Juana Doe v. IFC violence case settled in Honduras

JAN. 3, 2024 BY HELEN MURPHY

The International Financial Corporation settled with a group of farmers who alleged that the World Bank’s financial arm backed an investment in a company that “tortured, harassed, and killed” people from a community in Honduras.

Also in today’s edition: We look at artificial intelligence in education, highlight this year’s development calendar, and explain the naval blockade that means a holdup for aid to Gaza.

IFC takes a hit in Honduras

It’s unfortunately all too common in Latin America: companies that use intimidation and even murder to profit from natural resources in areas populated by poor rural communities.

That the World Bank allegedly found itself caught up in such a case is not a good look. But a group of farmers late last year reached a settlement with IFC, the World Bank’s private sector arm, in a class action lawsuit that alleges that a company it backed for investment tortured, harassed, and killed members of the Bajo Aguán community in Honduras.

The suit Juana Doe et al v. International Finance Corporation filed by a group of unidentified farmers in northeastern Honduras focuses on IFC and its Asset Management Company, or AMC, “knowingly profiting from financing murder, violence, and dispossession,” the group alleges in court documents.

IFC in 2009 approved a $30 million loan to Corporación Dinant to help expand its palm oil plantations and operations and build a biogas plant. Later that year it paid out $15 million of the loan.

But Dinant used “all kinds of unsavory and brutal and violent methods to obtain land from the campesinos,” Marissa Vahlsing, one of the lawyers at EarthRights International representing the farmers, tells Devex Senior Reporter Adva Saldinger. The violence was “openly talked about” in Honduras, and IFC could easily have accessed that information and should have known what was happening, she says.

Dinant denies all of the allegations, including charges of murder, which it called “completely meritless,” and said it is committed to respecting human rights. “We categorically deny the allegations made in the lawsuit,” it said in a letter to Devex.

An IFC spokesperson tells Adva that neither IFC nor AMC “has admitted to any wrongdoing or agreed to any remedial action as part of the settlement agreement.”

Read: Honduran farmers, IFC settle suit alleging violence linked to investment

Related: Civil society groups lambaste IFC over response to sex abuse allegations