World Bank’s IFC must pay reparations to Honduran farmers, US court rules

AGUÁN VALLEY, Honduras — In the years after 2018, during periods when the threats subsided and the paramilitary gunmen didn’t show up, nights in the village of Panamá were peaceful. People meandered freely through the dirt roads of the community, wedged against an ocean of reclaimed, reoccupied African palm plantations on the remote northern coast of Honduras. They played soccer or lounged about mom-and-pop stores to drink beers. But when the sicarios, or gunmen, appeared on the streets, sauntering around with assault weapons and bulletproof vests, everything closed.

They were the same gunmen accused of killing more than a dozen members of the land rights cooperative since 2018.

Panamá is one of several villages in northern Honduras that have faced repeated waves of violence allegedly linked to the Dinant Holding Corporation, a Central American African palm oil and consumer goods company. In 2009, Dinant benefited from a $30 million dollar loan to develop its plantations from the World Bank’s International Finance Corporation, even though the company was linked to waves of violence against land defenders in the Bajo Aguán Valley region of Honduras.

Yet on Oct. 3, a court in the U.S. state of Delaware ruled in a class action lawsuit against the IFC that the lender was liable for allowing its money to finance violent actors implicated in human rights abuses and killings. The court decided the bank needs to pay nearly $5 million in reparations to 13 anonymous plaintiffs from the Bajo Aguán Valley who filed for damages after losing lost loved ones to gunmen linked to Dinant.

It’s the first time a U.S. court has forced the World Bank’s influential lending arm to pay reparations to a community adversely affected by its investments. For years, the IFC has been notorious for ironclad impunity that allowed it to invest in “development” projects across the Global South — primarily mining, hydroelectric and agribusiness megaprojects. Through the Compliance Adviser Ombudsman, or CAO, the World Bank’s internal watchdog, there have been dozens of complaints over investments that have caused environmental damage, failed to give local communities prior and informed consultation and human rights abuses and homicides.

“The IFC agreed to settle the […] IFC lawsuit without any admission or concession of wrongdoing.  Dinant categorically denies the baseless allegations made in the lawsuit, and no credible evidence has been presented to support claims against the company,” said Roger Pineda Pinel, Dinant’s director of corporate responsibility and sustainability, in a written response to Mongabay.

The IFC’s legal untouchability first cracked in 2019, when the U.S. Supreme Court struck down the IFC’s “absolute immunity” from prosecution, granted under the 1945 International Organizations Immunities Act that protected international organizations from litigation in U.S. courts, after hearing a case regarding its financing of a coal megaproject in Gujarat, India. The power plant negatively impacted a biodiverse mangrove estuary that local fishers had depended on for their livelihood. Until now, however, the bank has never been forced to pay compensation as a result of its actions.

“We, the families of the victims, are satisfied with the agreement,” one of the victims said in a statement from EarthRights International, which litigated the case on behalf of the plaintiffs. “From the bottom of our hearts, we hope that armed violence will cease to be a tool in the areas around the world, where the institutions financed by the IFC defendants operate, so that this story of blood, death and pain will not be repeated.”

But the reparations are still “not enough,” said Karla Zelaya, a land defender from the region who has sought asylum in the U.S.

Kidnapped for several hours in 2012 by unknown gunmen in an act she believes was retaliation for land rights activism, Zelaya said more than a dozen of her compañeros in the land rights movement in the Aguán Valley, where Dinant’s plantations are concentrated, have been killed or disappeared. Killings related to land conflicts and Dinant have continued since the World Bank’s 2009 initial investment, Zelaya said. To date, more than  200 people have been killed. “There are so many victims. No amount of money is going to bring back our compañeros. … At least we can say this is a new precedent. The bank violated the principles for which it was created: to fight poverty. But in Bajo Aguán, they did the opposite; they gave money to a company drenched in blood of innocent campesinos.”

Dispossession for palm oil sustained by decades of violence

In 2009, the World Bank Group decided to loan $30 million to the Dinant Corporation.

The IFC’s investment, which enabled Dinant to “develop its young palm oil plantations,” never lacked controversy. In 2009, farmer groups warned the IFC that a military coup that summer — carried out with the backing of Dinant’s CEO, right-wing business magnate Miguel Facussé, and unleashing a wave of criminal violence that made Honduras more violent than some war zones — meant the investment was high-risk. Later revelations would link Faccusé to the regional cocaine trade: leaked 2004 U.S. State Department cables, a declassified U.S. Drug Enforcement Administration document from 2015 and testimony from the 2017 U.S. drug trafficking trial of the son of a former president indicated that Facussé’s properties in the Aguán Valley were being used to land planes loaded with cocaine.

Critics from rights groups pointed to allegations of fraud and intimidation surrounding the company’s initial acquisition of its industrial-scale palm plantations. In the 1990s, they say, Dinant (then known as the Cressida Corporation) and other agro-industrial corporations seized cooperative lands amid World Bank-sponsored structural adjustment measures, which made it easier to sell agrarian reform lands.

“There’s something that’s never been cleared up — they’ve never proved the legality of their land titles,” George Redman, country director for the NGO Trócaire, who has accompanied farmer groups in the region since 2012, told Mongabay. According to Redman, Dinant has never made public original legal titles to the land it obtained in the 1990s. Yet the loan moved forward.

Over the next five years, as farmer groups staged massive land occupations in defiance of Dinant and other agro-industrial corporations as well as the government that took power in the coup, about 150 campesinos were killed or disappeared across the several-thousand-hectare industrial palm plantations.

One report indicated the majority of the killings were targeted, reminiscent of “death squad activity,” carried out by private security forces contracted by Dinant in collusion with military special forces and police units, according to author Annie Bird. A 2013 report by Human Rights Watch, examining 29 killings as a cross-section of the wider killing spree, suggested that “in 13 of the murders there are indications of involvement by private security guards.”

It was “this massive wave of targeted assassinations of those who defend the land and water,” Zelaya said. “And we were in a state of total defenselessness.”

Some rights activists note the correlation between the World Bank loan and subsequent killing spree. “With World Bank money, the Dinant Corporation was able to take all this land through violence,” said Eslie Banegas, a land rights activist whose son was murdered in 2016 and whose name appeared on a military hit list leaked that same year.

“The Dinant Corporation managed to steal lots of territory,” said Yoni Rivas, a land rights organizer from La Confianza, a village in the Aguán Valley. “And the World Bank was able to finance that, including when they were killing all these land and water defenders.”

In December 2013, responding to complaints by farmer groups, the World Bank’s internal auditor, the CAO, published a report regarding Dinant’s financing that the NGO GRAIN labeled “one of the most damning investigations ever issued by the Bank’s internal watchdog.” The document noted allegations linking 40 killings to “Dinant properties, Dinant security guards or its third party security contractor,” and deemed the IFC “did not adequately supervise” Dinant in required measures to mitigate abuse by its security operatives.

Seeking reparations

It was around that time, according to Marissa Vahlsing, the chief counsel in the lawsuit against the IFC, that families in Aguán Valley began contemplating seeking reparations outside the World Bank’s accountability mechanisms. In 2017, Earthrights International, representing 13 plaintiffs who had suffered violence — one of whom was killed in 2015 — filed a class action lawsuit against the IFC, alleging Dinant funded “paramilitary death squads and hired assassins” to quash opposition while consolidating its hold over its plantations. In an extremely rare legal twist, the judge granted anonymity for the plaintiffs on account of the continued danger in Aguán Valley.

The process of developing the case dragged on for years. “All of these companies and institutions throw up so many barriers and obstacles to litigation that they put up roadblocks for a decade,” said Vahlsing. She argued that companies involved in human rights and their financiers bank on the hope that plaintiffs lose resources and energy. “They can fight you on procedure as long as they can.”

In the wake of CAO’s report, Dinant’s official security strategy was overhauled. They ceased contracting Orion private security — the military-linked firm that was denounced in 2012 by the U.N. working group on mercenaries as one of the most egregious human rights offenders — disarmed their remaining guards, subjected them to highly publicized human rights training and invited uniformed soldiers to guard their plantations. At the same time, residents began to allege that the emerging paramilitary was tied to Dinant security operatives with the goal of terrorizing the land rights movements.

The presence of these informal armed groups became even more clear to Vahlsing when she was interviewing land defender and community leader José Ángel Flores about Dinant-linked repression in February 2016 in La Confianza. They could hear bursts of automatic gunfire, which Angel Flores alleged came from a death squad called the Grupo de Celio attempting to intimidate them.

Ángel Flores was one of many who alleged the paramilitaries were armed by the military through German Alfaro, an officer contracted by Dinant and paid to intimidate and murder land defenders. He’d written out a list of the gunmen and frequently made reference to how he feared he would be killed over land rights. In the same spot where Vahlsing interviewed him, Ángel Flores and Silmer George were assassinated in front of a crowd of more than 50 people in October 2016.

Ángel Flores wasn’t the only land defender who predicted his own murder as an array of paramilitary groups with ties to military and former Dinant security operatives sprouted throughout the region.

One armed group, the Grupo de Torres or Grupo de Piturro, would emerge from the village of Panamá, whose leader, a former Dinant security operative, was photographed with military operatives and was accused of support from local security forces.

After Dinant disarmed its guards and ceased contracting Orion operatives, commandos from an elite military special forces task force, the Xatruch, turned a shack behind the community into a base during the same period for which they have a security agreement with Dinant, according to documents the company filed with the IFC. In 2016, a deserting soldier accused the Xatruch of executing and disappearing unidentified victims while they were charged, at the same time, with surveilling villages known for land rights organizing. When the soldiers left the community in 2018, the new paramilitary group took its place.

Hipolito or ‘Polo’ Rivas was a beloved leader and went on record in 2021 to denounce the military for arming the paramilitary group.

“Hipolito used to say, ‘If they kill me, it’ll be the Dinant Corporation,’” said Zelaya, who pointed out that he had delivered multiple complaints against the company.

In February 2023, Rivas and his son Javier were assassinated in the nearby village of Ilanga.

“It was terrible, because you tried to fight for justice,” said one resident of Panamá and a relative of Rivas, who fled to the United States. “But there was a group of sicarios that the Dinant Corporation sent, trying to intimidate us. And they followed through with the threats. They murdered our compañeros: Juan, Alfredo, Javier, Hipolito. Fighting people … it’s hard to see the people you love fall, for an honest struggle they wanted to do, that we all wanted to do as a cooperative.”

Fifteen years after the World Bank investment, land defenders contesting territories with Dinant — as well as those resisting a mining project also linked to the Facussé family — continue to be murdered.

In November, 2022, Dinant guards — whom the company had long prided on being unarmed and trained in human rights — were rearmed. A month later, Mauricio Esquivel, a member of the Tranvío cooperative that contested land with Dinant, was found executed in the town of Quebrada de Arena, in the Aguán Valley. In January, 2023, Omar Cruz was murdered at his home in Tocoa days after he submitted a complaint to Honduras’ Public Ministry alleging that Dinant financed an armed group known as Los Cachos, and that he was subjected to illegal surveillance by Dinant security operatives. By the end of 2023, at least 11 land defenders in the region would be killed.

“Dinant categorically denies the unfounded claim that the Company or its leadership has financed any armed groups, including ‘Los Cachos.’ This accusation is entirely fabricated, with no supporting evidence,” Pineda Pinel told Mongabay. He added that numerous independent investigations, including by the Inter-American Commission on Human Rights, Honduras’ Public Ministry and the International Criminal Court, “have consistently found no evidence to substantiate claims of human rights violations by Dinant.”

For some, the reparations are admirable but still not enough. “There’s going to be some reparations,” Banegas told Mongabay. “But it’s not enough. All the displacements, the assassinations. It doesn’t fix the damage that’s already been done.”

Banner image: Campesino farmers carry out the exhausting work of loading harvested African palm fruit on the Remolinos palm plantation in the remote Aguán Valley region of northern Honduras, February, 2023. Image by Jared Olson.

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