2012 INTERNATIONAL ECONOMIC DEVELOPMENT PROGRAM, COLOMBIA FORD SCHOOL OF PUBLIC POLICY, UNIVERISTY OF MICHIGAN

Colombian Palm Oil Production for Biodiesel

An investigation of the economic, environmental, and social impacts of an

expanding industry

Lauren Cotter, Allie Goldstein, Katlego Moilwa, Eric Roberts, & Nate Smith

April 2012

 

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INTRODUCTION Since the 1990s, Colombia has shed its label as a ‘failed state’ and come into its own on the world stage as an emerging leader in Latin America. The country’s political and economic landscape has changed dramatically over the past two decades, and many of these changes are tied to the transformation of actual landscapes as Colombia looks towards its rich natural resources as a platform for development. The palm industry and its growing biofuel component have been politically sanctioned as major players in the country’s economic growth, with the government mandating increased biofuel content in automotive fuel and exempting new palm growers from certain taxes. The fact that the biofuel industry in Colombia—and around the world—would fail without government support make it a fascinating nexus for policy analysis. This paper will examine how policies that influence biofuel production impact human and natural systems in Colombia. Our research is grounded in in-person conversations with policy-makers, industry representatives, activists, and academics conducted during February-March 2012 in Bogotá, Colombia as part of the International Economic Development Program at the University of Michigan’s Gerald R. Ford School of Public Policy. What we uncovered through this research was a nuanced story of biofuels—a story told very differently from different perspectives. To some, the biofuels industry represents the hope for progressive alternative energy, climate change mitigation, rural development, and a decisive break with the country’s notorious history of coca cultivation. The opposing narrative is one of lost biodiversity, stolen land, a widening canyon of income inequality, and the continued powerlessness of rural Colombians to determine their future. Our paper is an attempt to describe varied perspectives on the biodiesel industry in Colombia, analyze the impacts of palm production for commodities and fuel on people and the environment, and, where possible, map possible ways forward for specific policies.

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BACKGROUND ON BIOFUELS IN COLOMBIA A Brief History of Fuel Crops in Colombia Planting crops like sugar cane, cassava, beets, and potatoes is nothing new to Colombian farmers, but planting crops to make fuel rather than food is a relatively recent development. Sugarcane, now used as feedstock for ethanol as well as for food, arrived in Colombia in approximately 1540, and large-scale production began in the early 1600s. By 1700, Colombian farmers planted sugar cane on very large scales to sell for distillation of aguardiente.1 Newer to the fertile grounds of Colombia, and already cultivated quite extensively, is the African Palm (Elaeis guineensis), another crop that can be used as both food and fuel. While the Colombian government promotes both ethanol and palm oil production as feedstock for biofuel, our research focused on the palm industry because of its far-reaching environmental and social impacts. (Just five large sugarcane producers currently use the crop to make ethanol, so their impact is more contained and less prime for policy analysis.2) Brought to Colombia in approximately 1932, African palm was first planted as ornamental landscaping at the Palmira Agricultural Station in the Valle de Cauca.3 By 1945, the United Fruit Company established a palm oil plantation in the Department of Magdalena.4 Since the United Fruit Company’s initial large-scale plantation, thousands of acres have been planted with African palm. The cultivation and production of palm oil increased dramatically between 1960 and 2010. In 1960, African palm grew on approximately 18,000 hectares of land in Colombia; by 2003, the planted area had increased more than tenfold.5,6 Between 2003 and 2010, the land area allocated to palm plantations increased at a rate of 10% per year,7 and by 2010, palm oil plantations covered approximately 401,000 hectares of Colombia. During the same timeframe, the production of palm oil increased by approximately 7.9% per year.8 Palm oil has traditionally been sold as a commodity export and used domestically in Colombia for cooking. According to the National Association of Palm Oil Growers (Fedepalma), palm plantations are cultivated in 105 municipalities in four main regions of Colombia.9 In the North, palm is cultivated in the departments of Magdalena, Northern Cesar, Atlántico and La Guajira. In the Central region, palm is cultivated in Santander, North Santander, South Cesar and Bolivar. In the Eastern region, palm is grown in the departments of Meta, Cundiamerica, Cansanare and Caqueta. Additionally, palm is cultivated in the western

1 Centro de Investigación de Cana de Azúcar de Colombia (CENICANA). Fechas historicas de la agroindustria de cana en Colombia. Web. 2 Carbo, Julio. Foreign Commercial Service. Interview. 27 Feb. 2012. U.S. Embassy, Bogotá, Colombia. 3 Fedepalma. History of Oil Palm. Web. 4 Ibid. 5 Bacon, David. Blood on the Palms. Dollars and Sense. July/August 2007. 6 Rey, Gloria Helena. “Harvesting Sunshine for Biofuels.” Inter Press Service (IPS). October 6, 2006. 7 Reina, Mauricio. Elementos Para Modificar El Fondo De Estabilización de Precios Para El Palmiste, El Aceite De Palma Y Sus Fracciones. FEDESARROLLO. Web. March 2011. 8 Ibid. 9 Fedepalma, 2012.

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department of Narino. The northern region and the western region contain the most acres of palm plantations in the production stage.10 With the exception of the western region, which produces approximately 105 tons of palm fruits per year, each region produces approximately 1.2 million tons of palm fruits per year.11 At these quantities of production, Colombia produces two percent of the world palm oil supply and is the fifth largest producer of palm oil in the world.12

Map 1: Regions of palm plantations (Fedepalma 2011).

10 Fedepalma y Ministerio de Ambiente, Vivienda, Desarrollo Ambiental. Guía Ambiental de la Agroindustria de Palma de Aceite en Colombia: Versión para consulta. Febrero 2011. Web. 11 Ibid. 12 Ibid.

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While African palm has been grown in Colombia for almost a century, its cultivation for use as biodiesel feedstock is a fairly recent development, and one that the Colombian government ramped up significantly in the past decade. The inspiration for biodiesel production in Colombia, according to one of our interviewees, came when former President Andrés Pastrana visited biofuel giants Indonesia and Malaysia during his 1998-2002 term and envisioned similar “green production” for his country, dreaming of planting several million hectares of palm within 12 years.13 Though this extent of palm production has not yet come to pass, the seeds—both political and literal—for the industry were planted under Pastrana. Jorge Bendeck, president of FedeBiocombustibles, the biofuel federation of Colombia, told us that palm will need to cover 650,000 hectares of the country—with 35% of those hectares devoted to biodiesel feedstock—in order for Colombia to reach the biodiesel mixes the government has prescribed. As discussed below, such an expansion of the palm industry would significantly transform Colombian landscapes and lives over the next decade. Given the industry’s wide-spanning consequences, a critical look at the policies that promote biofuel production in Colombia is pertinent. A Vision for Biofuel Development In August 2006, during his second term in office, former President Alvaro Uribe announced his plan to develop the biofuel sector by first focusing on excess sugar cane and then promoting cultivation of African palm.14 Uribe’s plan utilized biofuels as a platform to promote three goals: rural economic development, energy security, and climate change mitigation.15 By the end of 2007, Uribe had established a federal mandate to require a 10% biofuel blend for domestic diesel, therefore promoting the expansion of palm cultivation.16 Behind the first of Uribe’s three goals—rural economic development—was the aim of providing Colombian farmers with an alternative to cultivating coca for narco-traffickers. In the rural settings where few economic opportunities existed apart from the production of coca, the demand created by the mandate of a 10% biofuel blend guaranteed that farmers would have a market in which to sell their production. This guarantee incentivized many farmers to stop producing coca and begin planting palm oil plantations.17 The second goal, ensuring Colombia’s long-term energy security, has strong economic underpinnings. Uribe’s plan was to decrease domestic petroleum consumption by steadily increasing biofuel blends at domestic fuel stations. This would help Colombia maintain its status as a net petroleum exporter.18 According to Chris Davy,

13 Rueda, Danilo. Justica y Paz. Interview. 27 February 2012. Bogotá, Colombia. 14 Rey, Gloria Helena. “Harvesting Sunshine for Biofuels.” Inter Press Service (IPS). October 6, 2006. 15 Davy, Chris. Deputy Economic Advisor, U.S. State Department. Interview. 27 Feb. 2012. U.S. Embassy, Bogotá, Colombia. 16 Gronewold, Nathanial. “Biofuels push becomes weapon in Colombia’s war on narco-traffickers.” Greenwire: Energy Policy. Web. May 2, 2011. 17 Ibid. 18 Meivor, Anne. “Spotlight on Colombia: Building a biofuel economy.” Cleantech magazine. July/August 2009.

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the Deputy Economic Counselor at the US Embassy in Colombia, this economic strategy extended Colombia’s net petroleum exporter position by approximately ten years, to 2022.19 Palm plantations’ ability to capture and store carbon was a key element of Uribe’s third goal of mitigating the effects of climate change. Due to the palm plants’ efficient photosynthesis process, palm plantations quickly accumulate carbon-rich biomass, 20 a characteristic that made them attractive to Uribe as part of a climate change mitigation strategy.

When President Juan Manuel Santos took office in 2010, he outlined the social and economic objectives of his presidency in the 2011-2014 National Development Plan: Prosperity for All. Santos’s plan identified agricultural operations and biofuel cultivation in particular, as one of the Colombia’s primary “economic engines” due to the agriculture sector’s historic contribution to the gross domestic product.21 Santos’ plan is essentially an extension of Uribe’s plan; it calls for increasing biofuel production for domestic use in order to enhance Colombia’s energy security and create jobs in the rural sectors of the country. Domestic Policies Promoting Biofuels To achieve the goals outlined above, the Colombian government established a minimum blend of 20% biodiesel (B20) and 20% ethanol (E20) for gasoline to be achieved in urban areas by 2020.22 Current rules adjust the mandatory concentration of biofuel along with production capacity, which has so far fallen short of the ambitious mandates. Concentrations of B10 and E10 are expected to be reached by late 2012 and late 2011, respectively,23 though the government’s original mandate was for ground transportation fuel blends of (B10) by 2010. There are current tax exemptions in play for biodiesel and ethanol consumption, a decrease in income tax from biofuels facilities from 35% to 15%, and tax exemptions for new palm oil plantations. Biofuels are also exempt from the value-added tax and global tax. Further, the Ministry of Energy regulates prices in addition to blend concentrations, guaranteeing a minimum price to biofuel producers, which is re-calculated each month.24 The Government of Colombia has taken other measures to increase biofuel consumption. The overall public transportation system, for example, can run on up to B50 fuel,25 while the Transmilenio mass transit system in Bogotá has been running on mixtures of between B5 and B50 fuel since 2007.26 Starting in 2012, a minimum of 20% of all cars

19 Davy, 2012. 20 Becerra, Manuel Rodriguez, and Bart Van Hoof. Environmental Performance of the Colombian Oil Palm Industry. Fedepalma and the Oil Palm Development Fund. 2005. 21 República de Colombia. Departamento Nacional de Planeación. Plan Nacional de Desarrollo 2010-2014: Prosperidad Para Todos. 2011. 22 Davy, 2012. 23 Pinzon, Leonardo. “Biofuels Production to Reach B10 and E10 in 2011.” USDA Foreign Agricultural Service Global Agricultural Information Network. Web. July 7, 2011. 24 Ibid, p.3 25 Ibid, p.4 26 Meivor, 2009.

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manufactured or imported into the country must be flex-fuel, or able to run on E85 ethanol as well as gasoline; this percentage is set to rise to 80-100% by 2016.27 International Frameworks Supporting Biofuels In addition to domestic government-based incentives, two international policy frameworks may have a role in bolstering Colombia’s biofuel industry: CDM (Clean Development Mechanism) and REDD+ (Reduction of Emissions through Deforestation and Degradation of Forests). Both are global UN climate change frameworks to reduce greenhouse gas emissions and increase carbon storage. CDM allows projects in developing countries to earn certified emission reductions, each equivalent to a ton of CO2, which can then be purchased by developed countries to help them meet emissions targets. In Colombia, Fedepalma, the national palm grower’s association, has been one of the largest recipients of CDM funding for capturing natural gas for local use in the process of biofuel production.28 Similarly, REDD+ provides a framework for developed countries to pay developing countries for carbon stored in the form of halted deforestation or reforestation efforts. The question of whether planted palm forests will be included in REDD+ is an undecided one, but if palm is in fact included in the framework, REDD+ could provide further incentives for planting palm for the additional income of carbon credits.

27 Pinzon, p.3; Mcivor; Proexport Colombia. “Invest in Colombia.” 30 January 2012. 28 Davy, 2012.

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ECONOMIC IMPACT OF COLOMBIA'S BIODIESEL MANDATE Economic Overview The Government of Colombia (GOC) has one of the more ambitious biofuel policies in the region, mandating ground transportation fuel blends of 10% biodiesel (B10) by 2010—though production growth could not keep up with the demand necessary, they expect the goal to actually be reached by the end of 2012.29 Similarly ambitious goals have been set for bio-ethanol blends as well. These figures indicate that GOC policy is generating demand for biofuel where there otherwise would be none, and several of our interviewees confirmed this view. Ana María Rodriguez, an economist with the National Planning Department (DNP) said, “Biofuel is not profitable in Colombia” and stated her dislike of the subsidy/mandate scheme. She argued that there are more cost-effective ways to create jobs in rural areas, and that any government subsidy scheme will necessarily be wasteful.30 Dr. Manuel Rodriguez Becerra, former Environment minister for the GOC and currently a professor at the University de los Andes, confirmed that the biofuel industry would collapse without government subsidies. He stated that “If the government took away the support, these industries would disappear,” but also said that from an environmental standpoint, it was possible to expand palm oil production in a responsible way.31 Currently, there are tax exemptions for biofuel consumption and production in Colombia, and the GOC further protects the industry by setting minimum prices and mandating fuel blends. Since tax incentives cost the government money in the form of foregone tax revenue, and mandated biofuel blends distort market incentives (i.e., the mandates would be unnecessary if consumers demanded biofuel-blended gasoline and diesel), such policies must be aimed at other goals, in particular energy security, rural development, and climate change mitigation. This analysis is to determine to what extent Colombia's biofuel policies are achieving these goals, the prospects for achieving them in the future, and a discussion of costs associated with the effort. Specifically, this section will focus on two of these goals: first, it considers the overall macroeconomic and trade effects of Colombia's biofuel mandate, specifically with respect to biodiesel and the overall energy sector. Second, it will analyze the role that biodiesel mandates have played in rural development, particularly with respect to increasing employment in the agricultural sector in rural and post-conflict areas. Energy Diversification/Security Colombia's oil exports declined for many years, but have since increased more recently (see figure 1). Since the mandated biodiesel blend level has not yet reached 10% throughout the country, and in parts remains significantly less than that, it is unlikely that any reduced domestic consumption of crude oil is yet responsible for the recent increase 29 Pinzon, Leonardo. “Biofuels Production to Reach B10 in 2012 and E10 in 2011.” USDA Foreign

Agricultural Service Global Agricultural Information Network, p 2. Web. 7 July 2011. 30 Rodriguez, Ana Maria. National Planning Department of Colombia. Interview. 28 Feb. 2012. 31 Becerra, Manuel Rodriguez. Ex-Minister of Environment. Interview. 1 March 2012. Bogotá, Colombia.

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in oil exports—and examination of consumption and export trends in figure 1 illustrates this phenomenon. While consumption has remained fairly steady (even increasing slightly since the mandates went into effect), the goal of remaining a net oil exporter is unlikely to be served in a significant way by biodiesel mandates in the near or medium term. While it remains to be seen whether Colombia can grow its domestic biodiesel sector to the point where it is displacing a significant portion of petroleum consumption in the future, little evidence exists for this phenomenon at this time.

This is not to say that Colombia has a severe energy dependence problem, however. Currently Colombia is a net oil exporter with exports on the rise, and some 70% of its electricity needs are fulfilled by hydroelectric sources. Its refining capacity has largely kept up with its consumption of refined petroleum products (see figure 1). It is therefore unclear whether mandating biodiesel blends is necessary for the purposes of energy diversification—it is likely, though, that its tax incentives cost the government money. While a full benefit-cost analysis of Colombia's biodiesel and palm oil tax incentives is beyond the scope of this project, these types of policies generally distort market forces and drive resources toward less efficient uses—they are best employed to correct a market failure of some kind. In this case, the market failure is the inability of the domestic biodiesel industry to supply increasing demand. Such demand, however, is itself manufactured by the government. In order for such incentives to be worthwhile, the government-mandated demand must itself be worthwhile. Rural Development/Employment In order to discern whether Colombia's biodiesel mandate is increasing employment in the agricultural sector, total palm oil production was used as a proxy in the analysis. This is because figures are more reliable (due to the informal nature of agricultural employment), there is a direct and clear link between palm oil production and

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employment in the sector, and there is no reason to believe that palm oil produced as feedstock for biodiesel is any more or less labor-intensive than palm oil sold for any other use.

While biodiesel production in Colombia has certainly expanded in recent years (see fig 2), it is also the case that Colombia remains a net palm oil exporter. The US Foreign Agricultural Service estimates that Colombia's biodiesel production has diverted around 30% of palm oil exports.32 The fact that the industry purchases its feedstock on the commercial market and is still displacing exports indicates that increased demand as a result of increasing blend mandates has not yet become a major driver of expanded palm oil production. In other words, the biodiesel industry in Colombia is buying all the feedstock it needs at high prices on the protected domestic market, and the palm oil industry is forced to export the rest at lower, unprotected world prices. This illustrates that biofuel mandates are not yet a major force in expansion of palm oil production, because in order to force this expansion they would need to displace all (or nearly all) exports. Still, biofuels figure prominently in Colombia’s projections of the expansion of the agricultural frontier. Fedepalma has outlined a land use change scenario in which agriculture accounts for 10-12 million hectares of the country (up from the 4.5 million hectares currently used) while still increasing forested areas.33 The industry’s hope is that palm plantations for biodiesel production specifically will account for tens of thousands of hectares of this agricultural expansion annually.34

32 Ibid, p. 3 33 Espinosa, Juan Carlos. Environmental Planning and Development, Fedepalma. Interview. 29 Feb. 2012. Bogotá, Colombia. 34  Bendeck, Jorge. President, FedeBiocombustibles. Interview. 28 Feb. 2012. Bogotá, Colombia.

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This interpretation is borne out in figure 3, indicating that palm oil production has more or less consistently outpaced GDP growth even prior to biofuel mandates, though it remains fairly volatile. The volatility is not unusual for a crop which has the potential to be significantly affected by adverse weather—there is little indication, though, that the rate of palm oil production increase has diverged significantly from the overall rate of economic growth since the introduction of mandates (see figures 2 and 3). Indeed, we can see in figure 4 below that the 10-year average growth rate continues a steady decline from a peak in the decade ending in 1988.

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Employment in the industry has been increasing along with the expanding production, and includes a significant number of farmers who formerly grew coca.35 Dr. Jorge Bendeck, head of the main palm oil producers industry group FedeBiocombustibles, reckons that palm is ‘like the Chinese wall’ in terms of job creation, and cites figures indicating that there is 1 direct job and 2 indirect jobs created for every 7 hectares of palm. He cites an annual increase in land under production of about 36,000 hectares as the ideal amount that the industry would like to see.36 These figures point to a high-end estimate of 15,428 jobs per year—not a small figure, but hardly a sizable dent in Colombia's severe unemployment issue. Further, the jobs generated by the palm industry are far from the most desirable: in so-called worker's cooperatives, in which workers are supposedly the owners, there is no formal, full-time employment, and thus no benefits and no unemployment compensation. This was a main point brought up in many of our interviews. Chris Davy, head of the economics desk at the US embassy, also said that it was an ongoing issue. Individuals we interviewed from human rights groups Justicia y Paz, Fedeagromisbol and CODHES also emphasized the lack of benefits and rights for palm oil workers. Investment One of the major questions the biofuel industry in Colombia must answer has to do with the lack of foreign direct investment (FDI) in biofuels. Materials from the government's trade ministry, Proexport, proclaim the benefits of guaranteed, government-mandated demand. Why, then, is FDI almost non-existent in the biofuel sector? Bendeck dismisses this lack of FDI by citing the seasonal and somewhat volatile nature of palm oil and sugar cane production—one need only look at the floods of 2010 for reason enough to scare away timid initial foreign investments. This explanation is somewhat buoyed by the fact that agriculture has never taken up much of a share of Colombia's FDI,37 but doesn't totally answer the question. Biofuel investments are part agricultural, but as demonstrated above, the agricultural component is not what is holding biodiesel production back. Instead, it makes sense to look at investment in Colombia's biodiesel sector in terms of overall foreign direct investment (see figure 5). By these standards, it is clear that FDI in Colombia overall has declined in the years since the biofuel mandates went into effect, indicating that the mandates have recently been ineffective in attracting FDI.

35 Gronewold, Nathanial. “Biofuels Push Becomes Weapon in Colombia's War on Narco-Traffickers.”

Greenwire (via New York Times). Web. 2 May 2011. 36 Bendeck, 2012. 37 Kalin, Ylva. “FDI in Colombia: Policy and Economic Effects.” Department of Economics at the

University of Lund. Web. October, 2009.

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There is some internal investment, however, in the biofuel industry. Domestic investors notably include Ecopetrol, the state-owned petroleum company, which is planning to invest $140 million in a plantation and biodiesel plant in eastern Colombia, and is currently planning an additional $60 million project in the Llanos region.38 In the near future an additional ten projects are planned, which will account for a further 2.77 million liters per day of production capacity.39 There are currently six biodiesel projects operating, for a combined production capacity of just over 1.4 million liters per day, cultivating 92,777 hectares.40 Economic Conclusions This all may take a broader view than is necessary—since the mandate really took effect in 2007, figure 3 indicates that we may be seeing the beginning of an expansion in government-incentive-driven palm oil production. However, for this to happen, use of palm oil as a feedstock for biodiesel would need to drive up the domestic price enough that production was encouraged to expand significantly. As long as exports continue and total demand is satiated, this is unlikely. The government is encouraging production by guaranteeing minimum prices to producers as well as protecting the domestic palm oil market with a 20% tariff.41 Behind this tariff wall, biodiesel demand may indeed drive up prices enough to promote significant production capacity expansion. Such hypothetical sustained price increases would put upward pressure on food prices, of course, and Colombian consumers would be the losers. For the foreseeable future, however, it appears that bottlenecks due to infrastructure are likely to keep palm oil consumption as feedstock for biodiesel production below overall palm oil production levels. According to our interview with Chris Davy, the primary impediment to expansion of biodiesel production is infrastructure bottlenecks, and not lack of feedstock supply.42 Much like

38 Proexport p.4 39 Ibid p.3 40 Ibid p.6 41 WTO figures [http://tariffdata.wto.org] (accessed 3/21/12) 42 Davy, 2012.

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other industries, the biodiesel producers in Colombia face high transportation and distribution costs due to poor quality roads and limited refining capacity. Until these infrastructure issues are addressed, expansion of palm oil production will not, in itself, facilitate expansion of the biodiesel industry. This means that while the goal of increasing employment in the palm oil sector may continue to be served by tax incentives, Colombia's biodiesel blend mandates are unlikely to promote energy diversification or oil exports anytime soon.

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ENVIRONMENTAL IMPACTS OF PALM PRODUCTION IN COLOMBIA While many of our conversations centered on the economics of the palm industry and the social impacts of agricultural development, nearly all of our interviewees discussed environmental issues associated with palm production. This section reports our findings on three primary environmental topics: climate change, land use change, and regulation trends. Palm Oil and Climate Change As the issue of climate change gains traction in global conversations, even small countries like Colombia are paying attention to potential climate stressors. Perry Holloway, the Deputy Chief of Mission at the U.S. Embassy in Bogotá, told us that Colombia “wants to be fighting above their weight on things like climate change,”43 and low-emissions development (LED) is common vocabulary. While three years ago the Colombian government emphasized climate change mitigation over adaptation, the 2010 floods during which nearly all of Colombia was underwater raised people’s consciousness and shifted the conversation towards adaptation.44 Still, mitigation is a national priority, and the biofuel industry is seen as an important part of Colombia’s climate change framework. To understand the various implications of palm production in Colombia as it relates to climate change, The Swiss Research Institute, EMPA, partnered with the Colombian Center for Cleaner Production to administer a life cycle analysis (LCA).45 Using the International Sustainability & Carbon Certification (ISCC) methodology, international reference data, and on-the-ground data, they compared the reduction of emissions against fossil fuel by examining three factors: greenhouse gas inventory including cultivation, transport, and palm mills; direct land use change; and indirect land use change.46 The findings were measured using the European standard for biofuels, which mandates a 35% reduction of emissions against fossil fuels.47 The results of the LCA indicated that palm production for biodiesel yields an 83% reduction in emissions against fossil fuels without considering the indirect land use changes; even with indirect land use change, the reduction is well above the European standard. (This figure takes into account the carbon storage capacity of the palm plant itself, which raises the estimated reduction in emissions from 46% to 83%.)48 These findings suggest that, if grown sustainably, biodiesel from palm oil is a preferable alternative to petroleum with regard to emissions. Jorge Bendeck of the national biofuels association holds up the LCA as a “tremendous answer to any doubt” that palm is net carbon positive,49 and the industry’s inclusion in Clean Development Mechanism funding highlights carbon-positive projects. 43 Holloway, Perry. Deputy Chief of Mission, U.S. Embassy. Presentation. 27 Feb. 2012. Bogotá, Colombia. 44 Rodriguez, 2012. 45 Espinosa, 2012. 46 Ibid. 47 Ibid. 48 Bendeck, 2012. 49 Ibid.

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The biofuels industry’s inclusion in the REDD+ climate change framework is less certain, and depends largely on how palm plantations are defined (or fail to be defined) in Colombia’s national REDD+ plan. While Bendeck called palm plantations “oxygen factories” and said that they would “of course” be included in REDD+, Juan Carlos Espinosa of Fedepalma asserted that “palm is not a forest,” though palm plantations do create more habitat for animals than many other crops.50 Still, the fact that Colombia lost 34,000 hectares of palm last year to infection51 indicates the inherent lack of biodiversity—and therefore lack of biological resistance—in monocultures that might threaten long-term carbon storage. It seemed that many policy-makers and planners had simply not considered the idea of including palm plantations in REDD+, which is perhaps why specific provisions for palm did not make their way into the national REDD+ plan. Land Use Change: Deforestation and Biodiversity The issue of land use change for palm production, both direct and indirect, remains a point of environmental concern, particularly with regard to deforestation and biodiversity. Our in-country interviews provided significant insight into the extent to which palm production in Colombia drives deforestation. In Colombia there are two classifications of palm cultivation: the plantations which already existed and primarily met demand for palm oil as an additive, and new and future plantations which are expanding to meet Colombia’s ambitious goals for biodiesel blends and growth in the agribusiness sector. While many of the older plantations operate in previously forested areas, our research found that the deforestation had occurred primarily as a result of conflict or narcotrafficking, and not expansion of the palm industry. Most of these forests were initially cleared for coca production and later converted to palm as pressure to halt coca production increased.52 When pressed to explain the shift from coca to palm as opposed to restoring natural forests, Jorge Bendeck, president of FedeBiocombustibles, explained that these communities depended on the livelihoods provided by the coca industry and needed the alternative income that palm could provide. The remaining palm plantations in these previously forested areas make up only a small portion of the total palm cultivation in Colombia.53 On the other hand, new and future palm plantations are designated to occupy the eastern plains of Colombia mainly in the region of Orinoquia (Figure 6), which formerly served as pasture land for cattle.54 With a shrinking cattle industry, down from 40 million hectares to approximately 20 million hectares, this land has been allocated by the government as prime real estate for agricultural expansion.55 The Cattle Federation actually admits that they have 12 million hectares in excess.56 Estimates show that there is enough land available in Colombia to double agricultural production without infringing

50 Espinosa, 2012. 51 Bendeck, 2012. 52 Rodriguez, 2012. 53 Ibid. 54 Becerra, 2012. 55 Ibid. 56 Becerra, 2012.

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on natural forest.57 “Palm oil development will not be at the expense of natural forest,” Fedepalma told us definitively.58 The relative abundance of underutilized land paired with federal-level legislation protecting natural forests indicates that it is unlikely that the palm industry will contribute to deforestation in the near term. Map 2: Region of Orinoquia

Though palm-driven deforestation is much less of a problem in Colombia than it is in countries like Indonesia and Malaysia, the issue of biodiversity preservation elicited mixed responses from our interviewees in Bogotá. Colombia maintains two biodiversity hotspots and claims some of the greatest species diversity in the world.59 Replacing pastureland with monoculture palm crops could harm the delicate ecosystem located in the eastern part of Colombia. Orinoquia, which is a wetland for part of the year, has a fragile water cycle, which could be seriously damaged by vast cultivation of a water-intensive crop such as palm.60 In an effort to address this issue environmental organizations have begun conducting environmental impact assessments of the region to determine the possible harmful effects of agricultural expansion.61

57 Espinosa, 2012. 58 Ibid. 59 Inter-American Development Bank. “Biodiversity Conservation in Palm Cropping Areas.” IDB website. 60 Becerra, 2012. 61 Ibid.

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While concerns over biodiversity loss persist, Juan Carlos Espinosa of Fedepalma expressed his opinion that palm cultivation may be the lesser evil in a suite of other agribusiness options.62 With agribusiness at the heart of Colombia’s development plan, many agree that it is not a matter of “if” the eastern plains will be converted to agricultural use, but “how” the former pastures will be converted.63 In this framework, it is important to consider palm production in comparison to other viable crops such as sugar, soy, or corn. When using this lens, palm seems to offer several environmental advantages. Espinosa explained that with palm plantations, “you can find a little more of a forest-like system than any other crop.”64 He also suggested that palm plantations can serve as a biodiversity corridor and acknowledged palm’s significant carbon storage capacity in relation to other crops.65 Environmental Regulation An important aspect of environmental protection with regard to agricultural expansion is a government’s ability to monitor and regulate the impacts of crop cultivation on natural and human systems. Palm plantations, which can require pesticides, and which are water-intensive due to the “thirsty” nature of the plant, can cause serious environmental degradation if not grown properly.66 Additionally, as these chemicals enter into water supplies through the soil, or run off into neighboring food crops, human health risks can become a grave concern.67 The responsibility of regulation should fall on Colombia’s Ministry of Environment; however, the Ministry of Environment lacks the capacity, authority, and resources to adequately regulate the palm industry, ultimately leaving the natural environment and human health vulnerable to unsustainable growers. Ana Maria Rodriguez of the National Planning Department described the Ministry of Environment as often ineffective, citing poor communication between Ministries as a large part of the problem.68 Similarly, financial consultants we met with jokingly described the perception of the Ministry of Environment as “the ugly sister who wants to stay home and never wants to do anything.”69 While not all palm growers are engaging in unsustainable and damaging growing practices, Espinosa acknowledged that producers run the spectrum from best to worst practices.70 He explained that in the best of cases, growers use precision agriculture, GIS technology, cutting edge irrigation systems, and integrated pest management to ensure minimum impact on human and natural systems.71 Unfortunately, not all growers engage

62 Espinosa, 2012. 63 Becerra, 2012. 64 Espinosa, 2012. 65 Ibid. 66 Ibid. 67 Richard, Sophie, Safa Moslemi, Herbert Sipahutar, Nora Benachour, and Gilles-Eric Seralini. “Differential Effects of Glyphosate and Roundup on Human Placental Cells and Aromatase.” Environmental Health Perspectives. 2005 June; 113(6): 716–720. 68 Rodriguez, 2012. 69 Virtus presentation, 28 Feb. 2012. 70 Espinosa, 2012. 71 Ibid.

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in such sustainable practices. In the face of a weak environmental ministry, Colombia relies on external bodies to implement monitoring and regulation of palm growers. First, Fedepalma offers services to new members, which include both soil and climate analysis.72 While Fedepalma does not directly monitor or regulate their members, they do provide support for growers interested in utilizing more sustainable methods. Next, Cenipalma, a Colombian research center, which investigates innovative technologies for palm oil, is conducting research on integrated pest management to minimize pesticide use.73 They are also researching ways to develop a hybrid palm plant to increase genetic diversity and to avoid using genetically modified crops as a way to protect the species.74 These developments by Cenipalma, if adopted by growers, could help mitigate negative impacts on the environment and human health. Finally, burgeoning certification programs in Colombia serve both as a regulating body and to set an international example for organic palm production. In 2010, the Roundtable on Sustainable Palm Oil (RSPO), working with Daabon Organic, launched the first certification for organic palm oil in Colombia.75 With support from The Body Shop, this certification gained international press and helped to set a standard worldwide.76 As growers begin to adopt sustainable practices in an effort to gain certification, monitoring and regulation responsibilities will fall to certifiers, alleviating the government’s burden of assuming a role it is not capable of administering. Environmental Conclusions It is yet to be determined what the long-term environmental impacts of palm production will be on Colombia’s eastern landscape. While our data suggests that opinions about the environmental impacts of palm production vary, it is clear that industry and government alike are considering what expansion may do to the ecosystems of the country. As we mention below in our policy recommendations, a comprehensive, market-driven certification system for palm may promote stronger environmental regulation of the industry, helping to narrow the wide spectrum of palm producers towards the best practices for land, water, and chemical use. Impacts on biodiversity will depend largely on the strategic expansion of the agricultural frontier—an expansion that will hopefully be informed by environmental impact statements that channel palm plantations towards degraded cattle pasture rather than more biologically rich wetlands or forests. As we discuss below, the biodiesel industry’s role in climate change mitigation is a bit more amorphous; the industry’s environmental record—at least in the near-term—will likely be based more on land use change and water and pesticide use than displaced tons of CO2.

72 Ibid. 73 Cenipalma. “Cenipalma: Investigación e Innovación Technológica en Palma de Aceite.” Web. 21 March 2012. 74 Ibid. 75 Daabon Organic. The Future of Organic and Sustainable Agriculture. Santa Marta, Colombia: Daabon Organic, 2011. 76 Harrison, R. “Palm Oil.” Ethical Consumer. Web. May/June 2011.

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SOCIO-POLITICAL IMPACTS OF PALM OIL CULTIVATION Introduction In general, we were not able to disaggregate palm production for commodities from palm production for biofuel feedstock in our analysis of social impacts; however, there is no real reason to differentiate the two when considering the consequences of expanding palm plantation acreage for poor rural Colombians. The social development strategy of the GOC in palm oil cultivation for biofuel has been to generate employment and alleviate rural poverty through this agro-business. Consequently, the land designated for palm oil is primarily in regions with high concentrations of poverty, as is later discussed in the Chocó case study. Palm oil cultivation has indeed provided a significant number of jobs in rural areas for previously subsistence farmers,77 though whether the biofuel component of the palm industry is specifically driving job creation is inconclusive. In general, the vision of palm cultivation alleviating rural poverty has not been achieved. This endeavor has been difficult because of structural impediments to development, chiefly, the ongoing civil conflict and the inability of government to ensure security to citizens in rural areas, as well as the low levels of economic activity in these regions.78 However, the palm oil producers has been accused of human rights violations as human rights groups claim that palm oil cultivation has threatened the lives and livelihoods of rural residents and subsistence farmers who, in specific cases, have been forcibly, and often violently, removed from their land by rebel armed guerillas and paramilitary acting on their commercial interest to grow palm. Secondly, there are palm oil cooperatives that grant farm laborers partnership of palm-growing companies but have the negative consequence of limiting their employment benefits. These negative consequences to palm cultivation occur despite a comprehensive legal and institutional framework to ensure that landowners are protected from displacement. This framework, in particular the Victims and Land Restitution Law—adopted in May 2011—designed to facilitate displaced peoples’ return to land post-conflict, was established to address land dispossession resulting from the country’s civil war (1964-present). Additionally, there are laws that protect indigenous and Afro-Colombian communities’ land rights, as they experience disproportionately higher rates of displacement.79 The issue here is the chronic lack of enforcement of laws that issue and regulate land titles, particularly on indigenous and Afro-Colombian protected territories. With regards to labor rights, the law facilitates the aforementioned labor conditions of palm growers. Policy and Institutional Framework for Social Development through Biofuel Politically, the Presidency and the Ministry of Agriculture and Rural Development are the primary supporters of palm oil for biofuel. These two powerful arms of government

77 Whether this employment has increased as palm oil has been used for biofuel, as opposed to the crop’s other use is not conclusive. 78 Becerra, Manuel Rodriguez. Ex-Minister of Environment. Interview. 1 March 2012. Universidad de Los Andes, Bogotá, Colombia. 79 Peace Brigades International. “PBI Colombia: Victims Law and Land Restitution”. March 2011.

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have great ambition for the industry as a means for social development, but also because of the international investment the industry is receiving.80 International private capital, international development finance institutions, and the governments of the United States or European Union, through USAID and the European Union Funds, often finance mega-projects in palm growing as an avenue for development cooperation. Investment in palm oil is being channeled to the country to support paramilitary demobilization through the creation of alternative agricultural projects that aim to reemploy and reintegrate ex-combatants into civilian life.81 The Ministry of Environment and Sustainable Development is the more vocal counterpart cautioning against heavy investment in palm monocultures because of negative environmental impacts. However, the smaller political influence of this Ministry and the limited regulation in pricing the economic value of ecosystems being destroyed from palm oil results in a diminished opposition to the governments’ biofuel ambition.82 Land Titles and Protection of Indigenous and Afro-Colombian Rights To date, the National Planning Department figures estimate land distribution in Colombia to stand at 6% belonging to Afro-Colombians; 12% to protected national parks and forests; and 30% to indigenous peoples of the country.83 There was an uneasy consensus among our interviewees in Colombia that despite the comprehensive legal framework to protect land encroachment for the purpose of growing commercial palm oil, the enforcement is sorely lacking. The expansion of palm monoculture crops for biodiesel is threatening the lives, livelihoods and lands of Afro-Colombian, subsistence farmer communities, and indigenous peoples in the regions of Chocó, Tumaco, Magdalena Medio, Vichada, Meta, and the Amazon.84 Displacement is perpetrated by FARC and paramilitary who bring in their family members to establish legal palm growing businesses (as the family members are not officially affiliated to illicit activity) on illegally occupied land.85 The land on which palm is grown overlaps with land under the USAID Colombian Strategic Development Initiative (CSDI), a follow-up program to Plan Colombia that supports palm-growing activities by paramilitaries for demobilization and reintegration efforts. Both the Colombian government and USAID are mandated to intervene in cases of human rights violations, and USAID is to freeze funding support to the CSDI program in such cases, but still displacement is often overlooked.86 Enforcement of these intervention mandates remains weak, as minority landowners and subsistence farmers continue to be forcibly removed and killed.87

80 Rodriguez, Ana Maria. National Department of Planning: Climate Change Division. Interview. 28 Feb. 2012. Bogotá, Colombia. 81 World Directory of Minority and Indigenous Peoples. “Country Profile: Colombia.” 82 Rodriguez, 2012. 83 Rodriguez, 2012. 84 Afro Presencia. Chocó and Subsidized Palm Oil Plantation Development Programs. 85 Rueda, Danilo. Justicia y Paz. Interview. 27 Feb. 2012. Bogotá, Colombia. 86 Ibid. 87 Public Broadcasting Corporation (a). “Women War and Peace. Episode: The War We Are Living In”. 1 November 2011. [DVD] Colombia.

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Land dispossession occurs despite a comprehensive legal framework in the issuance and regulation of land titles. The Ministry of Interior implements the legislation that has allocated 1.5 million hectares of land to grow palm oil, with a target to plant 30,000 hectares per year.88 Law 70 outlines minority lands—land belonging to indigenous peoples and Afro-Colombians as individuals and/or a collective—and requires all land title and applications that are on these lands to properly consult the communities residing on these lands before any activity or occupation. Since the passage of Law 70, Afro-Colombians have gained title to 6.1 million hectares of land.89 The recently approved Victims and Land Restitution Law seeks restitution of 2 million hectares of land to Colombia’s internally displaced population (IDP). 1.2 million hectares will come from usurped land now in the hands of third parties. The remaining land is land once owned by drug lords to be confiscated by the state. In cases where restitution is not possible, IDPs will be compensated.90 The Victims Law will receive considerable international investment, including $20 million from World Bank,91 and an undisclosed amount from USAID that will also provide technical assistance. The law, however, has not determined the process of land restitution, specifically, how to deal with restoring the livelihoods of subsistence farmers returning to palm plantations. Nor does the law protect returning IDPs from the FARC and paramilitary that violently forced them off their land to begin with.92 The Case of Chocó One highly publicized case demonstrating the potential negative side of palm cultivation is that of Chocó. Chocó is a region on the Pacific coast of Colombia with a high concentration of Afro-Colombian and indigenous peoples and poverty levels four times that of Bogotá. The region also falls under the CSDI that promotes palm growing as an alternative to coca. Coca is not indigenous to Chocó; it was brought to the region and has flourished, with the government overlooking the production and distribution of the illicit crop. Plan Colombia damaged the region’s biodiversity and the citizens’ health through the aerial pesticide fumigation process to eradicate coca crops. A palm oil plantation project implemented in the Riosucio Municipality of the Chocó region aimed to cultivate 20,000 hectares of palm trees despite the territory being on minority-protected lands.93 (Although the actual cultivation fell short of this aim reaching about 5,000 hectares at its peak.94) According to social justice group Afro Presencia, palm oil has led to the displacement of almost 3 million people in the region, 2 million of whom are of Afro-Colombian descent. Thirteen forced displacements have been conducted by paramilitary groups with the support of the 17th Colombian Army Brigade. 88 Bendeck, 2012. 89 Bacon, David. “Blood on the Palms: Afro-Colombians Fight New Plantations”. Upside Down World. 18 July 2007. 90 Peace Brigades International, 2011. 91 Rodriguez, 2012. 92 Peace Brigades International, 2011. 93 Rueda, 2012. 94 Forero, Andrés Castro. Planning and Social Development, Fedepalma. Interview. 29 Feb. 2012.

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These displacements have included economic blockades (rationing of food supplies and water), selective murders, massacres, and torture by paramilitary groups such as the “Aguilas Negras” (Black Eagles) that continue to threaten black and indigenous populations.95 Despite acknowledgement by the General Attorney’s Office and the Ombudsman’s Office, the Colombian government has not taken effective measures to prevent this situation or to restitute the land to the Afro-Colombian communities. According to a Colombian Institute of Rural Development report (March 2005), 93% of palm oil plantations in the region are on land for which Afro-Colombian communities hold collective land titles.96 Labor Rights of Palm Oil Farm Growers Palm oil plantations are found in 96 municipalities in 16 departments of Colombia.97 The plantations involve more than 7,000 producers and generate more than 100,000 direct and indirect jobs.98 The palm agro-industry involves small growers, agricultural workers, administrative personnel, technicians, and professionals from diverse disciplines along with rural entrepreneurs and industrialists.99 The cooperative is based on the labor model in the directivos of the coffee growers association. The small-scale farm growers (often the subsistence farmers who own the land) partner with larger enterprises to form a palm company. However, the farmers are contracted to grow the palm by the large-scale companies, often for nine-month terms that are continually renewed. Though farmers are regarded as temporary workers who are “equal partners” in the palm growing company, they are de facto working full time without benefits. It is the opinion of USAID that this practice follows sub-standard labor laws and constitutes an abuse of labor rights.100 It is worth noting here that Fedepalma’s position is that these cooperatives are both formal and legal forms of employment; 34% of palm workers are employed by cooperatives, and the Free Trade Agreement’s recent call to disband them would issue a serious blow to this “real economy.”101 The Work of Social Movements and Resistance by Minority Communities Colombia has a long history of Afro-Colombians working with Indigenous groups to take legal action against the national government in order to have their land rights recognized. About half of Colombia’s forests are the common property of Indigenous and Afro-Colombian communities. Their ties to the land are for socio-economic survival through mining on the land and growing diverse set of agricultural crops. These ancestral lands are also a site for their socio-historical and cultural identity. When Afro-Colombians or Indigenous peoples lose their land, they often have no other option but to migrate to the 95 Afro Presencia. 96 Ibid. 97 Fedepalma, 2012. 98 Forero, 2012. 99 Fedepalma. The Oil Palm. 100 USAID Environment Breakout Session. 27 February 2012. Interview. United States of America Embassy, Bogotá, Colombia. 101 Forero, 2012.

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slums of Colombia’s major cities and into a life of urban poverty. This entrenches the stigma of these social groups as inherently poor or having caused their socio-economic circumstance. Justicia y Paz (Peace and Justice) is a Colombian NGO providing psychological, legal, and educational services in the rehabilitation of Afro-Colombians and Indigenous peoples. The NGO’s position on palm oil is that it is detrimental to the human rights of rural Colombians because (1) palm is not a cultural fit with the traditional crops grown by the subsistence farmers and (2) palm is only profitable when grown on industrial-scale plantations and so does not lend itself to small-scale agricultural development.102 When palm comes in, Afro-Colombian and indigenous people sometimes find their land reduced to commercial crops and their cost of living increased since they now have to purchase agricultural crops. Socio-Political Conclusions This section has shown the detrimental effects that palm cultivation has had on rural livelihoods and lives. While there is a comprehensive legal framework to protect rural citizens from violence and land dispossession, the chronic weakness of enforcement will continue to stifle the rural development intention of the GOC. The organization of labor through palm growers’ cooperatives remains a complex issue: while the cooperatives are in fit with the labor traditions of the country and benefit farmers in not having to pay taxes, the practice does disenfranchise farmers in their labor rights. The issue that was unfortunately not explored in our interviews is why labor rights and the cooperatives’ practices have been interpreted as mutually exclusive?

102 Rueda, 2012.

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A WAY FORWARD FOR BIOFUELS IN COLOMBIA Our interviews in Bogotá indicated that, for better or worse, the expansion of the biofuel sector is a permanent fixture on Colombia’s horizon. Viewed within the context of a limited suite of development options for the country—a shortlist topped by mining, as of the most recent National Development Plan—biofuels do look like a better option than many in terms of the industry’s impacts on human and natural systems. Though our research indicates that the “three-legged stool”103 of rural development, energy independence, and environmental sustainability that justifies biofuel production is somewhat precarious, it does seem that the Colombian government is determined to make this stool stand. The task, then, is to develop mechanisms for best protecting the environment and people within the government’s vision of biofuel expansion. Environmental policy recommendations In terms of sustainability, the Colombian government has two (currently missed) opportunities to write environmental protection into current policies. While life-cycle analysis reveals that biofuel production measures up favorably against diesel in reducing greenhouse gas emissions, additional policy is needed to ensure that biofuels are in fact a valid part of the country’s low-emissions development vision. Specifically, palm plantations should be explicitly excluded from carbon markets, in particular the REDD+ framework for reduced emissions from deforestation. Though planting palm on degraded pastureland may in fact represent short-term carbon storage, the loss of biodiversity outweighs this gain. Species biodiversity has been shown to be key to the ability of forests to adapt to increased atmospheric carbon dioxide,104 making monoculture palm plantations a poor candidate for inclusion in Colombia’s climate change adaptation strategy. Putting a carbon price tag on planted forests may also create a perverse incentive to convert natural forest to palm—a risk the government should not take considering that deforestation accounts for 46% of national emissions.105 As a potential leader in climate change adaptation and mitigation policies, Colombia should take the limitations of biofuels’ inclusion in those policies seriously. When it comes to regulating the more localized environmental impacts of biofuel production, the Colombian government has the opportunity to support market-based incentives for greener practices. While our interviews indicated that the Ministry of Environment’s regulatory authority over any industry was limited in practice, the Roundtable on Sustainable Palm Oil (RSPO) offers a framework for best environmental practices, including efforts to reduce erosion and soil degradation, protect surface and ground water, use integrated pest management techniques, and seek alternatives for

103 Dwyer, Mike. Foreign Agricultural Service, USDA. Phone interview. Fedepalma. History of Oil Palm. Web. 10 Feb. 2012. 104 Zak, Donald R., Kurt S. Pregitzer, Mark E. Kubiske, and Andrew J. Burton. “Forest productivity under elevated CO2 and O3: positive feedbacks to soil N cycling sustain decade-long net primary productivity enhancement by CO2.” Ecology Letters. 2011. 105 Bank Information Center. “Colombia Forests.” Web.

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agrochemicals.106 Eight Colombian palm companies are currently RSPO-certified,107 and Fedepalma is encouraging certification among its members.108 The Colombian government could bolster these environmental efforts by buying biofuel feedstock from certified palm growers—perhaps eventually exclusively so. Such a policy would reward producers on the precision-agriculture side of the spectrum and encourage those with careless water- and pesticide-use practices to reduce their impact. Government support of certification practices should be politically feasible given the environmental narrative surrounding Colombia’s biofuel mandates. Social policy recommendations Our research found palm plantations to be entrenched in existing land and human rights concerns, with particularly egregious examples of rights violations in El Chocó. The social consequences of biofuel production are contentious, and often rife with uncertainty. That said, the stories we heard indicate a need for current laws to provide an explicit framework for dealing with palm plantations. As Andrés Castro Forero of Fedepalma explained, communities in Chocó weren’t displaced by palm, they were displaced by conflict—and then palm developed.109 The follow-up question that has not been adequately addressed by the government is: What now? Almost 6.65 million hectares of land—equal to 12.9% of the arable land in Colombia—has been usurped or abandoned because of violence between 1980 and July 2010.110 Though historic in its legal restoration of land rights, the Victims and Restitution Law is in practice facilitating people’s return to homes that have in some cases been transformed beyond recognition. Tensions and violence mount as peasants return to land now under the control of third parties and begin to cut down palm trees to start replanting corn and yucca.111 Though we learned of isolated cases in which the government backed the forfeit of palm-planted hectares to their original owners, the Victims and Restitution Law has overall fallen far short in its ability to protect people returning to contested territory. Specific provisions for dealing with palm plantations in the context of land restitution are an important starting point, however difficult their actual enforcement under the Victims and Restitution Law may be. In our interviews with government officials, few were hopeful on a resolution to enforcing the aforementioned progressive laws on land restitution; and fewer gave recommendations on a way forward to addressing the situation. The more substantive examples we were exposed to is the work of Pas y Justice in rehabilitation victims of violent land dispossession at the personal and communal level. However, the efforts in mitigating land encroachment and a national comprehensive resolution to implementing safe and just land restitution appears too complex for our interviewers, and subsequently beyond the scope of our analysis.

106 Roundtable on Sustainable Palm Oil. “RSPO Principles and Criteria for Sustainable Palm Oil Production.” Web. October 2007. 107 Ibid. 108 Espinosa, 2012. 109 Forero, 2012. 110 Semana. “National Verification Survey of the rights of the displaced population,” Public Policy for Forced Displacement Monitoring Commission, in “What size is the plunder of land and property in Colombia?” 19 October 2010. 111 Briss, Moira. Peace Brigades International. Skype presentation. 3 Feb. 2012.

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The incongruous narrative of “post-conflict development” in Colombia is a backdrop for these difficulties with the Victims and Restitution Law. As human rights group CODHES related, shifting the discourse to “development” even as the humanitarian crisis continues has meant that less attention is paid to protecting people from the actuality of ongoing conflict in rural areas.112 This has often been the case with the biofuels industry. In some ways, the message of moving onwards from a painful past has presented unique opportunities. Jay Lee, a climate change advisor for USAID, told us that Colombia would not normally have an environment program as large as the one they have were it not for the unique opportunity to incorporate environmental goals with development ones in a post-conflict country.113 Still, the post-conflict narrative rings false for the many Colombians who are still experiencing violence in their daily lives. Acknowledging this violence as a reality and not a tether is essential to ensuring that policy surrounding biofuels—and all rural development initiatives—provides explicit protection of human rights so that someday, the narrative of “post-conflict development” can be a true one. Conclusion Our conversations with policy-makers, industry representatives, and human rights groups in Colombia revealed varied and sometimes contradicting stories on the role of biofuels in the country’s development. Our macroeconomic analysis bears out that biofuels have not yet contributed significantly to Colombia’s goal of remaining a net oil exporter, though this may be because production has not had a chance to ramp up since the 2007 fuel mandates. Still, the limited infrastructure to transport biofuels to market and the leanings of the commercial market towards palm oil versus biodiesel are major challenges for the industry.114 Our research turned up mixed results on whether the biofuel industry is reaching its goals of being part of the country’s environmentally sustainable, low-emissions development strategy. As of now, the environmental impact of the industry varies depending on the producer, and neither the government nor industry associations yet have the capacity to regulate, though the emerging palm certification offers opportunities for increased environmental accountability. Palm’s inclusion in or exclusion from international climate change frameworks will likely be ironed out in the coming years, with possible opportunities for carbon-positive projects, as long as the palm frontier is truly degraded cattle grazing land and not forests. Though biodiversity impacts are probably inevitable, the palm industry is certainly preferable to large-scale mining in terms of its impacts of Colombia’s precious ecosystems. The biofuel industry’s social impact was the most difficult to evaluate, mostly because of incongruous scales. While countrywide job creation numbers indicate that palm may be contributing positively to rural development, many of the fine-grain testimony we heard from human rights groups was of forced displacement, violence, and loss of cultural identity as landscapes are transformed to palm. Our paper attempted to tell both of these intersecting stories.

112 CODHES. Presentation. 29 Feb. 2012. 113 Lee, Jay. USAID. Interview. 27 Feb. 2012. 114 Davy, 2012.

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Biofuels in Colombia are a fascinating case study on how government support of a specific industry drives economic, environmental, and social development goals. As the world (hopefully) begins to turn further away from fossil fuels as the backbone of our energy system and the demand for biofuels becomes market-driven rather than government-mandated, Colombia will be a country to watch in terms of assessing the nuanced domestic consequences of crop-based renewable energy production.

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