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Palm oil giants push out smallholders in Guatemala; deforestation risks remain

Empty boats on the La Pasión River in the Petén River in northern Guatemala following the 2015 ecocide. Image by Carlos Sebastián for Nómada.

  • Thousands of traditional rural Guatemalan families are negatively impacted by the country’s fast-growing palm oil industry. Plantations now cover more than 180,000 hectares (about 450,000 acres), accounting for nearly 2.5% of the nation’s total arable land.
  • Guatemala is now the third-largest palm oil producer after Malaysia and Indonesia (which produce 88% of the global supply) and is often seen as a more sustainable alternative. Today, more than 60% of Guatemala’s plantations are certified by the Roundtable on Sustainable Palm Oil (RSPO). High certification rates are largely attributed to plantations owned by a handful of producers, making it easier to certify large chunks of the industry, according to RSPO.
  • Certification in Guatemala did not drastically improve deforestation rates, a recent study found. Between 2009 and 2019, certified plantations showed 9% forest loss compared with 25% on noncertified plantations.
  • The palm oil industry’s expansion in Guatemala is causing a huge transfer of rural territory from traditional subsistence farming communities to a handful of palm oil mill owners. Local populations are cornered into working for these companies for low wages and often poor working conditions.

Mario Rene Xol used to enjoy life in Aldea Tierra Negra, an Indigenous village bordering the Lachuá-Ik’bolay Key Biodiversity Area (KBA) in northeastern Guatemala. Since the arrival of palm oil in 2006, Xol saw all but three small farms sold off to the land’s new owners: Industria Chiquibul, one of the 14 palm oil mills operating in the region.

Today, at least two-thirds of Xol’s community work for them as the subsistence farming community shifted toward minimum-wage jobs offered by the palm mill. Families of turtles near his house, once common along the San Román River that was diverted to irrigate the palm plantations, are now a rare sight, as are the fish and shrimp he used to catch with his family. Swarms of insects plague the residents.

“We used to live much better when there was no palm,” he told Mongabay in a telephone call. “My home today is surrounded by thousands of flies. It’s horrible — you can’t even eat outside or sit on the patio anymore.”

Oil palm fruit.
Oil palm fruit. Image by Rhett A. Butler / Mongabay.

In 2019, Xol was fired from his informal manual labor position after trying to organize better working conditions. In the same year, Cargill suspended trade with Industria Chiquibul after the latter declined an independent labor audit in response to allegations of labor rights violations. Still, the palm oil company sells to multinational giants Bimbo, Mondelez and PepsiCo.

The oil extracted from palm fruits is present in most industrialized products today, including chocolate, cleaning products, ice cream, deodorant and, increasingly, biofuels.

Oil palm plantations are taking over huge swaths of southwestern and northeastern Guatemala, especially in Petén, Alta Verapaz and Izabal municipalities, home to more than 2 million Q’eqchi’, Poqomchi’ and Achi Indigenous peoples.

The Central American nation is the world’s fastest-growing palm oil producer, ranking third in international exports in 2023 with 875,000 metric tons of oil, after Indonesia and Malaysia, which together make up 88% of the global total.

A map from the 2023 study shows oil palm driven deforestation in northern Guatemala. Highlights in orange indicate where palm oil plantations have replaced forests between 2009 and 2019. Image courtesy of VanderWilde et al.

Despite its small size, the country holds a competitive edge: Without an orangutan extinction crisis, Guatemalan palm oil is sold as a sustainable alternative to the Southeast Asian palm oil giants. The industry’s land use in Guatemala has almost doubled in the last decade, from an estimated 100,000 hectares (247,000 acres) in 2013 to 182,000 hectares (450,000 acres) this year, which accounts for nearly 2.5% of the nation’s total arable land.

But growth of the industry, which today makes up 1% of Guatemala’s GDP, has come at a social and environmental cost for regular Guatemalans, Claudio Abel Caal Tzuy, an Indigenous rights advocate at the Coordination of NGOs and Cooperatives, said in a telephone interview.

“Companies are generating enormous profits at the expense of the rights of Guatemalan women and men,” he told Mongabay. “The global demand for palm oil has led to large-scale deforestation, water contamination and the loss of our lands and displacement of entire communities.”

More than 80% of Guatemala’s palm produce is exported and sold to multinational companies, including Cargill, Unilever, Mondelez and PepsiCo.

Fourteen palm oil mills operate in northern Guatemala, and most follow the same modus operandi, said Tzuy. Rivers are diverted to irrigate the vast plantations, and contaminated water dumped back into rivers has caused mass fish deaths.

Certification does not stop deforestation

In Guatemala’s main palm-producing northern region, a total of 87,325 hectares (215,785 acres) — about 15 times the size of Manhattan Island — were converted to palm oil plantations between 2009 and 2019, a study published earlier this year in the Journal of Environmental Management found.

The results showed that 7,231 hectares (17,868 acres) were deforested in key biodiversity areas and 5,202 hectares (12,854 acres) in protected areas. Almost two-thirds of farms accessed in the region were certified by the Roundtable on Sustainable Palm Oil (RSPO), the world’s leading sustainable palm oil certifier.

For Benjamin Goldstein, bioresource engineer at McGill University and study co-author, the results of the satellite analysis exposed the risk of deforestation and the inadequacy of overrelying on the RSPO in addressing unchecked oil palm expansion. “I am concerned that this is just the tip of the iceberg,” he told Mongabay via email. “Guatemala is set to become one of the world’s top palm oil producers. I fear the encroachment on KBAs will go unnoticed until the problem becomes much larger.”

Between 2009 and 2019, noncertified plantations showed 25% forest loss compared with 9% on certified plantations, according to the study’s satellite imagery analysis. Any deforestation after 2004 in these areas is illegal in Guatemala.

After reporting river contamination near the Tierra Negra village in Alta Verapaz, community leaders joined authorities for an on-site investigation of Industria Chiquibul in 2019. The community has still not heard back from the authorities. Image courtesy of Mario Rene Xol.

RSPO told Mongabay in a video interview that the organization is not a silver-bullet solution but has made huge strides to set an acceptable industry standard for palm oil. “There isn’t one sector, country or community that is fully sustainable,” Yasmina Neustadtl, RSPO’s Latin America market transformation manager, said in the interview. “Agricultural commodities are difficult to put in black or white. Our job is to be in the middle and find the right path.”

Entering the certification process is a costly and voluntary process, meaning that companies may opt out without significant consequences. Industria Chiquibul, with more than a fifth of its plantations on land deforested after 2009, is not certified by the RSPO.

Guatemala currently stands as the world’s most certified country according to RSPO and Grepalma, with two-thirds of the industry certified. Producers hope to reach the 75% certification threshold by 2025, according to an agreement signed in 2021. Across Latin America, 35% of plantations are certified. The global average is under 20%.

The success in certification, however, can be attributed to land concentration, RSPO told Mongabay. “Guatemala is important for us because it is one of the highest-certified countries in the region. One of the reasons behind that is that there are very few smallholders,” Neustadtl said.

Smallholders out, big industry in

Distribution of land in the palm oil industry in Guatemala starkly favors big firms, with 95% ownership of oil palm areas, leaving only 3% under smallholder control. The proportion contrasts with other palm-producing nations: In Thailand, more than 75% of the industry is run by smallholders. In Mexico, the figure is 90%.

“Smallholder participation is minimal in Guatemala, the country with the least involvement of smallholders,” Antonio Castellanos-Navarrete, a researcher focused on oil palm expansion in Latin America at the National Autonomous University of Mexico said in a telephone interview.

Thousands have been displaced from their lands over the last decade to make space for palm oil monocultures, and former traditional smallholders increasingly work for the palm oil giants, with few regional alternatives for employment.

The shift from family-run farms to monoculture can make regional inequality worse, according to Castellanos-Navarrete. “This has strong social implications. [In northern Guatemala], the local population are becoming workers, not producers, which is a much less equitable model,” he said. “You can have plantations of a huge expansion that involves the exclusion of many people from the land.”

But he said the large-scale land transfer underway is an issue that cannot be resolved by certification organizations like the RSPO. It needs to be addressed on a state level, guaranteeing people’s access to land, Navarrete added.

Xol holds on to hope that the situation can be reversed one day and tries to warn other communities. “We go to communities where they have not yet sold their lands and inform them about what we are going through and tell them about the risks involved,” he said. “I have hope for improvement. It can be done, but it will be a somewhat lengthy process.”

Banner image: Empty boats on the La Pasión River in the Petén River in northern Guatemala following the 2015 ecocide, when toxic palm oil effluent overflowed its waters. Image by Carlos Sebastián for Nómada.

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Citation:

VanderWilde C.P., Newell J.P., Gounaridis D., Goldstein B.P. (2023). Deforestation, certification, and transnational palm oil supply chains: Linking Guatemala to global consumer markets. Journal of Environmental Management. 344. doi: 10.1016/j.jenvman.2023.118505.

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