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(Correct to clarify what Herakles investing in the project)
YAOUNDE, Nov 26 (Reuters) - Cameroon President Paul Biya has given final approval to New York venture capital firm Herakles Capital to start work on a 20,000 hectares palm oil plantation, despite opposition from some locals and conservation groups.
Herakles' palm oil project in the South West forest region of Cameroon has been mired in controversy after environmental campaigners including Greenpeace and WWF said it violated Cameroon's laws and could endanger wildlife and deprive locals of their livelihoods.
The firm had initially planned for a 73,000 hectare plantation, an area more than 10 times the size of Manhattan, but this was halted after protests. The government asked Herakles in June reduce the size of the plantation to 20,000 hectares.
The decree signed by Biya on Monday said Herakles can begin work on the reduced-size plantation after paying a 198 million CFA francs ($408,600) land tax and must invest about 260 billion CFA francs in the project.
The company was not immediately available to comment.
Greenpeace and Think Tank Oakland Institute said in a joint statement on Tuesday the government approval of the project, although downsized, was alarming.
"A downsized project does not resolve the problems related to the palm oil project by Herakles Farms," said Irene Wabiwa, campaigner with Greenpeace Africa. "It simply remains the wrong project in the wrong place, as the impact on communities' livelihoods and the forests remain unacceptable."
The government is also putting at risk a partnership with the European Union and Germany, who have a long standing relationship with Cameroon to help protect biodiversity and promote good governance in the forest sector, the statement said.
Palm oil is the world's most important vegetable oil, used in everything from margarine and soap to biofuel, with annual global production worth about $20 billion.
Critics of large palm oil plantation projects in Africa say it is part of a broader trend of land grabs in the continent, rich in farmable land, by companies looking to tap into the move to increase global agricultural production as demand and prices rise. ($1 = 485.7 CFA francs) (Reporting by Beaugas-Orain Djoyum; additional reporting and writing by Bate Felix; editing by James Jukwey)