UK-based New Forests Company suspends tree planting in Uganda

  By Mubatsi Asinja Habati

After it was accused of violently evicting thousands of poor rural Ugandans the UK-based New Forests Company (NFC) announced suspension of tree planting. A statement issued by the NFC Kampala office said the suspension of its agroforestry business in the districts of Kiboga, Bugiri, Kyankwanzi and Mubende comes on the heels of the September Oxfam report that raised alarm on the evictions. 

“Having planted millions of trees every year for the past six years and led the creation of a modern Ugandan forestry industry, we are very sad to have to suspend planting and lay off workers, forcing people back into poverty,” Julian Ozanne, NFC’s chief executive said, adding that “We very much regret this but have been put in a position where we had no alternative.” 

NFC alleges that following the report the World Bank/International Finance Corporation cancelled the $1million funding. According NFC the suspension of its activities implies loss of 560 jobs for Ugandans who were employed in its plantations.

 “NFC hasn't closed but has suspended planting in four districts,” says Anthony Silverman, NFC communication manager.

 See press release

NFC announces suspension of planting leads to 560 job losses, Oxfam campaign causes loss of investment funding

Kampala, January 9th 2012 – New Forests Company (NFC), Uganda’s biggest forestry group, announces today that it has  suspended tree planting across the country for 2012 that will result in 560 job losses in the Mubende, Kiboga, Kyankwanzi and Bugiri districts.

The decision to suspend planting and lay off workers follows the loss of a $14m investment in NFC by a new investor. This resulted from the negative publicity caused by an Oxfam report released September which attacked the eviction of illegal squatters by the Ugandan government from NFC’s plantations. The company also lost a further $1m of funding from the World Bank/International Finance Corporation in wake of the Oxfam campaign.

“Having planted millions of trees every year for the past six years and led the creation of a modern Ugandan forestry industry, we are very sad to have to suspend planting and lay off workers, forcing people back into poverty,” said Julian Ozanne, chief executive of NFC. “Job creation is critical to poverty alleviation in Uganda and losing jobs is a negative development for Uganda economic growth. We very much regret this but have been put in a position where we had no alternative.”

The UK based New Forests Company is the biggest forestry company in Uganda and one of the biggest foreign investors in Uganda’s agri-business sector. The company has planted 27,000 acres (42 square miles) of pine and eucalyptus trees in Mubende, Kiboga and Bugiri districts and has invested more than $23m in Uganda since 2005.

The company is also the largest supplier of transmission poles to Umeme which has allowed Uganda to stop  importing poles from South Africa. At its peak last year the company employed 2,300 people.

The company said it hoped to resume planting next year and restore job losses although this would depend on the outcome of the IFC mediation process.