World Bank Knowingly Funds Harmful Biofuel Co.

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In our March/April 2009 issue, journalist Heather Rogers investigates the controversy surrounding biofuel production and the ever-expanding oil palm plantations in Indonesia. In her report, Rogers explores why the world’s largest palm oil trader, Wilmar, is facing intense criticism: 

Wilmar is currently under scrutiny for illegalities…including logging protected areas, using fire to clear trees, forcibly removing peasants and indigenous people, and operating without proper permits. 

According to Rogers, these activities violate Wilmar’s own social responsibility policies, as well as the standards of the International Finance Corporation (IFC), the World Bank’s private sector lending arm that has bankrolled Wilmar with millions. After pressure from Indonesian activists, IFC’s ombudsman was forced to launch an investigation.

Well, the investigation finally wrapped up this summer, culminating in this damning report that details IFC’s failures:

  • IFC did not address the livelihood and economic issues faced by smallholders or plantation workers in the supply chain.
  • IFC overrode the assessment by it’s own economic and social department (CES) and incorrectly categorized investments in Wilmar’s oil palm projects as having “limited, or no, environmental or social impacts.”
  • IFC failed to address the fact that Wilmar’s plantation operations were not in compliance with Indonesia’s national laws, which require Environmental Impact Assessments (EIA), and local land rights customs.
  • IFC investments were overly influenced by commercial pressures and disregarded environmental and social due diligence requirements.

Indonesia’s civil society organizations have responded quickly to these findings. In conjunction with the UK’s Forest Peoples Programme, they sent a letter to IFC officials arguing that such failures require IFC “to suspend its support for the palm oil sector in Indonesia until these deficiencies are addressed.” As Marcus Colchester of the Forest Peoples Programme explains, “IFC staff knew of the environmental and social risks in the palm oil sector, including unresolved land disputes and non-compliance with its social and environmental standards, but chose to ignore the risks.”

Check out Heather Rogers’ investigation here.

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THE TRUTH...

is the first thing despots go after. An unwavering commitment to it is probably what draws you to Mother Jones' journalism. And as we're seeing in the US and the world around, authoritarians seek to poison the discourse and the way we relate to each other because they can't stand people coming together around a shared sense of the truth—it's a huge threat to them.

Which is also a pretty great way to describe Mother Jones' mission: People coming together around the truth to hold power accountable.

And right now, we need to raise about $400,000 from our online readers over the next two months to hit our annual goal and make good on that mission. Read more about the information war we find ourselves in and how people-powered, independent reporting can and must rise to the challenge—and please support our team's truth-telling journalism with a donation if you can right now.

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