May 2011 – Green Papers: Issue VIII
The World Bank Group and International Finance Corporation have released the Final Framework for Engagement in the Palm Oil Sector. The Framework will have wide ranging negative impacts on the growth and development opportunities from palm oil industry in developing nations. The Framework retains the most harmful elements of the original strategy and will move the World Bank Group further away from its mandate to reduce poverty and establish it as an international environmental regulator. It will hinder attempts to expand food production to meet growing demand and rising prices. Through this Framework the World Bank clearly establishes itself as a partner in a new strategy announced by WWF to control markets to meet environmental criteria. The new policy will reduce the capacity of the IFC to support new investors in the palm oil sector in developing countries and thereby reduce investment. The Bank has effectively endorsed Roundtable for Sustainable Palm Oil (RSPO) as the only acceptable standard for sustainability. Yet the standard ignores the national development strategies of developing countries. The new World Bank standards also will require that all small holder producers of palm oil be certified. This will reduce the number of small holders producing palm oil.
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