New Report Details Multilateral Development Bank, U.S. Role in Human Rights Abuses in Río Blanco, Honduras

October 07, 2013

A new report [PDF] from Rights Action examines the conflict in Río Blanco, Honduras, where the indigenous Lenca community has been involved in a stand-off against security forces and a major development company (Desarollos Energéticos, SA, or DESA) in order to prevent the construction of hydroelectric dams on the Gualcarque River. The report’s release comes just a few weeks after a court ordered the arrest of one of the most prominent figures opposing the dams, Berta Cáceres, coordinator of the Civic Council of Popular and Indigenous Organizations (COPINH), on weapons and other charges that are widely seen as bogus. Two of Berta’s colleagues, Tomás Gómez and Aureliano Molina also face charges under accusations that they “had instigated the protests” that have blocked access to the project site for over 185 days, and Amnesty International has declared that “If they are imprisoned,” the organization “will consider them prisoners of conscience.”

The case has attracted international support for COPINH, the persecuted activists, and the Lenca community of Río Blanco, with over 11,000 people having signed a petition urging the U.S. government to tell the Honduran authorities to drop the bogus charges. Protests have been held in several cities in the U.S. and various Latin American countries in support of Cáceres, Gómez and Molina and the Río Blanco community. “In Honduras it is increasingly clear that those who oppose a government plan may be imprisoned,” Ana Marcia Aguiluz of the Center for Justice and International Law told the Associated Press.

The Rights Action report addresses the charges against Cáceres and her colleagues, concluding that:

The public prosecutor’s office and the judiciary have aggressively and tendentiously prosecuted accusations against Lenca community members, and the human rights activists who support them.  The state has subjected human rights defenders to penal processes for actions which are simply the legitimate defense of the rights of indigenous communities.  This has led to the impending imprisonment of one of Honduras’ most recognized indigenous rights activists, Berta Caceres.

The report provides important historical, legal and cultural context for the current conflict, looking at the funding for the dam projects, a summary of the legal action on both sides, and a history of the harassment, persecution, and escalating violence against the community. Among other things, the report demonstrates that there are links – both in the past and in the present – between the World Bank and the Inter-American Development Bank (IDB) and the dam projects. “In 1990 as a condition of the structural adjustment program promoted by the World Bank and IDB, a new law regulating municipalities …was passed,” Bird writes, that allowed municipalities to sell ejidal lands, which was reaffirmed two years later in an “Agricultural Sector Modernization” law. These changes provided the legal pretext for the current intrusion into Lenca territory, even though the subsequent “encroachment into indigenous land” and “land grabs” violated Convention 169 of the International Labor Organization which enshrines people’s land rights (and which Bird notes supersedes the 1990 and 1992 laws).

The report also notes that the multilateral development banks (MDBs) pressured Honduras and other Central American countries to “allow private energy investment” through structural adjustment programs in the 1990’s. But the World Bank and IDB’s role in the current conflict is not limited to the last century. After citing information from the Central American Bank for Economic Integration [PDF], the report concludes that:

Public funds facilitated by MDB’s private sector funding agencies, including the World Bank’s International Finance Corporation and the IDB’s International Investment Corporation, appear to be funding the Agua Zarca dam through [the Central American Mezzanine Infrastructure Fund, CAMIF], an investment fund that in reality does not respond to the safeguard policies of the MDB’s, even though it may be obligated to.

Bird describes how the CAMIF, one of the main sources of funding for the hydropower projects, is:

a private equity fund, an investment fund, founded with seed capital lent by the MDB’s, which funds private companies to build privately owned infrastructure in Central America, dams, highways, ports, mines and more, all made possible by the core infrastructure projects in the PPP. …

MDB’s, banks owned by several states, including the World Bank’s International Financial Corporation (IFC), the Inter-American Development Bank’s International Investment Corporation (IIC), and CABEI, as well as Fondo de Fondos created by four Mexican banks, the Dutch development bank FMO and the Finfund of Finland, all pooled seed capital to loan to CAMIF. The public loans were then met with private capital, and in 2009 the fund began investing in privately owned infrastructure projects in Central America.

Among these was a loan to the DESA company for the Agua Zarca hydroelectric project which “was ‘co-structured’ by” the CAMIF and the Dutch FMO development bank.

The Washington-based MDBs’ role in funding the dam comes as the World Bank has announced a “return to funding huge hydropower projects,” as International Rivers describes it. Such renewed interest in hydropower, which the Bank justifies [PDF] as a cleaner alternative than coal projects, has environmental and human rights advocates concerned. The Bank and other MDBs have come under considerable criticism in the past for funding dam projects that were surrounded by human rights and environmental controversy, such as Narmada River dams in India and the Chixoy dam in Guatemala, where over 440 people were massacred, and over 3,500 forcibly displaced in the early ‘80s to make way for the dam.

With 22.4 percent of voting shares [PDF] in the IFC and 30 percent of the votes in the IDB, the United States wields enormous leverage over the MDBs, but unfortunately thus far the U.S. government seems uninterested in supporting human rights in Río Blanco. In fact, the report also notes that the U.S. Ambassador to Honduras, Lisa Kubiske, seems to have signaled a green light for the recent persecution of the anti-dam activists:

The investigation that led to the charges [against Cáceres, Gómez and Molina] was launched around the same time that Honduran newspaper reports circulated on June 28, 2013 claimed that US Ambassador to Honduras, Lisa Kubiske, had called on the Honduran government to prosecute those who promote land occupations, stating that “the government should guarantee a functional justice system to proceed against those who encourage campesinos to invade lands.”

Support Cepr


If you value CEPR's work, support us by making a financial contribution.

Si valora el trabajo de CEPR, apóyenos haciendo una contribución financiera.

Donate Apóyanos

Keep up with our latest news