Deal #1071

Location #1

Spatial accuracy level
Coordinates
Location
Codazzi, Agustín Codazzi, Cesar, Colombia

Latitude
10.0979
Longitude
-73.2359
Facility name
Las Flores N° 3
Target country
Colombia
Contract area
Comment on location
In Agustin Codazzi, Cesar, the company Oleoflores owns the plot known as Hacienda Las Flores. The uploaded shapefile shows one property where the refineries, mills and extraction plants are located. Around them are several oil palm fields. It is possible that the properties around this plot also belongs to Oleoflores SA, but it is uncertain. The source of the shapefile is the official cadastre of Colombia, developed by the Instituto Geográfico Agustín Codazzi. The coordinates of the biodiesel refinery are from an official document from Corpocesar (Environmental institution). The exact coordinates of the biodiesel refinery are: -73.2360, 10.0979. Obtained from the official document of Corpocesar for the allowance of air pollution.

Land area

Size under contract (leased or purchased area, in ha)
[current] 1710
Comment on land area
This size corresponds to the cultivated surface but not necessarily to the owned surface. Oleoflores owns land and also plant palm through contracts with farmers. The oil palm production capacity is 169000 Lt per day. The land is located in Agustin Codazzi (North). According to the official cadastre and satellite imagery, the company owns approximately 1710 hectares in Agustín Codazzi. They belong to the Hacienda Las Flores. There are more oil palm fields around this area, but it is impossible to assert if they belong to Oleoflores or take part in the contract farming scheme.

Intention of investment

Intention of the investment
Biofuels

Nature of the deal

Nature of the deal
Outright Purchase
Pure contract farming
Comment on nature of the deal
The Hacienda Las Flores in Agustín Codazzi, Cesar has belonged to the Murgas family since 1903. Nevertheless, the company has started with a contract farming contract that has brought several agricultural producers in the area to be part in the productive chain of palm oil. Oleoflores owns the mills and refineries. The company manages 42347 hectares of palm oil, but they are not only in Agustín Codazzi, but also in Tibú and María La Baja (see other deals).

Negotiation status

Negotiation status
[1903] Concluded (Contract signed)
Comment on negotiation status
Oleoflores business seems to be progressing. It is constructing a big oil palm transformation factory (with military protection). The main Hacienda, which belongs to the Family Murgas since 1903, was turned into an oil palm plantation. They might have extended this area through contract farming.

Implementation status

Implementation status
[2008] In operation (production)
Comment on implementation status
The company has owned land and also it has productive and social alliances with small farmers that they sold the production to the company.

Contract farming

Contract farming
Yes
Not on leased / purchased area (out-grower)
Yes
Not on leased / purchased area (out-grower, in ha)
[current] 42347
Not on leased / purchased households (out-grower)
2182
Comment on contract farming
The contract farming scheme is not only used in Agustín Codazzi. The size of the area might include area in the Catatumbo and María La Baja regions of Colombia (quite likely). Source: http://web.fedepalma.org/sites/default/files/files/3_%20OLEOFLORES_compressed.pdf

Number of total jobs created

Jobs created (total)
Yes
Current number of jobs (total)
10748
Comment on jobs created (total)
The company created 4364 direct and 6384 indirect jobs. They might be distributed along the whole country, not only in Agustín Codazzi. Source: http://web.fedepalma.org/sites/default/files/files/3_%20OLEOFLORES_compressed.pdf

Number of domestic jobs created

Jobs created (domestic)
Yes
Current number of jobs (domestic)
10748

Operating company

Operating company
Comment on investment chain
One of the principal investors in Oleoflores SA is Carlos Murgas Guerrero, ex minister of agriculture, who controls himself about 9,900 acres of palm plantings. Murgas benefited from a $1 million grant from USAID to plant oil palm through contracts between farmers and Oleoflores. In January 2008, Murgas and Oleoflores opened Colombia's first biodiesel factory.

 

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Data source #1

Data source type
Media report
File
Date
2011-01-01
Comment on data source
Federación colombiana de biocombustibles website

Data source #2

Data source type
Company sources
File

Data source #3

Data source type
Media report
File

Data source #4

Data source type
Personal information
Includes in-country-verified information
Yes

Data source #5

Data source type
Research Paper / Policy Report
File
Date
2009-01-01

Data source #6

Data source type
Media report
File
Date
2011-01-01

Data source #7

Data source type
Media report
File

Data source #8

Data source type
Media report
File

Data source #9

Data source type
Company sources
File

Data source #10

Data source type
Company sources
File

Data source #11

Data source type
Government sources
Publication title
Resolucion 0582 - Corporación Autónoma Regional del Cesar
Date
2016-06-30
Includes in-country-verified information
Yes

Data source #12

Data source type
Company sources
File
Publication title
Política de ben gobierno y código de ética grupo empresarial oleoflores

Data source #13

Data source type
Company sources
File
Publication title
Principales hitos de la organización oleoflores

Data source #14

Data source type
Other (Please specify in comment field)
File
Date
2018-05-03
Comment on data source
Formular uploaded by Oleoflores to the Roundtable of Sustainable Palm Oil

Consultation of local community

Community consultation
Free, Prior and Informed Consent (FPIC)
Comment on consultation of local community
In the ethical guidelines of the company is stated that they consult constantly with the community around the planted areas for mutual benefits from the projects. They assert that every decision should be the result of a negotiation. It is impossible to prove if that has happened in this area. Source: https://www.rspo.org/acop/2017/oleoflores-s-a-s/P-Policies-to-PNC-ethicalconducthr.pdf

Negative impacts for local communities

Negative impacts for local communities
Environmental degradation
Comment on negative impacts for local communities
The existence of an extraction plant, biodiesel refinery, mill and plant for solids generates the dispersion of material that could foster respiratory diseases. The company applied for an official permission and is following the current domestic legislation on this matter. Source: https://www.corpocesar.gov.co/files/resolucion-0582-30-06-2016-DG.pdf

Promised benefits for local communities

Promised benefits for local communities
Education
Financial Support
Other
Comment on promised benefits for local communities
On its contract farming program, the company through its subsidiary Promotora Hacienda Las Flores was offering technical, financial and social support for small and mid-size farmers. There is a foundation in the municipality that was offering education services for the children of the employees and the children from the neighboring communities. Source: http://web.fedepalma.org/sites/default/files/files/3_%20OLEOFLORES_compressed.pdf

Materialized benefits for local communities

Materialized benefits for local communities
Education

Former land owner (not by constitution)

Former land owner
Private (large-scale farm)

Former land use

Former land use
Commercial (large-scale) agriculture

Former land cover

Former land cover
Cropland
Shrub land/Grassland (Rangeland)

Detailed crop, animal and mineral information

Crops area
Oil Palm

Detailed contract farming crop and animal information

Contract farming crops
Oil Palm

Use of produce

Has domestic use
Yes
Has export
Yes
Country 1
Chile
Country 2
Mexico
Country 3
Netherlands
Comment on use of produce
They are also exporting to Peru, Spain and the United States

In country processing of produce

In country processing of produce
Yes
Processing facilities / production infrastructure of the project (e.g. oil mill, ethanol distillery, biomass power plant etc.)
In the property there is a biodiesel refinery, a mill, an extraction plant, a refinery for cooking oil and for solids (margarines, etc.)

Voluntary Guidelines on the Responsible Governance of Tenure (VGGT)

Application of Voluntary Guidelines on the Responsible Governance of Tenure (VGGT)
Yes
Comment on VGGT
It is possible to infer from the ethical guidelines of the company that it is aware of the relevance of land tenure. It is impossible to check if they are indeed complying with them. Source: https://www.rspo.org/acop/2017/oleoflores-s-a-s/P-Policies-to-PNC-ethicalconducthr.pdf

Principles for Responsible Agricultural Investments (PRAI)

Application of Principles for Responsible Agricultural Investments (PRAI)
Yes
Comment on PRAI
It seems that the company is aware of the principles for responsible agricultural investments, it is not possible to identify if there is a third party checking on them or if they are indeed fulfilling all of the principles.

Overall comment

Overall comment
Import of error check - Reviewer's overview comment: In 2007, the government of Alvaro Uribe made a law mandating a 10 percent biofuel blend for domestically distributed diesel. This strong political support boosted oil palm production in Colombia, and therefore land adquisitions and land pressure. Palm is promoted by authorities as an alternative to coca cultivation and its progress as being parallel to success in fight against FARC guerrilla. There was an important occurrence and was the enactment of one law that obliged that the fuels in Colombia should have at least 10% of its components of biodiesel. This fraction is supposed to increase up to 20%. This fostered and guaranteed an increasing demand of oil palm in the domestic market. The investments and fields of Oleoflores are distributed in 3 areas of the country: Agustín Codazzi (Cesar), Tibú (Catatumbo) and the south of Bolivar (María La Baja). It is not straightforward to differentiate where exactly are the fields located and the contract farming schemes. The company seems to use the same methods in all of the three areas. It seems that in Agustin Codazzi the land conflicts are not present, differently to the cases of María La Baja and Catatumbo, where several peasants suffered from internal displacement and their lands were then bought for the establishment of oil palm fields. PLEASE BE AWARE THAT THE MAIN PLANTATION PROPERTY HAS BELONGED TO THE MURGAS FAMILY SINCE 1903.

June 18, 2019, 3:27 p.m.

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June 18, 2019, 3:25 p.m.

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June 18, 2019, 3:24 p.m.

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Feb. 7, 2018, 9:27 p.m.

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Feb. 16, 2016, 9:19 p.m.

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Feb. 16, 2016, 9:14 p.m.

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May 2, 2013, 2:12 a.m.

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Feb. 15, 2013, 5:01 p.m.

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