Thursday, 10 September 2009

World bank proves Fonterra's claims a sham

World bank proves Fonterra's claims a sham

Auckland, 10 September 2009 – The World Bank has suspended funding to Fonterra’s palm kernel supplier, Wilmar International, due to environmental and humanitarian concerns.

Last week Fonterra claimed Wilmar was a reputable producer of palm kernel expeller (PKE) which is used as a feed for New Zealand’s dairy herd.

Fonterra sustainability manager John Hutchings told Radio New Zealand: “They [Wilmar] have been working very hard to ensure that all of their mills and plantations are RSPO (Roundtable on Sustainable Palm Oil) certified, and they have almost completed that task.”

“Fonterra has either not done its homework or it doesn’t care about the illegal and immoral activities of a business partner. Fonterra can no longer claim ignorance of what Wilmar and the palm industry is doing to supply palm based animal feed to New Zealand and has no choice but to stop all imports immediately.” said Simon Boxer, Greenpeace New Zealand senior climate campaigner.

Greenpeace is also calling on John Key to stop the imports of palm kernel animal feed into New Zealand and on the Indonesian Government to implement an immediate moratorium on forest and peatland destruction for the sake of climate stability, biodiversity and to protect indigenous peoples’ land rights.

Fonterra’s half-owned subsidiary, RD1, has a joint venture with Wilmar (1), which is the world’s largest trader of palm oil’s and kernel. It has a documented reputation for rainforest destruction, illegal burning and creating social conflicts over community lands. (2)

But the World Bank says on the back of concerns about Wilmar, it has decided to halt all new International Finance Corporation (IFC) investments in palm oil and review existing investments, due to environmental and social concerns. (3)

“Only three of Wilmar’s mills had RSPO certification, representing a minute amount of certified PKE, and the majority of its plantations had no certification at all”, said Boxer

Imports of PKE have increased from 400 tonnes to 1.1 million tonnes per year in the last decade. The secretary general of the RSPO, Dr Vengata Rao, quoted in a recent Sunday Star Times expose said “certainly very little expeller cake coming into New Zealand last year would have been RSPO certified at all”.

The World Bank will suspend funding of the oil palm sector pending the development of safeguards to ensure that lending doesn't cause social or environmental harm, according to a letter by World Bank President Robert Zoellick.

A recent internal audit found that IFC funding of the Wilmar Group, a plantation developer, violated the IFC's own procedures, allowing commercial concerns to trump environmental and social standards. The audit's findings were championed by environmental and indigenous rights' groups who have criticised World Bank support for industrial oil palm development which they say has driven large-scale destruction of rainforests in Indonesia, boosting greenhouse gas emissions, endangering rare and charismatic species of wildlife, including the orangutan, and displacing forest communities.


Notes to editors
(1) RD1 Press release, June 2008.

(2) A 2007 report by Friends of the Earth Netherlands, Kontak Rakyat Borneo and Lembaga Gemawan exposed Wilmar’s involvement in rainforest destruction, in ignoring national laws and the rights of communities and in forest fires in Sambas District, Kalimantan.