Palm oil changes take shape, so lending ban is lifted

The World Bank is to lend to the palm oil sector for the first time since September 2009, now that the industry has adopted a more environmentally friendly investment strategy.

The bank and its private finance arm, the International Finance Corporation (IFC), will resume lending to companies after an 18-month moratorium instituted when the IFC was accused by campaigners of indirectly facilitating environmental damage and indigenous land seizures through investments in the Singapore-based Wilmar Group, a leading player in the Asian agribusiness sector.

The new strategy includes plans on making contractual arrangements fairer and improving productivity.

The World Bank has said that it will also begin to prioritize support for smallholders and to ‘foster benefit sharing with rural communities’.

However, the Forest Peoples Programme, a UK-based international organization that led the original NGO complaints about the bank in 2009, said the strategy still fails to protect indigenous rights.

‘Although it is clear that the new policy has taken on board some of the comments made by NGOs and government agencies during the consultations, some provisions remain weak,’ it said.

‘The policy as adopted would discourage but still allow the takeover of indigenous peoples’ and local communities’ lands without their free, prior and informed consent.’