Posts Tagged ‘World Bank and Honduras’

Calls for the World Bank to suspend funding to Honduras amid continued human rights concerns

29 June 2016

In an April speech addressing the issue of environmental and human rights abuses and displacements resulting from large dam projects, World Bank president Jim Yong Kim stated “[y]ou cannot do the kind of work we are trying to do and not have some of these incidents happen”.

Over 300 civil society organisations (CSOs) and individuals responded with a letter to Bank President Kim in mid-May, rejecting his statement and calling for an apology. They criticised Kim’s statements regarding the situation in Honduras and the recent killing of Berta Caceres, an indigenous rights leader of the Civic Council of Popular and Indigenous Organizations of Honduras (COPINH) (see Observer Spring 2016). The World Bank published a “fact sheet” to “set the record straight” regarding Kim’s intervention, however five of the CSO signatories responded in a public letter that his statement is “subject to different interpretations” and noted that several other issues raised in the letter were not addressed.

In a separate late-May letter to Kim, Honduran social movements and indigenous peoples organisations, including COPINH, argued that his statements “justify serious violations and demonstrate a fundamental contradiction with the World Bank mandate: … it is not possible to do the work you are mandated to do when crimes like this happen.” They called on the Bank to “suspend financing to Honduras”, arguing that; “While the government of Honduras every day commits injustices … the World Bank continues to finance investments that lead to the militarization of the country, destruction the environment, disenfranchisement, displacement, violence, poverty and death in the most vulnerable communities.’

In a May blog on Business & Human Rights Resource Centre Natalie Bridgeman Fields and Siddharth Mohansingh Akali, from Accountability Counsel noted that “Rights abuses are often a choice to contravene the Bank’s own environmental and social safeguard policies and accountability frameworks. President Kim’s statements appear to condone this false choice between rights and development”.

IFC investments through financial intermediaries linked to human rights abuses in Honduras, again

5 April 2016



  • New complaint lodged against IFC financial intermediary project in Honduras
  • Honduran activisits murdered
  • Global trend of killings of environmental activists on the rise

In October 2015 a Honduran indigenous Garifuna community, with support of local NGO the Black Fraternal Organisation of Honduras (OFRANEH), lodged a complaint with the Compliance Advisor Ombudsman (CAO), the accountability mechanism of the International Finance Corporation (IFC, the World Bank’s private sector arm). The complaint alleged a number of breaches stemming from the Tela Bay Tourism development project in Indura, including “land grabbing, community displacement, lack of economic benefits and environmental degradation”. The CAO found the complaint eligible for further assessment in December and is currently assessing the case further. One of the project’s financiers is Banco Ficohsa, Honduras’ third largest bank, in which the IFC has made several investments since 2008, including trade finance, housing and SME loans as well as an equity investment in May 2011. The IFC’s investments through financial intermediaries (FIs) have been repeatedly criticised by the CAO and NGOs claiming that the IFC is unable to determine the development impact of the investments and to ensure they do no harm (see Observer Spring 2015, Winter 2015, and  Spring 2014).

In the complaint OFRANEH sets out the deleterious impact of World Bank involvement in Honduras since the 90s in promoting the “restructuring of land registration systems and cadastre through [development] programmes that affect the rights of Garifuna communities”. OFRANEH concluded “that a set of World Bank projects promoted massive encroachment of Garifunas’ land on the north coast, facilitating illegal [land] titles to third parties of ancestral Garifunas’ land and the IFC financed investments in private sector projects built on this stolen land.” It requested that the CAO investigate the IFC investment in Ficohsa and undertake a “broader review of the World Bank policies and practices that have contributed to the dispossession of large-scale land in Honduras and in particular the Garifunas communities”.

Repeated human rights concerns, same suspects

This is not the first time that the IFC’s investments in Ficohsa have come under scrutiny by the CAO. In August 2013 the CAO initiated a compliance appraisal, triggered by Ficohsa’s significant exposure to Corporación Dinant, a controversial palm oil producer in Honduras, also subject to a CAO audit that was initiated in 2012 due to allegations of human rights violations (see Observer Winter 2014, Bulletin Aug 2014, Update 86).  In January 2016 the CAO released its monitoring report of the Ficohsa investigation, citing repeated concerns about IFC’s management of environmental and social risk in relation to Ficohsa’s lending to Dinant. The CAO concluded that “to date IFC has not assured itself that Ficohsa’s ongoing financing for Dinant is contingent on binding commitments to implement the performance standards, either through its loan agreements or the environmental and social action plan.” The CAO will continue to monitor the IFC’s supervision of Ficohsa and aims to release a follow up monitoring report no later than December 2016.

World Bank projects promoted massive encroachment of Garifunas’ land…, facilitating illegal [land] titles… and the IFC financed investments in private sector projects built on this stolen land.OFRANEH complaint letter to CAO

Honduran activists murdered

In early March Berta Cáceres, leader of Honduran NGO the National Council of Popular and Indigenous Organisations of Honduras (COPINH), was murdered. Cáceres had led the peaceful opposition to the construction of the Agua Zarca dam, arguing it would destroy local indigenous Lenca communities’ farmland and limit their access to drinking water, and received continuous threats, harassment and persecution by the state and others. In October 2013 COPINH registered a complaint with the CAO concerning the Agua Zarca hydropower project, carried out by the company DESA, following the killing of an indigenous protestor, allegedly by the army and the building company, and intimidation of activists and local communities opposing the project (see Bulletin  Dec 2013, Observer Autumn 2013). However, the case did not come to conclusion, as CAMIF, IFC’s client, pulled out its investment in DESA and the Agua Zarca project. CAMIF’s withdrawal was followed by China’s Sinhydro, which cited publicly that its withdrawal was due to conflicts between the company and communities.

Following Cáceres’ murder numerous CSOs, such as COPINH, and  Both ENDS, called on all investors to pull out of the Agua Zarca project and do everything in their power to stop the violence and intimidation against activists. The Netherlands Development Finance Company (FMO) and the Finnish Finnfund suspended their support for the project one day after Nelson García of COPINH was also shot and killed in late March. On the website ‘Justice for Berta’, her children and COPINH demand “immediate cancellation of the Agua Zarca project, justice for the Berta’s murder, an end to the persecution of the Lenca community and justice for projects that threaten the environment and the lives of indigenous communities in Honduras”.

Killings of environmental activists a global trend

In April 2015 Global Witness, a UK based NGO, argued in its report How many more? that 2014 saw an increase in the killings of environmental activists. At least 116 environmental activists worldwide were killed, 40 per cent of which were from indigenous communities, with most working against hydropower, mining and agribusiness projects. The report described Honduras as “the most dangerous country to be an environmental defender” and “emblematic of the systematic targeting of defenders”. Three-quarters took place in Latin America, with South Asia the second-deadliest region. Victoria Tauli-Corpuz, UN special rapporteur on the rights of indigenous peoples, urged governments to give protection to environmental defenders. In March she told Climate Home, a global news agency: “The pattern of killings in many countries is becoming an epidemic definitely.” Tauli-Corpuz called for recognition of land rights and a robust legal system to prosecute perpetrators.

In late March the UN Human Rights Council approved a new resolution on the protection of human rights defenders addressing economic, social and cultural rights. An earlier draft version included a paragraph highlighting the human rights obligations of international financial institutions. This paragraph was removed in the final version due to calls for removal from the EU, China and Canada.

Report: World Bank Loan in Honduras Ignores Environmental and Social Risks

Resistance group Movimiento Unificado Campesino del Aguan (Unified Campesino Movement of the Aguan) holds a sign that says “No more murders of campesinos in the Aguan.” (Photo: AFP)

Resistance group Movimiento Unificado Campesino del Aguan (Unified Campesino Movement of the Aguan) holds a sign that says “No more murders of campesinos in the


The World Bank’s mission is to eradicate poverty. However, critics say its history in Latin America is tainted by land conflicts, human rights abuses, and environmental destruction.

The World Bank was criticized by its internal auditor on Monday for not properly carrying out adequate environmental and social safeguards before lending money to Honduras’ largest bank.

This is the second time this year that the International Finance Corporation (IFC), the World Bank’s private-sector arm, has come under fire for irresponsible lending practices in Honduras.

The IFC’s Office of the Compliance Advisor Ombudsman (CAO) noted in its audit that the IFC’s 2011 loan of US$70 million to Banco Fichosa failed to adequately assess the Honduran bank’s high-risk clients.

“The absence of an environmental and social review process that was commensurate to risk meant that key decision makers … were not presented with an adequate assessment of the risks that were attached to this investment,” the CAO report stated.

One of Fichosa’s clients, also a past IFC loan recipient, is the Honduran palm oil company Dinant. Dinant’s operations in Honduras’ Bajo Aguan Valley have sparked decades-long land disputes with local campesinos, along with charges of human rights abuses against the company.

Human rights groups claim that the company’s private security, working closely with Honduran military forces, is responsible for the murder of at least dozens of local campesinos – a fact that the CAO cited in a previous audit released in January criticizing the IFC’s 2009 loan to Dinant.

The CAO stated in Monday’s report that discovering that Dinant was a client of Fichosa, “a company which IFC knew to be affected by a violent land conflict,” led the auditing agency to initiate its investigation.

“Let’s be clear, this is not just about failing to take account of social and environmental risks. This is the World Bank profiteering from businesses that are implicated in murders, disappearances and land theft,” David Pred, Managing Director of Inclusive Development International, told teleSUR English.

Carla Garcia Zendejas, a program director at the Washington-based Center for International Environmental Law, said that while one could conclude that financial interests may trump human rights concerns at the World Bank, the organization’s bureaucratic structure may also be to blame.

“Some information is getting in but it’s not being used to halt investments in these dangerous situations where human rights violations exist and the rule of law is already compromised on the ground,” she said in an interview with teleSUR English.

The IFC, in a written response to the CAO report, said that changes have already been made to address any procedural shortcomings.

“Under this new structure, [environmental and social] risk will receive the same weight and attention as financial and reputation risk,” stated the response released on Monday.

Tanya Kerssen, Research Coordinator for Food First/Institute for Food and Development Policy, told teleSUR English that critics shouldn’t look at the cases of Dinant and Fichosa as institutional failures on the part of the World Bank; rather, these cases should be viewed through the broader context of the Bank’s larger purpose of advancing capitalism and neoliberal reforms in the developing world.

She also dismissed the IFC’s response of prioritizing environmental and social risks as nothing more than empty rhetoric.

“Unfortunately, whether its agriculture or extractive industries, the Bank has a long history of using social and environmental impact assessments as a means of pushing projects through and legitimizing them instead of as a tool to examine the real impacts of a potential investment,” said Kerssen.