In response to perceived inequitable and unsustainable practices, CDI facilitated multi-stakeholder global consultation processes which helped to develop a new strategy for engagement and sustainability in the international palm oil sector.
Growing palm oil business and its consequences
Nearly 40% of all vegetable oil traded worldwide is palm oil. It is widely used in food, cosmetics, industry and as a bio-fuel. Already the world’s dominant oil, the demand is set to grow dramatically over the coming years, especially from China and India. Most palm oil is produced in tropical areas using land that was once rainforest. The ecological implications are significant, and there are also severe negative consequences for local and indigenous communities. This multi-stakeholder issue thus is fraught with power and conflict issues from local level right through to global level.
In response to widespread concern and international campaigns, a group of NGOs and palm oil companies formed the Roundtable on Sustainable Palm Oil (RSPO). This initiative was relatively successful, yet unsustainable and socially inequitable practices continued. A coalition of local NGOs in Indonesia prevailed upon the World Bank Group to put a moratorium on any further investment in palm oil projects until the situation could be properly addressed by a global multi-stakeholder consultation process.
Multi-stakeholder consultations all over the world
Centre for Development Innovation (CDI), Wageningen UR supported IFC through a major strategy review exercise of its activities and future direction in the palm oil sub-sector. We facilitated a global consultation process with multi-stakeholder meetings in the USA, Indonesia, Costa Rica, Ghana and Amsterdam. Generally, these consultation rounds were attended by 50-70 participants, representatives of a wide variety of stakeholders including the public sector, industry, financial institutions, civil society, and indigenous peoples' organisations. Besides those meetings in real live, there were parallel e-consultations on the internet.
Towards a new strategy
The motivation behind the global consultation process was not to simply solve the conflict. Rather, it provided the World Bank Group with the views of all the stakeholders involved so that future investments could be made in a way that would ensure sustainable and equitable practices. Much emphasis was put on the need for better engagement and conflict resolution processes between companies and local people. The outcome of the global consultation rounds laid the foundation for the development of a new strategy for IFC’s engagement for a sustainable palm oil sector.