World Bank Suspends Loans to Palm Oil Sector Over Social & Environmental Concerns

oil palm fruit photo

Oil palm fruit, photo: Firtri Agung via flickr.

Remember how an internal audit of the World Bank's International Finance Corporation showed that it violated its own procedures in lending to palm oil companies -- the social and environmental impacts of which would ordinarily prohibit lending? Well, the World Bank has stepped up on this one and agreed to suspend funding to the palm oil sector, Mongabay reports:In a letter sent to several NGOs, World Bank president Robert Zoelick said he shared their concerns "about the detrimental effects of palm oil development when sound environmental and social practices are not followed" and that the internal audit "highlighted important deficiencies" in IFC's approach.

Therefore, until a new strategy is implemented to ensure that the same mistakes are not repeated, the IFC will not approve any new investments in palm oil. Additionally, the social and environmental impact of all existing loans to the sector will be reviewed.

More, plus all of Zoelick's letter at Mongabay.

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