Guatemalan palm-oil gains come at a price


On June 6, fisherman and farmers along Guatemala’s La Pasión River woke to a putrid smell in the air. The usually olive green river had turned black and oily, and clumps of flies hovered above its surface. Fish flopped about, gasped for air and expired by the tens of thousands. “We saw some fish die by the edge of the river and others leaping out of the water, as if trying to live,” Domingo Chop, deputy mayor of the town of Champerico, told the press.

Within two weeks, the pollution from an apparent spill of toxic agricultural chemicals had affected more than a third of the 353-kilometer- (219-mile-) long river in the northern department of Petén, near the border with Mexico. Over 10,000 people living in riverside settlements found themselves without potable water, and officials with the government’s National Council of Protected Areas had begun taking samples to gauge the impact on dozens of species of mammals, birds, fish and reptiles.

On June 15, the national Public Prosecutor’s Office also opened an investigation into possible crimes committed by Reforestadora de Palma de Petén (Repsa), a Guatemalan company that operates an African palm-oil plantation and two palm processing plants near the river. Environmentalists suspect Repsa’s oxidation pond, used to break down toxic chemicals with bacteria, may have overflowed during a period of heavy rains, releasing pollutants into the river.

Repsa has denied any responsibility, but comments by United Nations Guatemala Coordinator Valerie Julliard suggest the case will be scrutinized closely. “We want to be sure that no one forgets about this case, regardless of time, and ensure justice,” Julliard told the press July 21.

Meanwhile, broader questions arose as protesters took to the streets to demand government action. “This disaster demonstrates the power exerted by the few companies with a monopoly over the palm industry in Guatemala,” says Ricardo Zepeda, a sociologist who coauthored a 2013 report that was entitled “The Power of Oil Palm” and published by Oxfam, the international anti-poverty group. “[They] press for lax regulations and avoid the regulations that exist. It is something you see in the handling and discharge of pesticides, the treatment of communities in areas of palm expansion, and the deforestation of virgin forest to create palm plantations.”

Susana Siekavizza, executive director the Union of Palm Growers of Guatemala (Grepalma), told EcoAméricas her industry association’s members are waiting for the results of the state’s investigation, but feel solidarity with the affected families living along the river. Says Siekavizza: “We firmly believe in strengthening state institutions in terms of regulation and oversight, because what happened in the Pasión River is truly worrisome.”

Palm oil, a ubiquitous product used in foods, soap, detergent and cosmetics, holds significant potential for the Guatemalan economy. The country is only the 14th biggest producer in the world, ranking far behind giants Indonesia and Malaysia, and in Latin America behind Colombia, Ecuador, Honduras and Costa Rica. Yet with US$283 million in palm-oil exports in 2012, it was the ninth leading exporter of the commodity in the world and second in Latin America after Ecuador.

And thanks to its ability to produce seven metric tons of palm oil per hectare (three tons per acre), Guatemala has some of the highest yields in the world. That’s due partly to modern technology and stable winds and temperature. Moreover, hundreds of thousands of additional acres of pasture and crop-farming land are suitable for palm cultivation in Guatemala, according to an Agriculture Ministry study.

“Palm cultivation has a significant weight in the economy of the country,” says Siekavizza. She adds that it has brought development, employment and infrastructure “to local areas that had been completely abandoned.”

But expansion of the crop has not been universally welcomed. During 2003-14, land dedicated to African palm nearly quadrupled to 130,000 hectares (320,000 acres), with much of the growth in the northern departments of Izabal, Alta Verapaz, Quiché and Petén. In the process, thousands of indigenous and peasant-farmer families sold their land to one of the six business groups that control the bulk of the palm-oil supply. According to a 2014 report by Verité, a U.S.-based nonprofit dedicated to fair labor conditions, those sales were often far from transparent, often involving coercion, deceit and pressure.

Verité details a litany of bad practices. Intermediaries, known as coyotes, employed by the palm companies persuaded farmers to sell with false promises that they would get better paying, permanent jobs on palm plantations. They falsely informed farmers that a dam was being built and that their lands would be flooded. According to the Guatemalan Institute of Agrarian and Rural Studies (Idear), an independent think tank, some farmers were directly threatened. Palm representatives or ranchers looking to resell such land to the growers would approach the farmers and say: “Sell at this price or we’ll buy it from your widow,” Idear charges.

Ultimately, the farmers would come to regret it. Nearly 30% of land dedicated to new oil-palm plantations during 2005-10 had been peasant-farmer owned, essential for the production of maize, corn, beans and rice and the export of those goods to other parts of Central America.

“People told us they had been fooled by the coyotes who told [them] to leave behind [their] backward lives of hardship working on little plots,” says Alberto Alonso-Fradejas, an Idear fellow. “Instead, they found landlessness, unemployment, conflict and growing problems of alcoholism, either in their own communities or in other towns and cities.”

The environment also has suffered with the spread of plantations, and not only those of the oil-palm variety. In the northeastern Polochic Valley, home to sugarcane, banana and palm operations, inhabitants have reported foul odors and fish kills from the fertilizers and pesticides washed into area rivers. Meanwhile, Lake Izabal, Guatemala’s largest lake and the drainage site of those rivers, is suffering from a growing process of eutrophication, along with the resulting algae blooms. An excess of nutrients from fertilizers and other farm runoff are slowly starving the lake of the oxygen it needs to maintain lacustrine life, according to several environmental groups that have studied the area.

And African palm cultivation requires intensive irrigation, especially during the initial phases of planting. In many locations in Guatemala, plantations have diverted rivers or damned them. That has left some communities high and dry, with little water for household use or irrigation. “We’ve seen heavy machinery digging drainage ditches in wetlands, full of migratory birds, and the diverting and damning of rivers that leave whole communities without water during the summer months,” says a former government environmental official. “We’ve heard communities in many parts of Guatemala talk of how their wells have run dry since the palm plantations arrived.”

Some 20% of palm plantation land in 2010 had been forest in 2000. According to various estimates, over 148,000 acres (59,893 hectares) of woods fell to palm plantations during 2007-12 in northern Guatemala alone. And nearly one-quarter of plantation land was located in nature preserves as of 2010, according to a study by Guatemala’s Rafael Landívar University. “We’ve seen threats to six protected areas in Guatemala from the advance of palm plantations, threats that come directly from palm operations or from the displacement of small farmers by the plantations into the wilderness,” says the former government official. “In Sayaxché [a municipality in Petén that is a center of palm production] virgin rainforest has been burned, biological corridors important for jaguars, pumas, ocelots, white-lipped peccaries and deer have disappeared, and the population of mammals has decreased.”

Guatemala is by no means the only Latin American country to confront oil-palm industry impacts.

Colombia, Ecuador, Brazil, Peru, Honduras and Costa Rica produce significant amounts of palm oil for use in biodiesel or in food and health products. And virtually all of those countries have experienced environmental and social problems as a result. Agrochemical contamination of ground water, surface water and soils, for example, is nearly universal in oil-palm plantation areas, experts say. As early as the 1980s, when African oil palm production began to take off in Ecuador, pesticide-related fish kills were reported in the Shushufindi and Aguarico rivers downstream from oil-palm plantations in that nation’s Amazon region.

Land conflicts in oil-palm areas also are common. The violent expulsion of farming communities in Colombia’s Pacific state of Chocó by right-wing paramilitary groups in the early 2000s was followed by the felling of thousands of acres of primary forest for palm plantations.

In the Bajo Aguán river valley in Honduras, subsistence farmers were coerced, threatened or driven off their land over three decades. Wetlands were drained. And since 2009, more than 80 farmers trying to reclaim their territory have been killed by the palm-oil companies and their private security forces, according to an April 2015 report by the London-based human rights group Global Witness.

Still the relatively recent—and continuing—disruptions caused by oil-palm cultivation in Guatemala and the pollution of the La Pasión River have put the sector’s failings in a particularly stark light, experts say. The gold standard for certification in the oil-palm industry, many analysts agree, is what is known as the Roundtable on Sustainable Palm Oil (RSPO), a nonprofit, multi-stakeholder association formed in 2004. (See “Palm sector tends image”—EcoAméricas, July ’09, and “Companies issue tougher palm-oil standards”—EcoAméricas, Dec. ’13.)

The goal of RSPO, which includes governments, financial organizations, non-governmental groups and food companies such as Unilever, AAK and Sainsbury’s, is to move the palm industry to more socially and environmentally responsible practices that will command a premium price for certified producers. Today around 20% of global palm production is RSPO certified, with companies that are active in major producing nations such as Indonesia, Malaysia, Colombia and Brazil among those to get the green seal.

RSPO certification in theory offers a special status to companies. In effect, it guarantees a range of safeguards, including that they are not producing on recently deforested land, that they avoid contaminating surface and ground waters and that their operations do not engender land conflicts. Experts say the certification is especially important in countries where the palm sector has come under attack by critics for its social and environmental performance.

Guatemalan producers have shown great interest in the certification process, with eight of Grepalma’s 36 member companies beginning in 2012 to define national criteria for RSPO certification. Two of those eight have been certified in the last two years, and the other six plan to follow suit. “We in Grepalma believe that African oil palm is here to stay,” says Siekavizza, adding that the industry association has embraced the RSPO’s principles of economically, socially and environmentally sustainable production.

But critics say the RSPO certification process is not without loopholes. Several oil-palm companies in Malaysia and Indonesia have been widely accused of violating the organization’s standards, and even continuing to clear virgin rainforest, despite achieving certification. Other companies around the world have triggered significant land-use changes without consulting local communities.

Even the RSPO’s definition of sustainability is debatable.

“One of the critiques of the RSPO is that it emphasizes sustainable, certified production while failing to put a cap on how many hectares can be certified,” says Adrienne Johnson, a researcher on the RSPO at Clark University in the United States. “But how sustainable, critics ask, can a 20,000-hectare (49,000-acre) monocrop plantation be when it comes to its use of land and water resources potentially needed by surrounding communities?”

Johnson says that in some places such as Ecuador, the RSPO may be pushing both the government and palm companies to stricter regulations and better practices. Still, she adds, what matters most is the political will for reform, rather than the RSPO in-and-of-itself.

Whether enough such will exists in Guatemala has yet to be determined. On Sept 17, a criminal-court judge in Petén ordered a six-month suspension of Respa activities so prosecutors can compile evidence to determine the company’s responsibility, if any, in the ecological disaster in La Pasión. The following day two gunmen on a motorcycle assassinated Rigoberto Lima, a Champerico school teacher who first alerted the press to the river’s pollution.

How investigations into those events unfold, what sanctions are applied and what reforms are undertaken, say experts, will speak volumes about the future of the industry and the extent to which it is accepted among the Guatemalan people as a whole.

- Steven Ambrus

Alberto Alonso-Fradejas
Research Associate
The Transnational Institute (TNI)
Amsterdam, Netherlands
Tel: +(31) 206-6208
Adrienne Johnson
PhD Candidate in Geography
Clark University
Worcester, MA, United States
Tel: (508) 793-7336
Susana Siekavizza
Executive Director
Union of Palm Growers of Guatemala (Grepalma)
Guatemala City, Guatemala
Tel: +(502) 2366-3648
Ricardo Zepeda
Oxfam America
Guatemala City, Guatemala
Tel: +(502) 2205-5250