Updates to our Terms of Use

We are updating our Terms of Use. Please carefully review the updated Terms before proceeding to our website.

Thursday, December 7, 2023
Courthouse News Service
Thursday, December 7, 2023 | Back issues
Courthouse News Service Courthouse News Service

World Bank Lenders Accused of Deadly Profiteering

Accusing two World Bank lenders of profiting off murder financing, Honduran farmers brought a federal complaint over the tens of millions of dollars invested in Honduran palm oil companies during a deadly land conflict.

WASHINGTON (CN) -  Accusing two World Bank lenders of profiting off murder financing, Honduran farmers brought a federal complaint over the tens of millions of dollars invested in Honduran palm oil companies during a deadly land conflict.

Four anonymous widows are at the head of the 17 plaintiffs suing International Finance Corp. and its subsidiary, the International Finance Corp. Asset Management Co. LLC.

Filed in Washington, the March 9 complaint involves the funding of companies known today as Dinant that “have been at the center of a decades-long and bloody land-grabbing campaign in the Bajo Aguan region of Honduras.”

As laid out in the 132-page complaint, the late Miguel Facusse took the 16 palm-oil plantations from farmer cooperatives, using fraud, coercion and violence.

Dinant and its security forces "shot, killed and terrorized" the farmers, and Honduran authorities have failed to investigate the violence, the lawsuit claims.

The widows and other Facusse victims say International Finance Corp. and its subsidiary provided critical funding for the companies, despite its knowledge of the violence Dinant committed in the Bajo Aguan region. They say the companies knew such funding would aid gross human-rights violations.

An attorney for the Hondurans at Earthrights International noted in a telephone interview that what happened is at odds with the defendants’ image.

"The IFC and the World Bank have this development mission, which is supposed to be serving these communities,” said the attorney, who would speak only on anonymity because of security concerns.

"Now, we think there's no argument that someone who was as well versed and has such a long history in Honduras could have been blind to the risks of the investment when it was made in 2009," the Earthrights attorney added, referring to the defendant IFC.

The complaint accuses IFC and its subsidiary of making key contributions to Facusse amid political violence: first in 1997 for $55 million and again in 2009 for $30 million. The first half of that sum was allegedly dispersed just after a military coup d’état in the country.

"At the time of the IFC’s initial investment and disbursement of funds to Dinant in 2009, defendants not only were required by their own policies to investigate, but also actually knew that Dinant’s land ownership was highly contested in the Banjo Aguán, and that Dinant and its owner were connected to killings of the leaders and members of rural farmer cooperatives that challenged Dinant’s ownership of the land," the complaint states.

A representative for defendant IFC declined to comment on the ongoing litigation, but noted in an email that the company will respond to EarthRights' claims "in due course."

"IFC is saddened by the history of violence in the Aguán Valley," the spokesperson added in the email. "IFC is a development institution that promotes the growth of the private sector, focused on clients who commit to adopt internationally-recognized environmental and social practices in the most challenging of environments."

The Earthrights attorney said justice has been in short supply for the farmers. "Our clients have been living in the Aguan, really under the knife of Dinant, and that has been a tragic story that has played out for years without any real access to justice " the attorney said in a phone interview.

"This lawsuit is an opportunity for them to bring those claims to a court that can provide a remedy, and it's a forum for them to tell their stories as well," the Earthrights attorney added.

A larger issue that the case is tackling, the attorney said, is the immunity that the World Bank and the International Finance Corp. have enjoyed.

Through litigation, the farmers hope to show that "these aren't isolated incidents of malfeasance.” He said an ombudsman determined in a 2013 report that the IFC ignored its own policies and performance standards.

Even in 2010 when IFC met with Dinant's president, there were public reports about the violence circulating, the attorney noted. He said IFC continued to make investments regardless of the "obvious risks" presented to it.

“This pattern that we're looking at does underscore what we think is provable by the 2009 loan alone, is that the IFC was knowingly profiting from and knowingly investing in a land conflict," he added.

The widows at the head of the lawsuit are joined by three other surviving family members of farmers Dinant is alleged to have killed. Three of the plaintiffs survived gunshot wounds, while three others say they endured home invasions accompanied by the use of violence and threats of violence.

Dinant's security forces allegedly kidnapped, bound and threatened the other two plaintiffs.

Though the attacks did not occur on Dinant property, the farmers say “the purpose of these attacks was clear: Dinant wanted to threaten and intimidate the Plaintiffs and other farmers into accepting Dinant’s control over land that Dinant had taken from them.”

They filed their complaint anonymously because of “severe” security concerns.

“Every day I am scared, but this is how life has become,” plaintiff Juan Doe XI said in a statement. “At the end of the attack against me, the guards and military told me that they know where I live and that they will come to get me if I file a complaint against them.”

The lawsuit is part of a longer, broader campaign for justice, the Earthrights attorney noted.

"Obviously, this dispute over who owns land in the Aguan is central to the conflict and central to the violence," he said. "And while we are not going to put the title of that land at issue in a case in the United States - and it may be that we cannot - that story about profiting from and benefiting from land grabbing is something that is very important to our clients in their struggle for justice.”

The complaint against IFC seeks punitive damages for wrongful death, negligence, trespass and other claims. Marco Simons, an Earthrights attorney who did not give an interview for this article, signed the complaint.

Categories / Business, International

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.