FMO did not follow its own rules in financing Barro Blanco dam
Dutch development bank FMO did not sufficiently take into account the rights of the local population and effects on the environment before approving a $ 25 million loan for the construction of the Barro Blanco dam in Panama. This is not in accordance with FMO’s own standards. This was revealed in the long-awaited report by the independent complaints mechanism (ICM) of the FMO and the German development bank DEG, released on May 29. The report was published in response to a complaint filed by the M-10, the movement representing the affected indigenous Ngöbe population, in May 2014. Both ENDS has been supporting the M-10 in its struggle against the dam for years, and was one of the organisations that supported the complaint.
We are pleased that the conclusions of the independent experts of the ICM support our view that the banks did not comply with their standards.
Failure to obtain consent
The dam’s artificial lake will partially flood the territory of the Ngäbe communities living on the shores of the Tabassará river. These people will be forced to leave their homes and places of religious and cultural value. Despite national and international obligations relating to human rights, project developer Genisa failed to obtainthe 'free, prior and informed consent' (FPIC) of the Ngäbe population. According to the report the “lenders should have sought greater clarity on whether there was consent to the project from the appropriate indigenous authorities prior to project approval”.” Another shortcoming relates to the Environmental and Social Action Plan that was appended to the credit agreement. This plan "contains no provision on land acquisition and resettlement and nothing on biodiversity and natural resources management. Neither does it contain any reference to issues related to cultural heritage. ."
In their public reaction to the report, FMO and DEG acknowledge the conclusion of the report that they were not fully appraised at credit approval, but they made no further concrete commitments to ensure that the rights of those affected by the dam will be respected.. The banks claim that they are “facing limitations in their influence” over government processes to come to a satisfactory agreement with all stakeholders involved. Earlier this year though, the development banks did try to influence the government. In February 2015 the Panamanian government suspended the construction of the dam on the basis of Genisa not acting in accordance with the agreed Environmental Impact Assessment. The breaches included the lack of a legitimate agreement between the Ngöbe and Genisa, and violations of environmental laws. In reaction to the decision to halt the project, the FMOsent a letter to the Vice President of Panama, urging the government to resume construction as soon as possible. According to the bank, closing down this project could "negatively influence future investment decisions in Panama."
Banks’ response is inadequate
Anouk Franck of Both ENDS is surprised by FMO's reaction: "Instead of insisting on resuming the project, the bank should have shown us that it takes the interests of the local population seriously and that it acts in accordance with its own policies. Whenever we have meetings with its representatives, FMO assures us that it supports its clients to improve their social and environmental policies and practices. But in the case of Barro Blanco, the bank has shown it does exactly the opposite. In light of the conclusion of the ICM’s reports, indicating the bank did not comply with its standards, we urge FMO to withdraw from the project. Furthermore, to prevent similar situations in the future human rights impact assessments should become standard procedure at FMO. This is an important instrument to ensure that human rights and environmental standards are guaranteed in future projects."
Also read the press release of Both ENDS, SOMO and others, published on the 1st of June.
Dutch newspaper 'De Volkskrant' also covered the story on the 1st of June (in Dutch): Nederlandse ontwikkelingsbank zat fout met stuwdam Panama
You can also read a summary of the report of the complaints mechanism.
For previous news on barro Blanco on our website:
19 May 2015: FMO pushed Panama to continue Barro Blanco dam
6 May 2015: Construction of Barro Blanco dam will be resumed
11 Feb 2015: Construction Barro Blanco dam finally suspended
7 May 2014: Complaint against FMO on grievance mechanism.org
14 Feb 2014: Filing a complaint with the FMO?
In this 'long read' on Barro Blanco you can find a short overview of what has happened around the dam in in the past few years.
Read more about this subject
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.
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.
Publication / 19 June 2020
External link / 19 June 2020
When destructive projects are seen through the eyes of local women, it is clear that International financial Institutions (IFIs) are one piece of a large and complicated puzzle. Therefore, in 2019 we brought together experts in women's rights and IFIs to learn from each other.
News / 19 May 2020
On Monday 11 May, at the government's request, the Advisory Council on International Affairs (AIV) published an emergency advisory report on how the Netherlands can make an effective contribution to the worldwide fight against the Corona virus. Together with companies, scientists and environmental, human rights and development organisations, Both ENDS is today presenting a response to this report, in which we make a number of suggestions for investing in countries and people with insufficient resources to tackle the crisis effectively.
Blog / 13 May 2020
You can't eat gold, copper and gas
"The virus is spreading quicker than the information" – that was the first we heard in the Netherlands about COVID-19 in many African countries and the measures they were taking to tackle it. While states of emergency were announced, borders were closed and we saw image after image of violent police and army responses, many people outside the big cities did not know that what was going on. When the situation became clearer, serious concerns arose about the consequences of the measures that had been taken: the informal economy coming to a standstill, food shortages and internal migration flows.
News / 23 March 2020
In many places in Latin America, access to clean water is under great pressure from overuse and pollution, often caused by large-scale agriculture or mining. This has significant impact, especially on women. In March, with International Women's Day on March 8 and World Water Day on March 22, they make themselves heard and claim their right to water.
In 2011 one of the world’s largest gas reserves was found in the coastal province of Cabo Delgado, in the north of Mozambique. A total of 35 billion dollars has been invested to extract the gas. Dozens of multinationals and financiers are involved in these rapid developments. It is very difficult for the people living in Cabo Delgado to exert influence on the plans and activities, while they experience the negative consequences. With the arrival of these companies, they are losing their land.
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 / 18 November 2019
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.
Publication / 17 November 2019
Publication / 8 November 2019
News / 8 November 2019
On Thursday November 7th, a group of European NGO's including Both ENDS, sent a letter to Vice-President of the EU Frans Timmermans, in which they ask him to support the phase out of European Investment Bank’s fossil fuel financing by the end of 2020.
News / 5 November 2019
After a complaint filed by women's groups from Ixquisis, Guatemala, the Interamerican Development Bank (IDB) has started an investigation on several policy violations, amongst which the Gender Equality policy. This is a unique chance to create a precedent, because complaints on the IDB's gender policy are very rare. The women from Ixquisis are fighting for their rights with support of the Global Alliance for Green and Gender Action (GAGGA).
Event / 20 September 2019, 19:30
Last June, after months of negotiations in five different 'climate roundtables', the Dutch government presented its Climate Agreement . Negotiations had taken place in a roundtable for 'industry', for 'built environment', for 'electricity', 'mobility' and for 'agriculture and land use'. Climate measures that the Netherlands can take within its borders are pretty much covered by these climate roundtables. But the Netherlands also has a huge climate footprint outside its borders. It seems we have forgotten about the 'International' Climate Roundtable.
News / 30 July 2019
The European Investment Bank (EIB) has published its new policy for energy investments. In the new draft policy, the bank states to stop investing in fossil fuel related projects from 2020. This is good news for the climate, so Both ENDS and partners are happy with this draft policy. The shareholders of the bank, the member states of the European Union, still have to approve it.
Blog / 12 July 2019
and Stijn Deklerck of Amnesty International Nederland
On 12 and 13 July, the Asian Infrastructure and Investment Bank (AIIB) will be holding its annual meeting in Luxembourg. This is the fourth annual meeting of the AIIB which was set up on the initiative of China. As a shareholder, the Netherlands will be attending the meeting.
Publication / 10 July 2019
Blog / 24 June 2019
The European Investment Bank EIB should get rid of its gas-investments, and the Netherlands can take the lead in this. The Netherlands appears to be relying less and less on gas in its energy policy, and also seems to focus on gas-free investments at the EIB. Now it is important to maintain this position and also convince the other EU countries.
Publication / 29 May 2019