Across Latin America, palm oil violations abound — with little accountability

Palm oil producers across several Latin American countries have been the subject of complaints about their environmental practices, an analysis of official records has found, but these complaints rarely result in meaningful change in the industry.

Five Latin American countries are among the 10 largest palm oil producers in the world: Colombia ranks fourth, Guatemala sixth, Honduras seventh, Brazil ninth and Ecuador 10th. Together, they accounted for almost $55 billion in palm oil sales in 2020.

These countries share something else in common: Their expansive oil palm plantations are a significant cause of social and environmental grievances. A study published in the Journal of Rural Studies in January 2021 details the “conflicts between oil palm smallholders (often migrant settlers) and forest-dependent (indigenous and Afro-descendant) communities opposing this industry.”

Deforestation is another serious issue to varying extents in each country. A study published in the journal Science in 2018 identified monocultures, including oil palm, as one of the main drivers of forest loss worldwide.

How much of this deforestation is legal? How effectively do these countries oversee the industry and sanction it when necessary? And how can citizens and Indigenous communities know the environmental record of a company in their country?

A team of Mongabay Latam journalists, in partnership with media outlets from four of the world’s largest palm oil-producing countries — Colombia, Guatemala, Honduras and Ecuador — investigated the environmental impacts of the industry. Agencia Ocote (Guatemala), Contracorriente (Honduras) and La Barra Espaciadora (Ecuador) filed requests for all of the environmental sanctioning processes that the authorities in those countries have opened against palm oil companies, producers and processors between 2010 and 2020.

First among the findings was the level of secrecy with which the data are held and the resulting difficulty in accessing the information. In instances where it was possible to obtain a response, information was often incomplete or disaggregated. After verifying the information, we identified 231 cases, including environmental violations, complaints, and investigations in progress against companies and individuals in the four countries. Colombia had the most cases, according to the analysis, with 176. In general, most recurring sanctions were linked to noncompliance with environmental regulations and logging.

Worrying figures for the oil palm industry

During the six-month investigation, we filed 70 requests for information to official entities, and received 51 responses. Many of these responses could be summarized as, “The information isn’t systematized,” or simply said that no cases of environmental offenses had been registered in 11 years.

Once the information was collected, we used it to create a database, from which we identified 231 cases, including sanctions, complaints, and investigations currently in progress. After Colombia, Guatemala had the second-highest number of cases, with 48. Ecuador had six cases, and Honduras had one.

The analysis also revealed that 147 producers, including companies and individuals, were responsible for the 231 cases identified. Of these, 122 were from Colombia, 20 from Guatemala, four from Ecuador and one from Honduras.

The most common infractions were violations of environmental regulations (90 cases), logging (48 cases), and water diversion or water grabbing (42 cases).

The lack of transparency and access to information also played a key role in this investigation. For example, although it was possible to determine that some type of environmental impact arose in 197 cases, the exact details couldn’t be ascertained, even when the information was requested from authorities. Furthermore, in 141 cases, it wasn’t possible to determine the status of a sanctioning process (category: undetermined status), while in 37 cases, officials didn’t report whether an investigation had been initiated.

In 57 cases, it was only possible to confirm whether a producer was sanctioned, required to pay some form of environmental compensation, improve its production process, or was exonerated.

Similarly, in 96 of the case records obtained, the exact year in which the events occurred wasn’t reported, and in 12 cases, the name of the company or individual being investigated wasn’t mentioned.

The lack of such data, despite having been requested, demonstrates a potential gap in the ability of authorities to control and monitor the oil palm industry’s environmental practices.

In addition to the official information received, we made 20 more requests to social and environmental organizations working on oil palm-related issues. We also received complaints filed by communities, some of which were submitted to environmental authorities between 2010 and 2020. One of the most significant cases in Honduras involving a prominent palm oil company was based on a complaint filed with the Roundtable on Sustainable Palm Oil (RSPO), the leading certifier of environmental and social sustainability standards for the industry.

“In general, environmental authorities in Latin America have relatively weak environmental management, monitoring and oversight systems or don’t receive adequate and necessary resources to operate,” said Pablo Pacheco, a senior forestry scientist with WWF’s Global Science Team and a research associate at the Center for International Forestry Research (CIFOR).

Pacheco was a co-author of the January 2021 study on the impact of oil palm on rural livelihoods and tropical forest landscapes in nine Latin American countries. He said there’s an urgent need to improve the region’s land-use monitoring systems so that producers who don’t comply with environmental regulations can be identified, investigated, and ultimately penalized.

“This is the minimum,” Pacheco said, “although it would be ideal to also monitor the types of practices that are being developed for crops, and [to have] scientific monitoring that is more intelligent … so that there is less dependence on creating new cultivation areas.”

Colombia and Guatemala: Agribusiness expansion

The oil palm industry has established itself as a prominent force in Colombia, Ecuador, Honduras and Guatemala, but it has done so differently in each country. According to the January 2021 study, Colombia and Guatemala are following “large-scale agribusiness-based expansion trajectories.” The study notes that in Colombia, 72% of the oil palm area is controlled by large-scale entrepreneurs. In Guatemala, that figure is 95%; smallholders ther control only 3%.

“The pre-eminence of large-scale agribusiness-based trajectories in Guatemala, Colombia, and Brazil is the result, to a large extent, of pre-existing unequal agrarian structures, land tenure regimes posing few obstacles to land concentration, and, in some cases, oil palm policies biased towards large-scale producers,” the authors write.

Colombia is Latin America’s leading oil palm producer, churning out almost double the output of Guatemala, the second-largest producer in the region, according to recent figures. A key case there involved Oro Rojo, a palm oil producer created in 2013 to increase production in the Magdalena Medio region. Just one year after Oro Rojo starting operations, the municipality of Sabana de Torres where the company is located became the second-largest producer of crude palm oil in Colombia. Its output increased from 41,000 metric tons in 2013 to more than 72,000 metric tons in 2014.

Of the three permits granted by the CAS, one of the environmental authorities in the department where Oro Rojo is based, two are under investigation, and one has resulted in a fine. The company is being investigated for contaminating streams that flow into the Paredes swamp, an important wetland complex in the Magdalena River Basin. Pollution by various industries, including palm oil, is affecting the West Indian manatee (Trichechus manatus), according to biologist Katherine Arévalo-González, co-author of a study on water quality in parts of the swamp frequented by manatees. The species is classified as vulnerable on the IUCN Red List.

James Murillo, another co-author of that study and executive director of Cabildo Verde, an environmental organization that has helped communities in the area to file complaints with the CAS, wrote in a report that human communities have also been impacted by the contamination of the streams that feed the swamp. “Discharges particularly occurred when it rained, but people still noticed because of the dark and foul-smelling water,” Murillo writes.

In spite of these complaints, the company continues to operate. Flor María Rángel, former director of the CAS, publicly acknowledged in 2016 that the actions of Oro Rojo and other palm oil companies merit suspensions, but that this wouldn’t happen because “socially, it is very difficult to suspend them because there are approximately 20,000 people working [for such companies], and the community survives on this work.”

With 48 cases, Guatemala has the second-largest number of records in the database, eight of which are complaints about companies belonging to Agroindustrias HAME S.A., one of the country’s most powerful palm oil conglomerates. It trades under the Regia brand and supplies palm oil to Nestlé, among others.

HAME has been accused of committing “ecocide,” diverting rivers, draining a lagoon, cutting down hectares of forest, and operating without having conducted environmental impact assessments. Despite these accusations, its companies have received few sanctions, with a fine issued in just one of the eight cases identified.

Julio González is an activist with the Madre Selva collective, an organization that investigates and provides legal support to communities on environmental issues in Guatemala. “The sanctions are laughable,” González said. “The environmental damage is irreparable. Ecosystems cannot recover.”

Raúl Maas, director of the Institute of Agriculture, Natural Resources and Environment at Rafael Landívar University in Guatemala, said that the sanctions are often minimal. Some companies prefer to pay a fine for not carrying out an environmental impact assessment rather than stopping work to complete one, as it means they can continue to operate regardless of whether they have complied with the requirement, Maas said.

In addition to the officially registered cases, civil society organizations responded to our requests for information, sharing 13 specific complaints against palm oil companies in Colombia and one in Guatemala.

Ecuador and Honduras: No information or sanctions

In Ecuador, the distribution of the palm oil industry is mixed: A small group of farmers control around one-third of the area under cultivation, and there are also 152 industrial plantations averaging 746 hectares (1,843 acres) each.

We identified six cases in Ecuador in our database of complaints for environmental noncompliance between 2010 and 2020. Two of these cases involve the company Energy & Palma, which has had tensions with Indigenous and Afro-descendant communities in the province of Esmeraldas for several years. The company has sued some residents of the Barranquilla community for blocking the access road to its plantations. In early September 2021, an Ecuadoran judge ordered several community leaders, who live in extreme poverty, to pay the company almost $200,000.

“We reject the judge’s decision because it violates our rights,” said Néstor Caicedo, president of the Barranquilla community. “The community is outraged, but we are staying calm. We hope that the higher authorities, who are in Esmeraldas or Quito, look at the abuse being committed against us.”

Several residents of Esmeraldas communities have complained about environmental problems in the area since the arrival of the company. “We used to drink water from there, and nothing happened,” said José Mina, president of the San Juan de Chillaví commune. “Now the children bathe and get bumps [on their skin], and their bodies itch. The fish arrive here dead.”

Criminalization is one of the main forms of attack against defenders of Indigenous, land and environmental rights. A report from the organization Front Line Defenders shows 27% of the 193 such attacks reported globally in 2020 related to detentions or arrests, and 17% were legal actions against these defenders. A 2020 report by the watchdog NGO Global Witness shows that 17 of the 227 murders of environmental leaders that it recorded worldwide in 2020 were linked to agribusiness, which is among the main threats to environmental defenders.

The number of scandals involving Energy & Palma have increased over the years. The company has since 2018 not answered Mongabay Latam’s requests for comment.

Accessing information about the palm oil industry in Ecuador remains a challenge. The Ministry of Agriculture and Livestock, the province governments of Los Ríos, Sucumbíos, Orellana and Guayas, and the offices of the ombudsperson in these provinces responded that they had no information on environmental sanctioning processes against palm oil producers. The prefecture of Esmeraldas, where 67% of Ecuador’s oil palm crops are grown, said that it keeps statistics, but didn’t share them with Mongabay Latam.

Community leaders say they can’t understand why no investigations are launched in response to their complaints. Pío Bravo, environmental director for the province of Sucumbíos, said in an interview for this investigation that no sanctions were imposed for small plantations. The province’s only producer was found to have misused pesticides and discharged polluted water into estuaries and wetlands because companies were not held to account for these violations, despite the fact that the authorities had identified these issues. Bravo said the most alarming part is that only 30% of the 960 palm oil companies in the province are trying to formalize themselves, and the three palm fruit collection centers are not controlled by provincial authorities.

“Unfortunately, we are not able to sanction things that are not regularized,” Bravo said. “We are making an action plan, but this is not immediate.”

Attempts to get similar information in Honduras met the same obstacles as in Ecuador. In Honduras, where the expansion of oil palm crops is driven largely by small-scale farmers who control 61% of the cultivated area, we could only identify one case of an environmental violation submitted to a national oversight entity. The complaint, filed against the company Aceites y Derivados S.A. (Aceydesa), alleged misconduct relating to the modification of property deeds to remove areas identified by the government as environmental protection areas, data falsification, bribery of workers and state entities, manipulation of scale systems for weighing palm fruit, and operating without environmental licenses. It was also investigated by the RSPO, but the case doesn’t appear in any state records.

We contacted the RSPO about the complaint, but no information was available because the case was ongoing. For its part, the company said it would provide all explanations to the RSPO. Despite the seriousness of the allegations, Honduran environmental authorities have not launched an investigation into Aceydesa. The case is complicated by the fact that one of the company’s founding partners has been a national party representative for the department of Colón since 1990. The representative was mentioned in a trial in the Southern District Court of New York for allegedly receiving bribes to protect drug traffickers shipping cocaine into the United States. He’s currently on a list of officials sanctioned by the United States under the Magnitsky Act, which was passed in 2012 to penalize foreign officials involved in human rights violations and crimes against humanity, and the recent Engel List, which sanctions officials from Central America implicated in high-level corruption.

For Pablo Pacheco of WWF and CIFOR, the shortcomings in the Latin American countries’ environmental controls are linked to “the economic vision of pushing agricultural frontiers and promoting the expansion of agriculture and livestock instead of containing it and improving efforts to strengthen these systems,” he said. “It is a somewhat delusional vision in which rural development is thought to depend on the expansion of agriculture at any cost.”

Pacheco said there’s some hope in ongoing discussions such as those taking place within the European Union to impose greater restrictions on commodities linked to deforestation, and thus reduce what they call “deforestation imports.” He said he also wants to see domestic and international markets put pressure on violators by only buying from producers with good environmental practices. “It is not just states that should penalized, but the markets too,” Pacheco said.

This cross-border investigation was coordinated by Mongabay Latam in partnership with Agencia Ocote (Guatemala), La Barra Espaciadora (Ecuador) and Contracorriente (Honduras). It was first published here on Mongabay’s Latam site on Nov. 9, 2021.

Lead editors: Alexa Vélez, María Isabel Torres and Antonio Paz.
Coordinator: Antonio Paz.
Research and database analysis: Gabriela Quevedo, Carmen Quintela, Alejandra Gutiérrez, José David López, Jennifer Ávila, María Clara Calle, Lizz Gabriela Mejía, Alexis Serrano and Diego Cazar.
Reporters: Carmen Quintela, Jennifer Ávila, Lizz Gabriela Mejía, María Clara Calle, Antonio Paz, Alexis Serrano and José David López.
Data visualization and design: Rocío Arias and Daniel Gómez.
Audience outreach: Dalia Medina and Alejandra Olguín.

 

Citations:

Castellanos-Navarrete, A., De Castro, F., & Pacheco, P. (2021). The impact of oil palm on rural livelihoods and tropical forest landscapes in Latin America. Journal of Rural Studies, 81, 294-304. doi:10.1016/j.jrurstud.2020.10.047

Curtis, P. G., Slay, C. M., Harris, N. L., Tyukavina, A., & Hansen, M. C. (2018). Classifying drivers of global forest loss. Science, 361(6407), 1108-1111. doi:10.1126/science.aau3445