A group of Honduran farmers embroiled in a long-running land rights dispute has accused the World Bank’s private sector arm of “knowingly profiting from the financing of murder” as it extended millions of dollars in loans to one of the country’s largest landowners.
In a class-action lawsuit filed on Tuesday in the US District Court for the District of Columbia, lawyers for the farmers accuse the International Finance Corporation and a subsidiary of wilfully turning a blind eye to the murder of more than 100 people since 2009 in the Bajo Aguan region of Honduras.
The killings and other attacks, they claim, were part of a campaign waged against farmers’ co-operatives by palm oil producer Dinant and its late owner Miguel Facussé even as the IFC approved a controversial loan to the company and continued to finance it via a bank it invested in.
The filing of the case marks an escalation in what has been one of the World Bank’s ugliest human rights debacles in recent years. In a 2013 report, the bank’s internal watchdog raised questions about the approval of a US$30m loan by the IFC to Dinant while it faced allegations of backing violence against local farmers. Since then the IFC has also faced scrutiny over its 2011 US$70m investment in Honduras’s Banco Ficohsa, one of Dinant’s largest creditors.
In court documents the plaintiffs, identified only by pseudonym, said they had brought the suit, which seeks damages “over $75,000”, out of fear and frustration at the continuing violence and their exhaustion of avenues of complaint with the IFC.
“We are poor families, trying to survive without husbands. We want justice for what they did to us,” one plaintiff, identified as Juana Doe II and the widow of a man killed by Dinant guards, said in a statement.
The case was brought on behalf of two overlapping classes — residents of the village of Panama, which is hemmed in on three sides by Dinant plantations, and the participants in farm co-operatives dismantled in the 1990s as part of reforms pushed by the World Bank.
It accuses the IFC of being linked to a range of crimes by Dinant from wrongful death to assault and alleges the international institution reaped “unjust enrichment”.
In court documents, lawyers lay out a build-up of violence before and after the IFC, which had a history of financing businesses owned by Facussé, began lending to the company. Among the incidents it documents are the 2010 murder of five farmers and the 2012 killing of a local lawyer who represented people fighting Dinant. The most recent incident documented is the killing in October last year of two farmers as they left a meeting of activists, allegedly by members of a paramilitary death squad. The youngest of the plaintiffs, identified as Juana Doe VIII, is just eight years old.
But the case brought by victims of violence in Honduras’s Aguan Valley also represents a new test of the longstanding immunity from lawsuits that international institutions like the World Bank and subsidiaries like the IFC have enjoyed.
A US judge last year rejected a lawsuit brought on behalf of affected people by campaign group EarthRights against the IFC over a $450m loan to a coal-fired power plant owned by a subsidiary of India’s Tata Group on the grounds that the IFC is covered by the US’s International Organisations Immunities Act.
EarthRights, which is also representing the Dinant farmers in the new case, has appealed against that ruling. But the new case also includes an IFC subsidiary — the IFC Asset Management Company — that lawyers argue is a commercial entity and therefore would not be covered by the act.
An IFC spokesman declined to comment on the lawsuit, citing a policy not to address ongoing litigation.
But the spokesman added: “IFC is saddened by the history of violence in the Aguan Valley. IFC is a development institution that promotes the growth of the private sector, focused on clients who commit to adopt internationally recognised environmental and social practices in the most challenging of environments.”
Dinant said on Wednesday: “All allegations that Dinant is — or ever has been — engaged in systematic violence against members of the community are without foundation.
“It is absurd for EarthRights International to connect Dinant with high levels of insecurity in the Aguan Valley on the grounds that several tragic deaths have occurred in the same region in which we own land.”
Dinant said it had operated in the Bajo Aguan for many years in a “just and lawful manner”.
“We invite all interested parties, including EarthRights International, to visit our African Palm plantations in the Bajo Aguan region, as well as the rest of our operations sites, to see the results of the extensive resources that Dinant is investing in creating sustainable, well-paid jobs,” it said.