World Rainforest Movement

Papua New Guinea: World Bank promoting oil palm and pushing people into poverty

The “Small Holder Agriculture Development Project” (SADP) is a World Bank loan recently granted to the PNG Government. The SADP project, a U$S 27.5 million credit “aims to enhance agricultural incomes in a number of communities in West New Britain and Oro provinces.” According to World Bank’s Country Manager for PNG Benson Ateng this project is “a core element of the new Country Strategy, through its support for poverty alleviation in two oil palm growing provinces. The project aims to increase the revenues of oil palm farmers through a community-based approach to agricultural development.”

However, the local people in Oro Province, where plantations were also developed with a previous World Bank loan and one of the targeted areas under the SADP loan, are strongly opposed and denounce that the loan “has been hijacked by the Oil Palm Plantation Companies in Papua New Guinea to push for the expansion of oil palm rather than expend it in areas that will enable greater economic benefits for the agricultural dependent rural masses of Papua New Guinea.” 

Instead of promoting a diversified approach to agricultural development, by means of this project smallholders will be encouraged and receive funding to establish oil palm plantations on their lands.

According to a letter received by the World Rainforest Movement, local communities object to the loan being spent on oil palm expansion for the following reasons: 

“Firstly oil palm is not the only option for active participation in the cash economy for the rural population as is the view of our Government and the multinational oil palm companies operating in our country. The various assessments have been focused on oil palm rather than alternatives. In the Northern Province, the assessment teams held discussion only with the stakeholders in the oil palm industry. These consultations also failed to convene meetings with non oil palm growers in oil palm growing areas. Therefore, the views presented to support the loan submission do not reflect a broad cross section of the community. 

Secondly, we are of the view that for this SADP Loan to benefit more agricultural dependent families the government should focus on developing and maintaining road access to rural communities to enable greater participation by the bulk of the population. 

Any further expansion of oil palm will not be in the best interest of the nation as it will have serious negative effects on our social and terrestrial environment. It has already contributed to major losses of forests and biodiversity in our country bringing with it social and environmental problems which the oil palm companies have refused blatantly to accept responsibility. 

We are aware of the fact that the World Bank is very well informed of the issues as a direct impact by the oil palm industry however sees it fit to grant another loan to the Government of PNG in the pretence of agriculture development as a strategy to alleviate poverty whilst the fact remain the multinational corporations profit from the loans while we repay these loans. 

In fact the previous World Bank loan for the Oro Expansion Oil Palm Project in Oro province has done quite the contrary from reducing poverty. Some of our people have suddenly become landless who will pioneer a class of poor. This is something we have not known since our ancestors.”

Based on the above considerations, local communities call on the World Bank to either review the loan conditions to promote alternatives other than oil palm or to cancel the loan. 

On their part, palm oil companies are lobbying the government to push for the funds to be released quickly as they already have their own implementation plans ready. Yet, there is still time to make things change and that is exactly what the local people from the northern Oro Province are pushing for: to stop this monocultural approach and push for a diversified future.

They are requesting international support and have drafted a letter that will be sent to the World Bank authorities as well as to the PNG government. The letter in full is available at:

Those who would like to support the letter, can do so by sending your name, organization and country to the email: support@wrm.org.uy before February 20th.

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