Wednesday, November 10, 2010

World Bank set to back RSPO model; new report on US palm oil markets

1.[Presumably "Ukraine" should read "Uganda".]

World Bank Arm Ready To Back Palm Oil If Ban Goes

Date: 11-Nov-10
Author: Niluksi Koswanage

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 on Wednesday.

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 strategy 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.

"That is something we are proposing for companies that are primary producers of palm oil," he said, speaking on the sidelines of the RSPO meeting in Jakarta.
Formulating new methods of assessing the palm oil industry' social and environment impacts and favoring 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 guidelines may help more potential clients become more eco-friendly, Atul said.

"There is increasing interest in operating this business sustainably, so we have had a lot of clients come to see what is our timetable and what is our approach and how we might help them take their business on a sustainable path," he said.
If palm oil clients violate commitments to keep forests standing and engage with local communities, the IFC will work with them to ensure they meet standards. Exiting investments will only be a last resort.

"If we reach a point which we don't think they have the commitment or they don't meet it, we can invoke contractual requirements to exit," Mehta said.
(Editing by William Hardy)

2.  [hat tip: Ape Alliance]

National Wildlife Federation is pleased to announce the release of our new report, entitled: *Food, Fuel, or Forests; Charting A Responsible
U.S. Role in Global Palm Oil Expansion

This report warns that the increased demand for palm oil -- which makes its way into the U.S. in a myriad of food and cosmetic products-- may lead to further loss of tropical forests and create new greenhouse gas emissions if palm oil expansion is not managed sustainably.

Palm oil has overtaken soybean and canola as the world’s largest source of vegetable oils. Over the next decade, global demand for vegetable oils and biofuels are expected to rise between 50% and 40% respectively with palm oil contributing a high percentage in both sectors. However, palm oil expansion has been linked to significant increases in tropical deforestation, social conflict, and emissions of greenhouse gases that result from the clearing and draining of tropical forests and peatlands. While the majority of plantations are currently in Southeast Asia, the palm oil industry is aggressively branching out into Latin America and Africa.

This report is being released on the eve of the General Assembly of the Roundtable on Sustainable Biofuels (RSPO) in Jakarta, Indonesia from November 9-11. The RSPO was set up six years ago to improve the sustainability of palm oil supplies by establishing an independent certification program, similar to other commodity sectors. Despite the growing demand for certified palm oil, the RSPO still has several structural problems in its system that must be fixed if palm oil can be credibly claimed to be sustainable, according to NWF’s report.

The report focuses on the role that major U.S. buyers and distributors of palm oil can play in improving the sustainability of palm oil supplies. While the U.S. is a relatively small consumer of bulk palm oil in the global economy (only 2%), it is estimated that around 50% of packaged retail food products sold now contain palm oil, and that U.S. demand may rise sharply in the years ahead, especially given new markets for biofuels. Many large scale U.S.-based agricultural industries are members of the RSPO and are among the largest global buyers and distributors. Some of these companies have committed to switching their palm oil supply to “certified� sources by 2015 but they have not necessarily committed to RSPO standards or to improving RSPO systems.

The report sets out the steps U.S. companies can take to play an active role in improving the environmental and social standards of the palm oil industry and can be found at NWF’s website at


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Biofuels are a wide range of fuels which are in some way derived from biomass.

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