Nature Alert: World Bank's IFC suspends palm oil investments

Thursday, 10 September 2009

World Bank's IFC suspends palm oil investments

Wed Sep 9, 2009 6:27pm EDT

WASHINGTON (Reuters) - The International Finance Corp (IFC), the World Bank's private sector lender, said on Wednesday it had suspended investments in palm oil businesses until after a review of its practices in the sector.

The review follows social and environmental complaints in 2007 by smallholder and indigenous groups in Indonesia related to IFC's investments in two subsidiaries of major palm oil producer Wilmar (WLIL.SI).

An independent complaints advisory ombudsman found that IFC did not have a specific strategy for dealing with the Indonesia palm oil sector, despite being aware of social, environmental and governance problems in the country's palm oil industry.

The audit also found shortcomings in IFC's assessments of the Wilmar projects. The probe did not evaluate Wilmar's performance nor any environmental and social impacts of IFC's projects with the company.

In a statement e-mailed to Reuters, IFC said it would develop the strategy over the next few months to guide its involvement in the palm oil sector and will not approve any new palm oil projects until it was completed.

"The strategy will define the basis and manner in which IFC intervenes through its investments and advisory work to support implementation of more sustainable practices among firms engaged in the palm oil business," IFC said.

IFC currently has $132 million invested in palm oil projects in Asia, central America, Ukraine and West Africa.

Palm oil comes from the fruit of the tropical oil palm tree, which originated in West Africa, and is grown for its multiple clusters of fruit called fresh fruit bunches.

Responding to concern about IFC investments in Wilmar and conditions in the Indonesian palm oil sector, World Bank President Robert Zoellick said the independent audit highlighted important deficiencies in IFC's practices.

"Therefore, I have directed IFC management to take all necessary steps to ensure that the problems identified in the CAO audit are not repeated," Zoellick said in an August 28 letter.

(Reporting by Lesley Wroughton; Editing by David Gregorio)

http://www.reuters.com/article/GCA-Oil/idUSTRE5886OD20090909

Hall of Shame for President Susilo Bambang Yudhoyono and the Palm Oil Industry.

Nothing can prepare one for the sight of the systematic extermination of orangutans by the government of Indonesia.

Look at the photos and news articles on these pages in the context of a statement the President made to the media on 10th December 2007.

“In the last 35 years about 50,000 orangutans are estimated to have been lost as their habitats shrank. If this continues, this majestic creature will likely face extinction by 2050,” President Susilo Bambang Yudhoyono said at the launch of an orangutan conservation plan at the climate talks in Bali.

“The fate of the orangutan is a subject that goes to the heart of sustainable forests … To save the orangutan we have to save the forest.”

Statements like these are most welcome, but unless backed up by action, such words fall on deaf ears within the Ministry of Forestry....who are busy granting licences to cut down the very forests the President says they should protect!

When you think you are to busy to help, please could you reflect for a moment on .........

The following extract refers to environmental problems in general. I just hope you find it as thought provoking and relevant to orangutans as I have.

"This is such a shocking and unpalatable fact that most people deny it, or they just don't want to think about it. They believe as individuals, they can do little about it, so push it to the back of their minds. But I can't do that.

When something has to be done, we need to do it. It doesn't matter how big the challenge is or how hard the solution; if I know something is wrong, and I am in a position to help, I will do my best to make it right." Duncan Bannatyne, successful British businessman.