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An internal report is set to raise the lid on funding for an industry that’s forcing farmers off the land.
WASHINGTON — A recent political coup. Drug trafficking. One of the world’s highest murder rates. With attributes like those, Honduras may not sound like an easy sell for international investment.
But that hasn't dissuaded the World Bank, whose mission is to encourage development in the countries that need it most.
The bank’s private lending arm, the International Finance Corporation, is spearheading several multimillion-dollar projects in Honduras, one of the poorest countries in the Americas. However, some are questioning whether the money is doing more harm than good.
Human rights groups accuse the IFC of ignoring warnings that its funding for the Honduran palm oil industry is helping fuel a deadly land conflict that’s turning the fertile Aguan Valley near the country’s northern coast into a virtual military zone.
Farmworkers say they’ve been forced off land that’s mostly taken up by oil palm tree plantations. The controversy is casting doubts about whether the bank and its 182 member countries can respect their own code of ethics while doing business in politically unstable, corrupt societies.
Concerns about the social and environmental impacts of the IFC’s investment in Honduras have triggered an internal investigation that activists are anxiously awaiting.
“It’s going to be very sensitive,” says Peter Chowla, coordinator of the London-based Bretton Woods Project, which monitors World Bank projects. “We’re talking probably explosive findings of the IFC’s continuing support after they knew death squads were operating in the region.”
Hondurans describe a state of terror in the Aguan Valley, according to testimony recorded by Rights Action, the International Federation for Human Rights and other advocacy groups. They say police, military and landowners’ security forces are working together to blockade roads, burn farmers’ homes and hunt down, torture and murder land activists, lawyers and journalists.
At least 92 people have been killed in land disputes in the Aguan Valley between 2009 and 2012, most of them land activists, according to the country’s human rights commissioner.
At the heart of the issue is the IFC’s client, Corporacion Dinant, an African palm oil and food giant run by one of Honduras’s most powerful men, Miguel Facusse.
Although Facusse says he’s committed to the community’s welfare, human rights groups accuse the 89-year-old and his security forces of possible crimes against humanity related to the killing, kidnapping and forced eviction of farmers in one of Central America’s bloodiest recent agricultural conflicts.
Some of the allegations came in a submission to the International Criminal Court.
Dinant spokesman Roger Pineda rejected accusations the company’s security forces have been involved in violence against anyone claiming rights to Facusse’s property.
“The most common incidents in which violence have taken place have always been against our security personnel during the trespassing events against our properties by the invaders that always carried heavy weapons such as AK-47s to perform the illegal invasions,” he said.
But Rights Action co-director Annie Bird — who wrote the original report raising concerns to the World Bank — says landowners’ private security forces, military and police on Honduras’s Caribbean coast have “completely militarized” the area where Dinant operates.
“It’s basically like a war zone,” she says. “And there’s an absolutely non-functional justice system.”
World Bank President Jim Yong Kim recently acknowledged the concerns in a rare statement that pledged an action plan to respond to the findings of the internal investigation. However, he was short on specifics and did not say when the audit would be published.
The audit has been in the works since April 2012, when the World Bank’s internal watchdog, the Office of the Compliance Advisor Ombudsman, said it would look into whether the IFC’s funding had negative social or environmental impacts on and around Dinant’s plantations.
The resulting inquiry revealed the IFC was involved in an elaborate funding program that kept millions pouring into Dinant even after the bank registered concerns about the violent land conflicts.
Internal IFC documents quoted in the watchdog report show the IFC characterized Facusse in July 2010 as a “very respected businessman” and said nothing about the violent land conflict.
Nevertheless, the IFC held back the second half of a $30 million loan to Dinant in mid-2010 following violent clashes over land in the Aguan Valley.
In December 2010, the IFC urged Facusse to use restraint after the Washington-based group Rights