Farmers sue World Bank lending arm over alleged violence in Honduras
Members of the Peasant Unified Movement (Muca) of Bajo Aguán carry mock coffins bearing pictures of farmers killed in land conflict clashes, in Tegucigalpa, September 2012. (Photo: Orlando Sierra/AFP/Getty Images)
Guardian | 8 March 2017
Farmers sue World Bank lending arm over alleged violence in Honduras
Complaint lodged with US federal court claims World Bank’s private sector lending arm is ‘knowingly profiting from the financing of murder’
By Claire Provost
Peasants in Honduras have sued a branch of the World Bank over its financing of the corporation Dinant, which has vast palm oil plantations in Bajo Aguán valley in the country’s north. Lawyers for the farmers say they are seeking compensation for alleged attacks and killings, including actions by the company’s private security forces.
Attorneys for the NGO EarthRights International (ERI) filed the suit on the farmers’ behalf on Tuesday, at a US federal court in Washington DC, where the World Bank is headquartered.
The suit’s plaintiffs include more than 15 individuals. There are two class action claims: one regarding roughly 200 members of the Panamá community, the second representing roughly 1,000 people and focused on allegedly “unjust” profit-making from contested land acquisitions in the past.
The 132-page legal complaint says the plaintiffs are seeking compensation for “murders, torture, assault, battery, trespass, unjust enrichment and other acts of aggression”. Ultimately, it says, the case is about World Bank entities “knowingly profiting from the financing of murder”.
The document describes decades of violence but focuses on the period since 2010, seeking damages for several specific deaths and what ERI attorneys described as a “pattern of attacks that is ongoing”.
“People have been attacked in their homes, in their gardens, while riding their bikes, driving their cars, farming their land, outside of churches,” said ERI’s lawyers. “People have lost loved ones, which can never be remedied.”
The lawyers added that some of those killed have been families’ primary breadwinners. The goal of the violence, they claimed, has been “to intimidate farmers from asserting competing rights to land that Dinant has sought to control”.
ERI said the plaintiffs require anonymity due to continuing security concerns. One woman, given the pseudonym Juana Doe III, said: “We live from our families and our land and now we are left with nothing. We want justice … We have to move forward.” Her husband was allegedly shot and killed by Dinant security personnel.
Another plaintiff, Juan Doe VIII, said he witnessed farmers being pulled out of their homes and beaten. He said: “One bullet hit me, it still affects my breathing. I didn’t realise I’d been shot, but I touched it and saw blood. Another person was shot through the stomach.” He was allegedly shot and injured by Dinant security personnel, and says he has never fully recovered.
The lawsuit names as defendants both the World Bank’s International Finance Corporation (IFC) and the latter’s wholly owned subsidiary IFC Asset Management Corporation (AMC). ERI’s legal team said precise amounts of compensation requested would be determined at trial.
The NGO said the suit follows years of attempts by farmers to seek justice in Honduran courts and through political advocacy and protests. Complaints have also been lodged previously with the IFC’s internal watchdog.
The lawsuit – the second of its kind filed against the IFC in US courts – follows a case filed in 2015 regarding financing of a coal-fired power plant in India that local communities say destroyed their livelihoods.
In that case, the IFC asserted “absolute immunity” under the 1945 International Organisations Immunities Act, a US federal statute. (It is currently before an appeals court after a first judgment accepted the IFC’s immunity claim).
It is unclear if the IFC will present a similar defence in the suit filed this week, though ERI understands that its co-defendant, IFC AMC, is not itself covered by the 1945 act and cannot claim immunity.
The World Bank has a development mandate and explicit goals to end global poverty and boost “shared prosperity”. The UK is one of its largest shareholders. The UK’s executive director at the bank did not respond to a request for comment from the Guardian.
The bank’s long history in the Bajo Aguán valley includes support for a controversial land modernisation programme in the 1990s (pdf) that has been criticised for paving the way for large-scale plantations at the expense of small-scale farmers.
In 2009 the IFC disbursed $15m (£12.3m) in loans to Dinant; further IFC support was subsequently forthcoming in the shape of indirect investments, through the Ficohsa bank in Honduras and IFC AMC.
Honduras is one of the deadliest countries for environmental and human rights defenders. In 2016 a prominent Bajo Aguán valley activist was killed while under police protection. Numerous incidents have involved private security forces, which nationally outnumber Honduran police five to one.
In 2013 the IFC’s Compliance Advisor Ombudsman watchdog said its support (pdf) for Dinant failed to follow policies to protect local communities. An “action plan” (pdf) was produced including requirements that the company adopt new security protocols.
But ERI’s legal team said this “hasn’t resulted in remedy or credible investigation for the farmers and their families”. Instead, the NGO’s attorneys claimed the IFC seemed to put “profit before people at every turn”.
The IFC makes money from its investments, though precisely how much is unclear.
Founded by the late businessman Miguel Facussé, the privately held Dinant corporation produces food and cleaning supplies. Some products, including crude palm oil, are exported overseas.
On its website, Dinant says it is committed to economic development, corporate social responsibility, and “creating an image of credibility”.
A 2016 company report said it has, under IFC guidance, worked to “safely secure its facilities while engaging peacefully with local communities”. It said it has removed all firearms from its security personnel in Honduras.
The report said it “welcomes an independent review of its past efforts and current procedures in investigating allegations of human rights abuse”. It added that Dinant employees have also suffered violence and that it “deeply regrets the tragic and unnecessary deaths that have occurred on all sides”.
The legal complaint filed this week specifically alleges that “guards and security agents working for Dinant continue to intimidate and kill community members and farmers’ leaders across the Aguán to this day”.
The complaint accuses IFC and IFC-AMC of having financed the company with alleged “reckless disregard of the obvious and highly probable risk that their actions would result in serious harm to the plaintiffs”.
The Panamá community’s class action claim references an alleged “pattern of aggression, which Dinant security personnel carry out in order to intimidate and terrorise the villagers”.
The second class action claim regards profit-making from land allegedly acquired by “fraud, coercion, threat of violence, or actual violence”. It alleges that IFC and IFC-AMC are now “reaping the benefits” of historical injustices.
Responding to the lawsuit, Kate Geary, at the watchdog Bank Information Centre Europe, said local communities in Honduras have suffered “appalling harms”. She said: “It is high time that the IFC was made to answer in the courts for the many human rights abuses – not only in Honduras but around the world – that they have been linked to through their investments.”
Roger Pineda, Dinant’s corporate and banking relations director, said: “All allegations that Dinant is – or ever has been – engaged in systematic violence against members of the community are without foundation.”
Pineda said it was “absurd” to connect the company with “high levels of insecurity in the Aguán valley on the grounds that several tragic deaths have occurred in the same region in which we own land”.
He insisted that Dinant operates “in a just and lawful manner, and we require the same of all our contractors, vendors and tenants”.
He added: “We care deeply about the wellbeing of our employees, the thousands of farmers who supply our processing plants, and the surrounding communities of which we are an integral part.”
An IFC spokesman said the institution does not comment on ongoing litigation and will respond to claims “in due course”.
He added: “IFC is saddened by the history of violence in the Aguán valley” and is “focused on clients who commit to adopt internationally recognised environmental and social practices in the most challenging of environments”.
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