World Bank Group publishes draft framework for sustainable palm oil

By Katie Bird

- Last updated on GMT

Related tags Palm oil

The World Bank and the International Finance Corporation (IFC) have released a draft framework for engagement in the palm oil sector, in the hope of promoting positive change.

Palm oil is recognized in the framework as a crop which can help fight poverty and drive economic development; although, the sustainability of current production methods and social impacts are questioned.

In the draft document, the World Bank Group, one of the biggest sources of funding for developing countries, has set out the possible ways it can help move the sector onto a more sustainable footing.

The Group proposes action on four major themes – policy and regulatory environment, sustainable private sector investment, benefit sharing with small holders and communities, and sustainability codes of practice.

Actions proposed include working with governments to design appropriate policy institutions, strengthen small holder producer organizations and improve smallholder access to finance, as well as working with the Roundtable on Sustainable Palm Oil (RSPO) in order to strengthen its sustainable palm oil certification program.

Uniform certification needed

Spokesperson for the IFC, Irina Likhachova, said that the need for uniform certification was a recurrent theme during the five month collaboration process with stakeholders.

“We heard this from various stakeholders, the need for uniform certification. While this may not necessarily be the RSPO certification, it is probably the main one,”​ she told USA.

Although it was clear during the collaboration process that the RSPO is far from perfect, it is the only industry round table that brings together all actors along the supply chain, she said.

Wider implications of the framework

The World Bank Group is present in the majority of palm oil producing countries through a number of projects funded by the IFC, as well as World Bank Country Assistance Strategies. However, it stopped investing in new palm oil-related projects last year due to concerns over the sustainability of the crop.

The need to produce a comprehensive approach to palm oil investments was one of the drivers behind the report, but the World Bank Group hopes its approach will have wider implications.

“The intention of the intervention is to promote positive change in the sector as a whole. We want a change that goes beyond our immediate projects,”​ Likhachova told USA.

One of the ways this could occur is of course through work with the RSPO on certification programs, she said.

Ultimately the wider implications of the framework countrywide depend on the willingness of governments to enter into discussion with the group.

“A lot depends of the willingness of the governments to be able to get into a policy dialogue. If, within a country assistance strategy, palm oil comes up as an important sector then we can discuss this in detail and put forward proposals on how to approach this,”​ she added.

The draft framework can be viewed here​ and input can be made here​. The final document is expected to be published in September.

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