Guatemala is among the world’s most prolific palm-oil-producing countries, but it also appears to be one of the cruelest.
A new report (pdf) released by the international labor watchdog Verité details the labor and human rights problems in Guatemala’s fast-growing palm oil industry. And there are many, according to the report: Forced labor, child labor, health and safety risks, poor housing, environmental damage, and wage exploitation are just the highlights of the list of dangers facing impoverished palm oil workers and farmers in the country.
A global palm oil boom has seen worldwide demand jump from just over 25 million metric tons of the vegetable oil in 1970 to nearly 150 million metric tons in 2010. The vegetable oil now rakes in some $50 billion annually and is used in half of all packaged food worldwide. Guatemala has worked to position itself among the world’s largest supplier countries. Between 2000 and 2012 alone, the number of acres under cultivation in the country grew eight-fold from just over 36,000 to just under 300,000. Guatemala has become the ninth largest palm oil exporter in the world, and the second largest palm oil exporter in Latin America. Indonesia and Malaysia currently produce more than 80% of the world’s palm oil.
The problem with the rise of Guatemala’s palm oil industry is it benefits only a tiny portion of the Guatemalan populous—just eight families control all of the country’s processing plants and produce some 98% of the country’s palm oil, according to a 2012 study. And it comes at a huge human cost.
Most immediately, as the industry expands its foothold, it displaces farmers tending other crops—often forcibly—leaving them few options but jobs producing palm oil. “The expansion of both organized crime and African palm cultivation is forcing impoverished peasant farmers off of their land and into employment in the palm sector,” the report says.
That’s unfortunate on a few levels. For one thing, palm oil, which is extracted from palm fruit, doesn’t require nearly as much labor as other agricultural sectors do. Only the cattle industry uses less. So as the palm oil industry takes over more and more of Guatemala’s farm land, it does so at the expense of workers—especially when it’s displacing more labor-intensive farming of crops such as chilies and peppers.
The palm oil sector in Guatemala is a pretty terrible place to work, according to the report. Displaced peoples and migrant workers are often lured with promises of lucrative salaries and lush treatment, only to find themselves overworked and underpaid. The industry, notorious for its use of child labor, has damaged the region’s educational infrastructure. “The spread of palm plantations has also resulted in a reduction in the number of schools,” the report says.
And it’s plagued by violence. The report cites several instances in which workers and managers were killed or kidnapped—in one case, while Verité was carrying out its research. The government is often blind to the abuses of the palm oil industry, according to the report, and sometimes even complicit in them. “Labor and human rights violations, including forced labor and human trafficking are all-too-often hidden from view, deep within the supply chain where social compliance and government enforcement programs have little, if any, visibility,” the report says.
The main purchasers of Guatemalan palm oil include Mexico, El Salvador, the Netherlands, and Nicaragua. At present the US and European Union are minor importers.
But even if it’s not buying much raw palm oil from Guatemala, the US is indirectly participating in the industry’s questionable labor practices. Guatemalan palm oil is used to make processed foods, beverages, and cosmetics manufactured by US firms but sold in Latin America, the report says.
For all the problems in Guatemala’s palm oil industry, what makes it an attractive place to do business is its efficiency: it has the highest palm oil yields per acre of any country, according to Verité. And with production setbacks currently afflicting producers in Southeast Asia and galloping demand worldwide for the oil, the industry is likely to continue swallowing both land and laborers in Guatemala.
It’s worth noting that Guatemala is far from being the only palm oil producer in the world to operate under shady conditions. Exploitative practices are also common in Malaysia and Indonesia, according to a recent report by Humanity United (pdf). And worldwide, the industry has been linked to devastating tropical deforestation.
For consumers, it’s difficult to avoid an ingredient as ubiquitous as palm oil, which is an ingredient in many pantry staples. But organizations including the Roundtable on Sustainable Palm Oil (RSPO) and some large companies such as Colgate-Palmolive, Nestle, and Unilever, have taken steps towards incorporating only sustainable palm oils in their products and goods.