IFC Honduran client linked to death squads

8 April 2013

The International Finance Corporation (IFC, the Bank’s private sector arm) loan to Honduran palm oil producer Corporación Dinant has come under increased scrutiny as new evidence submitted to the Compliance Advisor/Ombudsman (the IFC’s accountability mechanism) in late February revealed Dinant’s links to repeated forced evictions and the killings of almost 90 local campesinos (peasant farmers) and their supporters.

A February report by US-based NGO Rights Action, based on over 70 interviews with local campesinos and activists, revealed concrete links between the Honduran army, the regional police, and a number of private security firms and calculated that at least 88 campesinos and their supporters have been killed in the region since 2009; the majority “clearly have the characteristics of death squad killings.” The report concluded that “actions taken by the World Bank directly contributed to the context of impunity which facilitates the ongoing death squad activity, as they provided loans to Dinant, a principal actor in the conflict, even as reports of the land conflicts in the Aguán were widespread and a general context of impunity and repression carried out by the state in the context of the military coup was also widely reported upon”.

The IFC provided Dinant, the region’s largest single landowner, with a $30 million corporate loan in November 2009, just five months after Honduras’s president was removed in a military coup. The IFC insists in the project summary, updated in February 2013, that “oil palm plantation development is occurring on existing, cleared agricultural land, and there is no destruction of or impact on critical habitat involved. Land acquisition is on a willing buyer-willing seller basis, and there is no involuntary displacement of any people.” Moreover it defended the strong social impacts of the project and Dinant’s role as “an important job creator – employing 4,500 permanent and 2,500 temporary workers – in a region that has long suffered from a lack of jobs and social services.”

World Bank financing for monocultures and transnational corporations is what today has generated agricultural and food crisis

IFC under CAO investigation

A Compliance Advisor/Ombudsman (CAO, the IFC’s accountability mechanism) investigation (seeUpdate 82) began in April 2012 after allegations from human rights organisations that the IFC’s client  “conducted, facilitated, and supported forced evictions of campesinos in the Aguán valley through inappropriate uses of force by the public and private security forces under the control or influence of Dinant.” Having concluded that its initial inquiry merited further investigation, in August 2012 the CAO began a full audit into the adequacy of the IFC’s response, including a three-week panel inquiry which was completed in early March . Its decision is expected to be published in the summer. Carlos Benavente, president of Latin American NGO network Latindadd, called on the World Bank to order the CAO to “expedite the report to prevent further abuses being committed against Honduran peasants, journalists and lawyers.

According to German NGO Rainforest Rescue, Dinant has been implicated in land conflicts dating back to the 1970s. In 2012 a campesino group’s 20-year struggle for justice was finally rewarded when a court ruled that Dinant’s owner, Miguel Facussé had illegally evicted them, and ordered the restitution of their land. This victory was however bittersweet, as only three months later, the group’s lawyer, Antonio Trejo Cabrera was murdered. In February, his brother who had campaigned for a full investigation into his death, was also killed.

International condemnation

The IFC’s partnership with a client strongly linked to human rights abuses, has attracted international condemnation. In March, an open letter signed by 17 global NGOs, including social movement La Via Campesina, and an international petition signed by over 63,000 people, called on the Bank to immediately cease its support for Dinant. In 2011 the German state-owned development bank, German Investment and Development Corporation (DEG) under pressure from human rights groups, suspended its loan to Dinant. Yoni Rivas of Honduran campesino activist group Movimiento Unificado Campesino del Aguan (MUCA) said: “Clearly the World Bank financing for monocultures and transnational corporations is what today has generated agricultural and food crisis in Honduras.” Despite weighty evidence of Dinant’s activities, including a March 2011 international human rights organisational fact-finding mission report, an October 2011 Inter-American Commission of Human Rights hearing and a May 2012 international public hearing in the region, the IFC maintains that “Dinant understands the importance of having good relationships with their neighbouring communities and are quite proactive in this regard.”