Transnational corporation Nestle announced Tuesday it would stop buying palm oil from a Guatemalan company, Reforestadora de Palmas del Peten S.A., Repsa, accused by the country’s prosecutor of paying bribes to receive tax credits.
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The Swiss company said “we have decided to stop our sourcing of palm oil from Repsa,” citing concerns over corruption allegations. Their joint commercial relationship will end by September.
Repsa, an agroindustrial company that pioneered palm oil plantations in Latin America, has been involved in other serious scandals, without national or international repercussions. The company is linked with a 2015 social and ecological disaster in Guatemala, deemed by many as a case of ecocide, when one of its palm-oil treatment plants dumped chemicals into the Pasion river, killing its marine life and affecting human populations that depend on its resources.
The company was temporarily shut down by a Guatemalan court, but eventually resumed operations. According to local media, no one has been held accountable due to the company’s successful legal representation. The Guatemalan Center for Social, Environmental and Legal Action denounced in 2016 that the company participated in “influence peddling” to escape prosecution.
Palm oil extraction is linked to deforestation and land dispossession, according to environmental activists. Last year, a University of Barcelona study in Guatemala revealed how the expansion of palm oil plantations in the country turns fertile land into infertile and unusable land. The study also pointed out that Latin American palm oil plantations have replaced 40 percent of tropical jungles, greatly reducing the amount of productive land available.
All of these facts and their impact on affected communities did not motivate Nestle to cut ties with Repsa. The multinational kept working with Repsa more than two years after the Pasion river incident.
This is not the first time Nestle deals with companies that have poor human rights records. In August 2015, the multinational faced a class-action lawsuit by U.S. customers who claimed Nestle’s Fancy Feast cat food was the product of slave labor. Later, the company launched its own investigation and admitted to the charge.
Nestle, which has roughly 100 bottled water factories in 34 countries around the world, has been criticized for pushing a water privatization agenda around the world.