A Truck Holding Palm Fruits in Guatemala

Today (March 31, 2014), Verité releases an in-depth case study of the risk of human and labor rights abuses in the production of palm oil in Guatemala. This report is the outcome of weeks of on-the-ground field research and expert consultation led by Research Program Manager Quinn Kepes. The report details many labor risks in the palm sector, including unethical recruitment and hiring practices, forced labor vulnerability, wage and hour violations, child labor, violations of women’s rights, unacceptable living conditions, and a lack of grievance mechanisms. Land grabs, forced displacement, and environmental damage were also found to be issues of concern.

Guatemala’s palm oil sector has grown exponentially during the last decade, making it the ninth largest palm oil exporter in the world and the second largest palm oil exporter in Latin America in 2011. Guatemalan palm oil makes its way into the food, beverages, and cosmetics produced and sold by large US-based companies in Mexico, the United States, Guatemala, and other Central American countries. Verité’s research focused primarily on the region of Sayaxché, which is located in Guatemala’s northernmost department of Petén and has the highest concentration of African Palm cultivation in Guatemala.

As Verité’s report demonstrates, companies in the Guatemalan palm oil sector operate in a difficult environment in which preexisting land conflicts, weak government capacity for protection and enforcement, and unscrupulous labor contractors and criminal actors can contribute to a risk of land grabs and the exploitation of workers. Verité’s research found evidence of improved protections for workers in some parts of the palm sector due to government and private voluntary initiatives. However, there is still a high level of vulnerability, and problems persist. Many of the problems that Verité found in Guatemala’s palm oil sector—such as vulnerability of migrant laborers, and the risk of child labor—were also found in different manifestations in earlier research in Malaysia and in a forthcoming report on Ecuador.

In Guatemala and other countries, it is essential that companies all along the palm oil supply chain take urgent steps to address these risks of labor and human rights violations. Action can begin with a risk assessment of sourcing practice, and a thorough look at compliance regimes. Companies should make certain that compliance mechanisms extend to the bottom of the supply chain, where violations are most likely to occur. Whenever possible, palm oil should be sourced directly from plantations, mills and refiners that have a demonstrated commitment to sustainable labor practices. Supplier policies and guidelines should be put in place, and used for assessment and monitoring. Efforts should be focused on high risk areas. Where palm oil is sourced from intermediaries, these entities can be required to demonstrate a commitment to sustainable palm oil and mechanisms to verify and document legal and fair labor practices in the palm oil they supply. Plantations themselves can be proactive in ensuring and demonstrating that their production practices are free from labor violations.

Traceability is a key element to the responsible production of palm oil. Retailers and manufacturers can demand full traceability, and processors and other intermediaries can likewise commit to working with buyers and directly with plantations to build transparency. Smallholders are often left out of compliance efforts, yet smallholder production accounts for 40% of all palm oil. Companies at all points on the supply chain can take steps to facilitate the inclusion of smallholders in sustainability regimes.

Companies can also work together to address the complex and multifaceted labor risks involved in palm oil production. The Roundtable on Sustainable Oil (RSPO) is the leading multi-stakeholder initiative that tackles unsustainable production practices in the palm oil sector and certifies the production of sustainable palm oil. The organization has a modest but growing membership amongst Latin America-based companies, and offers trainings and workshops in key producing countries in the region. The RSPO offers a place to work alongside other stakeholders to define and verify sustainable practice, at the global, regional and national levels. Companies can invest in membership, and in leading the organization to continuously improve its standards and verification and dispute resolution mechanisms.  

Finally, companies can engage in policy advocacy, alone and via multi-stakeholder groups like the RSPO, to press for more robust labor protections and enforcement in palm oil production. The Guatemalan government has exhibited good faith in addressing human rights abuses in the palm oil sector. Verité offers a set of recommendations for further government action in its report.

While the root causes of labor abuse in palm oil production are often complex, there are many steps that companies can take to promote good practice and mitigate against risk. Some of these steps are presented here. More can be found in the practical tools and guidance on Verité’s Help Wanted website, available in both English and Spanish.