Deal #3891

Location #1

Spatial accuracy level
Coordinates
Location
Vichada, Colombia

Latitude
4.999997
Longitude
-70.834457
Facility name
Veracruz
Target country
Colombia
Contract area
Comment on location
Given that Riopaila Castilla made use of legal artifacts to circumvent law 160 of 1994, which impedes any company or person to be the owner of more than one UAF of land previously allocated by the state, it is highly complicated to discern the actual domains of the company. Nevertheless, by comparing information from media reports, legal documents of the Ministry of Interior and the company's sustainability and financial report, some of the holdings were signaled. This shapefile might not be completely accurate and should be use a first source to check whether the company is managing them, or not. Please see Source 15 to see a map indicating some of the areas of influence of the company.

Land area

Size under contract (leased or purchased area, in ha)
[2014] 50000
Size in operation (production, in ha)
[2014] 38096
Comment on land area
The number of area under operation might not be completely accurate. It is certain that they have 2027 hectares with oil palm, 644 hectares with Acacia Mangium 200 hectares for grassland (Bachiaria) and the rest for livestock grazing. Source 9

Intention of investment

Intention of the investment
[2017] Biofuels (2027 ha)
[2017] Food crops (80 ha)
[2017] Fodder (790 ha)
[2014] Timber plantation (for wood and fibre) (662 ha)
Comment on intention of investment
See Source 9 and 12

Nature of the deal

Nature of the deal
Outright Purchase
Comment on nature of the deal
On the paper, Riopaila Castilla is leasing the lands they are using. Nevertheless, it seems that they created artificial companies that bought the land, so that law 160 of 1994 is not violated. The companies were acquired by some spanish companies, which likewise were acquired by a company registered in Luxembourg. Riopaila Castilla owns 100% of this last one. See Source 12 Source 4

Negotiation status

Negotiation status
[2011] Concluded (Contract signed)

Implementation status

Implementation status
[2012, current] In operation (production)

Purchase price

Purchase price
40000000000
Purchase price currency
Colombian Peso ($)
Purchase price area type
for specified area
Purchase price area
50000
Comment on purchase price
This number might not be accurate. The initial investment (possibly to acquire the land) was COP 40000 Million. In the financial reports they show a leasing fee, which will be in the immediately next section.

Leasing fees

Annual leasing fee
2481000000
Annual leasing fee currency
Colombian Peso ($)
Annual leasing fee type
for specified area
Purchase price area
50000
Comment on leasing fees
In the financial report is signaled that Riopaila Castilla is paying this amount to the 29 companies it created under a company in Luxembourg for renting in the land. See source 12.

Contract farming

Contract farming
No

Number of domestic jobs created

Jobs created (domestic)
Yes
Current number of employees (domestic)
[2017] 74

Operating company

Name of investment project
Veracruz
Comment on investment chain
Riopaila constituted 29 companies in Colombia to acquire 50000 hectares of land approximately, with the advice of the law firm Brigard & Urrutia. Simultaneously, Riopaila created companies in Spain and Luxembourg that own this initial 27 companies in Colombia. Finally, Riopaila owns the company in Luxembourg known as Asturias Holding Sarl. The companies at the lowest level are "leasing" the land to Riopaila in a contract for 30 years.

 

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Data source #1

Data source type
Media report
File
Date
2013-06-18

Data source #2

Data source type
Media report
File
Date
2013-06-14

Data source #3

Data source type
Media report
File
Date
2013-06-29

Data source #4

Data source type
Media report
File
Date
2013-06-11
Comment on data source
Pesos $40 Mill were loaned to the front companies to acquiring the land

Data source #5

Data source type
Media report
File

Data source #6

Data source type
Media report
File

Data source #7

Data source type
Company sources
File

Data source #8

Data source type
Company sources
File

Data source #9

Data source type
Company sources
File

Data source #10

Data source type
Company sources
File
Publication title
Proyectos Altillanura

Data source #11

Data source type
Company sources
Publication title
Ganadería: Proyecto Veracruz

Data source #12

Data source type
Company sources
Publication title
Informe de Sostenibilidad y Gestión 2017
Date
2017

Data source #13

Data source type
Research Paper / Policy Report
File
Publication title
Proyecto Veracruz en Santa Rosalía y La Primavera, Vichada
Date
2014-05

Data source #14

Data source type
Company sources
Publication title
Grupo Agroindustrial Riopaila Castilla

Data source #15

Data source type
Government sources
File
Publication title
Certificación Número 972 de 2014
Date
2014-05-29

Data source #16

Data source type
Company sources
File
Publication title
La Luciérnaga revela en exclusiva comprometedor documento de la firma Brigard & Urrutia
Date
2013-06-18

Names of communities / indigenous peoples affected

Comment on communities / indigenous peoples affected
Information obtained by comparing the official map of Indigenous communities of Colombia and the properties of Riopaila Castilla

Recognitions status of community land tenure

Recognition status of community land tenure
Community traditional or customary rights recognized by government
Comment on recognitions status of community land tenure
The communities have some land rights recognized under indigenous reserves.

Consultation of local community

Community consultation
Not consulted
Comment on consultation of local community
The company complied with Colombian law regarding the previous consultation required in case of presence of ethnic or minority groups once a project is to be developed. Given that the influence area of the company do not collide with the indigenous reserves of the previously mentioned ethnic groups, the company is not obliged to make any previous consultation. This happens, although the properties of the company might be just 112 meters away from the indigenous territories. Source 15.

How did the community react?

Community reaction
Mixed reaction
Comment on community reaction
It seems that the municipal administrators are in favor of the project, nevertheless, these testimonies were obtained from company resources. The public opinion in Colombia is highly divided around this project, since the way the company acquired the land was clearly a legal artifact. Some argue it was illegal.

Presence of land conflicts

Presence of land conflicts
Yes
Comment on presence of land conflicts
Some of the properties were legalized or registered in the notaries 20th of Cali and 4th of Villavicencio, which was being investigated by one of the registry offices of Colombia for committing fraud on land that previously belonged to paramilitary groups or businessmen linked to them. It is not clear whether those land had a past linked with the Colombian conflict. Notwithstanding this matter, it is certain that the company used a legal artifact to be the owner of the land, circumventing law 160 of 1994, which impedes irregular land accumulation. Source 5

Displacement of people

Displacement of people
No

Materialized benefits for local communities

Materialized benefits for local communities
Other
Comment on materialized benefits for local communities
Trainings, technical assistance

Former land owner (not by constitution)

Former land owner
Private (smallholders)
Comment on former land owner
the land were bought to peasants families

Former land use

Former land use
Smallholder agriculture
Pastoralism

Former land cover

Former land cover
Pasture
Marginal land

Detailed crop, animal and mineral information

Crops area
[2017] Oil Palm (2027 ha)
[2014] Accacia (644 ha)
[2017] Corn (Maize), Soya Beans (80 ha)
Eucalyptus (18 ha)
Crops yield
[2017] Oil Palm (1135 tons)
[2017] Soya Beans (200 tons)
[2017] Corn (Maize) (416 tons)
Comment on crops
Source 12
Livestock area
[2017] Beef Cattle
Livestock yield
[2017] Beef Cattle (7537 tons)
Comment on livestock
Number of beef units in the area.

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.)
Oil palm mill.

Water extraction envisaged

Water extraction envisaged
Yes

Source of water extraction

Source of water extraction
Groundwater

How much water is extracted?

Water extraction amount
7200
Comment on how much water is extracted
This number ignores the water used for livestock, since the animals get it by its own means during most of the year.
Use of irrigation infrastructure
Yes

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 project is held in an area of high land informality and really close to indigenous communities. The form how the company got access to the land might be considered by some as illegal. Nevertheless, the Colombian government let the company go ahead with the transaction.

Principles for Responsible Agricultural Investments (PRAI)

Application of Principles for Responsible Agricultural Investments (PRAI)
No
Comment on PRAI
Principle 4 was not accomplished. Principle 5 is also ignored: not respecting the rule of law.

Overall comment

Overall comment
An investigation by the Colombian House Representative, Wilson Arias, revealed that Riopaila Ingenio Castilla SA rented 42,000 hectares of land in the Vichada, from 27 societies formed to buy the land with loans given for Riopaila, and these new 27 companies will "return the favor" by renting the land back to Riopaila for 30 years by an amount equal to the value of the area.

June 28, 2019, 3:21 p.m.

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March 19, 2019, 5:56 p.m.

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March 5, 2016, 1:06 a.m.

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Nov. 27, 2013, 12:46 a.m.

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July 16, 2013, 6:56 p.m.

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July 5, 2013, 11:48 p.m.

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