Ocho Sur oil palm plantation in Peru challenged by UN experts for violations of Indigenous rights and environmental damage

Following a complaint by members of the Santa Clara de Uchunya community of the Shipibo-Konibo people, UN experts on business and human rights, Indigenous peoples, environment, defenders, and water and sanitation express concerns about the operations of the Ocho Sur oil palm company in Ucayali in the Peruvian Amazon in formal communications to the company, its US investors, its buyers in Europe and Asia, and the governments that must regulate the companies involved.

On 26 October 2023, the UN Working Group on Business and Human Rights, together with the Special Rapporteur on human rights and the environment, the Special Rapporteur on the situation of human rights defenders, the Special Rapporteur on the rights of Indigenous Peoples and the Special Rapporteur on the human rights to safe drinking water and sanitation, sent a series of communications to the company Ocho Sur, its US owners and investors, its buyers, and the States responsible for regulating the companies involved, requesting information and clarification regarding the allegations of human rights violations raised by the community.

After 60 days, the UN publishes the submissions and responses received on its website.

This formal communication from the UN is in response to an allegations letter submitted on 21 February 2022 to the Working Group by members of Santa Clara de Uchunya, FECONAU, IDL and FPP against Ocho Sur and its investors, detailing the grave situation faced by the community due to the presence of the company in their territory and the multiple human rights violations that the company and its associates have allegedly been committing against the community and its members.

 

“We thank the United Nations for doing this work and also the companies that are ending their purchases from Ocho Sur. We hope that now the Working Group, having seen the shortcomings of Ocho Sur, will make a statement, and that it will continue to work in favour of the communities," said Efer Silvano Soria, on behalf of the Defence Front of Santa Clara de Uchunya.

 

The UN letters focused on allegations made by community members and allied institutions related to the deforestation of 7,216 hectares for the installation of oil palm plantations on the community's ancestral territory without their free, prior and informed consent; how the lack of legal security has led to increased land trafficking and deforestation on the community's traditional lands; the various legal processes underway against Ocho Sur P for aggravated usurpation of territories, environmental crimes and failure to comply with environmental and forestry legislation; the company's attempts to foment divisions within the community to overcome any resistance to its activities and the expulsion of community members in retaliation; the pollution and diversion of water bodies; threats, intimidation, acts of harassment and attacks against Indigenous leaders and defenders since 2014 for asserting their territorial rights; violations of health and safety standards with impacts on company workers during the pandemic.

The content of these exchanges is detailed below and can be accessed on the UN website by typing "Ocho Sur" in the keyword search: https://spcommreports.ohchr.org/TmSearch/Results?page=1

Documents collected on Drive: https://drive.google.com/drive/folders/1m49SlluadOlejWYfuKDNhGr4-vm6GeqI?usp=share_link

US financiers remain silent when questioned by UN about harmful effects of their oil palm investments in the Peruvian Amazon

In relation to the Ocho Sur group, the UN sent letters to the company Ocho Sur; its owner Peruvian Palm Holdings, based in Bermuda; and investors Anholt Services (USA) Inc. and AMERRA Capital Management LLC, both based in the United States. Of these, only Ocho Sur responded. As on previous occasions, when community or Indigenous organisations have called for accountability from Ocho Sur's investors, Anholt and AMERRA have remained silent.

Peruvian state acknowledges that Ocho Sur operates without environmental permits, but has little to show for its Indigenous rights obligations

The UN also wrote to the Peruvian state. In its response to the UN's allegations, Peru provided information regarding:

1) Ongoing criminal proceedings against the companies Ocho Sur and Plantaciones de Pucallpa. Six investigations initiated by the Public Prosecutor's Office are detailed.

2) Measures adopted by the state to guarantee the rights of Indigenous peoples.

3) The status of environmental and social impact assessments of palm oil activities in Ucayali and the strengthening of environmental oversight.

4) Actions to promote respect for human rights by companies.

5) Measures to guarantee integral reparation for community members.

6) Measures to protect human rights defenders.

7) Actions to ensure the labour rights of the company's workers.

In relation to the company's environmental permits, it is important to highlight that the Peruvian state reports that the company currently lacks an environmental management instrument:

 

"By General Directorate Resolution N° 057-2020-MINAGRI-DVDIAR-DGAAA, the approval of the Environmental Adaptation Programme of the auditable unit was denied. Although this resolution was appealed, by means of Vice-Ministerial Resolution N° 008-2021- MIDAGRI-DVDAFIR the appeal was declared unfounded, but the company's right to submit a new request for evaluation of an environmental management instrument was safeguarded once compliance with a plan to replenish the forest cover to a minimum of thirty percent (30%) of the area with agricultural aptitude of the auditable unit is defined. As of March 2023, no application for the evaluation of an environmental management instrument had been registered. Therefore, Ocho Sur P S.A.C. does not have an approved environmental management instrument and, consequently, there are no socio-environmental commitments assumed in relation to the Native Community of Santa Clara de Uchunya".

 

In addition, it is important to mention that:

 

"(...) the administered party is obliged to comply with the environmental regulations applicable to its agricultural activities contained in the Environmental Management Regulations of the Agricultural Sector approved by Supreme Decree N° 019-2012-AG (...)".

 

This point in the State's response is crucial as it reaffirms that the company must comply with the regulations of the “Reglamento de Gestión Ambiental del Sector Agrario” (REGASA), which dismantles the company's narrative that these regulations do not apply to it because they came into force after it began its activities in the field. And regardless of whether the company must comply with REGASA, Ocho Sur was obliged to obtain the authorisation for the change of land use and the authorisation for deforestation, which according to the National Comptroller of the Republic was irregularly granted in favour of the company by officials of the Regional Government of Ucayali in 2019. In addition, it is worth noting that in 2021, the regulatory body revoked this irregular authorisation, which is why the company has taken legal action against the denial of the change of land use. However, whatever the company says, the fact remains that Ocho Sur P. does not have the forestry permits required by Peruvian regulations.

Unfortunately, much of the information provided by the Peruvian state is generic and reflects a lack of concrete actions on the ground to address the problem of Santa Clara de Uchunya.

For example, the Peruvian state does not detail what it has done to secure the ancestral territory claimed by the community, as it does not address the community's pending requests for land titling before the Regional Directorate of Agriculture of Ucayali (DRAU) or the Constitutional Court ruling of 2022 that ordered the DRAU to continue with the process of territorial demarcation of the Indigenous community of Santa Clara de Uchunya. Nor does it address whether the National Action Plan on Business and Human Rights 2021-2025 has done anything specifically in the emblematic case of Ocho Sur, nor what measures it has taken, or contemplates taking, to ensure that members of the community have a comprehensive and effective remedy in accordance with the UN Guiding Principles and international law.

The UN also sent letters to the governments of Belgium, Spain, the Netherlands, Japan, the United States and the United Kingdom, in light of their responsibility to regulate the companies involved. Their responses were very general and highlighted that they have regulatory frameworks that respect human rights: several made mention of Peru's aforementioned National Plan on Business and Human Rights, as well as developments related to the European Union’s Deforestation Regulation (EUDR) and the OECD Guidelines.

The United States, the country where Ocho Sur’s investors are based, limited its response to noting its expectation that companies will comply with applicable standards (such as the Guiding Principles and the OECD Guidelines). At the time of writing, the UK had not responded, despite having joined the forest protection commitment in the Joint Statement of Intent between Peru, Germany and Norway in 2022.

Markets react: international buyers block Ocho Sur's palm oil

Finally, the UN wrote to six international buyers of Ocho Sur's palm oil: Bunge Loders Croklaan and Vandemooretele NV (both from the Netherlands), Lasenor Emul and Lípidos Santiago (both from Spain), Meiji Holdings and Nisshin Oilio (both from Japan).

Of the three companies which replied, Bunge Loders Croklaan and Nisshin Oilio confirm having suspended Ocho Sur and the third, Meiji Holdings, denies having bought from the company.

In its response, Nisshin Oilio (Meiji Holdings' supplier) maintains that following an internal investigation, it officially suspended business activities with Servicios Agrarios de Pucallpa SAC (the processing plant of the Ocho Sur group) and entered them in its complaints register. Meiji denies having purchased any products from Ocho Sur P. SAC and provides evidence of its investigation and confirmation from Nisshin Oillio Group. However, FPP previously found that Meiji included Servicios Agrarios de Pucallpa in its list of palm oil mills for January - June 2021.

For its part, Bunge details the steps it took after learning of the serious allegations against Ocho Sur, including the exclusion of Ocho Sur from its supply chain and the reasons for this decision. It mentions the ongoing monitoring and measures taken to prevent the unintentional inclusion of Ocho Sur palm oil. Bunge states that Ocho Sur will remain a blocked supplier in the supply chain until community land claims, environmental damage and human rights violations are satisfactorily resolved. In addition, Bunge mentioned that it tried to influence Ocho Sur regarding remediation and responsible practices, but found that the company did not fully address the public allegations against it, nor the issue of free, prior and informed consent and respect for human rights.

At the time of writing, Vandemooretele NV, Lasenor Emul and Lipidos Santiago had not responded to the UN.

Peruvian Congress encourages impunity for dispossession and deforestation in the Amazon

In the weeks since the UN communications and replies were made public, Ocho Sur has faced additional international scrutiny, following a new report by the Environmental Investigation Agency, which investigates how palm oil and cocoa companies are driving deforestation in the Amazon and committing illegalities with the complicity of the Peruvian government. The report highlights Ocho Sur's business links with Nestle, Kellogg's and Colgate.

This takes place in a context where the Peruvian Congress hastily approved a modification of the Forestry Law that promotes impunity for deforestation.

The UN Special Rapporteur on the rights of Indigenous Peoples, Francisco Calí Tzay, has warned,

"Due to the great pressure on unprotected Indigenous territories, the creation of these exclusion areas [under the new forestry law] could generate impunity for crimes such as illegal logging, deforestation and change of use; weakening the fight against deforestation and aggravating the current climate crisis".

To date the Working Group has not issued a public pronouncement as a result of its assessment.

Click below to read a summary of the exchanges between the UN Working Group on Business and Human Rights, Ocho Sur, its investors, buyers and the States with obligations to regulate the behaviour of the companies involved