African Development Bank accepts complaint about coal plant

Senegal is one of the countries with the highest amount of effective sunshine on earth. Instead of using the 3000 hours of sunshine a year as a source of energy, 2 new coal fired power plants are now being built with the help of the Dutch development bank FMO, using public money. This video shows the consequences for the local population.

On September 20th FMO published its new position statements on human rights, land governance and gender. We appreciate that FMO takes human rights serious and applaud the efforts that have been made to come to an improved position on human rights, land and gender. However, to truly have a positive impact on people and the environment, some important follow up steps are necessary.

Today, three representatives of the Honduran indigenous people's organisation COPINH, together with the family of environmental activist Berta Cáceres, who was murdered in March 2016, announced that they are preparing to press charges against the Dutch development bank FMO. COPINH accuses the FMO of complicity in human rights violations in connection with the controversial Agua Zarca hydroelectric project.

On Thursday, November 29, seven suspects of the murder of Berta Cáceres (in March 2016) were found guilty. Members of the indigenous human rights organisation COPINH, of which Cáceres was the leader, and close relatives of Cáceres herself see the ruling as the first step towards justice for her murder and the recognition that the company DESA is co-responsible for this. They also point out, however, that the process was permeated with corruption, intimidation and other abuses from the very beginning, and that the masterminds behind the murder are still walking around freely.

This week, the African Development Bank (AfDB) holds its 2018 Annual Meetings. A large group of African civil society organisations calls on the bank to ensure social and environmental protection, to involve civil society, to pay attention to gender issues and to make sustainable choices in their energy access ambitions.

In a new Position Statement on Financial Intermediary (FI) Lending, Dutch development bank FMO argues for limited responsibility over the outcomes investments that are channeled through commercial banks, investment funds, and other financial intermediaries, representing by far the bigger sector of its portfolio. In doing so, FMO is undermining its development mission, including the protection of human rights and addressing the climate crisis. FMO intends to delegate these key responsibilities to its FI clients only, falling short of best practices of peer financial institutions. In a joint submission prepared by Both ENDS, Oxfam Novib, Recourse and SOMO, we argue that FMO can do much more to ensure the protection of human rights, the environment, and to measure the development impact of its indirect investments.

The Dutch development bank FMO is not sufficiently transparent about the projects it finances and is therefore acting contrary to its mandate. This is evident from a new report published by the International Accountability Project (IAP) and the Foundation for the Development of Sustainable Policies (FUNDEPS), endorsed by 28 organizations including Both ENDS, SOMO, and Oxfam Novib. The research assesses FMO's disclosure and access to information practices for investments proposed between January 1, 2019, and May 31, 2020. Only in 25% of the cases was it disclosed what potential negative consequences an investment by FMO would have for people and the environment.

FMO's new position statement on fossil fuel investments commits to ending new direct finance in the downstream and midstream coal and oil sectors, whilst still allowing for investments in gas-fired electricity generation under exceptional circumstances only. Both ENDS welcomes this development as a step in the right direction.

The Dutch development bank FMO has published a statement about fossil fuels to take steps in climate action. Both ENDS and partners are pleased that FMO is finally taking a stand regarding fossil fuels, but in our opinion it could be more ambitious. In order to really contribute to sustainability and equality, it is essential that development banks stop investing in harmful fossil projects.

Sometimes things must go terribly wrong before big players start to move. In March 2016, Honduran activist Berta Cáceres was murdered because of her leading role in the protests against the Agua Zarca hydro dam, co-financed by the Dutch FMO. One and a half year later, FMO changed their policies to prevent such events in the future.

Good news for the climate: last week, the European Investment Bank (EIB) decided to stop investing in fossil fuels by 2021. This is part of its new energy strategy.