Cargill axes palm oil supplier over human rights

11 January 2018

Agricultural giant Cargill has suspended business with a major Guatemalan palm oil supplier that has been accused of human rights violations and environmental degradation.

Chris Schraeder, director of sustainability communications at Cargill, said the company had cut ties with its supplier Reforestadora de Palmas del Peten (REPSA) because of violations of its commitment to sustainable oil.

“The suspension is in response to grievances raised by a coalition of international and Guatemalan NGOs,” he said.

“We will not enter into new purchase contracts with REPSA until the supplier can demonstrate adoption of the required sustainable environmental and social practices.” 

He added that the company would reassess its business relationship with REPSA if the supplier showed a renewed commitment to Cargill’s sustainability goals.  

In 2014, Cargill, one of the world’s largest traders of palm oil, set goals to achieve a 100% transparent and sustainable palm oil supply chain by 2040. Since then, it has partnered with NGO The Forest Trust and signed the Indonesian Palm Oil pledge at the 2014 United Nations Climate Summit to achieve the goal.

In its review outlining its decision, Cargill said although it had been working been working with REPSA since December 2015 to get it to comply with the company’s sustainability and social policies, it still “fell short on several key expectations”. 

Cargill launched a review of its relationship with REPSA after the September 2015 shooting and death of Rigoberto Lima Choc, a Guatemalan schoolteacher who had spoken out about a big fish kill in the Pasion River in northern Guatemala.

At the time, Choc and other local activists in the region claimed that millions of fish died due to discharges into river from a REPSA palm oil operation, which led to a Guatemalan judge ordering REPSA to shut down the plantation for six months.

The ruling was quickly followed by the kidnappings of three local human rights activists and Choc’s killing near a courthouse in the city of Sayaxhe.

REPSA has said it was not linked with Choc’s death and a higher Guatemalan court overturned the order to temporarily close the REPSA plantation.

In response, in 2016 Cargill asked REPSA to implement an action plan that included strengthening environmental and social protection, adhering to local and national laws, and issuing a “strong zero tolerance policy on violence and intimidation”.

Last year, a report by Verité, a US non-profit research group for workers, said palm oil companies and sugarcane harvesters in Guatemala were “operating in very complicated environments”.

It said conflicts over land, weak government protection and unscrupulous labour contractors can “contribute to land grabs and the exploitation of workers”.

Gemma Tillack, agribusiness campaign director of Rainforest Action Network, said Cargill’s decision is rare because it is based not only on environmental concerns but human rights issues.

“In our view, this is a precedent-setting moment, given that this is such a monumental case involving violence and intimidation,” she said. 

Jeff Conant, senior international forests programme director for Friends of Forest, said Cargill’s suspension of business with one of their key suppliers sent an important signal to the palm oil industry.

“Cargill is among the global agribusiness companies that have tried to dissociate themselves from human rights exploitation and by making this definitive break with REPSA, they are showing they are serious,” he said.

“Instead of just working with a company to come up with what are often cosmetic improvements, this shows a willingness to suspend business.”

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