Prosecutor targets ‘ringleader’ Dennis Melka in Peru cacao case

After employees at Melka-run firm sentenced for illegal Amazon deforestation, officials now pursuing the millionaire businessman for yet more suspect practices in Peru

Czech-American millionaire Dennis Melka is in the crosshairs of prosecutors over illegalities at a cacao plantation he owns as his activities in the Peruvian Amazon come under scrutiny again.

Illegal deforestation allegations have plagued the commodities investor since he entered Peru in 2010.

In the intervening years Melka has amassed a portfolio of 25 companies in the cacao and oil palm sectors, several of which are accused of destroying primary forest and native lands in the process.

For all the accusations, damning reports and community protests, prosecutions against The Melka Group have not materialised – until recently.

In July, an executive from Tamshi SAC (previously called Cacao del Perú Norte), a subsidiary of the Cayman-domiciled Melka outfit United Cacao, was jailed for eight years for his part in illegally clearing 1900 hectares (ha) of land in the Amazon state of Loreto.

Two other employees were handed four-year suspended sentences by prosecutor Alberto Yusen Caraza. Civil reparations of 15 million soles ($4.4m) were also issued.

While the judgement took six years to materialise, it is considered a major legal precedent in Peru’s fight against illegal deforestation, one that has emboldened prosecutors to pursue further linked investigations, including one against Melka himself.

“In Loreto I have the continuation of this case called ‘Cacao 2’, where now I have Melka as ringleader,” Caraza told Ojo Publico in August.

“In this investigation I have requested the lifting of bank secrecy and communications, as well as coordination through the international cooperation office. Efforts are being made for Melka to come and defend himself in this process.”

Palm oil and cocoa cultivation alongside illegal gold mining and cocaine production have resulted in widespread deforestation in Peru. A May report from non-profit group The Dialogue stated that Peru lost 250,000 hectares of forest in 2018 – its fourth highest annual total recorded.

The specific focus of the investigation is unclear, but it is the latest in a growing catalogue of controversies to engulf The Melka Group.

A 2015 investigation by the Environmental Investigation Agency accused United Cacao of illegally deforesting almost seven thousand hectares of primary rainforest in the Nueva Requena region.

Meanwhile, a separate firm owned by Melka is entangled in a land trafficking scandal in Ucayali – another Amazon region blighted by deforestation.

Prosecutors believe five officials inside the agricultural department of Ucayali illegally awarded 128 land parcels to a network of 121 individuals connected to them, who in turn intended to pass on ownership to Melka’s Ocho Sur SAC oil palm company, among other firms.

It is estimated that the deals, formalised between 2016 and 2018, totalled at least 3,000ha of land. Oil palm cultivation in Ucayali has accelerated rapidly with more than 40,000ha of land used for the crop in 2018, compared to only 6,000ha in 2006.

Isaac Huamán Pérez, former head of the Regional Agricultural Directorate of Ucayali (DRAU), and Christopher Hernández Larrañaga, head of DRAU’s Directorate of Legal Physical Sanitation of Agrarian Property, were arrested by anti-corruption police in December over the land trafficking allegations.

Indigenous communities have also taken aim at Melka. The Shipibo community filed an RSPO complaint against Plantaciones de Pucallpa, a member of the oil palm sustainability body, in 2015 accusing the firm of clearing 7,000ha of community forest in Ucayali.

In response the company, owned by Melka, withdrew from the RSPO and transferred its assets to a new entity – Ocho Sur SAC.

However, this has not stemmed the flow of allegations. A new RSPO complaint filed by the community in 2019 alleges that Peruvian consumer giant Alicorp and miller OLPESA, both RSPO members, are purchasing Ocho Sur palm oil “produced through clearance of primary forests and in violation of the community’s rights over their traditional lands.”

The Alicorp complaint was dismissed by RSPO in June but the Forest Peoples Programme (FPP) – who are working on the complaints – told Earthsight that they have now filed complaints against financial institutions that bankroll Alicorp.

Tom Younger of FPP said: “[T]he community and allies have presented formal complaints to two banks with significant investments in Alicorp –  Norges Bank Investment Management and Handelsbanken Fonder AB – calling upon them to use their shareholder influence to pressure Alicorp to stop doing business with the Ocho Sur plantation and adopt tougher measures to avoid human rights violations and deforestation in their palm oil supply chain.”