If you are in U.S. academic, research, medical, or cultural fields, your assets are likely managed by pension fund giant TIAA(formerly TIAA-CREF). Though frequently neglected, pension funds constitute the largest sector of the financial industry. TIAA is among the 100 largest corporations in the United States, serving over five million active and retired employees from more than 16,000 institutions.
During the past decade, TIAA has become the largest global investor in farmland and agribusiness, accumulating over 1.6 million acres worldwide. In Brazil, TIAA is accused of evading national laws restricting foreign investments in farmland, a charge corroborated by both the New York Times and National Public Radio. In Guatemala, TIAA-linked investments are denounced as contributing to environmental destruction and human rights violations in palm oil operations according to a recent report in the New Yorker.
Investing in farmland has increasingly attracted pension fund managers who see land as a shrinking and often under-valued resource that is more dependable than volatile financial markets. TIAA manages farms for its own clients as well as for other pension fund managers, such as AP2 of Sweden, the Caisse de dépôt et placement du Québec (CDP), and the British Columbia Investment Management Corporation (bcIMC), both of Canada. TIAA set up second global farmland fund in 2015, called TIAA-CREF Global Agriculture II, and added the New Mexico State Investment Council, Cummins UK Pension Plan Trustee, the UK’s Environment Agency Pension Fund, and the Greater Manchester Pension Fund of the UK to its existing investor pool.
As TIAA expanded rapidly into farmland, it became a founding member of the UN-backed Principles of Responsible Investment in Farmland, one of several sets of guidelines developed for corporations to voluntarily self-monitor their holdings. The signatories are all institutional investors who endorse environmental sustainability, respect for labor and human rights, recognition of existing land and resource rights, and a commitment to report regularly on implementation of the principles.
However, Tristan Quinn-Thibodeau of ActionAid USA, a partner in the campaign against TIAA, questions whether “these Principles, which are created by and for the companies, are anything more than a cover and PR tool to give the companies free license.” Quinn-Thibodeau explained that The Committee on World Food Security , the foremost and most inclusive platform for ensuring global food security, is a more appropriate UN body to address these issues.
Circumventing Brazilian Law
TIAA holdings in the vast northeastern Cerrado region of Brazil have more than doubled since 2012. Deemed one of the world’s 25 biodiversity hotspots and most threatened savannas, an estimated 40- 50% of its vegetation is already destroyed while another 30-40% is degraded. Woodland is cleared at a rate local environmental groups call “alarming,” mostly for mechanized agricultural estates growing soy with large doses of pesticides.
Hiparidi Top’Tiro, a leader of the Mobilization of Indigenous Peoples of the Cerrado told Cultural Survival , “Our lands are completely surrounded by huge agroindustry. They are poisoning our rivers and our children. They fly over our lands when they dust crops, dropping chemicals down onto us from the air.”
TIAA began investing in Brazil in 2008 when it joined with sugar colossus Cosan to create Radar, a company 81 per cent owned by TIAA. With the 2010 tightening of a Brazilian law limiting foreign ownership, other international investors backed out, but TIAA pushed ahead in acquiring land, sidestepping the law through minority partnerships with Brazilian-owned subsidiaries. TIAA and Cosan formed a new company, Tellus, with Cosan holding a 51-percent stake.
TIAA also bought land through local businessman Euclides De Carli, who has been accused by a state deputy in neighboring Maranhão, Manoel Ribeiro, of illegally seizing over a million hectares. De Carli allegedly hired armed men to force local people to leave the land, and is accused of arranging murders of two farmers who resisted. Brazilian researchers have described how once people are forced off the land, grileiros (land grabbers) like De Carli obtain titles through forged documents and bribes. “Euclides de Carli is one of the principal grileiros of Brazil’s agricultural frontier,” Lindonjonson Gonçalves de Sousa, a local prosecutor, told the New York Times. Conflicts between grileiros and the poor posseiros (homesteaders) in the Cerrado date back to the 1950s.
In July 2016, the Agrarian Prosecutor in northeastern Piauí state voided 124,400 hectares of De Carli’s land titles, but TIAA has purchased other land from De Carli. “The significance of these canceled titles,” said Quinn-Thibodeau, “is that it increases the likelihood that the land that TIAA owns was bought illegally.”
This places TIAA front and center in Brazil’s land conflicts. TIAA refutes the charges, even though its 2015 report on complying with Principles of Responsible Farmland Investment acknowledges that it helps to “facilitate the growth of local agribusinesses” in Brazil. The financial services giant insists that it almost always buys existing agricultural land rather than uncleared land, and that 100% of its purchases are subject to a rigorous title search.
The difficulty with verifying these claims is that TIAA refuses to disclose the names and locations of the individual farms. Non-governmental critics insist that they must be made public to ensure adequate external evaluation. A 2015 report based on research by Brazilian campaign partner Rede Social de Justiça e Direitos Humanos argues that TIAA contributes to deforestation because it purchases already-cleared land that was obtained illegally by grileiros.
Ecocide in Guatemala
Most of TIAA’s Latin American investments in agriculture involve large scale agro-industries— soy in northeastern Brazil, sugar cane in Brazil’s south east and palm oil in Guatemala. Palm oil, found in everything from food to cosmetics to biodiesel, is expanding worldwide by approximately 10 percent each year. The oil’s astonishing productivity has rapidly transformed it into the world’s most used vegetable oil, fueled by food manufacturers’ steady move away from trans fats. But it has also proven destructive: a 2012 article in Scientific American warns that land-clearing for palm oil significantly contributes to greenhouse gas emissions. And the U.S. Department of Labor considers palm oil one of the world’s worst industries for forced and child labor.
A 2016 report by Friends of the Earth calculates that TIAA invests just over $433.65 million in palm oil production worldwide. In Guatemala, TIAA is linked to both Wilmar International and Cargill, which source the oil from local producer, Reforestadora de Palma de Petén SA (REPSA). Malaysian conglomerate IOI then purchases the Guatemalan palm oil from Cargill for its European markets.
In March 2016, IOI was suspended from the Roundtable on Sustainable Palm Oil (RSPO), a multi-stakeholder, collaborative initiative that certifies industry sustainability and labor standards for 17% of the world’s palm oil. The ruling against IOI, over deforestation in Indonesia, led multinationals, including Kellogg’s and Cargill, to drop IOI. After agreeing to changes its practices, IOI was reinstated into the RSPO in August.
However, York University’s Adrienne Johnson doubts that the industry-controlled RSPO can really make palm oil “greener.” The organization’s track record has been uneven at best: a RSPO representative admitted recently that the palm oil certification process is “not perfect.”
REPSA grows 96 square miles of African palm in Guatemala’s northern, sparsely populated Petén, a region that only a few decades ago, was almost completely rainforest. Land dedicated to palm exploded almost ten-fold from 2000 to 2012, turning Guatemala into the region’s fourth largest producer. Growth is unlikely to slow as a 2010 Ministry of Agriculture study found that just 15.7 % of the country’s land suitable for palm is currently in production.
Palm oil cultivation is centered around Sayaxché, one of Guatemala’s poorest municipalities. A 2013 Oxfam report found that a third of palm plantations were previously forested and a quarter were grassland, as palm has taken over huge swaths of land previously occupied by small family farms. The Oxfam report, as well as another 2016 report by labor rights organization Verité, implicate REPSA in land grabbing, forced labor, and human rights abuses.
In early 2015, thousands of dead fish showed up along 100 miles of the banks of the once unspoiled Pasión River that runs through Sayaxché, convincing Guatemala’s Ministry of the Environment and Natural Resources that the disaster was an “ecocide.” The suspected cause was a gigantic discharge into the river of organic matter from REPSA’s palm-oil mill effluent ponds. The spill destroyed the livelihoods of roughly 12,000 local families. “People who lived off the river lost their houses because they couldn’t pay their bank loans,” fishing leader Evaristo Carmenate told the national press.
An environmental judge suspended REPSA’s operations for six months in September 2015 so that an investigation could proceed into the company’s alleged role in the catastrophe. The case against REPSA was brought by a Sayaxché organization, the Commission for the Defense of Life and Nature (CDVN). A day after the court ruling, thousands of REPSA employees angrily took to the streets because they saw in the ruling a threat to their livelihoods. They blocked roads, kidnapped and threatened to burn three activists alive, and occupied the local courthouse in an attempt to intimidate the judge. Later the same day, CDVN spokesman and local teacher Rigoberto Lima Choc was murdered outside the same courthouse. CDVN has received constant threats and intimidation ever since.
A year after the environmental tragedy on the Pasión River, the only government action has been two administrative orders against the company. REPSA was permitted to resume operations in November 2015 pending the case’s resolution. The Center for Environmental and Social Legal Action of Guatemala (CALAS), which represents CDVN, suspects that the company has bought off local judges so as to sabotage and stall the investigation.
In December 2016, U.S. environmental and human rights groups demanded the Guatemalan government act to protect CDVN and other Petén land defenders. “CDVN has faced death threats, defamation campaigns, and attacks by REPSA employees,” says Saul Paau, CDVN spokesperson. “All we want is that those responsible be held accountable for the environmental contamination and attacks against our Indigenous people.”
REPSA has come under pressure from its customers Cargill and Wilmar, who demanded in June 2016 that it adopt measures to prevent future violence. REPSA issued a Policy on Non-Violence and Intimidation the same day as the reprimand from the companies. Cargill pledged to terminate its contracts with REPSA if the issues remained unresolved by December 2016. But to date, Cargill has taken no action against REPSA.
Holding TIAA accountable
TIAA’s investments in global farmland and agro-commodities have thrust it into a toxic brew of poverty, environmental degradation and violence with a tragic history in both northeastern Brazil and Guatemala. The explosion of foreign-financed agribusiness has only intensified these dynamics, making any notion of sustainable and socially responsible investing appear a non-starter.
TIAA is massively invested in U.S. land as well. ActionAid USA estimates that these holdings are at least half of TIAA’s total farmland assets, encompassing a quarter million acres. “Strong evidence exists that speculation has driven rising land prices putting incredible pressure on America’s small and mid-size farmers, many of whom need to rent land or who are denied loans,” Tristan Quinn-Thibodeau explained. “Even if they do everything legally, TIAA is still participating in a process that forces more US farmers off the land, making what TIAA calls ‘responsible’ investing anything but.”
A barrier to increased transparency for TIAA’s individual account holders is that assets in Brazil and Guatemala are often held through index funds, mutual funds whose portfolio matches or tracks the market. This leads to the routine shifting of assets as markets fluctuate, obscuring where funds are. Friends of the Earth and As You Sow have launched an online “transparency tool,” called Deforestation Free Funds to provide information on which of some 6,500 funds have holdings in palm oil producers linked to deforestation. They plan to expand the tool to incorporate other products that contribute to rainforest destruction.
The groups at the heart of the TIAA campaign hope that the investment giant will rise to the challenge handed it. They are building on a successful 2013 campaign led by U.S. organizations that compelled TIAA to drop U.S. companies that supported Israel’s occupation of Palestine through pressure from over 20,000 shareholders. “We’re giving TIAA an opportunity to take the lead in the field worldwide on land grabs and environmental destruction,” says Jeff Conant of Friends of the Earth. “Pressure from their pension fund holders is part of convincing them to step up.”
If you hold a TIAA account, you can sign to a letter that demands full disclosure of TIAA farm and agribusiness investments, divestment from acquisitions that contribute to the displacement of local farmers, a commitment to a deforestation and a land grab free investment policy, and investment in companies proven to protect the environment. For those without TIAA accounts, you can sign a general petition.