Palm Oil and the International Finance Corporation (IFC)

http://www.landcoalition.org/cpl-blog/?p=6765

Palm Oil and the International Finance Corporation (IFC)

Posted on 08, July, 2010

borneo1Forest Peoples Programme, Update July 2010

Photo by Matley0/Flickr

“During May and June, the International Finance Corporation (IFC), the World Bank’s private sector financier, finally began a long-delayed process of consultation aimed at developing a revised strategy setting out the terms and conditions for future investment in the controversial palm oil sector. The IFC produced an ‘issues paper’ which usefully summarised the viewpoints of the various actors, including critics of the IFC. Consultations were then held in Washington, DC; then in three places in Indonesia, followed by Ghana, Costa Rica and finally Europe. Working closely with a consortium of Indonesian NGOs, smallholders and indigenous peoples, Forest Peoples Programme (FPP) helped put together a detailed Joint Statement to the IFC setting out proposals for the IFC strategy and how it should be developed. The statement was endorsed by over 160 organisations in Indonesia and around the world and was widely cited by supportive organisations in the subsequent consultations.

In the Joint Statement, the consortium called for a longer process of consultation on the actual draft strategy and pointed out that the World Bank President had actually promised a strategy for the entire World Bank Group (WBG) not just for the IFC. The statement also provided detailed evidence that until there are legal and procedural reforms in Indonesia it will be nigh on impossible for the WBG to invest without causing serious social and environmental harm. The statement thus called on the WBG to focus on reforms - including recognition of forest peoples’ and smallholders’ rights - instead of just getting back to business as usual.

Reports from the first meetings indicated that the IFC had tried to put a ’spin’ on the consultations, implying that what they had heard was endorsement for their re-entry into the sector. This led the same consortium to issue a press release, widely reported on the web, calling on the IFC not to be too hasty about its future role. Norman Jiwan of the Indonesian NGO Sawit Watch noted:

Without comprehensive reforms, pouring more money into palm oil development will only lead to further land grabbing, more human rights abuse, rampant forest destruction and massive greenhouse gas emissions.

While Norsianus, General Secretary of the independent Oil Palm Smallholders Union (Serikat Petani Kelapa Sawit) of Sanggau in West Kalimantan (Borneo) made clear:

Current laws and procedures seriously disadvantage us, indigenous peoples and smallholders. The whole approach to smallholders needs changing first before the World Bank re-starts large-scale investment. This all needs much more thorough discussion.

Earliest indications are that the IFC has heeded these messages of caution and our demands for a more inclusive process. The IFC has opened its External Advisory Group for the process to one or two more NGO representatives and is now considering extending the strategy-making from July into September, including another round of consultations once there is a draft strategy to discuss.”

Source: http://www.forestpeoples.org/documents/ifi_igo/ifc_palm_oil_update_jul10_eng.shtml#1