13 January 2014

World Bank’s loan to company engaged in violent conflict in Honduras is criticised

The World Bank ombudsman criticised the International Finance Corporation, which provides loans to companies in developing countries, for failing to follow requirements when it approved a loan to Corporación Dinant, a Honduran palm-oil company, in 2009 and inadequate supervision afterward. Dinant is in violent conflict with farm workers over land tenure of the Bajo Aguán Valley, where Dinant is the largest single landowner. Almost 100 people have been killed since 2009 in Bajo Aguán, according to the country’s human rights commissioner, Ramón Custodio.

The corporation lent Dinant 30 million US dollars to expand its oil-palm plantations and snack-food business. While 15 million dollar was disbursed in 2009, the rest has not been paid out yet. Non-governmental groups suggest that the World Bank withhold further financing to Dinant and encourage the company to respect human rights. In its defense, the corporation claimed that ‘there was no evidence of land claims in the legal system or otherwise.’ However, the audit found various public references to conflicts in Bajo Aguán. Additionally, the corporation stated that they ‘chose to remain engaged and work with Dinant’ to improve its policies ‘particularly in security and community engagement.’

Dinant also defended itself against, what it calls, ‘unfounded comments’ and claimed to be taking action to improve social and environmental standards. In 2012, Dinant agreed to transfer almost 10,000 acres to the Honduran government in an attempt to redistribute land to farm workers. However, such redistribution has been difficult because of disputes over the value of the lands.

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Source: The New York Times | World Bank Is Criticized for Honduran Loan

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