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Report shows Peru failed to stop Amazon deforestation for palm oil and cacao

Deforestation in Fundo Tibecocha, an area comprising at least 232 properties acquired by Plantaciones de Pucallpa in Ucayali. Fundo Tibecocha partially overlaps with an area the local community of Santa Clara de Uchunya claims as its ancestral territory. (Photo: Environmental Investigation Agency US)

Mongabay | 8 February 2024

Report shows Peru failed to stop Amazon deforestation for palm oil and cacao

by Dimitri Selibas

Several palm oil and cacao companies operating in the Peruvian Amazon have systematically contributed to clearing at least 13,000 hectares (32,000 acres) between 2012 and 2021 in the country’s most forest-rich regions of Loreto and Ucayali, shows a new report by the Environmental Investigation Agency (EIA).

The investigation “Carving up the Amazon” claims that deforestation happened with impunity under the eyes of the Peruvian state, which has put forests at risk through irregular titling practices and by allowing companies to continue their practices despite obvious legal infringements. Almost 100% of deforestation in Ucayali and Loreto between 2012 and 2018 had no legal permits, which is part of a larger trend in which 2.7 million hectares (6.7 million acres) of forest have been cleared in Peru over the last two decades, the EIA stresses.

The EIA identifies six cases of illegal land titling, three cases of unauthorized deforestation and two cases of violating the rights of Indigenous and local communities. The report also details how Peru’s flawed legal framework for assigning land use and poor monitoring have given companies the chance to buy vast tracts of the Amazon and illegally clear forests.

“There are so many failures by a whole range of different state institutions, national and regional, and that shows a kind of dysfunction,” Chris Moye, EIA Latin America program manager and co-author for the report, told Mongabay. “We’ve got cases that have been ongoing for a decade. And the surprise is the systemic nature of this problem, how it goes across the executive and across the judiciary [in Peru]. Now the legislature as well.”

In January, Peru’s Congress enacted Law 31973, which pardons all historical illegal deforestation on rural properties or areas cleared for agriculture. Critics, including civil society and Indigenous peoples’ organizations, fear the law could fuel future deforestation and shield agribusinesses from accountability.

Julio Guzmán Mendoza, public prosecutor with Peru’s Ministry of the Environment, told Mongabay that Law 31973 prevents the reparation of damage and thus its recovery, which is the main function of the country’s environmental criminal law.

“The law, in theory, forfeits those spaces and basically gives them another status, which is land for agricultural species,” said Guzman Mendoza. “The ecological damage is permanent because we’re not going to recover those spaces.”

The companies investigated, some of which have since been superseded by other entities, are Cacao del Perú Norte, Plantaciones de Loreto, Plantaciones de Marín, Plantaciones del Perú Este, Plantaciones de Loreto Este, Plantaciones de Inahuaya, Plantaciones de Lima, Cacao de la Amazonía, Plantaciones de Ucayali and Plantaciones de Pucallpa.

The companies are associated with the “Melka Group,” a controversial business conglomerate investigated by the EIA in 2015. In 2017, the 25 companies involved were delisted from the London Stock Exchange based on allegations of illegal deforestation in Peru.

Although Peru claims that most of its deforestation comes from small-scale agriculture, industrial agriculture remains highly problematic in a country where palm oil is listed as a crop of national interest, states the report.

Some of the palm oil coming from deforested land ends up in the supply chains of multinationals such as Kellogg’s, Nestlé, Colgate, Belgian food group Vandemoortele and Spanish vegetable oil company LIPSA.

This could create issues in trading with the EU, as the bloc’s deforestation regulation (EUDR), applicable from December 2024, will prohibit imports of commodities from any illegal deforestation, as well as those from legal deforestation post-December 2020.

Irregular land titling endangers forests

In Peru, forests can be titled and converted into agriculture if it can be shown that the land was peacefully occupied and used, and if soil studies were carried out and approved by the agriculture ministry to show the land’s suitability for farming.

The investigation reveals that that six companies cleared more than 7,600 hectares (18,800 acres) of forests between 2012 and 2021 after acquiring 571 plots of land that lacked soil studies or consistent evidence of peaceful occupation.

The EIA also finds that land classifications for the plots analysed appear to have been done only via desk work, without any field visits. Information obtained via freedom of information requests shows that from 2015 to 2018, 6,140 land titles were issued in Ucayali. However, soil studies were claimed to have been conducted in only 711 cases, a mere 11.5% of the total.

In one case, in 2013, Cacao del Perú Norte (now known as Tamshi) bought 60 plots of land — almost 2,700 hectares (6,700 acres) — from farmers in Tamshiyacu, a small village one hour away by boat from Iquitos, Loreto. Within a year, almost three-quarters of the land was deforested and later planted with cacao without any authorization. Attempts by residents and NGOs to block the project didn’t stop the company.

“They began to buy land from small farmers. Once they had acquired the forest lands, they clear-cut the primary tropical forests, without having any type of soil study, authorization to change land use or environmental impact studies,” said Lucila Pautrat, investigator and president of the Kené Institute of Forestry and Environmental Studies.

Pautrat, who previously worked in the environmental department of Peru’s Ombudsman’s Office, has been investigating companies mentioned in the report for the past 14 years and has acted as a plaintiff as well as a witness in cases against some of the corporations.

In 2015, she filed an injunction with the Constitutional Court of Lima, which ordered Cacao del Perú Norte to suspend its operations. The company never complied, and in 2018, it changed its name to Tamshi, continuing to operate.

“The companies have changed their corporate name several times, but they haven’t changed their managers or their investors,” said Pautrat. “Their modus operandi is to mutate in order to evade monitoring by national and international law enforcement authorities.”

Impacts on Indigenous territories

The report reveals violations of Indigenous peoples’ rights by companies like Plantaciones de Ucayali and Plantaciones de Pucallpa, which illegally which illegally deforested more than 13,000 hectares (32,000 acres) in Ucayali between 2012 and 2021 to plant palm oil. These areas were later transferred to two subsidiaries belonging to U.S.-funded palm oil corporation Ocho Sur.

In 2015, the agriculture ministry sanctioned Plantaciones de Ucayali for noncompliance; despite not paying the penalties, it continued clearing. The successor, Ocho Sur U, eventually paid two fines in late 2022 but failed to conserve the legally required 30% of forest, with the remaining forest making up only 3% of the area.

“We as Indigenous people are not opposed to development,” said Rolando Escobar, vice president of the Federation of Native Communities of Ucayali and Affluents, an Indigenous organization of more than 30 communities.

“We fight to defend our territories so that our supermarkets don’t close. The forest is the supermarket,” Escobar told Mongabay via video call. “We get our food from it, and from it comes the material to build our houses. That’s where our medicine is. Everything is there.”

Escobar said the community of Santa Clara de Uchunya in Ucayali has been resisting for the past eight years, but despite the illegalities, including planting on their ancestral land, there have been no sanctions against Plantaciones de Pucallpa. Without the forest, conflicts also arise within the community, as some people work for Ocho Sur and others are resisting it, creating deep divisions within the community.

“And what’s more, young people are going elsewhere in search of work, because there’s no supermarkets, there’s nowhere to hunt, there’s nowhere to fish, there’s nowhere to get products,” said Escobar. “That’s why the population has to migrate to other regions in search of work. … Not only is it plundering our ancestral territory, but it is also dividing the population.”

Weak governance and corruption

Magaly Avila, environmental governance program director at Proética, Transparency International’s Peru chapter, told Mongabay that impunity for environmental crimes remains an enormous problem in the country, along with corruption.

“For there to be a corrupter or a corrupted entity, there has to be an entity that also corrupts,” said Avila. “If you start to follow where the money comes from, it ultimately has to do with certain kinds of pressures being behind it.”

Avila explained that in Peru, private interests lobby members of the Congress to legislate or modify norms favoring the interests of non-private third parties and not the national interests.

“In the past seven years, we have had six presidents with ministerial changes, which has also led to an outflow of professionals from the public sector,” said Avila. “There is a lot of weakening of public institutions as a whole.”

Holding accountable private and public officials involved in illegal activities is one of EIA’s recommendations. Others include establishing transparent land titling processes, aligning land titling legislation with forest conservation goals, ensuring transparency in cadastral data and cleaning up supply chains to ban trading unlawfully produced agricultural goods. Currently more than 13 million hectares (32 million acres) of forest — roughly the landmass of Greece — lack an assigned right to use and could risk deforestation under current titling irregularities.

The EIA also advocates for repealing Law 31973 and safeguarding human rights and forest defenders by adopting U.N. recommendations and ratifying international agreements such as the Escazú Agreement.

Moye says that EIA plans to discuss the report with various Peruvian state entities, the companies mentioned, international donors and governments such as the U.S., Norway, Germany and the U.K., which have agreements with Peru providing aid in exchange for forest protection.

“It has to be a strong, concerted effort by a government that’s really interested in conserving forests, helping local communities and Indigenous peoples by making sure that the institutions are answerable to them and to the democratic process,” said Moye. “And that they’re not just entities to be manipulated by companies and political interests for their own ends.”

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