The World Bank’s draft framework for investment in the palm oil sector was met with dismay from civil society groups, who said that it failed to offer a credible strategy to address manifold social and environmental problems.
With the World Bank and IMF under consideration as significant sources of climate finance, controversy continues around the Bank’s Climate Investment Funds (CIFs) and carbon offset projects.
Proposals to place climate funds at an institution like the World Bank, over which developing countries have limited ownership, have undermined the process of negotiations through the UNFCCC. However, G77 countries have stood against the World Bank and have firmly supported placing climate finance under the UN, despite a diversity of positions. Lobbying by the World Bank and key donors both in international and bilateral discussions to secure a significant and decisive position for the Bank with
As pilot countries are selected and funding allocated, concern mounts over poor consultation, the weakness of some country proposals, and failure to address governance issues.
Notes of the meeting
The World Bank is currently undertaking a major review of its controversial engagement in palm oil production, but critics warn that consultation has been inadequate and that the Bank seems to have already decided to continue investment in the sector.
The IMF has gone back to promoting fiscal austerity and pressuring governments to implement spending cuts and structural reforms. Austerity also remains at the heart of the Fund's debt sustainability policies.
As talks aim toward an agreement on climate finance in December in Cancun, fault lines remain about the role of the World Bank. Contradictions in recent Bank lending and contributions to alternative financing mechanisms have fuelled ongoing debates about the Bank’s role.
Controversy over the Botnia paper mill, which was part financed by the International Finance Corporation (IFC), the World Bank's private sector arm, continues as the International Court of Justice (ICJ) ruled that Uruguay breached regional treaty obligations by failing to properly inform neighbouring Argentina when authorising its construction.