| July 28, 2011 - Papua New Guinea’s palm oil industry is second only to the public service in terms of formal employment, with around 23,000 people formally employed in the industry. In addition, the sector provides an all-important source of income for smallholder farmers. About 18,500 smallholder farmers are engaged in the sector, supplying 30 percent of the fruit that is processed. In response to calls from smallholder communities, provincial governments and the central government of PNG, the World Bank funded SADP project was approved in 2007 with the aim of increasing the productivity and efficiency of existing oil palm areas in two provinces, improving access to markets by upgrading roads and improving local infrastructure through community grants.  While the main project activities have not yet started, the project is intended to improve the livelihoods of smallholder oil palm farmers in Oro and West New Britain provinces, while ensuring that the utmost priority is devoted to environmental sustainability. The World Bank Group is committed to promoting a sustainable palm oil sector – to help protect forests, biodiversity and vulnerable communities. The World Bank commissioned an effluent study to supplement information in the Environmental Assessment prepared for the SADP. The need for this study was identified in the Management Response to the Request for Inspection for the SADP. A Palm Oil Mill Effluent Management Action Plan has been developed to respond to the findings of the Effluent Study. The main project activities under the Smallholder Agriculture Development Project – such as road rehabilitation and infill planting – are expected to start later this year. While an Environmental Assessment has been prepared for the project, the World Bank commissioned the  Effluent Study with clear terms of reference:  to assess whether the palm oil milling companies in the SADP project areas have the capacity in their mills to adequately treat the increase in Palm Oil Mill Effluent (POME) that could be anticipated due to an increase in production of oil palm fruit under the Project and identify any measures needed to prevent or mitigate any adverse environmental effects and improve environmental performance. The study finds that the relevant milling companies in the Project areas should have the processes and structures to adequately deal with additional wastewater production from the Project. The report found that most of the mills in the SADP project area are legally compliant with Papua New Guinea’s national environmental regulations. The report says that a categorical statement about full legal compliance for all mills is not made because of a lack of clarity with some of the permits and because all environmental performance data were not available (notably from the Oro sites). At the same time, the report highlights the importance of updating the PNG Environmental Code of Practice for the Oil Palm Processing Industry in order to strengthen national regulations and improve environmental monitoring. The study also highlights a number of specific operational issues that need to be further investigated and addressed at different mills in the Project area. In addition to the study, a POME Management Action Plan has been developed in order to follow-up on the issues raised in the SADP effluent study to ensure adequate mitigation measures are in place. This plan will be jointly implemented  by the Oil Palm Industry Corporation (the Project Implementing Agency), the Papua New Guinea Department of Environmental and Conservation (DEC), New Britain Palm Oil Ltd., Hargy Oil Palm Ltd, and Kula Oil Palms Ltd, with the assistance of the World Bank. The Action Plan includes establishing detailed baseline information for each project area mill; carrying out a follow up environmental audit to review  compliance with the existing discharge standards as per the Environmental Code of Practice Papua New Guinea Oil Palm Processing Industry; monitoring the implementation progress of the mitigation measures; and assisting the PNG Department of Environment and Conservation to produce an updated Draft PNG Code of Practice for the Palm Oil [Processing] Industry, which would then be used among other things as the basis for regulation to improve the quality and scope of effluent-related environmental monitoring. The SADP stands to benefit about 16,500 oil palm smallholder farmers in Oro and West New Britain provinces. The milling companies in the Project areas are committed to environmentally sustainable practices and are members of the Roundtable on Sustainable Palm Oil. They have indicated their commitment to the actions outlined in POME Management Action Plan. |
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