WASHINGTON, D.C./LIMA – Maps published today confirm that land transferred by two oil palm plantations to a Peruvian trust services company, which is now auctioning off these properties, is located in illegally deforested Amazon rainforest. EIA mapped the properties transferred to the trust to show the scale, location, and corporate connections of the clear-cut Amazon land now being offered through offshore vehicles to unknown bidders.
In an announcement appearing in Indonesia’s Jakarta Post on June 23, the two oil palm plantations, which are located in the Amazon region of Ucayali, Peru – Plantaciones de Pucallpa S.A.C. and Plantaciones de Ucayali S.A.C. – are listed for sale via the Lima-based trust services company La Fiduciara S.A. The sale comes in the midst of ongoing legal proceedings brought against the plantation companies by the Peruvian government for environmental crimes and obstruction of justice, related to unauthorized deforestation of at least 9,174 hectares of rainforest.
The auction, advertised as public, is open to selected bidders who present notarized letters of interest. The structure of the trust through which these illegally deforested properties are being sold mirrors the types of schemes exposed in the Panama Papers, and prevents the public from knowing who the true buyers and sellers of the properties may be.
According to Peruvian public records, Plantaciones de Pucallpa S.A.C. and Plantaciones de Ucayali S.A.C. transferred the majority of their properties to a trust established by La Fiduciaria S.A. on September 2, 2015.1 On the same day, the Peruvian Ministry of Agriculture issued a stop-order against any further activity by Plantaciones de Pucallpa S.A.C., due to the deforestation of at least 5,263 hectares of rainforest carried out without the required environmental approvals.2
Plantaciones de Ucayali S.A.C. had already been issued a stop-order for illegally deforesting at least 3,911 hectares of rainforest without the required environmental approvals in 2014,3 in addition to being sanctioned with a fine for violating the Peruvian Forest and Wildlife Law.4 Investigations into legal violations and environmental crimes are ongoing against both companies and could result in significant fines and penalties.
EIA learned that the Peruvian State is presently pursuing “precautionary measures” to secure the Plantaciones de Pucallpa S.A.C. and Plantaciones de Ucayali S.A.C. assets, and to ensure that the responsible companies respond to the potential fines from the ongoing legal processes against them. The sanctions against the companies could add up to millions of dollars in fines for the illegal deforestation of these same pieces of land they are trying to sell now.
“While it is not illegal to sell private property in Peru, the sale would be illegal if the intention is to evade the payment of the fines and other remedies imposed by the Peruvian government and courts,” said Peruvian environmental lawyer, César Ipenza. “The Peruvian Government is trying to avoid such a potential evasion by using precautionary measures.”
EIA was informed that if any transactions happen before the precautionary measures are set in place, the Peruvian government would request the transfer be nullified, which means that the ownership would be legally returned to the Peruvian plantation companies and then be subject to seizure under the same argument: to secure the resources to cover for their penalties for illegal deforestation.
“The clear message from the Peruvian State is that whoever acquires the land must be aware that in the near future, the transfer will be annulled and the ownership will be returned to the Peruvian plantation companies, so that the land can be seized or otherwise secured in response to any crimes the Peruvian Judiciary decides they are responsible for,” added Ipenza.
These two plantation operators have ties to a network of 25 Peruvian companies which have at least four open legal cases against them and their employees in Peruvian courts.5 Outside of Peru, two offshore Cayman Islands companies have been providing significant financing for the plantations. United Oils Ltd. SEZC is the primary financier of at least one of the palm oil companies, Plantaciones de Ucayali S.A.C, and holds shares in Plantaciones de Pucallpa S.A.C.6,7 United Cacao Ltd. SEZC has financed the same two oil palm plantation companies through cash advances.8
United Cacao Ltd. SEZC, which is traded on the London Stock Exchange’s Alternative Investment Market (AIM), has recently come under fire for its role in illegal deforestation and making misleading statements regarding its fully-owned subsidiary, Peruvian cacao plantation operator, Cacao del Peru Norte S.A.C.9
A series of offshore companies in the British Virgin Islands, Cayman Islands, and Bermuda appear as the investors, buyers, and sellers associated with this group. The sale, through an opaque fiduciary trust and offshore companies whose true ownership is unknown, appears to put at risk the ability to hold a company or individuals responsible for massive environmental crimes in the Peruvian Amazon. Meanwhile, this type of transaction enables potential buyers to acquire illegally-deforested, troubled land assets without revealing the nature of the acquisition to the public until the deal has taken place.
“Association with the legacy of these plantations and properties should raise serious questions for any legitimate buyer, given the likelihood of further prosecution and fines against these companies for breaking Peruvian law and destroying Amazon rainforest,” said Ipenza.
La Fiduciaria S.A. also provides services to some of Peru’s largest resource extraction companies in order to provide anonymity and tax benefits.
2 Dirección General de Asuntos Ambientales Agrarios, Ministerio de Agricultura y Riego. (2015, September 2). Resolución de Dirección General N° 270-2015-MINAGRI-DVDIAR-DGAAA. Lima, Peru.
3 Dirección General de Asuntos Ambientales Agrarios, Ministerio de Agricultura y Riego. (2014, December 9). Resolución de Dirección General N° 463-2014-MINAGRI-DVDIAR-DGAAA. Lima, Peru.
4 RDE 290
5 Procuraduría Publica Especializada en Delitos Ambientales, Ministerio del Ambiente. (2015, November 19). Informe No. 22-2015-MINAM/PP. Lima, Peru.
6 Plantaciones de Ucayali S.A.C. Superintendencia Nacional de los Registros Públicos. Publicidad Registral en Línea. Retrieved 2016, March 31 from https://enlinea.sunarp.gob.pe/sunarpweb/pages/acceso/ingreso.faces. p. 18, 26.
7 Plantaciones de Pucallpa S.A.C. Superintendencia Nacional de los Registros Públicos. Publicidad Registral en Linea. Retrieved 2016, March 31 from https://enlinea.sunarp.gob.pe/sunarpweb/pages/acceso/ingreso.faces. p. 17.
8 Environmental Investigation Agency. (2016, May 4). London Stock Exchange Financing for Illegal Deforestation in Peru via AIM-listed United Cacao Ltd. SEZC. Washington, DC.
9 “Letter from over 60 Civil Society Organizations to the Alternative Investment Market of the London Stock Exchange.” (2016, May 4).
Maggie Dewane, EIA Press Officer, [email protected], +1 202 483 6621