VZCZCXYZ0000
RR RUEHWEB

DE RUEHBO #4353/01 3441821
ZNR UUUUU ZZH
R 091821Z DEC 08
FM AMEMBASSY BOGOTA
TO RUEHC/SECSTATE WASHDC 5970
INFO RUEHBR/AMEMBASSY BRASILIA 8546
RUEHCV/AMEMBASSY CARACAS 1399
RUEHPE/AMEMBASSY LIMA 6809
RUEHLP/AMEMBASSY LA PAZ DEC PANAMA 2752
RUEHQT/AMEMBASSY QUITO 7501
RUEHRC/DEPT OF AGRICULTURE WASHDC

UNCLAS BOGOTA 004353 

SENSITIVE 
SIPDIS 

WHA/EPSC FOR FCORNEILLE; EEB/ESC FOR MMCMANUS; OES/ENV FOR 
JBENFORADO 

E.O. 12958: N/A 
TAGS: EAGR SENV ENRG ECON PGOV PHUM CO
SUBJECT: COLOMBIAN PALM: RURAL SAVIOR OR HUMAN RIGHTS 
ALBATROSS?

REF: BOGOTA 2331 

¶1. (SBU) SUMMARY: Driven by strong international demand for 
palm oil, improving security in rural areas, government 
support for viable alternatives to coca, and domestic demand 
for palm oil-derived biodiesel, Colombia's palm industry has 
expanded 70 percent since 2003.  As a result, it now ranks as 
the largest in the Americas and the fifth largest in the 
world.  President Uribe frequently points to palm as 
Colombia's future motor of rural development and employment 
as conflict recedes.  However, the sector has come under 
repeated allegations of profiting from forced displacements 
of Afro-Colombian and indigenous populations, destroying 
biodiversity, failing to benefit small farmers, and creating 
an unsustainable industry unable to compete globally.  A more 
detailed analysis reveals that many of the allegations appear 
exaggerated or unsubstantiated.  Nevertheless, the Colombian 
palm sector, and the licit employment it creates, risk 
permanent denigration unless producers and the GOC are more 
successful at combatting this negative image.  END SUMMARY. 

Misconception #1: Conflict Palm Widespread 
------------------------------------------ 

¶2. (SBU) Colombia's Pacific Coast region suffers from 
numerous long-standing land tenure conflicts fueled by 
displacements of local Afro-Colombian and indigenous 
populations by illegal paramilitary forces, as well as by 
individual legal disputes related to Colombia's collective 
titling law (Law 70).  Approximately 32,000 hectares of land 
in Choco Department alone are in dispute under Law 70.  Of 
that total, 4,000 hectares were the subject of two 
high-profile forced displacements in the Uraba region 
(Curvarado and Jiguamiando) which were then planted with 
palm.  While none of the firms responsible for the subsequent 
palm cultivation are members of Colombia's National 
Federation of Palm Grower's (Fedepalma) or mainstream 
producers, various human rights NGOs to have attempted to 
link palm production generally to Colombia's armed conflict 
and land rights issues as a result of these incidents. 

¶3. (SBU) Civil society representatives such as Zoraida
Castillo of Lutheran World Relief and Aida Pesquera of Oxfam 
tell us that slow progress by the GOC in securing justice in 
theUraba incidents has obscured the fact that such 
documented cases represent less than two percent of 
Colombia's palm cultivation.  While the vast majority of the 
industry has not been subject to such conflict, Fedepalma
President Jens Mesa Dishington told Econoff that he considers 
the prospect of industry-wide stigmatization resulting from 
isolated abuses as the most significant risk to the brand of 
Colombian palm.  In an effort to address the situation, 
Fedepalma has supported pending legislation in Colombia's 
Congress to require clear registration of all agricultural 
land as a means to impede profiting from displacements.  The 
human rights group Association for Alternative Social 
Promotion (MINGA), which blames pro-agribusiness GOC policies 
for driving indigenous and peasant farmers off the land, 
recognizes that Colombian land problems extend well beyond 
palm, and recommends that instead of new laws the GOC should 
allocate more resources to the existing institutions 
responsible for land titling. 

Misconception #2: Palm Destroying Biodiversity 
--------------------------------------------- - 

¶4. (U) Critics of the palm industry frequently assert that 
growers are razing biodiverse lands, particularly on the 
Pacific Coast, in order to introduce new cultivation.  While 
palm cultivation grew from 206,000 planted hectares in 2003 
to an estimated 340,000 hectares in 2008, the growth has 
occurred predominately in the traditional agricultural areas 
of Meta, Cesar, Santander and Magdalena.  Only ten percent 
(34,000 hectares) of Colombia's palm sector is located in the 
Pacific Coast, and its participation is declining, down from 
13 percent in 2003.  The GOC and Fedepalma are aware of the 
global association of palm production with deforestation, and 
have a stated policy of developing Colombia's palm oil and 
biodiesel industry utilizing only degraded lands or lands 
already in agricultural production.  To that end, the GOC has 
identified 3.5 million hectares of such land, of which only 

66,000 hectares are located in the Pacific Coast Departments. 


¶5. (SBU) Likewise, producers have engaged NGOs directly and 
through the Kuala Lampur-based Roundtable for Sustainable 
Palm Oil (RSPO), which has established eight principles and 
related criteria for sustainable palm oil development.  One 
Colombian palm producer, Daabon, has already begun the 
certification process.  Fedepalma Sustainable Development 
Director Andres Castro told us that Fedepalma, which 
represents approximately 80 percent of Colombian palm oil 
production, is also working with the GOC on a "national 
interpretation" of the RSPO criteria to inform Colombian 
growers how the criteria fits with existing GOC regulations. 
Finally, Fedepalma, with support from the World Wildlife 
Fund, held the first-ever Latin American Roundtable Meeting 
on Sustainable Palm Development in October.  Reflective of 
these efforts, the Journal of Environmental Science and 
Technology identified Colombia as one of the top five 
countries for capacity to sustainably develop its palm 
industry. 

Misconception #3: Small Farmers Left Out 
---------------------------------------- 

¶6. (U) While critics often portray Colombia's palm sector as 
large-scale agroindustry, Fedepalma estimates over 5,300 of 
Colombia's 7,000 palm growers are small producers cultivating 
plots of 50 hectares or less, producing 20 percent of 
national palm oil output.  According to Fedepalma statistics, 
Colombia's palm sector supports 40,000 direct jobs, including 
many on small farms, and 55,000 indirect jobs in 93 
municipalities and 16 departments.  As the pruning of palm 
trees and the harvesting of palm fruit are both labor 
intensive and do not have viable mechanization alternatives, 
the sector employs on average one worker per ten hectares of 
palm cultivation.  In addition to the new jobs that palm 
production has created, palm oil mills and producers have 
formed 109 production alliances across the country to ensure 
existing small producers have access to credit and markets 
and mills have a steady supply of palm fruit. 

¶7. (U) USAID, through its Alternative Development Program, 
supports an additional 2,400 small landowners through 24 
palm projects totaling nearly 36,000 hectares.  USAID has 
promoted a system of alliances between large and small 
producers to share the technical knowledge, access to credit, 
risk-bearing capability of large producers with small 
producers that provide much of the sector's land and labor. 
USAID has also developed a protocol for strengthening due 
diligence processes in place to ensure protection of communal 
and individual land tenure rights. 

Misconception #4: Colombian Palm Cannot Compete 
--------------------------------------------- -- 

¶8. (U) Despite Colombia's recent boom in palm oil production, 
many critics assert that the industry remains uncompetitive 
over the long term.  Due largely to high labor costs, 
Colombia's average production cost (USD 450 per metric ton) 
is as much as double that of Asian producers.  Nevertheless, 
Colombia ranks fourth worldwide in palm oil yield per 
hectare, possesses strong domestic demand for dietary 
consumption of palm oil, and enjoys lower transportation 
costs to the U.S. and European markets.  Currently 46 percent 
of Colombian production is directed to exports, with the 
Netherlands, Germany, United Kingdom, and Mexico representing 
Colombia's largest markets.

¶9. (SBU) In addition, palm oil has become a principal 
feedstock for biodiesel in Colombia, for which the GOC has 
mandated five percent biodiesel blending into local diesel 
fuel.  The GOC forecasts Colombia's overall diesel 
consumption will grow nine times faster than gasoline 
consumption over the next 15 years.  This growing diesel 
demand combined with the biodiesel blending mandates, which 
are set to increase to ten percent in 2010 and 20 percent in 
2020, create a guaranteed domestic demand for Colombian palm 
oil.  Four biodiesel plants have come on-line in the last 18 
months and two more will enter operation by mid-2009 to 
process biodiesel for the impending ten percent blend. 

According to Maria Emma Nuez, President of Colombia's Palm 
Oil Marketing Association (Acepalma), crude palm oil 
production will reach 806.000 tons in 2008 and 872,000 tons 
in 2009 in response to domestic demand for palm oil-derived 
biodiesel.  Over the longer term, the Ministry of Agriculture 
forecasts that Colombia will need to increase palm 
cultivation by 700,000 hectares to produce the estimated 3.3 
million liters of biodiesel Colombia will require by 2020. 

Why Controversy Persists 
------------------------ 

¶10. (SBU) Independent observers such as Jonathan Glennie, 
Country Director for Christian Aid Colombia, say much of the 
controversy surrounding palm has little to do with the 
industry itself and more do with booming sector becoming a 
causecelebre for local communities and activists frustrated 
with Colombia's broader land tenure issues, skeptical of the 
country's history of boom/bust cash crops, and distrustful of 
agroindustry.  Zoraida Castillo and other civil society 
representatives also cite the lack of GOC progress in 
resolving the few, but egregious, cases of documented forced 
displacement and subsequent palm cultivation in Uraba. The 
pace, they say, fosters a perception among marginalized 
communities that government authorities and large-scale palm 
producers have colluded to advance their economic interests 
at the expense of human rights and environmental protection. 

Comment:  Clarifying the Record Before Its Too Late 
--------------------------------------------- ------ 

¶11. (SBU) The GOC recognizes that for a post-conflict 
scenario to be sustainable, rural employment opportunities 
must be generated.  Palm has the potential to be one of the 
principal motors of such employment.  But whereas Colombian 
palm should enjoy an image boost -- particularly compared 
with Asian palm -- because of lack of rainforest destruction, 
it is instead on the defensive due to human rights 
allegations.  Signs are that the palm industry and the GOC, 
after merely dismissing the allegations as baseless, are now 
beginning to grasp the potential long-term damage to the 
Colombian palm brand. Senior Agriculture Ministry Advisor 
Andres Espinosa told EconCouns that Agriculture Minister 
Arias is seized with the issue and is coordinating a GOC 
working group with producers and civil society to clarify the 
public record.  For its part, Fedepalma Sustainable 
Development Director Castro Mesa says his association will 
continue to push the GOC in private to resolve the 
outstanding land and human rights cases in Uraba while 
encouraging its members to pursue sustainability 
certifications and deepen alliances with small producers. 
NICHOLS 

=======================CABLE ENDS============================