NGOs Warn World Bank Over Palm Oil Funding in Indonesia

Eny Wulandari Jakarta Globe 5 Sep 10;

Jakarta. Environmental groups Greenpeace and Sawit Watch have called on the World Bank to extend its international suspension of financing for the palm oil sector unless producers meet environmental criteria.

Jefri Saragih, head of Sawit’s campaign in Indonesia, said on Sunday that the World Bank must provide palm oil makers with clear guidelines on what they must do to reduce their industry’s impact on global warming.

Jefri delivered the statement in response to a World Bank meeting held in Frankfurt on Tuesday and Wednesday.

During the gathering, the World Bank’s International Finance Corporation said it would promote and finance environmentally and socially sustainable palm oil.

It said it would invest in palm oil production if producers meet international certification or provide a solid schedule for achieving sustainability.

Bustar Maitar, a local campaigner for Greenpeace, also urged the World Bank to make financing dependant on palm oil producers prioritizing environmental concerns.

Fadhil Hasan, executive director of the Indonesian Palm Oil Producers Association (Gapki), said on Sunday that his office would continue giving feedback to the World Bank until it made a decision on whether to resume funding the sector.

“We have yet to have any final response on the World Bank’s strategy at the moment. The World Bank will hold another meeting in October,” Fadhil said.

Fadhil said Gapki members would not pin their hopes on the World Bank, because they have been able to rely on commercial loans to fund their operations.

However, he said the international body should not make financing dependent on meeting environmental criteria, saying that the jobs created by palm oil producers should be taken into account.

Environmental groups have been making a stir with campaigns accusing palm oil firms of illegal deforestation, with Sinar Mas Group being boycotted by some of its top buyers.

On Thursday, US fast food giant Burger King said it would stop buying palm oil from the firm and its subsidiaries after Greenpeace mounted a successful campaign against Sinar Mas’s land-clearing practices.

Unilever and Nestle earlier dropped the supplier over the criticism.

Since 1965, the World Bank has channeled nearly $2 billion for 45 projects in the palm oil sector in 12 nations across Africa, Latin America and Southeast Asia.

Indonesia has been a major focus of the financing, receiving $618.8 million of the total funding. The World Bank suspended the financing in September 2009 over environmental concerns.