The World Bank’s private sector lender will focus more on palm oil firms pursuing green standards if a suspension on financing the sector is lifted by its president, an official said Nov. 10.
The International Finance Corp. (IFC) stopped financing the industry in 2009 after social and environmental complaints by smallholders and local communities in Indonesia, prompted a internal review of its lending practices.
The IFC has since taken inputs from nearly 3,000 stakeholders to create a new strategy of engagement with the $30-billion palm oil industry that will be forwarded to World Bank president Robert Zoellick by the first quarter of 2011 for approval.
Part of the new strat – egy involves supporting the Roundtable on Sustainable Palm Oil (RSPO) – a grouping of planters, green groups and consumers that formulated green standards for the industry, said IFC’s director of global manufacturing, agribusiness and services Atul Mehta.
“On our performance standards, we already encourage our clients to also aspire to internationally recognized certification very much along the lines of what the RSPO is promoting,” Mehta told Reuters in an interview.
Formulating new methods of assessing the palm oil industry’s social and environment impacts and favouring investments in firms that depend on small farmers for supply also feature in the new strategy, Mehta said.
Although IFC’s involvement in the sector is small, having invested $132 million in palm oil projects in Asia, central America, Ukraine and West Africa, the new guideliness may help more potential clients become more eco-friendly, Metha said.