In 2011, the World Bank Group (WBG) adopted a Framework and Strategy for investment in the palm oil sector. The new approach was adopted on the instructions of former World Bank President Robert Zoellick, after a damning audit by International Finance Corporation’s (IFC) semi-independent Compliance Advisory Ombudsman (CAO) had shown that IFC staff were financing the palm oil giant, Wilmar, without due diligence and contrary to the IFC’s Performance Standards. Wilmar is the world’s largest palm oil trader, supplying no less than 45% of globally traded palm oil. The audit, carried out in response to a series of detailed complaints from Forest Peoples Programme and partners, vindicated many of our concerns that Wilmar was expanding its operations in Indonesia in violation of legal requirements, Roundtable on Sustainable Palm Oil (RSPO) standards and IFC norms and procedures. Almost immediately after the audit was triggered, IFC divested itself of its numerous other palm oil investments in Southeast Asia.
This Joint Statement is the outcome of a conference held in Medan on 5 - 10 November 2012, organised by Darma Agung University and grassroots organisation Lentera Rakyat, on land grabbing and oil palm plantations in Southeast Asia.
The right to Free, Prior and Informed Consent (FPIC) in the Round Table on Sustainable Palm Oil (RSPO) Principles and Criteria establishes how equitable agreements between local communities and companies (and governments) can be developed in ways that ensure the legal and customary rights of indigenous peoples and other local rights-holders are respected.
Globally oil palm plantations continue to expand at a rapid rate. World leader, Indonesia, has raced past Malaysia to become the number one producer. Latest data from the Indonesian watchdog NGO, SawitWatch, suggests that oil palm plantations in Indonesia now cover 11 million hectares, up from 6 million hectares only five years ago. New plantings are spreading to the smaller islands of the archipelago and to the less developed areas of eastern Indonesia. Hopes that a Presidential promise of a 2 year moratorium on forest clearance would slow the crop’s expansion – part of a deal to reduce green house gas emissions - have also evaporated as the government has excepted areas where preliminary permits have already been handed out.