The Latest Oil Controversy: Palm-Oil Vs. The IFC
The International Finance Corporation (IFC), which is the the private arm of the World Bank, has suspended funding for the palm oil industry–a move brought on, mainly, by harsh criticisms of Wilmar International, the planet’s biggest palm-oil producer. That corporation’s business practices in Kalimantan and Sumatra are the targets of the criticism. Read more about Biofuels & Greenhouse Gas Emissions
Palm-oil production may seem innocent enough, but in fact it is highly controversial to many people. Palm oil is highly versatile and used in nearly every processed food ever sold. And–it’s often a component in biodiesel fuel. The crops are inexpensive while the profits are enormous. However, despite palm-oil’s use in a “green” fuel source, its environmental impact can be a nightmare without careful regulatory procedures. Deforestation, endangered plants and animals, and displaced forest communities have all resulted from the crop’s careless cultivation.
It is, of course, possible to grow and cultivate biofuel crops that do not have disastrous environmental impacts–crops such as algae and grapeseed. However, palm-oil is so diverse in its applications and so inexpensive that it is a very highly desired crop.
So it was that in 2007, a collection of 19 environmental groups, local organizations, and plantation smallholders, representing indigenous people filed a complaint with the IFC, in which they claim that Wilmar International failed to comply with prevailing laws in Indonesia with regards to environmental and social impact assessments, and ignored the IFC’s procedural protocol.
World Bank President Robert Zoellick, in a letter to Marcus Colchester, Director of the Forest Peoples Programme, IFC’s ombudsman proceeded with an audit following the NGO complaints and concluded that IFC funding of the publicly traded Wilmar International did violate the IFC’s procedures, and that commercial concerns had been placed before IFC environmental and social standards.
Responding to the findings of the audit, the IFC writes that it “recognizes the deficiencies identified in the ombudsman’s report and that there are lessons to be learned for future investments in the palm oil sector”.
Yes, indeed. For instance, Datuk Masidi Manjun, Sabah’s Minister of Tourism, Culture, and Environment, has pleaded with the palm oil industry to end its polluting of rivers and work with NGOs to preserve wildlife. “I myself have had a couple of sessions with the planters. They promised to do this and do that, but suddenly it’s clear to me it’s all been lip-service…I went into the plantations myself to check and I know some of the mills have not done their job by letting pollutants out into the river,” he says.
Read more about Biofuels & Greenhouse Gas Emissions
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