Reaction to FMOs position statements on human rights, land and gender
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.
Strong language on Human Rights Defenders
In the position statement on human rights FMO includes some strong language on human rights defenders (HRDs). FMO states that it does not "tolerate any activity by our clients that amount to the oppression of, violence towards, or any other violation of the human rights of those who voice their opinion in relation to FMO activities and the activities of our clients". FMO also commits to developing an internal protocol in the event that opponents of a project are facing threats. We strongly support the development of such a protocol and call upon FMO to include external stakeholders in the development of it to make sure it will outline steps and measures that truly protect the safety of HRDs. Additionally FMO should further protect the safety of HRDs by including a risk analysis in their impact assessments and by developing an early warning system to detect possible threats in high risk projects.
On human rights, FMO also states that "we are actively working on more systematically including human rights in our environmental & social due diligence and client engagement." The best way to do this would be for FMO to commit to the United Nations Guiding Principles (UNGPs) as a leading framework for their human rights due diligence and include human rights impact assessments in their project and client selection processes. It is not quite clear why FMO is reluctant to commit to the UNGPs as the principles are more firmly embedded in human rights law than the IFC Performance Standards, which are leading for FMO, and are moreover actively promoted by the Dutch government, the majority shareholder of FMO.
FMO should commit to FPIC
In the position statement on land governance FMO clearly seems to understand the social and environmental impact of land acquisition or projects that change the use in land. They also added some clarity on what they expect from their clients and how they monitor this. However, to truly respect the land rights of the people in the countries they invest in, this is not enough. We strongly encourage FMO to follow international best practices and commit to respecting the right to Free Prior and Informed Consent (FPIC) not only for indigenous people but also for all other communities that collectively own land and are dependent on this land for their livelihood. This is the only way to make sure communities that are affected by FMO's projects are not only consulted but also truly participate in the decisions and have a strong voice in what happens to their land and resources. FMO should furthermore acknowledge the responsibility of financial institutions in obtaining FPIC and the importance of monitoring this throughout the entire project cycle. If communities do not agree with the developments on their land, FMO should not get involved in such projects. As a recent report published by Fern (and supported by Both ENDS) showed, FMO will remain involved in land grabs and human rights violations if it does not strengthen its land policy further (link to report).
Separate position statement on gender
Finally, we appreciate the inclusion of a separate position statement on gender. It is an improvement that FMO explicitly states that they not only assure women's rights but also "understand" the gender specific impact their investments can have. FMO can be much stronger though in explaining how they assess such impacts and also in what they do to prevent negative impact on women's rights in their projects. To start with, the position statement should describe how gender will be incorporated into a broader assessment of human rights impacts, and include the roles, wishes, needs, rights and access to natural resources women have in that specific region and context. Crucial for this is to include gender disaggregated information, not only on job creation, but pertaining to the economic and socio-economic condition of affected persons.
These position statements are part of the revised sustainability policy that went through a process of public consultation – the first ever for FMO – in which SOMO and Both ENDS provided extensive comments.
FMO certainly took some positive steps. But to truly become leading in the development finance world some serious next steps are necessary. We will closely follow these next steps and will continue our engagement with FMO to strengthen its accountability even further.
- Report by FERN on European development finance, with the input of, among others, Both ENDS: European Development Finance Institutions and land grabs: the need for further independent scrutiny
- FMO's position statements on on human rights, land and gender
- Press release by Global Witness, 26 september 2017: Dutch Development Bank takes step forward on human rights, but must do more to protect defenders
Read more about this subject
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.
Press release / 10 February 2021
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.
News / 10 June 2022
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.
Letter / 10 June 2022
Both ENDS, SOMO, Oxfam Novib and Recourse sent in a submission to FMO's public consultation on its Position Statement on Financial Intermediaries. In this position statement, FMO only takes limited responsibility for the consequences of its investments through so-called financial intermediaries. We call upon FMO to publish a position statement that focuses on protecting human rights and the environment and take full responsibility for this.
Letter / 9 November 2020
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.
Letter / 1 October 2014
Both ENDS letter to the World Bank on the Environmental and Social Safeguards policies review. The World Bank safeguards review is part of a reorganization that aims at making lending cost-effective with less rules in place, which likely entails an increase in the number of problem projects. The reorganization aims at making lending
more cost-effective, forms in place. Safeguards policies are of crucial importance for project affected people to hold banks to account. However, Environmental and Social Frameworks (ESF) nowadays replace safeguards at banks. The ESF model leads to a reduction of a Bank's direct and mandatory role in overview, including due diligence, monitoring, and evaluation, of Bank funded activities and investments, along with a shift towards a greater reliance on client self-assessment and self-reporting. Our main ask is a return to binding, rules-based safeguards policies at banks.
News / 4 June 2021
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.
News / 10 November 2020
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.
News / 11 May 2017
A year ago, the Senegalese NGO Takkom Jerry filed a complaint with the African Development Bank (AfDB) and the Dutch Development Bank FMO, with support from Both ENDS. These banks finance the Sendou coal power station, right next to the fishing village of Bargny. The AfDB has now recognized the complaint. FMO is already processing the complaint and will publish an official response shortly.
Publication / 11 February 2016
Video / 18 March 2015
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.
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.
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.
Press release / 5 October 2022
Independent research confirms FMO’s responsibility for destruction caused by Barro Blanco dam, recommends compensation
Utrecht, 5 October 2022 - Dutch development bank FMO bears responsibility for the destruction of livelihoods, economic losses and environmental damage caused by the construction of the Barro Blanco dam in Panama, according to a report by the bank's Independent Complaints Mechanism (ICM). Indigenous communities affected by the dam are pleased that their complaints have been confirmed and reiterate their call for apologies and compensation.
News / 22 August 2022
Both ENDS partner IFI Synergy has filed a complaint to the World Bank on behalf of local inhabitants about the Nachtigal dam in Cameroon. The dam is causing considerable problems for local communities and local people feel that the compensation they receive is inadequate. They also feel that they were insufficiently informed and consulted before construction of the dam started.
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.
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.
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.
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.
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.