stakeholders have the right to refer to the en-vironmental regulation framework to ask for compliance,like in the case the Lom Pangar project when the World



Bank and other funding partners complained and subse-quently obtained adjustments from the Chinese construc-ting company.

III.2.3.4 Field case presentations resulting from the field visit

The Lom Pargar Dam Construction Project

The Lom Pangar dam project is located in the East Re-gion of Cameroon, Lom and Djerem Division. Its site isfound on river Lom, about 4 km downstream of itsconfluence with the Pangar, 13 km upstream of itsconfluence with the Sanaga, and 120 km north of the townof Bertoua, the Capital of Region. It includes: a 45m highdam and a reservoir covering a 540 km²; the Tourakébridge; a hydropower plant with a 30 MW capacity; an in-terface between the reservoir and the Chad-Cameroon pi-peline, a section of which will be under water after thefilling of the reservoir; a set of access roads and tracks; atransmission line of 90 kV linking the power plant and theinterconnected network in Bertoua (105 km); and equip-ment for the implementation of the ESA recommendationsof the project.

The area of influence of the project extends from itsimmediate vicinity where the impacts are concentrated, tothe Atlantic Ocean: The Social and Environmental Mana-gement Plan (SEMP) of the project covers the followingareas: (1) erosion and sedimentation control; (2) loggingmanagement; (3) career management; (4) water qualitymonitoring; (5) management of and emergency responseto chemicals and other toxic and dangerous products; (6)control of dust and other air emissions; (7) noise control;(8) management of cultural heritage and archaeologicalassets; (9) landscape plan and reforestation; (10) wastemanagement; (11) management of risks related to the fil-ling of the dam’s reservoir; (12) environmental and socialtraining (13) management of construction traffic and siteaccess; (14) construction and management of accommoda-tion amenities; (15) staff health management; (16) dam sa-



fety; (17) planning and sustainable management ofconstruction sites; (18) Operational Procedures Manual.

From the field observations, it appears that there is amedical centre and waste management, wastewater treat-ment were improved after the 2013 site inspection by do-nors that issued 13 recommendations. Traffic and accessto the site is secured; speed limitation on the way to theproject site is effective and the road is well maintained.Employees work with appropriate equipment. Security onthe site is provided by the Cameroonian Defence Forcesand a private security company, the living conditions ofthe workers have somewhat been improved, but a numberof challenges remain, regarding the efforts that should bemade in reducing promiscuity, in order to improve their li-ving conditions.

The Company’s Environmental and Social Manage-ment Plan (CESMP) of the project covers: fight againstpoaching (Joint Patrols: Security; health and hygiene;fight against erosion; and site re vegetation. The corres-ponding activities are likely to be subcontracted to localstructures, the objective being to ensure that the social andenvironmental requirements are fulfilled. Collaborationwithin the Environmental and Social Specifications (ESS)covers: reparation of all monitoring documents (periodicreports); communication on site following the communi-cation plan between the Project Owner and the Contractor(provided by an Environmentalist. The contractor (CWE)has a Chinese Health, Safety Environmental Manager onsite, assisted by local deputy.

The major challenges concern: environmental manage-ment of water retention, especially with regard to timberlogging and fishing; preservation and exploitation of otherexisting resources (mine); evaluation of residual risks rela-ting to mining operations, by the Ministry of Mines andIndustry and Technological Development (MINMID); ar-chaeological rescue for which a MOU was signed betweenthe project owner (EDC), the Group VABIOCE - WBC-AMS and the Ministry of Arts and culture (MINAC). An



Operational Technical Unit (OTU) is responsible for thefight against poaching with the participation of: ATN tomonitor the park; the Ministry of Forestry and Wildlife(MINFOF); the Cameroon Oil Transportation Company(COTCO), the National Security Forces (Army / Police);and local communities represented by nine ParamountChiefs.

Images from the Lom Pangar Project site



Lom Pangar dam

Waste filtering units

The Mekin Hydropower Dam Construction Project

The construction site of the Mekin hydroelectric damis in the Southern Region of Cameroon, in the Dja andLobo division, District of Meyomessala, Mekin Village (asmall location of nearly 600 residents). The project is de-veloped over the Dja River, for the construction of a 15MW hydroelectric dam, in a view to reinforcing the Southinterconnected grid and supply power to all the eightcouncil areas in the Dja and Lobo Division.

The main social issues regarding the project that ap-peared from field observation relate to impact on faunaand flora. They also concern population displacement withfor example a particular village called Nyabisu to be relo-cated, the compensation process and risks of a possiblerupture of the dam. Compensation of the project site andvicinity was made, but there are complaints in the Mekinvillage that some people with no connection with the vil-lage received significant compensation. The relationshipbetween the contractor and local staff are sometimestense, over working conditions including onsite accommo-dation and communication with Chinese company autho-



Showing the newlyreconstructed village

of Lom Pangar.

All the area to the leftwill be flooded com-

pletely by the LomPangar reservoir

rities. In terms of accommodation, for instance, local wor-ker complain that their Chinese Colleague are poweredround the clock, whilst Cameroonian workers have lightonly from 6pm 6am.

There are no significant signs of conflicts between resi-dents and Chinese workers who generally live in isolationin their camp. Nevertheless, the inhabitants of the Mekinvillage believe that these new neighbours do nothing forthe development of their village. Young people in the sur-roundings villages prefer farming or fishing instead ofgoing to work on the dam construction site, because theybelieve that wages are too low, and the jobs offered are notdecent enough. Most of the local workers for the projectcome from other regions of Cameroon, particularly the FarNorth and the North West Regions. Local residents arealso concerned that there is no indication that they will be-nefit from electric supply from the dam. They see the highvoltage lines that have already been built, and wonderwhether medium and low voltage will come any soon.

Images from the Mekin Project site





IV - CONCLUSION AND RECOMMENDATIONS

IV.1 Conclusion

IV.2 Recommendation

- WWF engagement with Cameroon Government

- WWF engagement with Chinese authorities

- WWF engagement with other Chinese investmentactors


66 Conclusion and recommandations

IV.1 ConclusionChinese investments in Cameroon are mainly concen-

trated in infrastructure projects such as transport (ports,roads,) telecommunication, sports (stadia), and social(hospitals, and provision of drinking water). Most of theseprojects are situated in areas considered ecologically pris-tine and could have serious negative environmental andsocial impacts in the absence of well-defined mitigationmeasures. While these projects are aligned to Govern-ment’s poverty alleviation policy highlighted in the Growthand Employment Strategy Paper (GESP), a net positiveimpact for the local communities will require an effectivemanagement of value addition.

The challenge is to ensure that operations by Chinesepartners are environment-friendly. Even though the Ca-meroonian legal framework provides for environmentalmanagement instruments, under the control of the Minis-try of Environment, Nature Protection and SustainableDevelopment (MINEPDED), full compliance by Chinesecompanies is still an issue of great concern. It is crucial toensure collaboration with relevant contacts within the dif-ferent Chinese companies in Cameroon on environmentalimpact management. However, such collaboration is madedifficult for non-state actors and sometimes even for pu-blic institutions, due to insufficient trust and absence of aconfidence building mechanism with the Chinese compa-nies. It may be easier to attain such collaboration througha well-defined partnership between Government, the com-panies and civil society.

The traditional approach consisting of placing theblame on the Chinese operators without understandingtheir mind set or clearly identify their prime interest isthus inefficient. It is important to find better ways toconnect with Chinese operators, in full respect of their offi-cial framework. Going through Cameroonian Public Au-thorities is an option to combine with a situational analysisof the structuring within each relevant Chinese companywith regards to environment issues, in a view to establi-

shing solid collaboration links.

In that respect, some Chinese companies are more re-levant than others, due to their business span in Cameroonin terms of number and importance of the project as wellas geographical location. The China international Waterand Electric Corporation (CWE), which is involved in elec-tricity and road infrastructure, with many dam and roadconstruction project in ecological sensitive areas, is one ofthese. It would be of interest for WWF to focus on collabo-rating with such companies if not with all.

IV.2 RecommendationIn order to ensure that projects related to Chinese in-

vestments in Cameroon are environment friendly in theirimplementation, there are three levels of collaboration onwhich WWF can work, by engaging with the three main ca-tegories of relevant stakeholders: Cameroon Public Autho-rities; Chinese Authorities and the Chinese operationalinvestment actors. There are also some General Policy as-pects to be considered by the Cameroonian Government.

IV.2.1 General Policy consideration by Cameroon GovernmentThe Government of Cameroon could better capitalize

on the implementation of projects related to Chinese in-vestments, and on the cooperation with China and otheremerging partners in general. This is possible by takingfull ownership of the related impact management beyondstrict environmental considerations. It would mean ensu-ring that the public is extensively informed and sensitizedon the benefits linked to such cooperation, as well as onthe corresponding risks and the way these risks are mitiga-ted. In the domain of environment protection, emphasisshould be put on enforcing the existing law and regula-tions, in collaboration with other stakeholders following aclear collective formula involving an official roadmap.

IV.2.2 WWF engagement with Cameroon GovernmentEngagement with the Cameroonian Government and

other Public Authorities should seek collaboration with allkey sectorial Ministries that initiate Chinese investments


Conclusion and recommandations 67


68 Conclusion and recommandations

related projects and in a particular way with the Ministryof Environment, Nature Protection and Sustainable Deve-lopment (MINEPDED) on the one hand, and the Ministryof Economy, Planning and Regional Development (MINE-PAT) on the other. With the Ministry in charge of environ-ment, WWF could try to set up a collaboration scheme thatconsist in supporting the Ministry in the process of Envi-ronmental Certificate deliverance and monitoring of com-pliance to Environmental Management Plans duringprojects implementation. WWF in that support processcould work to technically and financially support the per-manent allocation of human resource, from the Ministry,to the project site for work following specific guidanceagreed upon between the MINEPDED, the project owner(the sectorial Ministry or other relevant institutions), theproject supervising entity and the Chinese company.

Collaboration in the monitoring process will have tostart right from the stage of Certificate deliverance, withWWF involvement in the examination of the ESIA.Through that permanent human resource allocation, WWFwill have the opportunity to be closer to the decision ma-king concerning environmental management. Additionallyit would be worthwhile to develop close and special colla-boration with the MINEPAT Director in charge of emer-ging countries to ensure connection with ChineseAuthorities and subsequently with Chinese operators.

IV.2.3 WWF engagement with Chinese authoritiesBefore engaging with Chinese Authorities, it would be

essential to be clear on what their prime interest is and tofind out what the official pre-defined line is for China onthe issues at stake. In the case of Chinese investment rela-ted project and the environmental impact managementissue, the Chinese legal instrument providing the relatedguidelines would be a good reference. However, thisshould not be brandished as a tool for finger pointing toblame Chinese companies for non-compliance. It shouldrather be used in combination with local legal instrumentas a collaboration area to propose to Chinese operators in

a view to helping them protect their interests while theyoperate in Cameroon.

IV.2.4 WWF engagement with other Chinese investment actorsThe WWF approach in connecting with relevant

contact persons in Chinese companies, for environmentalimpact management, should consider collaboration withkey contact persons within the project owner and the su-pervising entity, to access the relevant contact person inthe Chinese company. To achieve this, an in-depth analy-sis of the structuring of the targeted Chinese operators isnecessary. The stake to propose to Chinese companies herewould be assistance to help facilitate their relationshipwith the supervising entity, by assisting them in the elabo-ration and implementation of the project EnvironmentalManagement Plan (EMP).


Conclusion and recommandations 69

ANNEXCONSULTATION GUIDE FOR THE STUDY ON

THE STATUS AND TRENDS OF CHINESE INVEST-

MENTS IN CAMEROON WITH FOCUS ON IT’S SO-

CIAL AND ENVIRONMENTAL IMPLICATIONS


72 Annex

CONSULTATION GUIDE FOR THE STUDY ONTHE STATUS AND TRENDS OF CHINESE INVESTMENTS INCAMEROON WITH FOCUS ON IT’S SOCIAL ANDENVIRONMENTAL IMPLICATIONS

Introduction

This consultation guide indicates the core questionsaround which discussions should be conducted with rele-vant stakeholders. The stake is to be able gather informa-tion at all possible level, be from individual or frominstitution on key aspects of Chinese investments in Came-roon. They conversation with the stakeholder will be freelyshaped with much flexibility so as to integrate contextualfactors. The consultation guide is made broad enough inits design, so that it can be used for all categories of stake-holders.

Key generic questions and objectives

- What is the stake with regard to Chinese investment?

o Position the person or the institution in the Chineseinvestment arena

- What is the area of operation?

o Find out the sector and any other relevant character

- What are the features of the relevant projects?

o Describe interests and stakes, give more detail on thesector

- What is the location of project

o Geographical and other localisation factors

- Chinese counterpart and type of collaboration?

o Identify resource persons for future collaboration

- What investments level and shares?

o Specify investments amounts and partnerships

- What is the labour force structure?

o Specify on local share of the work force

- What are the environment and development sustainabi-lity challenges?

o Specify the challenge and the corresponding mitiga-tion approach and identify resources persons as counter-parts for environmental issues; indicate documents ofreference


Annex 73

1

2

3

4

5

6

7

8

9

10

China international water and electriccorporation (CWE).

SINO HYDRO Corp

China national electric engineeringCorporation (CNEEC)

Shichuan Hanlong Group

China Harbor Engineering Company(CHEC),

CGCOC Cameroun

SINOCHEM (90% HEVECAM shares)

China Harbour Engineering Company).

China's Yan Chang LogoneDevelopment Holding Company

China Machinery EngineeringCorporation (CMEC)

East

South

South

East

South

Littoral

Sud

South

Far North

Centre

Electricityinfrastructure


Road infrastructure



Mining

Road Infrastructures

Water infrastructure

Agriculture


Petroleum

Water infrastructure

Lom Pangar Water ReserveDam

Menchum Hydro powerdam Rehabilitation ofNgaoundere-Kousseri road

Memve’ele hydropowerdam of 201 MW / NTEMriver. Yaounde- Nsimalenfreeway

MekinhydropowerDam/Dja river

Mbalam iron ore miningproject

Construction of the DeepSeaport Project in Mboro,Kribi

Enhancing potable watercapacities in Douala Phase2Enhancing potable watercapacities in Douala Phase2

Rubber Plantations

Kribi – Lolabé doublecarriage Road:

Successful oil Explorationin the Zina-Makary block inthe Logone Birni basin

Water project to supplyYaoundé with 400 000 m3from Sanaga river.

Chinese Companies Location Sector Nature of project

HSE Counterpart

or Contact Person

Remarks for contact facilitation

Table 2: HSE

counterparts in

Chinese invest-

ments related

companies in

Cameroon


74 Annex

11

12

13

14

15

16

17

18

Shaanxi Company under the nameSINO-CAM INKO AgricultureDevelopment Co, in Cameroon

The China International Water andElectricity Corporation (CWE)

SINOSTEEL’s subsidiary,SINOSTEELCAM S.A.

China Road and Bridge Constructioncompany (CBCC)

China first Highway Engineering(CFHE)

China Communication ConstructionCompany (CCCC)

China Communication ConstructionCompany (CCCC)

Jiangsu Provincial Transportation En-gineering Group Co Ltd (JPTEG)

China Road and Bridge Constructioncompany (CBCC)

Centerregion

Centerregion

SouthRegion

Littoral

CentreLittoral

SouthWest

SouthWest

Littoral

Agriculture

Iron Ore Mining

Roads

Road infrastructure


Road Infrastructure

Roads

Revamping Agriculture withChinese Expertise nourishing'un-whitened' rice packaged

Construction of a Canal onthe Mfoundi river banks

Exploration for iron at theLobe concession near Kribi

Roads construction projects

Yde-Dla Highway (80 Km)

Kumba Mamfe road

Kumba Mamfe road

Roads construction projects

List of TablesTable 1: Matrix of Chinese investments in Cameroon

Table 2: Volume analysis of Chinese investments in Came-roon (2007-2013)

Table 3: Synthesis of Chinese assistance to Cameroonsince 2007

Table 4: HSE counterparts in Chinese investments relatedcompanies in Cameroon


Analysis of chinese investments in cameroon I 75References 75

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CHINESE INVESTMENTS IN CAMEROONdtnac4dfluyw8.cloudfront.net/downloads/report_wwf_2014.pdf · 2020. 6. 12. · Report for WWF Cameroon - September 2014 4 Summary projects in Cameroon