IFC prawn farm loan sparks conflict

5 April 2001

In February, Honduran fishermen in the Gulf of Fonseca protested against the expansion of a prawn farm which has been supported by the World Bank’s International Finance Corporation (IFC). NGOs believe that the IFC shares responsibility for the violent conflict between local communities, the companies and the police which re-erupted in February.

Demonstrating that prawn farming destroys the marine environment and reduces fish breeding, the fishermen, supported by organisations such as CODDEFFAGOLF, were successful in getting the area declared a Ramsar Convention protected wetland site in late 1999.

In June 1999 the IFC loaned six million dollars to the San Bernardo Marine Farms (SBMF) shrimp company (predominantly North American owned), contradicting a May 1999 Bank statement which said it would never again fund fisheries projects which created ecological and social problems.

The loan was justified by the claimed need to reactivate shrimp production after Hurricane Mitch. However, the Forest Peoples’ Programme in a recent letter to the IFC, points out that “the company had not in fact suffered severe damages during Hurricane Mitch and the funds are now being used by the company to expand its operations, thereby destroying neighbouring wetlands and affecting the livelihood of local fishing communities”. In early March the IFC sent some staff to Honduras to investigate but their report has not yet been published. It looks unlikely that the IFC will commission an independent investigation, as NGOs demand.

Meanwhile Raja Siregar, a marine policy campaigner with Indonesian NGO WALHI released a similar statement calling on “the World Bank and Asian Development Bank to stop promoting shrimp farming in Indonesia because it is destroying the country’s mangroves”.