Serious setbacks in IFC’s handling of complaints about its support for Wilmar CAO admission of validity of NGO complaint regarding Wilmar ignored by IFC

Update

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 related reports - IFC to be audited for policy violations over palm oil projects NGO complaint regarding Wilmar taken up by CAO (Update September 2008)

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):

1. Letter from FPP and complainants to CAO raising concerns about procedural irregularities and standards violations in IFC support for Delta Wilmar - December 2008
2. Emailed note of clarification by FPP and complainants with regard to their letter of 26 August 2008 - December 2008
3. Reply from CAO to further concerns of complainants - October 2008 
4. Information posted on IFC website about new loan to Wilmar - October 2008
5. Letter from FPP to CAO querying bad faith of IFC in making further loan and content and timeline for further dialogues with Wilmar to address wider problems of social and environmental performance - October 2008
6. Letter from FPP and complainants to CAO protesting upcoming loan to Wilmar - August 2008 
7. CAO reply to FPP letter of August 2008 - September 2008
8. Letter from Milieudefensie and other NGO to IFC Vice President and to IFC Executive Board protesting upcoming loan - August 2008 
9. CAO appraisal to assess if the request by the complainants for an audit of the IFC was justifiable.