Forest Conversion for Commercial Agriculture and Associated Exports
According to the Peruvian government, small-scale agriculture and cattle ranching is responsible for 75 per cent of deforestation, while medium-to-large-scale agriculture is the second most important driver (Ministerio del Ambiente 2013). All of the latter and perhaps three-quarters of the former is commercial in nature (Berdegué and Fuentealba 2011). Recent projections suggest that expansion of oil palm monoculture is fast-becoming the main driver of deforestation in the Peruvian Amazon (Douroleanni et al. 2010). Ninety percent of the 5 Mha of Peruvian land with potential for oil palm is forested (Burneo, 2011). In 2015, 11 requests for the transfer of forest land for development of large oil palm concessions in Loreto, Ucayali, and San Martin were outstanding, amounting to 99,356 hectares. If these are approved, national deforestation would increase by 88 per cent (AIDESEP 2015). Another new major driver of deforestation in Peru is cocoa plantations.
Most palm oil production in Peru is being consumed domestically, but the new plantations recently planted may be export-oriented. Cocoa production is nearly all destined for export.
Illegalities in conversion
While large-scale industrial oil palm and cocoa plantation development is only just starting in earnest in the country, there is already a growing body of evidence that much of this development in the Peruvian Amazon Basin is illegal. Companies have been illegally authorized to develop oil palm plantations in areas of primary forest zoned for sustainable selective timber harvesting. Companies are also alleged to have abused small-scale permits for subsistence agriculture by getting local people to clear forest and apply for such permits, then buying up and combining these permits to create an oil palm plantation. There have also reportedly been cases of companies clear-felling forests and planting oil palm without any permits at all (Urrunaga 2013). Illegalities are abetted by an unclear and contradictory legal framework governing the allocation of forest land for agricultural development (EIA 2015).
By far the largest current oil palm grower in Peru is the conglomerate Grupo Romero, which has three large oil palm estates in San Martin and Loreto provinces in the Peruvian Amazon. Allegations of illegalities involving two of these estates have been made by a legal advisor to the regional government of San Martin, who is reported to have claimed that the subsidiary operating one of the estates, Palmas del Shanusi, had “not respected the 30 per cent forest coverage provided by the Law” and had constructed roads and a private airport “without the authorization of the competent authorities” and without an adequately approved environmental impact study. He also claimed that the owner of a second Grupo Romero estate, Palmas del Oriente, had failed to comply with the terms of its Environmental Impact Assessment, and logged the forest in less than five months instead of doing it gradually over three years (CEPES 2010). As of 2015, Palmas del Shanusi was facing “at least seven legal cases related to illegal deforestation in which several of the group’s high-level representatives have been charged”(EIA 2015).
Between 2012 and 2013, four different companies owned by the Group submitted requests to develop new oil palm plantations covering a total of 34,295 hectares. Based on analysis of satellite data, a campaigning NGO has claimed that these plantations will be developed over primary forests, which is in violation of a Peruvian law which forbids agricultural activity on land containing intact forest resources, and is also in violation of a Supreme Decree that limits oil palm plantations to areas that have previously been deforested or that are appropriate for agriculture (EIA 2015).
In the last few years, the operations of the Melka Group, via the London-listed company United Cacao, has come under increasing scrutiny for deforestation for new industrial cocoa and oil palm plantations in Loreto and Ucayali respectively. These plantation developments are responsible for the single largest tracts of recent deforestation in the Peruvian Amazon. Both projects are mired in serious allegations of illegality.
In May 2016, the Peruvian government’s forest authority, SERFOR, released a statement saying the company’s cocoa plantation in Tamshiyacu, Loreto (clearance for which began in 2013), had not obtained the necessary environmental approvals before starting operations, and that it had illegally cleared large areas of primary rainforests (Mongabay 2016). An updated zoning evaluation released by the Peruvian Ministry of Agriculture and Irrigation (MINAGRI) in July 2016 revealed that the majority of the land concerned could not have been legally developed, since it is forest-zoned land, not land permitted for use in agriculture (MAAP 2016). The Peruvian government issued a stop work order on the project in December 2014, but testimony and satellite imagery collected by NGOs indicated that plantation development nevertheless continued during early 2015 (Mongabay 2016). United Cacao has denied all the allegations and claims to be operating legally according to Peruvian law.
Meanwhile in Ucayali, two other companies related to the Melka group, Plantaciones de Pucallpa and Plantaciones de Ucayali, have been clearing large areas of forest for new oil palm plantations. Both have been found to be operating illegally.
In July 2014, the provincial government imposed $650,000 of fines and penalties on Plantaciones de Ucayali for deforesting 4000 hectares without the required permit from the Ucayali forest authority (EIA 2015). At the nearby Plantaciones de Pucallpa oil palm development, where some 5200 hectares of forest has been felled since January 2013, the local Shipibo community filed a complaint with the Roundtable on Sustainable Palm Oil (RSPO) in November 2015 alleging (among other things) the development was illegal because it contravened a prohibition on conversion of primary forest, proceeded without required environmental impact assessments and other permits, and was carried out without the consent of local indigenous peoples (RSPO 2016). Based on the second of these alleged illegalities, the government issued an order suspending the company’s activities in September 2015 (MINAGRI 2015).
The controversial new oil palm and cocoa plantations mentioned above are not yet mature and therefore not exporting any products. However, it is estimated that large volumes of commercially valuable timber have been being harvested during the felling of forests to make way for these projects (EIA 2015), some of which is likely reaching overseas markets.
Ministerio del Ambiente, Peru. 2013. Forest Carbon Partnership Facility (FCPF) Readiness Preparation Proposal (R-PP), December.
A regional study of Latin America published in 2011 found that 75 percent of small-scale agriculture is commercial (Berdegué and Fuentealba 2011)
Dourojeanni, Marc, Alberto Barandiarán Alberto and Diego Dourojeanni. 2010. “Amazonía Peruana en 2021. Explotación de recursos naturales e infraestructura: ¿Qué está pasando? ¿Qué es lo que significa para el futuro?” Segunda edición. ProNaturaleza, DAR, SPDA, and ICAA, Lima
Burneo, Zulema. 2011. “El proceso de concentración de la tierra en el Perú.” El Centro Peruano de Estudios Sociales (CEPES), Lima. http://www.cepes.org.pe/portal/node/10777
AIDESEP, 2015: http://www.aidesep.org.pe/gobierno-impulsa-nuevo-plan-nacional-de-palma-aceitera-sin-reglamentacion-clara/ and EIA 2015: http://eia-global.org/blog/peru-promotes-oil-palm-expansion-despite-devastating-consequences-for-indig
Urrunaga, Julia. 2013. “REDD+ Relevant Commodity Supply Chains: Voluntary Efforts to Remove Deforestation from Supply Chains.” Presentation at Oslo REDD Exchange, October.
CEPES. 2010. “La deforestación continua: A pesar de la paralización de su proyecto Palmas del Caynarachi, el Grupo Romera continúa con sus planes de expansión de palma aceitera, a expensas del bosque amazónico.” La Revista Agraria 118: 12-13. http://www.larevistaagraria.org/sites/default/files/revista/r-agra118/LRA-118-12-13.pdf
EIA. 2015. Deforestation by Definition: The Peruvian Government fails to Define Forests as Forests, While Palm Oil Expansion and the Malaysian Influence Threaten the Amazon. http://eia-global.org/images/uploads/150325.1_EIA_Peru_Palm_Report_P06-WEB.pdf
Monitoring of the Andean Amazon Project (MAAP). 2016. MAAP#38: United Cacao Deforestation in Area Classified as “Forest Production”. 11th July 2016. http://maaproject.org/2016/united-cacao-forest/, citing MINAGRI resolution approving the Update of the Soil and Optimum Land Use Suitability Studies for Areas in the Loreto Region – http://busquedas.elperuano.com.pe/normaslegales/aprueban-actualizacion-de-los-estudios-de-suelos-y-capacida-resolucion-no-300-2016-minagri-dvdiar-dgaaa-1394544-1/
Mongabay. 2016. United Cacao responds to bid to remove company from London Stock Exchange. 12th May 2016. https://news.mongabay.com/2016/05/united-cacao-responds-bid-remove-company-london-stock-exchange/
RSPO. 2016. Case Tracker: Plantaciones de Pucallpa. http://www.rspo.org/members/complaints/status-of-complaints/view/88
MINAGRI. 2016. Oficio No.1564-2015-MINAGRI-DVDIAR-DGAAA. 4th September 2015. http://www.rspo.org/files/download/03bc6c90b025437
This summary was last updated in September 2016. For more recent information, please see news on Peru here.