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World Bank Arm to Sell Stake in Singapore's Olam

WASHINGTON (Reuters) - International Finance Corp, the private lending arm of the World Bank, has decided to sell its stake in Olam International Ltd OLAM.SI, a Singaporean- based company accused by Greenpeace of environmental damage.

In a brief statement issued on Saturday, IFC said the “decision is driven by policy considerations and is not indicative of IFC’s opinion on Olam’s financial position and performance (present or future) or the merits of any investment in Olam.”

IFC also noted in the statement that it was “committed to good international practices in environmental sustainability.”

An IFC spokeswoman declined to elaborate.

IFC’s 2007 annual report placed the value of its Olam investment at $7.5 million. Olam’s Web site indicated that this represented 3.4 percent of the company’s stock. Olam is a trading and food-processing company.

Greenpeace claimed in August that Olam was involved in destructive exploitation of rainforests in the Democratic Republic of Congo. In addition, the Financial Times reported on Friday that IFC was reviewing the allegations.

Olam denies Greenpeace’s claim. It also published a response to the FT article on its Web site noting that it had never operated its Congo timber concessions, and had already returned them to the Congolese government.

“We have operated with as much caution and diligence as we could under the circumstances and the terrain,” it said.

Furthermore, Olam said the concession represented only 0.6 percent of the total granted in Congo, and it had only been picked out because of the stake held in it by IFC.

Reporting by Alister Bull, editing by Maureen Bavdek

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