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.
"If the forest next to your village is cut down to build an oil palm plantation, or there is a big dam in the river that you depend on for water and fish, you need to have access to information to defend your interests and have a voice in decision-making," says Anne de Jonghe of Both ENDS. "FMO continues to trust its customers to inform people and to include them in decision-making, while these customers often have an interest in not telling the honest story about what such a project delivers and what it costs. As an investor, FMO should take responsibility for the provision of information, but unfortunately falls seriously short in this."
Operating with public money
FMO's response to the report shows that the bank itself believes that the responsibility for making information public and the potential negative effects of investments on people and the environment lie with the project developers and its clients. However, as a development bank that is largely funded with public money, FMO has the mission and responsibility to invest in sustainable, fair projects that improve people's lives and respect human rights. One way to ensure this is to strive for as much transparency as possible about intended investments and to enable affected communities to meaningfully participate in the decision-making surrounding a project. This research shows that FMO still has a lot of ground to cover in fulfilling communities' right to information.
No reports on social and environmental impacts
The analysis of 241 projects disclosed on FMO's website between January 1, 2019 and May 31, 2020, reveals that potential negative impacts for these investments were disclosed in only 59 cases (25%). For the remaining 182 investments (75%) there was no information available on the website. Appendices with more detailed technical information, such as reports on social and environmental impacts, were under no circumstances available on the website.
"What's more, the little information that is disclosed is only available in English, while FMO has investments all over the world, often in countries where English is not the first or even second language," said Ishita Petkar of the International Accountability Project (IAP). "As a development bank, it is FMO's responsibility to ensure they are fulfilling the right to information for the communities they impact. True development requires respecting human rights — FMO should ensure vital information, including technical documents, are disclosed and accessible in national and local languages."
FMO must improve policy and practice
The 28 organizations have written a letter to FMO calling on the bank to thoroughly review and strengthen its access to information policy and practice. This includes improving information disclosed on the FMO website, adopting internationally endorsed principles on access to information, and obligating clients to fully disclose project documentation. FMO must also ensure that information is disclosed in understandable formats and reaches the communities concerned so that they can participate meaningfully in project decision-making processes as the intended beneficiaries of development.
More information:
The report and the NGOs letter to FMO
Link to IAP's blog as a reaction to FMO's statement
For more information
Themes
Read more about this subject
-
Dossier
Advocating for responsible policies of development banks
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 / 1 December 2018
7 suspects of the murder of the Honduran Berta Cáceres were found guilty
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 / 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.
-
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.
-
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.
-
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.
-
External link / 31 May 2018
Agua Zarca debacle leads to policy changes at FMO (Annual Report 2017)
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.
-
Letter / 15 May 2022
Both ENDS Comments and recommendations on the Bank Group’s Environmental and Social Policy of the AfDB Integrated Safeguards System
This letter by Both ENDS to the African Development Bank is a comment written in reaction to a draft version published by the Bank of its Environmental and Social Policy as part of a formal public consultation held by the Bank. This comment was sent to the bank along a joint submission letter with other CSOs, and specifically responds to the overarching Policy.
The bank's flexible requirements for clients and national standards for risky projects dilute safeguards. Project approval should be predicated on specific and binding targets for compliance and reflect input from communities involved.
-
Letter / 15 May 2022
Joint Submission of comments and recommendations to the Public Consultation on AfDB Integrated Safeguards System
Together with 29 other CSO's, we've submitted our comments and recommendations in the Public Consultation on the AfDB Integrated Safeguards System. These include that the Bank should prioritize community-led development and human rights-based approaches; protect natural resources and tackles environmental and climate crises; raise the bar on access to information, transparency and accountability; facilitate participatory processes in policies, programmes and projects; and end inequality, poverty, and the cutback and privatization of vital services.
-
Dossier
Agua Zarca: indigenous fight against dam costs lives
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 / 4 October 2017
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.
-
Letter / 1 October 2014
Policy briefing note on World Bank safeguards, 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. -
Blog / 12 July 2019
Dutch participation in the AIIB, an international bank with Chinese characteristics
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.
-
News / 11 May 2017
African Development Bank accepts complaint about coal plant
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
Money Energy People
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.
-
Blog / 13 November 2018
The "Dutch hero" came to develop "poor Africa"
Last weekend there was an article in Dutch newspaper De Volkskrant about the Lake Turkana Wind Power Project in Kenya. I was surprised and angry about how the story was presented. How can people be so blind to the perspectives of others? And how can a progressive paper like De Volkskrant devote so much space to such an unnuanced account? This is exactly why such projects lead to conflicts.
-
News / 23 May 2018
African civil society urges AfDB to support sustainable, inclusive and people-centred development
This week, the African Development Bank (AfDB) holds its 2018 Annual Meetings. A large group of African civil society organisations calls on the bank to ensure social and environmental protection, to involve civil society, to pay attention to gender issues and to make sustainable choices in their energy access ambitions.
-
External link / 10 December 2018
Human Rights Defenders are a Cornerstone of Sustainable Development
An Open Letter to States and Development Financiers on the need to ensure that development interventions support the realization of human rights, safeguard human rights defenders and guarantee meaningful public participation
-
Publication / 30 June 2017
