The emerging oil palm agro-industry in Palawan, the Philippines: Livelihoods, environment and corporate accountability

The document investigates the expansion of the oil palm industry in Palawan, operated primarily by Palawan Palm & Vegetable Oil Mills, Inc. (PPVOMI) and Agumil Philippines, Inc. (AGPI). It finds that while promoted as an economic opportunity, the industry has led to significant grievances, including contractual deception of smallholder cooperatives, land dispossession of indigenous peoples, and illegal encroachment into protected forestlands. The study highlights a failure in institutional oversight, noting that environmental clearances were often obtained after project initiation and that the legal framework fails to distribute liability fairly, leaving smallholders with most of the financial risk. It concludes with ten recommendations to strengthen corporate accountability, including contract revision, stricter government 'gatekeeping', and the promotion of RSPO certification.

• The oil palm industry in Palawan is dominated by Palawan Palm & Vegetable Oil Mills, Inc. (PPVOMI) and Agumil Philippines, Inc. (AGPI), with the latter utilizing an out-grower scheme involving agrarian reform beneficiaries (ARBs). The project's licenses mandate the cultivation of 15,469 hectares, which represents approximately 2% of Palawan's total land area but occupies up to 99% of agricultural land in some southern municipalities.
• Smallholder cooperatives have reported severe financial distress and food insecurity due to deceptive contractual arrangements. Seven of the 14 consulted cooperatives were unable to meet production targets and amortize loans from the Land Bank of the Philippines and AGPI, while AGPI imposed a 10% management fee and 14% compounded interest on delayed payments, deepening their debt.
• The out-grower contracts (PTMA and MSA) effectively transferred control to AGPI while leaving financial and managerial risks with the cooperatives. This created a patron-client relationship where farmers lost control over land-use decisions, leading some to describe themselves as "tenants on their own land."
• The industry has caused land dispossession and encroachment on ancestral domains of indigenous peoples. Evidence suggests that Free Prior and Informed Consent (FPIC) certificates were often not obtained or were only secured after the project was already established, with some land acquired through middlemen or pressure from influential people.
• Oil palm cultivation has expanded illegally into protected forestlands and replaced food crops. In the municipalities of Quezon and Rizal, the Department of Environment and Natural Resources (DENR) identified 185.25 hectares of cultivation in timberland, with 35.15 hectares located inside and outside the Mt. Mantalingahan Protected Landscape.
• There are widespread concerns regarding the introduction of insect pests, specifically the coconut leaf beetle (Brontispa), and long-term environmental degradation including soil compaction and the contamination of drinking water by pesticides and fertilizers.
• Institutional oversight was found to be deficient; Strategic Environmental Plan (SEP) clearances and Environmental Compliance Certificates (ECCs) were often obtained after the project had already begun, in breach of the Environmental Impact Statement System.
• The current legal and regulatory framework in Palawan creates ambiguities in access to justice. Government agencies often view cooperative grievances as private contractual matters, and the provincial government has been hesitant to intervene for fear of discouraging private investment.
• Under the Philippine Labor Code, AGPI should be jointly liable for labor rights infringements as a principal hiring contractors. However, because the cooperatives are not registered with the Department of Labor and Employment (DOLE), the principle of solidary liability is not currently applied.

APA

Larsen, R. K., Dimaano, F., & Pido, M. D. (2014). The emerging oil palm agro-industry in Palawan, the Philippines: Livelihoods, environment and corporate accountability. Stockholm Environment Institute. https://www.sei.org/mediamanager/documents/Publications/SEI-WorkingPaper-Larsen-PalmOilPalawan-24-Sep.pdf

Chicago

Larsen, Rasmus Kløcker, Francisca Dimaano, and Michael D. Pido. The emerging oil palm agro-industry in Palawan, the Philippines: Livelihoods, environment and corporate accountability. Stockholm Environment Institute, 2014. https://www.sei.org/mediamanager/documents/Publications/SEI-WorkingPaper-Larsen-PalmOilPalawan-24-Sep.pdf.

Wikipedia

{{cite report |last1=Larsen |first1=Rasmus Kløcker |last2=Dimaano |first2=Francisca |last3=Pido |first3=Michael D. |title=The emerging oil palm agro-industry in Palawan, the Philippines: Livelihoods, environment and corporate accountability |publisher=Stockholm Environment Institute |date=2014 |url=https://www.sei.org/mediamanager/documents/Publications/SEI-WorkingPaper-Larsen-PalmOilPalawan-24-Sep.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{larsen2014emerging, author = {Larsen, Rasmus Kløcker and Dimaano, Francisca and Pido, Michael D.}, title = {{The emerging oil palm agro-industry in Palawan, the Philippines: Livelihoods, environment and corporate accountability}}, institution = {Stockholm Environment Institute}, year = {2014}, url = {https://www.sei.org/mediamanager/documents/Publications/SEI-WorkingPaper-Larsen-PalmOilPalawan-24-Sep.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }