Melka group palm oil company in Peru withdraws from RSPO and is slapped with fine

Melka group palm oil company in Peru withdraws from RSPO and is slapped with fine

Since 2014, the indigenous Shipibo community of Santa Clara de Uchunya with the support of FECONAU (the Federation of Native communities of Ucayali) has been challenging the operations of the palm oil company Plantaciones de Pucallpa SAC (PdP), which has destroyed more than 5,000 hectares of its traditional forest lands in the Ucayali region of Peru. Recently the struggles of the community have begun to yield important victories.

These victories include Resolution No. 347-2016-MINAGRI-DVDIAR-DGAAA, the Ministry of Agriculture’s 15 July rejection of a soil study that PdP had submitted in an attempt to retrospectively legalise its activities. Just 10 days later, PdP was hit with a $150,000 fine [1] from Peru’s Ministry of Agriculture (MINAGRI) for preventing environmental prosecutors from accessing its plantations as well as its incompliance with an order to suspend its operations in Santa Clara de Uchunya issued by the Ministry of Agriculture the previous September.

Finally, in October, PdP withdrew from the Roundtable on Sustainable Palm Oil (RSPO) when it appeared that a final decision from the complaints panel, which was considering a formal complaint submitted by Santa Clara de Uchunya, was imminent. Although this was an effective admission of guilt by PdP, and sends a strong signal to existing and potential investors, complainants are insisting that the RSPO proceeds to issue a final resolution on the case and takes steps to strengthen its accountability mechanism.

Despite these important victories, the community and its supporters are insisting that the Peruvian government sanctions the company for its illegal deforestation, and enforces its September 2015 suspension order. Most critically, they are insisting that the government takes steps to restore the community’s rights over its traditional lands that were illegally acquired by PdP. In May, the community filed a landmark lawsuit to hold the government and company to account for the illegal acquisition of its lands.By Conrad FeatherFor more details please see the following blog by the Peruvian Institute of Legal Defence (IDL) and FECONAU:FECONAU and Shipibo community secure important victories against Melka group As is public knowledge, the Native Community of Santa Clara de Uchunya has been demanding that the Regional Government of Ucayali (GOREU) restores its right to its ancestral territory. Instead, the GOREU has been issuing land possession certificates to settlers, who, after requesting and obtaining ownership rights of the properties, has sold them to Plantaciones de Pucallpa SAC (PdP), which is part of what has become known as the ‘Melka group’, and which has subsequently converted more than 5,000 hectares of these forests to oil palm plantations.

Faced with this situation, the community decided to initiate a set of legal actions to demand the restitution of its ancestral territory and the cancellation of the contracts (between PdP and settlers) as well as to hold the company to account for illegal deforestation and conversion of more than 5,000 ha of forests – as reported by the Ministry of Agriculture (MINAGRI). In this context, three important battles have just been won.

1. The rejection of soil studies conducted by Plantaciones de Pucallpa

General Directorate Resolution No. 347-2016-MINAGRI-DVDIAR-DGAAA rejected PdP’s soil classification study which asserted that it was operating on lands ‘apt for agricultural use’. This is very important as it highlights the illegality of the expansion and exploitation of oil palm plantations in Pucallpa. In this regard, forestry legislation makes it clear that no agricultural activity can be carried out on soil types that are classified as ‘forest lands’. Despite having already cleared and converted the land, the company presented a soil study in order to retrospectively legalise this conversion by changing the classification of soil from forestry to agricultural lands. As a result, the decision of MINAGRI is key, since it undermines the strategy of the company to legalise its exploitation activity. Irrespective of this decision of course, the company should have submitted and waited for the approval of the soil study, before starting its economic activities.

The practical result of this is that the economic activities of PdP lose all appearance of legality and, consequently, become illegal and arbitrary.

2 & 3. PdP receives two fines for preventing MINAGRI from overseeing its activities and for not complying with an order to suspend its operations.

MINAGRI has fined the company (Resolution No 361-2016-MINAGRI-DVDIAR-DGAAA) for not letting its officials enter its plantations to oversee and supervise its operations. In addition, it sanctioned it for not complying with Resolution No. 270-2015-MINAGRI-DVDIAR-DGAAA on 2 September 2015, which ordered Plantations of Pucallpa to suspend its economic activities. Both fines amount to approximately US $150,000.


Clearly, this is all good news for the Native Community of Santa Clara de Uchunya and FECONAU as they are the ones who are challenging the operations of PdP.

These resolutions reveal not only the bad practices of the company, but also the bad faith with which it acts. This includes: devastation and destruction of primary forests and Amazonian biodiversity; violation and ignoring the legal norms and institutions of the State and violation of the rights of indigenous peoples.

In that sense, although these resolutions are important and necessary, they are insufficient. MINAGRI must execute and implement Resolution No. 270-2015-MINAGRI, which ordered the company to paralyse its economic activities. What is the use of reaching resolutions if they cannot be executed? The responsibility of MINAGRI does not end with the issuance of these resolutions, but with their effective execution.

At the same time, PdP remains unsanctioned for having deforested more than 5,000 ha forest, as has been recognised in MINAGRI's resolution. This is extremely serious, yet in spite of it, PdP has remained painfully unpunished.



  1. General Directorate Resolution No Nº 361-2016-MINAGRI-DVDIAR-DGAAA (Spanish / English)