Deal #3121

Location #1

Spatial accuracy level
Coordinates
Location
Pivijay, Magdalena, Colombia

Latitude
10.4512
Longitude
-74.5608
Facility name
El Avion; Murillo
Target country
Colombia
Contract area
Comment on location
The polygons that represent the area of the firm "Agrifuels" might not be completely accurate. They were obtained from company sources that depict the landholdings. Media sources and documents from environmental authorities let know that at least 2 of the landholdings are known as "El Avión" and "Murillo". It seems that the latest one is now known as "El Puente". This had some legal problems during the land transactions, since the previous owner of the property asserts that the land authority of Colombia (Incoder by this time) allowed the transfer of abandoned land to paramilitary groups. Please see Source 14 for more detail on the location Source 13, 17, 14

Land area

Size under contract (leased or purchased area, in ha)
[2012-02] 9850
Comment on land area
A company source asserts that in 2012 the company was already managing 9850 hectares. 3443 out of them were purchased by the company. It is unclear which size of land is currently under operation, since some witnesses assert that by 2014 the project had stopped. Source 14, 12

Intention of investment

Intention of the investment
Biofuels
Comment on intention of investment
The intention of the investment was to plant 10000 hectares of sugarcane for the production of bioethanol. This was supposed to be marketed domestically. The company intended to have a fully mechanized operation, with the goal to invest US 300 Million, out of which 30 had been already put by the company itself. Source 1

Nature of the deal

Nature of the deal
Outright Purchase
Lease
Comment on nature of the deal
The operating company had purchased 3443 hectares of land and leased other 6354. A senator of Colombia discovered that 1023 of those purchased hectares had been allocated within a land reform program of the government. By this time, law 160 of 1994 was active and it impedes the accumulation of allocated land. The maximum allowed was 67 hectares in the municipality of Pivijay. In total, the company acquired 19 landholdings with these characteristics, which is prohibited. Source 6 Source 14

Negotiation status

Negotiation status
[2010] Concluded (Contract signed)

Implementation status

Implementation status
[2014] Project abandoned
Comment on implementation status
Source 12

Purchase price

Comment on purchase price
the whole project represents an investment of US$250 millions.

Contract farming

Contract farming
No

Number of total jobs created

Jobs created (total)
Yes
Planned number of jobs (total)
6500
Comment on jobs created (total)
This number seems inaccurate. The company stated that they wanted to have a fully mechanized greenfield, therefore unskilled labor would remain minimal. This number should have included direct and indirect jobs. Source 1

Number of domestic jobs created

Planned number of jobs (domestic)
7000
Comment on jobs created (domestic)
1000 direct jobs and 6000 indirect jobs for the Region

Operating company

Comment on investment chain
It seems that the company was involved in the corruption allegations of Odebrecht in Brazil. It is unclear if that occurred through the Banco Nacional do Desenvolvimento or the interest of the company known as Odebrecht Agroindustrial. It was impossible to discern whether this last one was involved. Nevertheless, the name of Agrifuels Colombia and Merhav was added in the investigation known in Brazil as "Lava Jato" Source 12, 14

 

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Data source #1

Data source type
Media report
File
Date
2010-01-19
Comment on data source
Description of the business model. Investment through Agrifuels for 10,000 has in Colombia, with loans and own capital.

Data source #2

Data source type
Media report
File

Data source #3

Data source type
Media report
File

Data source #4

Data source type
Media report
File

Data source #5

Data source type
Company sources
File
Date
2010-09-06
Comment on data source
One of the first announcements of the investment in Colombia for Marhev.

Data source #6

Data source type
Media report
File
Date
2013-07-31
Comment on data source
Colombian senator reported that 1023 hectares are acquired irregularly in Mgadalena (Colombia) through Agrifuels de Colombia S.A.S

Data source #7

Data source type
Company sources
File
Comment on data source
Merhav description project of ethanol in Colombia in 10,000 has

Data source #8

Data source type
Research Paper / Policy Report
File
Date
2013-07-31
Comment on data source
Documents proves the land selling to the Agrifuels Colombia for 1023 has

Data source #9

Data source type
Media report
File

Data source #10

Data source type
Media report
File

Data source #11

Data source type
Research Paper / Policy Report
File

Data source #12

Data source type
Research Paper / Policy Report
File

Data source #13

Data source type
Media report
File
Publication title
Una familia guajira reclama 5 mil hectáreas en tres departamentos
Date
2014-07-19

Data source #14

Data source type
Company sources
File
Publication title
Ethanol Project in Colombia
Date
2012-02

Data source #15

Data source type
Government sources
File
Publication title
Resolución No. 2559
Date
2011-12-01

Data source #16

Data source type
Government sources
File
Publication title
Resolución No. 0899
Date
2012-05-04

Data source #17

Data source type
Government sources
File
Publication title
Auto No. 1903
Date
2011-11-03

Presence of land conflicts

Presence of land conflicts
Yes
Comment on presence of land conflicts
The land was illegally expropriated by the Incoder and then was reallocated to front men linked to a Colombian congressman who was found guilty of having relationships with paramilitary groups. Furthermore, 19 plots of the Merhav's purchased holdings were previously allocated by the state. The accumulation of these holdings which together exceeds the limits of the UAF (67 hectares in Pivijay) are prohibited. Source 13, 6

Former land owner (not by constitution)

Former land owner
Private (smallholders)

Former land use

Former land use
Smallholder agriculture
Pastoralism

Former land cover

Former land cover
Pasture
Comment on former land cover
Source 10

Detailed crop, animal and mineral information

Crops area
Sugar Cane
Crops yield
[2012-02] Sugar Cane (140 tons)
Comment on crops
Expect to have a yield of 140 Ton/ha

Use of produce

Has domestic use
Yes
Domestic use
100
Comment on use of produce
Both (domestic and export use). The company produce algal oil and algal biomass.

In country processing of produce

In country processing of produce
Yes
Comment on in country processing of produce
Sugar Cane for the ethanol production

Water extraction envisaged

Water extraction envisaged
Yes

Source of water extraction

Source of water extraction
Surface water (River)
Comment on source of water extraction
From the Magdalena River

How much do investors pay for water and the use of water infrastructure?

Comment on how much do investors pay for water
The company must pay for the water extraction. It was impossible to know by 2012 which was the fee per m3

How much water is extracted?

Comment on how much water is extracted
The company obtained permissions to extract 14 m3/sec from the Magdalena River
Use of irrigation infrastructure
Yes
Comment on use of irrigation infrastructure
Drip irrigation and the construction of 28 kms of waterways. Source 14 Source 15

Voluntary Guidelines on the Responsible Governance of Tenure (VGGT)

Application of Voluntary Guidelines on the Responsible Governance of Tenure (VGGT)
No
Comment on VGGT
The land purchases of the company entail 19 properties that were previously allocated under a land reform contract. It is now allowed to accumulate those lands in an area larger than 67 has. Additionally, some of the acquired properties had been illegally expropriated by the land authorities and allocated to people linked to paramilitary groups. Source 12

Principles for Responsible Agricultural Investments (PRAI)

Application of Principles for Responsible Agricultural Investments (PRAI)
No
Comment on PRAI
It seems that the company was involved in the corruption process in Brazil known as Lava Jato. Since 2014 the acquired land had been unused.

Overall comment

Overall comment
This land deal comprehends almost 10000 hectares of land, which had been purchased or leased by the end of the first decade in the 2000s. The main goal of the project was to plant sugarcane to process it domestically and obtain bioethanol, a produce that had been widely supported by the government (there must be at least 10% of bioethanol in vehicle fuels). The company intended to invest US 300 million in the project and build irrigation systems from the Magdalena river to the production facilities (28 kms). It seems that since 2014 the project is abandoned. This might be due to the involvement of the company in the corruption case known as "Lava Jato". Additionally, there were some corruption cases linked to this deal. The congressman Jorge Enrique Robledo found that 19 of the acquired plots had been state allocated, which forbids them to be held by one person or a company. It was also found that some of the land holdings had been illegally expropriated and given to a congressman linked to paramilitary groups.

June 26, 2019, 6:44 p.m.

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Feb. 21, 2018, 8:53 p.m.

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Feb. 29, 2016, 5:35 p.m.

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Sept. 9, 2013, 11:21 p.m.

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Feb. 24, 2013, 1:53 a.m.

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