Friday 08 september 2023
Palm oil has the potential to make a positive impact in Colombia, but only with full transparency, landscape investments in ecosystems, a common environmental human rights vision and close collaboration among actors. To make sure the EU Deforestation Regulation and the upcoming Corporate Sustainability Due Diligence Directive will achieve a genuine effect in biodiverse landscapes it is essential to profoundly understand the supply chains.
Header photo: palm oil plantations in Guaviare in Colombia © FCDS
AidEnvironment and IUCN NL therefore published the report ‘Insights in the supply chain: palm oil from Colombia to the EU’. In this report, we map the trade flows of Colombian palm oil to the EU and analyse potential social and environmental risks in the supply chain by studying six case studies.
- In Colombia, oil palm cultivated area has increased 116% between 2011 and 2021 according to the FAO. The country aims to become a large producer of biodiesel, which would further push this trend.
- In 2020, 52% of Colombia’s total production of crude palm oil was destined for the domestic market and 48% for international exports.
- Increased transparency in the value chain is essential. Mill list and supply chain transparency up to the level of the plantation play a vital role in achieving full transparency.
- Many commodities that are under the scope of the EU Deforestation Regulation are cultivated in landscapes where environmental and social risks are present. The case studies in this report show this is also happening in Colombia.
- Colombia is a front runner in the Latin American sustainable oil palm market, with 28% of its production volume certified as sustainable. The country’s commitment to the Zero Deforestation Agreement and adoption of strict principles for sustainable production showcase its dedication to environmental preservation.
- The six case studies show that part of the palm oil flows entering the EU market may potentially be linked to environmental human rights risks. These palm plantations have reportedly led to environmental damage to watersheds on which communities depend.
- The study shows increases in the surface of palm oil competes with other land uses, such as cattle ranching, thereby potentially contributing to indirect land use change (ILUC). Since ILUC is a complex dynamic, further independent research and data are needed to determine if there is a correlation between palm oil expansion and deforestation in Colombia.
- The case studies conducted on the transition zone between the Amazon and the Orinoquía region to the north have primarily impacted natural savannah ecosystems and, to a much lesser extent, forest ecosystems.
- Mills in areas with conflict dynamics demand heightened scrutiny from auditors to prevent environmental or human rights violations.
Six cases 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 proximity of deforestation, the proximity to Indigenous territories and protected areas, 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. The scope of this study does not include a risk assessment methodology, but relies on referenced sources to indicate existing or potential risks. They do, however, provide a valuable indication of environmental and social realities.
Recommendations for EU policy makers
Based on the findings analysed in the report, 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 sufficient resources for nature conservation and environmental human rights measures in high-risk productive landscapes, rather than relying solely on EU traceability requirements or (indirectly) promoting the abandonment of areas of concern.
2. It is imperative for the EU to maintain its support for and collaboration with – independent civil society organisations and multi-stakeholder sustainable palm oil initiatives, as well as enhance the capacity of local authorities to implement the EUDR and beyond.
3. Expand the scope of the EU Deforestation Regulation to encompass additional ecosystems beyond forests. Excluding the encroachment of the products in the EUDR’s scope into other ecosystems, such as ‘Other Wooded Lands’ (including savannas), in the regulation, could benefit forests and wetlands as well.
4. 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.
5. Indirect Land Use Change (ILUC) risks in relation to the Colombian palm oil sector should be further studied to see whether there is a correlation between palm oil expansion and continued deforestation. Since ILUC is a complex dynamic, which can differ between countries, ILUC related to the palm oil sector in Colombia should be further independently investigated. We recommend the Colombian Palm oil sector to adopt a specific ILUC strategy to mitigate these risks.
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 116% 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 Zero Deforestation law by making European countries accountable for the products they import: they cannot import commodities that have caused deforestation or forest degradation.
Report: palm oil exports from Colombia to the EU
In the report ‘Insights in the supply chain: palm oil from Colombia to the EU’, we elaborate on these and other findings and recommendations for policy makers and the private sector, both in the EU and Colombia. These recommendations and conclusions build on our study 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.
Second version of the report
This report was initially published in April, 2023. On the 26th of May, IUCN NL and AidEnvironment received a response from Fedepalma, Solidaridad Colombia and the Tropical Rainforest Alliance (TFA). Open dialogue and solid data are of major importance to IUCN NL, because of which we temporally took the report offline to carefully review the feedback.
IUCN NL and AidEnvironment organised two calls with representatives of Fedepalma, Solidaridad Colombia and TFA. The points raised by these organisations were discussed and taken into consideration while we thoroughly reviewed the report.
Having reviewed the report in its entirety, we reassert its robustness and the accuracy of its findings. Nevertheless, it emerged that select facets within the report could benefit from more clarification and additional sources to avoid ambiguity. We express gratitude towards Fedepalma, Solidaridad Colombia and TFA for identifying these areas warranting enhancement. The robust publication is based upon an aggregation of over 150 independent sources and datasets.
The palm oil sector has an important role to play in sustainable development in Colombia. We understand that full transparency and sustainable practices by all actors is a complex aim to achieve, and we recognise the steps the industry has already taken. The recommendations can serve as valuable input for enhancing both the sustainability and traceability of Colombia’s palm oil sector, ensuring a balanced benefit for both nature and people.