News / 6 November 2023

Response to FMO investments in Nicaragua

On 27 October, RTL Nieuws reported that the Steungroep Nicaragua considers the millions of euros that the Dutch development bank FMO is investing in Nicaragua irresponsible. When asked, FMO stated that 'it had to continue to support its entrepreneurs in difficult times'. Both ENDS believes that the choice to continue to invest in Nicaragua brings substantial risks, which FMO does not take sufficiently into account when deciding on financing. Previous FMO investments have caused harm to people and the environment and, in some cases, even led to violence – with, as its lowest point, the murder of Berta Cáceres in Honduras in 2016.

Civil society in Nicaragua has been systematically silenced in recent years. Political critics and human rights defenders have fled the country in fear of their safety. Others have been murdered or imprisoned. The free press – such as research medium Confidencial and national newspaper La Prensa – has been wound up and/or banned. Both now continue their work in exile. In December 2021, Nicaragua withdrew from the Inter-American Commission on Human Rights, essentially sidelining the highest human rights court in the region. In October 2022, it broke off diplomatic ties with the Netherlands. The UN speaks of a deterioration of human rights and of crimes against humanity and political persecution since 2018, when civic protests against the regime were violently quashed and the dictatorship took on its current form. According to the latest figures from Global Witness, Nicaragua is the country where the most land and environment defenders are murdered per capita. These crimes are linked to economic activities like deforestation, livestock farming and the expansion of sugarcane and palm oil plantations.

Human rights violations

In such a context it is not inconceivable that commercial activities – including those of companies supported by FMO – cause or contribute to human rights violations. In a response to the RTL Nieuws report, FMO states that 'it closely monitors what happens to the funding it provides'. Both ENDS has serious doubts about this statement: how is reliable monitoring possible in a country where the freedom of expression and the freedom to organize are completely smothered by the state? Where international human rights experts from the UN and the IAHCR have been denied access to the country for many years? In a country where people are dispossessed of their land and their lives are under threat, they never hear a dissenting voice and there is no question of 'close monitoring'.

Stop investing in unfree countries

This case once again shows how complex it is to do business with companies in countries governed by corrupt and repressive regimes. Because FMO's investments in Nicaragua are not an isolated example – the bank also continues to invest in unfree countries like Congo and Uganda – Both ENDS calls on FMO to stop investing in countries where democratic monitoring from civil society, a free press and a political opposition are not safeguarded.


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