WASHINGTON-based World Growth (WG), a pro-development non-government
group, said the World Bank is straying from its core purpose of poverty
alleviation as it adopts narrowly-defined sustainability rules before it
lends money for oil palm planting.
This is despite the fact
that Malaysia and Indonesia are being represented in the World Bank and
that Prime Minister Datuk Seri Najib Razak heads the Southeast Asian
constituency in the bank’s governing board.
When contacted by
Business Times, WG chairman Alan Oxley noted that it would be natural
for the World Bank’s president, Robert Zoellick, to consult the
governors, which include Najib and Indonesian president Susilo Bambang
Yudhoyono, over palm oil funding given how important it is for the
countries’ drive to alleviate poverty.
Indonesia and Malaysia are the world’s top producers of palm oil.
It seemed that World Bank staff listen more to donors and environmental activists rather than developing countries.
Its private-sector lender, International Finance Corp (IFC), stopped
funding the palm oil industry in 2009 after complaints from
environmental and human rights non-governmental organisations prompted a
review of its lending practices.
IFC’s director of global
manufacturing, agribusiness and services Atul Mehta reportedly said part
of the World Bank’s new strategy involves supporting the Round-table on
Sustainable Palm Oil (RSPO), of which it is a member.
said if palm oil clients violate commitments to keep forests standing
and engage with local communities, the IFC can refuse loans.
Last month, lawmakers in the US wrote to the World Bank president
stating their concerns over the bank’s “no land conversion policy and
suspension of palm oil funding”.
Congressmen John Shadegg and
Scott Garrett said the sustainability criteria will limit farmers in
developing nations to benefit from private and public investment and
undermine the World Bank’s core mission of raising living standards.
In a document made available to Business Times the congressmen said,
“the World Bank’s reconsideration of its pro-agriculture policies is
worrisome given the proven economic success of this development model”.
When asked to comment, Oxley concurred with the congressmen that the
World Bank should not overreach its priorities to set environmental
standards, especially when it impacts its core mission, the jobs of
millions and food offerings to billions.
on the freeze of palm oil funding is a gross overreaction to a minor
workplace infraction. Furthermore, this decision will lock in RSPO-style
regulations and requirements on World Bank lending,” he said.
“Why is the World Bank stepping into a role of an environmental
regulator and enforcer instead of staying committed to its primary
mission of poverty alleviation?” Oxley questioned.
Source : Business Times