Politics of Poverty

The next frontier for palm oil expansion: Latin America

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Latin American countries are quickly becoming leading producers and exporters of palm oil, but at what cost? (AP Photo/Rodrigo Abd)

The palm oil boom in Latin America is threatening the rights of local communities and putting forests and ecosystems at risk – there is an urgent need for reforms to ensure social and environmental sustainability that places human rights front and center.

This post was co-authored by Stephanie Burgos, Oxfam’s America’s Economic Justice Policy Manager.

For a long time sustainable palm oil advocates have focused their attention squarely on Southeast Asia, where much of the world’s palm oil originates. The trail of devastating impacts on forests and communities that have resulted from the rapid expansion of palm production in this region has finally jolted a number of companies into action. Today major global brands and palm oil traders like Wilmar and Cargill have committed to ensuring that their palm oil supply chain is deforestation and exploitation-free, and over 90 percent of globally traded palm oil is bound by sourcing policies that aim to ensure socially and environmentally responsible production practices.

But oil palm cultivation is now beginning to be scaled up in other continents, in particular Latin America, where production has been primarily for domestic use, but is now seeing a rapid expansion driven by galloping global demand. While Latin America currently produces just 6 percent of globally traded palm oil, with limited land available for expansion in Southeast Asia, the region is poised to be the next frontier of global palm oil production.

Countries in the region are well aware of their potential. Colombia, Latin America’s largest palm oil producer, has plans to increase production six-fold by 2020. Palm oil production in Ecuador has grown 7 percent per year over the past decade. Peru quadrupled production between 2000 and 2013. And Guatemala, the largest palm oil exporter in Latin America, has increased the amount of land available for oil palm cultivation by 10 percent annually for the last few years. Much of the recent expansion is driven by efforts to attract investment and promote economic growth in rural areas. But there is real danger that the Latin America palm oil boom may result in the same type of devastation, in both human and environmental terms, that has occurred in Southeast Asia.

Evidence is already mounting in Latin America on the adverse effects of oil palm, which is eating into tropical forests and exacerbating social conflict and land concentration. New research shows that Latin America is one of the regions most vulnerable to deforestation from palm cultivation, which has already led to severe deforestation in places like the Peruvian Amazon and the Petén in Guatemala.

Conflicts over expansion of large-scale monoculture such as oil palm, though not new in Latin America, are worsening. Communities have mobilized to fight for land rights and to stop environmental devastation and destruction of local livelihoods. But their demands have often been met with repression. Over 40 percent of human rights defenders killed in the region last year were defending land, environmental, and indigenous peoples’ rights. The Latin American palm oil industry has done little to address these alarming developments, with rampant palm oil expansion resulting in human rights abuses and environmental damage.

As one example, over the last year, community activists have been mobilizing in Guatemala against REPSA, a company that supplies palm oil to global traders such as Cargill and Wilmar. The company is responsible for a massive spill of toxic effluent waste along a 100-mile stretch of the Pasión River which is the lifeblood of the region, and there are concerns they have been perpetrating intimidation and violence against nearby communities who demanded accountability for this ecological disaster. In fact, for years small farmers in this northern region of Guatemala have been raising serious concerns about adverse social, environmental and economic impacts of oil palm plantations, including loss of access to water sources and their contamination from agrochemical use. s uut a link to our Power of Oil Palm paper here social

In the wake of continued pressure from Guatemalan civil society and international advocacy groups, Cargill, one of the largest purchasers of palm oil from Guatemala, required REPSA to take actions to prevent future violence and strengthen its environmental and social practices. While this is a significant step forward, it’s not sufficient to ensure meaningful reforms especially given the high levels of violence related to such conflicts in the region. And there is still no evidence on the ground of any positive change in company practices that affect communities.

Real transformation of the Latin American palm oil industry requires sustained effort and engagement by global companies and other industry stakeholders who have committed to responsible palm oil production.

So what can these global companies do to ensure that the palm oil they source from Latin America is truly exploitation and deforestation free?

  1. They need to start by recognizing and investigating the environmental, social and human rights impacts of the palm oil supply chain in Latin America.
  2. They need to walk the talk with their suppliers and take action against those that threaten or violate the rights of local communities and destroy critical ecosystems.
  3. They need to advocate for real reform in the region’s palm oil industry and place human rights front and center, respecting the principle of free, prior and informed consent of affected communities and promoting the protection of human rights defenders.
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