analysis of each mill‟s capability to treat liquid waste is needed in order to facilita
comprehensive analysis of current operations. The action plan attached here has been prepared
to follow-up on the issues that have been raised in the SADP effluent study and ensure
adequate mitigation measures are in place to deal with increased palm oil mill effluent due to the
te a more
Project.
In 2007, the World Bank approved an IDA Specific Investment Credit (IDA Credit 43740-PNG) of
US$27.5 million equivalent for the Papua New Guinea (PNG) Smallholder Agriculture
Development Project (SADP), which aims to improve community participation in local
development while increasing revenue flow from the already established local oil palm
production industry. The SADP has three components: (a) smallholder productivity
enhancement including: the infill planting of new smallholder village oil palm along existing
access roads; upgrading of provincial access roads and establishment of sustainable financing
for road maintenance; and strengthening of oil palm extension services; (b) local governance
and community participation, which supports the improved provision of local services and
infrastructure through participatory processes; and (c) Project management and institutional
support for Oil Palm Industry Corporation (OPIC), the implementing agency; and for the
smallholder sector, through training, research and studies. The Project was approved by the
World Bank‟s Board in December 2007, however the main Project activities (including road
reconstruction and maintenance and infill planting) will only commence in 2011 due to delays in
signing the Credit, establishing management capacity, and starting up implementation.
This report was undertaken to supplement information in the Environmental Assessment1
prepared for the SADP. Based on site visits and data analysis of the nine existing palm oil mills
in the Project areas in Oro and West New Britain, the report assesses the environmental
management implications of increased palm oil mill effluent (POME) production arising from the
SADP. The report concludes that most of the mills in the SADP project area are legally
compliant with Papua New Guinea national regulations. The author states 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 points
out discrepancies between the World Bank Group Environmental Health and Safety Standards
for Vegetable Oil Processing (2007) and existing national regulations and a number of specific
operational issues that need to be further investigated and addressed at different mills in the
Project area.
While the study findings indicate that the relevant milling companies should have the processes
and structures to adequately deal with additional wastewater production from the Project, it is
Bank Management's view that the study is not fully conclusive. Further in-depth technical
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