Oil palm expansion in Nicaragua threatening local communities and forest conservation

In southeast Nicaragua a palm oil company has allegedly expanded its oil palm cultivations without the necessary environmental permits and driven local farmers to occupy lands at a protected area.

In January Mongabay Latam and Onda Local, a Nicaraguan news platform, reported that small farmers who have felt compelled to sell their plots to a palm oil company to pay off their debts have been moving into the Indio Maíz Biological Reserve in southeast Nicaragua, causing environmental damage to the reserve’s forests.

Farmers who have stayed on their lands told Mongabay and Onda Local that those who have sold their plots have been left without options, with many migrating to Costa Rica or settling in the reserve, which extends for 4,500 square kilometres and is one of the best preserved forests in Nicaragua.

At the root of the problem is an expansionist drive by Palmares de El Castillo S.A. (PALCASA), the company in question, over the past 12 years that has displaced local communities and allegedly committed violations of environmental law.

In 2006 PALCASA obtained permits from Nicaragua’s Ministry of the Environment and Natural Resources (MARENA) to cultivate 3,600 hectares (ha) of oil palm in the municipality of El Castillo, department of Río San Juan.

However, by 2009 PALCASA had been cultivating palm in an area extending for 5,463ha, which is 1,863ha more than the area authorised by MARENA in 2006. 

A 2017 study conducted by Amaru Ruiz, president of Fundación del Río, a conservation NGO, and Julio Lopez, claimed that by 2013 the company’s monocultures covered 6,000ha. 

Samuel Polanco Centeno, a local conservationist who spoke with Mongabay and Onda Local, estimates that PALCASA’s plantations now extend for over 7,000ha.

Ruiz and Lopez’s study accused PALCASA, alongside Maderas Cultivadas de Centroamérica S.A and Agroindustrial del Río S.A, of being one of the three main land grabbers in southeast Nicaragua.

A previous investigation by Fundación del Río argued that the expansion of PALCASA’s palm oil plantations had been illegal since MARENA had only authorised the company to cultivate 3,600ha.

PALCASA’s process of buying land from local farmers and cooperatives started in 2007. According to Fundación del Río, this process of expansion was never contemplated by MARENA’s original permit. 

The NGO says that this expansionist drive has had significant socio-environmental impacts in the area as it has displaced families and pushed them into protected forests.

For Matías Álvarez Oporta, a former PALCASA employee, the expansion of the company’s palm monocultures is directly linked to the invasion of the Indio Maíz Biological Reserve. “The buyers say: ‘here is this piece of land (the reserve), nobody is cultivating it,’” he told Mongabay and Onda Local. 

According to Álvarez Oporta, intermediaries working for the company have even offered 35-hectare plots within the reserve to farmers potentially interested in selling their lands.

Several local farms bought by the palm oil company are located within the reserve’s buffer zone, which has restrictions about how large-scale agriculture can take place and demand special permits from MARENA and other government agencies.

Local farmers told Mongabay and Onda Local that PALCASA’s processing plant in the area has contaminated the water and killed several of their cattle.

On its website, PALCASA claims that its activities in El Castillo, including at the reserve’s buffer zone, comply with Nicaraguan law and that the company is committed to the protection of Indio Maíz.

Palm oil production in Nicaragua increased by 23% in the 2017/2018 season and is expected to continue to grow. Palm plantations in the country doubled in size between 2011 and 2017. 

Its main export markets are Mexico, USA, Honduras and Costa Rica.