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. ."
FMO's role
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
3 March 2014: Parliamentary questions about construction Barro Blanco dam in Panama
18 Feb 2014: Situation tense for indigenous Ngäbe people near Barro Blanco dam
14 Feb 2014: Filing a complaint with the FMO?
19 June 2013: Will VN-rapporteur James Anaya investigate Barro Blanco dam in Panama?
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
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Dossier
Indigenous communities threatened by Barro Blanco dam in Panama
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.
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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.
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News / 8 November 2021
Both ENDS and SOMO condemn violence against Indigenous community near the Barro Blanco dam in Panama
Members of the Indigenous Ngäbe Buglé people were brutally attacked by Panamanian police on Friday 29 October 2021 from a parcel of private land near the FMO-financed Barro Blanco hydroelectric dam. The victims, all members of the anti-dam movement M22, had peacefully occupied the land after their protest camp got dismantled in July this year.
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Publication / 2 November 2021
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Letter / 23 August 2021
Joint CSO Submission A Gender comment on the newly proposed EIB E&S Framework
6 civil society organizations, including Both ENDS have submitted a gender comment on the newly proposed EIB Environmental and Social Framework. The EIB Environmental and Social Standards has to be updated to ensure that due attention to gender specific impacts, risks and related mitigation strategies is integrated in the policy and each standard, as well the assessment needs to specifically address the needs and problems of all genders. A lot of improvements can be made in the integration of gender aspects in policy and standards, in order to prevent violation of the rights of women and girls during project implementation, and tools (widely used by other organisations) and or commitments for their development should be included (inclusive consultations, Gender assessments and analyses, gender impact assessment, Legal Assessment Tool (LAT) for gender-equitable land tenure, gender responsive tools for prevention of violence.
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Letter / 23 August 2021
Reflecting the duality of gender and climate in the EIB’s Environmental and Social Sustainability Framework’s Standard 5 on Climate Change
This briefing of Eurodad, co-authored by Pieter Jansen, Both ENDS aims to outline recommendations on how the European Investment Bank should address the interconnected issue of gender inequity and the climate crisis in the newly proposed environmental and social policy.Severe climate change has consequences for human rights, including the right to life. As such, under the European convention on human rights the EIB has a duty to stop carbon-emissions related investments. The EIB and project promoters must monitor a project's greenhouse gas emissions and the climate risks of the project on the natural environment, and the women possibly affected by the project. The newly proposed policy should ensure that project promoters, who apply for EIB funding, submit a gender and social inclusion plan, and full participation and engagement of women, local communities and stakeholders in the Climate Risk Vulnerability Assessment methodology.
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Letter / 5 August 2021
A joint CSO submission to the European Investment Bank, Standard 11 on intermediate finance in the Public consultation on the EIB Group's
16 civil society organisations including Both ENDS have written a letter of concern to the European Investment Bank about a newly proposed standard for the Bank its intermediate finance investing. Both ENDS contribution to the contents of the joint letter consists out of proposals for improvement of screening, scoping, due diligence, appraisal, monitoring and supervision of high-risk clients and sub-projects. through financial intermediaries and clear and mandatory social, environmental and human rights requirements for FI investing matters.
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Letter / 5 August 2021
Joint CSO Submission EIB Group Environmental and Social Policy
25 civil society organisations, including Both ENDS have submitted a comment on the overarching policy of the newly proposed Environmental and Social Framework of the EIB Group. The EIB has to undertake environmental, climate, social and human rights assessment and appraisal of proposed projects to inform the decision of financing and must not rely on a clients' self-assessment and reporting (solely). The Policy needs to state clearly what the due diligence, monitoring and reporting responisibilities for the EIB are, in particular regarding human rights and contractual clauses with clients should enshrine the standards in all EIB operations, enabling for suspension of contracts if the standards are not implemented.
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News / 27 July 2021
In conversation with the Ngäbe-Bugle community in Panama, after five years of Barro Blanco-dam
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.
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News / 23 July 2021
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.
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News / 4 June 2021
Welcoming step of FMO to phase out fossil fuels from their direct investments
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.
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Publication / 22 April 2021
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News / 2 March 2021
5 years after her murder, Berta Cáceres’ family is still waiting for justice
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.
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Press release / 10 February 2021
Transparency at development bank FMO is seriously lacking
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.
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Publication / 31 December 2020
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Publication / 26 November 2020
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Publication / 12 November 2020
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Publication / 11 November 2020
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News / 10 November 2020
FMO takes a step towards divesting from fossil fuels
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.
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Letter / 9 November 2020
Input into FMO’s public consultation on Climate Action Commitments and Fossil Fuel Statement
Both ENDS and partners gave their input on FMO's public consultation on Climate Action Commitments and Fossil Fuel Statement. 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.
