CAO admission of validity of NGO complaint
regarding Wilmar ignored by IFC
Update: December 2008
FPP and 18 other NGOs, including local organisations in Indonesia, have
been involved in a long-running process to get redress for the IFC’s
persistent violations of its social and environmental policies in the
palm oil sector in Indonesia. For over five years IFC has been providing
financial support to the company Wilmar Trading / Wilmar International,
one of the world’s largest palm oil dealers, directly and through various
subsidiaries. In August 2007, FPP with other concerned NGOs and local
organisations in Indonesia filed a complaint with the IFC Compliance
Advisory Ombudsman (CAO) about this financing, alleging serious social
and environmental problems in Wilmar’s operations, as well as violations
of IFC’s own standards and procedures in making these credits and loans.
This has led to the CAO admitting the
complaint. To resolve the problems, the CAO has mediated in an ongoing
negotiation between Wilmar and two Wilmar-affected communities. The
CAO has also accepted that there is a prima facie case that IFC staff
did not properly apply the IFC's social and environmental policies
in providing this support for Wilmar. The case is therefore subject
to audit by the CAO. For details see:
http://www.forestpeoples.org/documents/ifi_igo/ifc_wilmar_update.shtml
Despite these findings, despite an ongoing dialogue between Wilmar
and complainants, despite an ongoing audit of the IFC's prior dealings
with Wilmar and despite the complainants writing further letters to
the CAO and the Board of the IFC noting their concerns that IFC was
contemplating a further loan to Wilmar, the IFC, in open defiance
of the CAO, went ahead and provided a further loan to Wilmar on 23
October 2008.
At the same time the complainants have
engaged in a follow-up correspondence with the CAO over the delays
and content of a further CAO-negotiated dialogue meant to address
the widespread and systemic abuses in Wilmar’s wider operations, which
is also part of the original complaint. This update thus provides
links to the relevant background information (most recent corresponce
listed first):
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