World Bank lifts Moratorium on Lending Money for Oil Palm—What does this mean for Rainforests?
Posted under: A few weeks back, Reuters reported that the World Bank would begin financing oil palm investments. Again. This could mean some real changes for the oil palm sector in Southeast Asia, possibly even driving more deforestation of tropical rainforests as money is invested in new oil palm projects. But let’s not get ahead of ourselves.
This was big news because this marked the lifting of an 18-month moratorium the World Bank had imposed on themselves, starting in 2009. So why the sudden change of heart?
World Bank Logo.
A little history : The World Bank stopped investing money in oil palm in 2009 after an internal audit revealed that the World Bank’s investments in major oil palm plantations were not in compliance with the World Bank’s own standards for performance. The audit was conducted after indigenous rights groups, NGO’s, and smallholder farmers filed a complaint about the practices and standards used by plantation companies funded by the World Bank.
So we get back to our initial question : why would they lift the moratorium if there were these major problems with lending? The World Bank has come up with this new framework (rules) for their lending, which are supposed to protect standing forests by, for example, only allowing plantations to be grown on already-degraded lands and/or by improving current plantation productivity (more product for less land). They have also now stated that new money invested in oil palm would be used to support small-scale oil palm producers rather than large, commercial plantations.
But the question remains—will ending this ban and restarting their lending actually hurt tropical rainforests? It’s tough to know the answer to that yet—small scale oil palm has been praised as “a more environmentally friendly” form of producing oil palm compared to plantation agriculture, but there is no guarantee this is always the case. Oil palm plantations are very clearly NOT a substitute for natural forests — it doesn’t matter whether it is run by a smallholder farmer or a big plantation owner.
Credit : Achmad Rabin Taim / Wikimedia – Although they may look "green", acre after acre of natural tropical forest must be cut down in order to make way for oil palm plantations. Let's hope the new World Bank lending strategies do not promote more clear-cutting, and instead endorese sustainable planting on lands that are ALREADY deforested. We cannot continue expanding into these standing forests!
But what if we can’t just keep huge tracts of tropical forest untouched by palm oil plantations? It’s hard to just tell the oil palm industry to just STOP what they’re doing. According to the World Bank the palm oil sector employs over six million rural poor worldwide! Not only that, but there is a huge global demand for palm oil, and in the US it’s believed that it can be found in over half of all items on your supermarket shelves! So while conserving intact forests in Southeast Asia is still the single most important way to protect endangered species like orangutans, sustainable oil palm production also has an important role to play in protecting nature while supporting local livelihoods. The good news is that the World Bank is being closely watched to see how their new investments impact both poverty reduction AND conservation efforts, which may help ensure forests are adequately protected under these new investments.
I guess everyone’s “homework” is to keep an eye on just how environmentally-friendly their new lending policies end up being. If it becomes clear that, once again, there are serious problems with the World Bank’s standards, then we, the international community, will have to call for another moratorium so that we can ensure that World Bank lending does not promote more deforestation!
