In Honduras, the World Bank has funded a known coup-backer, murderer, and narcotrafficker, while escalating a decades-long land conflict and undermining local food security.
In November 2009, just months after the military coup ousting President Manuel Zelaya shook Honduras, the World Bank delivered a US$15 million loan to the Honduran corporation Grupo Dinant, despite obvious human rights concerns.
The US$15 million, paid through the World Bank’s private sector lending arm the International Financial Corporation (IFC), was the first installment of a US$30 million loan to be paid to to the palm oil processing and snack food company owned by Honduras’ largest landowner Miguel Facusse.
Though the World Bank approved the US$30 million loan prior to the coup in 2008, the first payment was made in the post-coup context of political repression, widespread human rights abuses, popular protest in Honduras, and regional condemnation of the coup regime. Honduras had been suspended from the Organization of American States (OAS), with the regional body encouraging both member states and international organizations to “review their relations” with Honduras in light of the coup. The World Bank did not take heed.
What’s more, Grupo Dinant’s founder and owner Miguel Facusse – palm oil magnate, member of the Honduran oligarchy, suspected narcotrafficker, and one of the wealthiest men in the country – was a key backer of the coup who has long been implicated in violent land conflicts in the Northern Aguan Valley region where Dinant’s African oil palm plantations and processing facilities are located.
“In Honduras, the main problem is a complete lack of democracy and violent repression of all those who oppose the pillaging of the country’s resources by a handful of elites, such as Miguel Facussé.”
Nevertheless, in spite of the precarious and dangerous political situation in Honduras and dubious track record of Facusse and Dinant, the World Bank plowed ahead with the hefty loan, financing death and dispossession in the Aguan as a result.
As Annie Bird of Rights and Ecology explains, “If the Bank staff had done certain mandated due diligence and database searches they would have found news reporting implicating Dinant’s owner and the Dinant company in the use of its land for drug trafficking, misuse of political influence, murder, and environmental crimes.”
Instead, the World Bank has blood on its hands from the more than 120 murders in the Aguan region related to the land disputes in which Dinant is implicated.
According to Tanya Kerssen, Research Coordinator for Food First/Institute for Food and Development Policy, this follows the typical World Bank practice of promoting capitalism within business-friendly but highly repressive political environments.
“In Honduras, the main problem is a complete lack of democracy and violent repression of all those who oppose the pillaging of the country’s resources by a handful of elites, such as Miguel Facusse,” she said. “If the Bank were truly to engage in meaningful transformation, it would simply not operate in countries with such a savage disregard for democracy, instead of propping up corrupt governments that operate with impunity.”
International human rights organizations and Honduran social movements have pressured for the loan to be cancelled, calling attention to the despicable conduct of Dinant and the World Bank’s failure to even comply to its own rules. However, despite the evidence of a brutal human rights situation and the negative impact of the loan in the Aguan, the World Bank initially denied accusations and was slow to respond to international backlash.
Under ongoing pressure and a scathing internal audit conducted by the Bank’s Compliance Advisor Ombudsman (CAO) made public in 2014, the second US$15 million installment of the loan has been suspended as the World Bank undertakes further review of Dinant.
As Haydee Saravia, Secretary General of the Coordinator of Popular Organizations of Aguan (COPA), explained, local campesino communities are clear on their demands with respect to Dinant. “They are demanding that the World Bank not continue financing business owners like Miguel Facusse, who has caused a lot of pain and death for campesino families,” she said, noting movements’ long-held key demand for land access and as well as the demand for immediate demilitarization of the region.
In the meantime, Dinant continues “business as usual,” which is not just the business of producing and processing palm oil, but also of repressing campesinos.
Campesino Resistance: From Land Grabs to Post Coup Repression
The Aguan Valley has a decades-long history of agrarian conflict, which has intensified since the coup. In the 1970s, agrarian reform legislation – won through the struggles of powerful campesino organizations – distributed land in the Aguan to landless workers, establishing the first peasant cooperatives and expanding the agricultural frontier. It was also through agrarian reform that African oil palm was first promoted in the region, sewing literal and metaphorical seeds of today’s conflicts.
In the early 1990s, a political turn to neoliberalism aided by an IMF structural adjustment package reversed agrarian reform and shifted the agrarian paradigm from land redistribution to marketization. The new Agricultural Modernization Law enabled a wave of manipulative land grabs resulting in a gross re-concentration of land throughout the country, but especially in the Aguán.
One of the principal beneficiaries of this neoliberal land grab was Facusse. While campesino cooperatives were systematically undermined, manipulated, threatened, and otherwise pressured into selling their land titles, large landowners swept up huge swathes to build agribusiness empires. In some cases, campesino cooperatives were outright robbed of their land, and many of those conflicts remain unresolved.
Prior to the coup, campesino mobilization and direct action successfully pressured former President Zelaya to launch a commission to investigate land conflicts, with the potential of putting agrarian reform back on the political agenda. However, Zelaya’s ouster meant the promise of settling land disputes was never realized – a major setback for campesino movements, while large landowners like Facussé benefited immensely.
As Bird explained, “The convoking of that commission (to investigate land disputes) was a huge threat to the Dinant corporation because they were looking into the validity of land holdings, and this could have potentially led to annulling illegal title. They clearly benefited by the coup in assuring that their land holdings were not going to be questions and they would retain control.”
And in addition to direct political benefits, private interests that supported and enabled the coup, like Dinant, afterward benefited economically from the World Bank, Bird added.
The fertile land of Aguan River valley is highly coveted. While expanding African oil palm plantations of wealthy landowners stretch far and wide, campesino communities wage a resilient land reclamation movement to secure access to land, promote food sovereignty, and resist the repression of large landowners and the hostile post-coup government. Facing landowner and state enabled violence, the human rights situation is dire.
Honduras Police agents detain peasant leaders from Bajo Aguan at a protest in the capital, Tegucigalpa. Photo: AFP
Blood Money: Displacement, Dispossession, and Death in the Aguan
The human rights crisis has deepened in the Aguán since the coup, furthered by widespread political corruption, heavy militarization of the region that functions to protect private interests by criminalizing campesinos, and a state culture of impunity.
COPA’s Saravia explained that while the agrarian conflict in the Aguán has deep historical roots, the situation has intensified. “Since the coup in 2009, the violation of human rights is much greater,” she said. “There is a heavy militarization campaign that began in 2010 when they militarized the region. Assassinations started, violent evictions started in the African palm farms, and there is criminalization, kidnappings, death threats, illegal detentions – a series of violations of the rights of campesinos.”
Since the coup, human rights organizations such as Rights Action have documented over 120 murders in the Aguan, as well as countless other cases of human rights violations such as those mentioned by Saravia.
In addition to funding physical and deadly violence against campesinos, the World Bank loan promotes forced displacement and landlessness of campesinos through backing evictions carried out by and at the behest of Facussé’s Dinant.
Rights and Ecology’s Bird, who has rigorously documented human rights abuses in the Aguan, outlined the situation in the Aguan and the central role of Dinant in violence against campesinos.
“In the Bajo Aguan there are groups of death squads or assassins that operate with impunity and with the collaboration of state security forces,” she said. “There’s widespread denouncements from many different sectors and witnesses that implicate both the Dinant company and its security forces directly in killings, kidnappings, and other abuses, but also very frequently the abuses are happening through joint operations with state security forces, the military and the police.”
The bankruptcy of Honduran democracy, U.S.-backed militarization, and World Bank investment in a company with a history of violence, manipulation, corruption, and drug trafficking, make for a perfect storm of alarming human rights violations and ongoing impediments to democracy in the Aguan.
World Bank Capitalism: Making a Killing from Human Rights Abuses
Unfortunately, both the World Bank and the Honduran government have failed to respond seriously to the grave human rights situation in the Aguan, and instead continue to enabled it.
“In the Bajo Aguan there are groups of death squads or assassins that operate with impunity and with the collaboration of state security forces.”
According to Saravia, the World Bank has taken nominal steps toward investigating claims against Dinant, but no tangible outcomes have come of the process. “The World Bank has sent a negotiator to see if there have indeed been violations by Dinant corporation, and they have given a series of recommendations for Dinant, such as that security guards in the farms be disarmed,” she explained. “But the truth is that the security guards are still in the farms and the military are also still in the farms, guarding the property of Dinant corporation and other business owners.”
According to Bird, the issue is structural, not just in terms of structural issues in Honduran politics and economy, but the World Bank itself.
“There’s a widespread problem that World Bank funding around the world does not take into account human rights issues, and has consistently argued that human rights is somehow a political issue as opposed to a governance issue, and it has argued that the world bank can’t be involved in politics,” said Bird. “Whereas advocates for human rights are clear that a nation’s compliance with human rights standards is a governance issue as much as fiscal policy is and has a very direct implication on the development outcomes of funds.”
This is why internationally, organizations are pressuring the World Bank not just to de-fund Dinant, but to give central priority to considering the danger of adverse effects when approving loans to ensure financing doesn’t back human rights violations like in Honduras. Unfortunately, devastating outcomes of World Bank-funded projects are all too common.
“It’s not just Dinant, this is a very grave case, but there are dozens of other loans just in the region, just in Central America, which cause conflict and cause violence,” explained Bird. “There are governance issues surrounding the loan and the kinds of activities that the loans are funding – like hydroelectric dams, palm oil and sugarcane, which compete for land and force people off of their land and pollute their livelihood.”
As Kerssen points out, the negative consequences of World Bank funding aren’t accidental, but fundamentally related to the kinds of projects and investment the institution prioritizes. The World Bank’s stated mandate is to combat poverty, but in reality it is in the business of promoting capitalism in ways that in fact exacerbate poverty and inequality, destroy the environment, and forcibly displace communities.