In 2005, OLAM was awarded logging titles covering over 300,000
hectares in the Bandundu region, in violation of a 2002 moratorium
on the allocation of new logging titles, and DRC’s Forest Code,
both of which were introduced with the support of the World Bank in
an attempt to tackle uncontrolled logging in the DRC.
In December 2003, the IFC invested $15 million in OLAM and,
during 2004, a partial guarantee of $50 million was approved for
the company. World Bank records show that, as of fiscal year 2006,
IFC held $11.2 million in OLAM loans and guarantees. Meanwhile, the
World Bank denies any IFC involvement in the DRC forest sector,
stating on their website that “the Bank does not fund logging
anywhere in Africa and our main advice to the Government of DRC is
not to expand industrial logging.”
“This is an example of the World Bank’s double standards when it
comes to using international finance to help save the DRC’s
forests. While the left hand of the Bank claims to save the Congo
forests, its right hand helps destroy them,” said Susanne
Breitkopf, Greenpeace forest campaigner. “Rather than financing the
plunder of the world’s second largest rainforest, the World Bank
should invest in strengthening forest law enforcement in the DRC,
to control the wanton and illegal destruction being perpetrated by
logging companies.”
In April 2007, Greenpeace published a report detailing how OLAM
trades in timber from third parties whose destructive logging
operations cause social conflicts, massive environmental damage and
significant loss of state revenue. In May, Greenpeace wrote to the
IFC asking that it divest from OLAM on the basis that the group’s
existing logging titles, awarded illegally after a 2002 moratorium
on new titles, should be considered illegal and cancelled. At the
end of July, the IFC rejected this request, claiming that the group
only works with suppliers who hold valid logging permits and that
OLAM is committed to sustainable forestry.
OLAM’s operations have already faced legal issues elsewhere in
Africa, and in 2004 the company was fined $20,000 by the U.S.
Commodity Futures Trading Commission for illegal practices in the
United States.
“There are serious questions about the effectiveness of the
IFC’s Performance Standards. The World Bank Group should ensure its
funds are used to improve governance and to alleviate poverty, not
to fund forest destruction. Despite capacity building talks about
the DRC forest sector since 2002, international logging companies
continue to operate with impunity and the government has no means
to control them,” concluded Breitkopf.
VVPR info: [email protected]
http://www.greenpeace.org/international/campaigns/forests/africa/congo-report
