Dutch development bank FMO's funding for Agua Zarca project possibly linked to malpractices
The million-dollar loan that the Dutch development bank FMO provided to project developers of Honduran company DESA for the construction of the controversial Agua Zarca dam project in Honduras, may be related to gross corruption and malpractice. This is concluded in an article published today in the Dutch news paper Financieel Dagblad, based on information provided by COPINH, the indigenous organisation that has been opposing the construction of the dam for years. Several members of the organisation, including its leader Berta Cáceres, were murdered. DESA director David Castillo has recently been convicted of being involved in the assassination of Cáceres in 2016.
Responsibility for public interest
The article in the Financieel Dagblad supports Both ENDS's position that FMO must drastically improve its policies. FMO operates in countries where there is great poverty and inequality and where good governance is lacking. FMO has a responsibility to adhere to international environmental and human rights standards, such as the OECD Guidelines and UN Guiding Principles. These standards require thorough research into human rights and environmental risks, transparency and inclusive decision-making processes.
Letter with five recommendations
In May 2021, Both ENDS, together with SOMO and Oxfam Novib, sent a letter to FMO with five important recommendations to prevent future abuses within projects financed by FMO.
1. Indigenous) communities are FMO's partners and should at all times be involved in and consulted about projects in their area. Establish your own, credible and direct lines of communication with project-affected people and CSOs;
2. FMO must be transparent about projects to be financed, as currently the level of transparency is far from sufficient. Launch and consult publicly on a review of your Disclosure Policy;
3. FMO must be accountable and compensate any damage caused. Commit to prepare management action plans (MAPs) in response to complaints and establish remedy funds;
4. FMO must be extra careful with financial intermediaries. Launch and consult publicly on a mandatory Position Statement on Financial Intermediaries;
5. FMO's projects should stimulate sustainable development and investments in climate-unfriendly (fossil) projects are at odds with this. Develop a clear climate vision across all its operations, including public reporting on and targets to reduce emissions.
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Indigenous Hondurans are resisting the construction of the Agua Zarca hydrodam. Their fight has cost several lives, including that of Berta Cáceres. After considerable public pressure, Dutch development bank FMO withdrew from the project.
News / 10 July 2020
Dutch development bank FMO is considering investing in the controversial Ficohsa bank in Honduras. The bank has close ties with the elite in Honduras, which holds considerable power in politics, the (para)military and the business community. Last Wednesday, a number of Honduran organisations, including the indigenous organisation COPINH – whose leader Berta Cáceres was murdered in 2016 – sent a letter to the FMO management. The letter, signed by forty organisations including Both ENDS, calls on FMO not to do business with this bank.
News / 6 July 2017
Both ENDS and SOMO welcome the announcement done today by the Dutch and Finnish development banks, FMO and FinnFund, to exit the controversial Agua Zarca hydroelectric project in Honduras. Conflict about the project has led to violence in the region, including the murder of three leaders who opposed the project. In March 2016, renowned human rights defender Berta Caceres was murdered for opposing this project in indigenous Lenca territory.
News / 2 March 2017
Today, it is exactly one year ago that Berta Cáceres was brutally murdered in her home in Honduras. Cáceres was a globally known human rights defender and coordinator of the indigenous Lenca organisation COPINH. The murder of Berta is closely related to her protest against the Agua Zarca dam, a hydroelectric project financed partially by the Dutch development bank FMO.
News / 7 February 2017
Last week, Global Witness published 'Honduras: the deadliest place to defend the planet'. This shocking report clearly shows the worrying situation of human rights in Honduras and backs the demand of Both ENDS and partner COPINH: FMO must divest from the Agua Zarca dam.
News / 16 December 2019
Earlier this month, the seven men found guilty of the murder of Berta Cáceres were sentenced to jail for periods between 30 and 50 years. The court confirmed its opinion that Berta Cáceres was murdered for her role in defending the rights of the indigenous Lenca communities.
News / 2 March 2021
Today it is 5 years ago that Berta Cáceres was shot in haar home in La Esperanza, Honduras, for defending the rights of indigenous people. The leader of indigenous organisation COPINH resisted the Agua-Zarca hydropower dam that was planned to be build in indigenous territory. The actual murderers have been convicted, but not so the intellectual authors of the murders.
News / 6 March 2018
On Friday, March 2, the director of DESA, David Castillo, was arrested in Honduras on suspicion of involvement in the murder of Berta Cáceres, exactly 2 years ago. The Honduran government refused for a long time to not only detect the actual murderers, but also the intellectual authors of the murder of Cáceres.
The Barro Blanco dam project in Panama, which has Dutch financial support, is causing indigenous lands to disappear under water. Both ENDS is working to protect the rights of indigenous communities living near the dam.
External link / 31 May 2018
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.
News / 20 October 2016
This week, Laura Zuniga Cáceres, daughter of Berta Cáceres*, visits the Netherlands. She will talk with the directors of the involved departments of the Dutch Ministry of Foreign Affairs, participated in a colloquium about indigenous right of Leiden University and meet with several Dutch NGO's. Both ENDS asked this brave young woman about the situation in Honduras and her motivation to continue her mother's work.
News / 23 December 2021
2022 is the year for FMO to make good on its promises and provide financial support only to sustainable development
2021 was a turbulent year for Dutch development bank FMO, to say the least. The bank has been under fire for many years for investments linked to human rights violations and suspected corruption. But in the past year, the Dutch press and media have reported on one new development after the other in ongoing cases involving FMO. Below we give a short summary of these cases and call on FMO to make the promised improvements in 2022.
Large-scale infrastructural projects have detrimental effects on local people and the environment, while their benefits are felt elsewhere. Both ENDS is working to ensure that local people have a greater say in decision-making and is investigating the way these projects are funded.
News / 17 May 2018
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.
News / 28 June 2022
On Tuesday 28 June, the Honduran organisation COPINH and the Global Justice Association filed a complaint with the public prosecutor in the Netherlands against Dutch development bank FMO. For COPINH, this is part of their continued efforts to bring to justice those involved in the murder of their leader Berta Cáceres. FMO financed the Agua Zarca project in Honduras in 2014. The new complaint is based on documents indicating that FMO's money has been used improperly.
Development banks should comply with strict environmental and human rights rules to ensure that their projects benefit and do not harm the poorest groups. Both ENDS monitors the banks to make sure they do.
News / 27 July 2021
In April 2021, the Dutch development bank FMO announced that it is no longer involved in the Barro Blanco project, a controversial dam in Panama. GENISA, the Panamanian company that built the dam, unexpectedly paid off the multi-million dollar loan early. The question is to what extent, now that the bank is no longer actively financing the project, FMO can still be held responsible for the damage and suffering that was caused when this was still the case.
News / 1 December 2018
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.
Letter / 7 July 2020
A number of Honduran organisations sent a letter to the FMO management to call on FMO not to do business with Honduran bank FICOHSA. The bank has close ties with the elite in Honduras, which holds considerable power in politics, the (para)military and the business community.
News / 8 November 2021
Both ENDS and SOMO condemn violence against Indigenous community near the Barro Blanco dam in Panama
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