Is a World Bank Loan Funding Murders in Honduras?

The World Bank is facing intense pressure from human rights and environmental groups to cancel a $30 million loan to a palm oil company in Honduras that’s suspected of being involved in the murder of scores of small-scale Indigenous farmers in the country’s Aguan river valley.

Photos by hondurasdelegation/FlickrCampesinos watch as security forces demolish their homes in Bajo, Aguan. Grupo Dinant, is alleged
to have violently confiscated thousands of acres of land from local residents in the fertile valley.

The company, Grupo Dinant, is alleged to have violently confiscated thousands of acres of land from local residents in the fertile valley region on the country’s northeast coast. International human rights groups claim Grupo Dinant is responsible for displacing and assassinating subsistence-level farmers, who are seen as a threat to the land-intensive monoculture needed for palm-oil production.

The groups have documented dozens of murders of farmers, activists, and their supporters since 2010 in connection with the land conflict in Aguan. The NGOs’ research also claims to implicate security guards employed local palm producers, including Grupo Dinant, in many of the killings.

The World Bank has sought to downplay the violence. In its most recent assessment of the loan it stated that “Dinant understands the importance of having good relationships with their neighboring communities and are [sic] quite proactive in this regard.”

But critics say human rights violations remain commonplace in Aguan – and that community leaders and activists are still being targeted for assassination.

On February 23, 2013, the bodies of two villagers were found with their hands bound together, evidently having been tortured before execution. A week earlier the leader of a farmers’ union was shot to death in front of his wife. In all, at least 91 people have been slain by “death squads” in this small river valley in the last three years.

Victims have been gunned down while travelling or working, at demonstrations, during evictions, or abducted and later found dead.

“There is a situation of endemic repression and violations of the rights of campesino [subsistence farmer] populations in the Aguan region,” Grahame Russell, Rights Action co-director, told EIJ. A February report by Rights Action indicates strong ties between the death squads and a number of private security firms, at least one of which is connected to Grupo Dinant.

“Large landowners have used… private security forces to assassinate [local farmers], and have done so with one hundred percent impunity,” he said. Russell — who has just returned from a fact-finding trip to Honduras — accused Grupo Dinant of being involved in “a brutal effort to evict campesino communities from their lands.”

***

Victims have been gunned down while travelling or working, at demonstrations, during evictions,
or abducted and later found dead.

The World Bank paid Grupo Dinant the first half of the loan in 2009. The second $15 million disbursement is due to go out this year. Now, a coalition of human rights and environmental groups, including Russell’s Rights Action, Biofuelswatch, and Friends of the Earth have stepped up efforts to force the Bank to rescind the rest of the loan.

Another international backer, the German Development Bank, withdrew its support for Grupo Dinant in 2011 citing human rights abuses and peasant assassination. But the World Bank is still holding firm.

“It’s telling that the World Bank continues to provide tens of millions of dollars of funding to Dinant when Germany’s public development bank withdrew its credit line to Grupo Dinant nearly two years ago as a result of campesino killings and other human rights abuses involving Dinant’s security guards,” said Alex Main, an analyst who specializes in Latin American affairs for the Washington, DC-based Center for Economic and Policy Research (CEPR). “Clearly human rights is not a serious consideration in the World Bank’s ... loaning practices,” said Main, whose organization is not part of the coalition seeking to get the loan canceled

World Bank spokesperson Vanessa Bauza defended the controversial loan in an email to EIJ, calling Grupo Dinant, “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.” According to Bauza, about 60 percent of Hondurans live below the poverty line.

Bauza also makes clear that the World Bank is aware of the allegations concerning murdered activists and forced evictions.

“As a result of the conflicts in the Aguan Valley, IFC [International Finance Committee, a member of the World Bank group] recommended that Dinant hire a security and human rights expert to ensure that its policies, procedures and training are in line with the Voluntary Principles for Security and Human Rights ... The aim is to help the company’s security teams avoid further conflict and to protect the lives and welfare of local residents.”

As further evidence of good will on the part of Grupo Dinant, Bauza points out that the company recently sold 4,000 hectares of peasant-occupied farmland in Aguan to the Honduran government, in January of 2013. The government purchased the land on behalf of local farmers “to settle land claims.”

Rights Action director Russell is not impressed by this largesse.

“It is controversial, to put it mildly, that the World Bank claims they sold land to the government that many campesino communities are claiming is their land to begin with. Furthermore, it is irrelevant with respect to the allegations that the Bank’s partner, Grupo Dinant, is linked directly and indirectly in the killings of some 90 campesinos in the region.”

Russell said he believes the World Bank has a responsibility to thoroughly investigate potentially shady clients, especially in a place like Honduras, which, with its per-capita murder rate of 91 per 100,000 is one of the most violent places on Earth.

“The World Bank should have a very clear understanding of how Honduras has become the ‘murder capital of the world’ and the ‘repression capital of the Americas’, [a] clear understanding of the corruption and impunity with which the powerful economic sectors act in Honduras.”

However, despite the request for an investigation filed by Rights Action and the other NGOs with the World Bank ombudsman, and a separate petition demanding the loan be cancelled that has already garnered more than 60,000 signatures – it appears unlikely the World Bank will sever its ties to Grupo Dinant anytime soon.

Russell said that decision is fraught with moral consequence.

“The World Bank [remains] indirectly if not directly complicit with the extraordinarily high levels of repression and killings in the Aguan region,” Russell said.