Monday 17 april 2023
To make sure the EU Deforestation Regulation and the Corporate Sustainability Due Diligence Directive will achieve a genuine effect in biodiverse landscapes it is essential to profoundly understand the supply chains. These legislative initiatives of the European Union will address deforestation and forest degradation linked to commodities, as well as protection of environmental and human rights of Indigenous peoples and local communities. AidEnvironment and IUCN NL therefore mapped the full palm oil supply chain, from plantation level in Colombia to consumption level in Europe.
Header photo: palm oil plantations in Guaviare in Colombia © FCDS
Through this research, we identified key supply chain actors, their trade flows and their operations. Six case studies show palm oil mills that are unlikely to comply with the environmental and/or human rights standards that are at the core of the EU Deforestation Regulation and the Corporate Sustainability Due Diligence (CSDDD), while palm oil supply chain actors in the EU still buy from these mills.
Recommendations for EU policy makers
Based on the findings analysed in the report Uncovering the supply chain: palm oil from Colombia to the EU, we have developed recommendations for policy makers and the private sector in both Colombia and the EU.
Five key recommendations for policy makers at EU level:
1. The EU and its member states must allocate resources towards environmental and human rights measures in high-risk productive landscapes, rather than relying solely on traceability requirements or avoiding these areas of concern.
2. In the event of persistent non-compliance, it is imperative to take measures to prevent traders and EU buyers from being linked to sites that are associated with environmental degradation and human rights abuses.
3. The EU must maintain its support for and collaboration with civil society organisations, as well as enhance the capacity of local authorities to bolster the traceability and landscape governance of palm oil.
4. Expand the scope of the EU Deforestation Regulation to encompass additional ecosystems beyond forests.
5. Ensure that the European Directive on Corporate Sustainability Due Diligence adheres, at a minimum, to the OECD Guidelines and the UN Guiding Principles on Business and Human Rights, with a specific focus on environmental due diligence.
In the future, palm oil has the potential to make a local positive impact in Colombia, but only with full transparency, landscape investments, a common environmental human rights vision and close collaboration among actors.
Colombian palm oil sector
Colombia is the fourth producer of palm oil worldwide. Annually, the Andean country produces around 1,838,000 metric tons of palm oil, which is approximately 2.3% of the global production. In 2020, almost half of the Colombian palm oil was exported. European countries, in particular the Netherlands, Italy and Spain, form an important export market for Colombian Palm oil.
The country’s palm oil cultivation has increased 75% in the past ten years. The government’s objective to become a major producer of biodiesel, among other developments, makes further growth of the industry likely. In theory this cannot happen at cost of the forests that are of high ecological and socio-cultural importance: deforestation is forbidden by Colombian law. The EU Deforestation Regulation builds on the Colombian law by making European countries accountable for the products they import: they cannot import commodities that have caused deforestation or forest degradation.
Palm oil has the potential to make a local positive impact in Colombia, but only with full transparency, landscape investments, a common environmental human rights vision and close collaboration among actors.
Six case studies
In six case studies, companies were investigated by applying the radius monitoring approach and conducting desk research. Several selection criteria were applied to select the case studies in this report, including the presence of deforestation, the proximity to Indigenous territories and national reserves, connection to polluted waterways and RSPO complaints or other social issues. Because we deliberately selected cases with potential environmental and social impacts linked to oil palm expansion, the case studies in this report do not necessarily represent the situation of the entire Colombian palm oil sector. They do, however, provide a valuable indication of environmental and social realities in the sector.
The report’s case studies show that palm oil flows entering the EU market are linked to palm oil mills located near areas where clear indications of burned natural areas and expansion of palm oil plantations onto land previously utilized for cattle ranching exist. Although it is not possible to confirm this with the available data, the proximity of the mills makes it a very possible scenario.
These studies also indicate that palm oil expansion has an indirect role in pushing the deforestation frontier, with many current pastures expected to be overtaken by palm oil plantations in the near future.
Environmental and human rights
Part of the case studies also show human rights violations and/or social issues, such as the displacement of Indigenous peoples and local communities through forced or unfair land deals. Another issue is access to water: in areas where palm oil plantations are expending, local people have less access to (clean) water.
In some cases, the expansion of the plantations takes place near areas of conflict. This increases the risk that palm oil production is contributing to severe negative social impacts, including human rights and labour violations, displacement, land disputes, and extortion, abuse, and even murder of Indigenous peoples and local communities by armed groups. Nevertheless, we cannot conclude with certainty that palm oil plantations directly cause conflict dynamics.
Based on the results of the study, we strongly recommend that the EU and its member states allocate resources for environmental and human rights measures in high-risk landscapes, rather than relying solely on traceability requirements. Traceability and transparency play a pivotal role in the Colombian palm oil sector in preventing deforestation and illegality, but are not always (correctly) in place.
Some areas not suitable for oil palm cultivation or expansion, as this would further push the deforestation frontier, increase environmental degradation and harm the rights of the Indigenous peoples and other local communities. It is imperative to take measures preventing that palm oil imported from the EU comes from areas where persistent non-compliance takes place.
Report: palm oil exports from Colombia to the EU
In the report ‘Uncovering the supply chain: palm oil from Colombia to the EU’, we elaborate on these and other recommendations for policy makers and the private sector, both in the EU and Colombia. These recommendations and conclusions build on research on palm oil trade between the EU and Colombian, the key supply chain actors and six case studies. The report is a joint publication of AidEnvironment and IUCN NL.