FMO did not follow its own rules in financing Barro Blanco dam
Dutch development bank FMO did not sufficiently take into account the rights of the local population and effects on the environment before approving a $ 25 million loan for the construction of the Barro Blanco dam in Panama. This is not in accordance with FMO’s own standards. This was revealed in the long-awaited report by the independent complaints mechanism (ICM) of the FMO and the German development bank DEG, released on May 29. The report was published in response to a complaint filed by the M-10, the movement representing the affected indigenous Ngöbe population, in May 2014. Both ENDS has been supporting the M-10 in its struggle against the dam for years, and was one of the organisations that supported the complaint.
We are pleased that the conclusions of the independent experts of the ICM support our view that the banks did not comply with their standards.
Failure to obtain consent
The dam’s artificial lake will partially flood the territory of the Ngäbe communities living on the shores of the Tabassará river. These people will be forced to leave their homes and places of religious and cultural value. Despite national and international obligations relating to human rights, project developer Genisa failed to obtainthe 'free, prior and informed consent' (FPIC) of the Ngäbe population. According to the report the “lenders should have sought greater clarity on whether there was consent to the project from the appropriate indigenous authorities prior to project approval”.” Another shortcoming relates to the Environmental and Social Action Plan that was appended to the credit agreement. This plan "contains no provision on land acquisition and resettlement and nothing on biodiversity and natural resources management. Neither does it contain any reference to issues related to cultural heritage. ."
FMO's role
In their public reaction to the report, FMO and DEG acknowledge the conclusion of the report that they were not fully appraised at credit approval, but they made no further concrete commitments to ensure that the rights of those affected by the dam will be respected.. The banks claim that they are “facing limitations in their influence” over government processes to come to a satisfactory agreement with all stakeholders involved. Earlier this year though, the development banks did try to influence the government. In February 2015 the Panamanian government suspended the construction of the dam on the basis of Genisa not acting in accordance with the agreed Environmental Impact Assessment. The breaches included the lack of a legitimate agreement between the Ngöbe and Genisa, and violations of environmental laws. In reaction to the decision to halt the project, the FMOsent a letter to the Vice President of Panama, urging the government to resume construction as soon as possible. According to the bank, closing down this project could "negatively influence future investment decisions in Panama."
Banks’ response is inadequate
Anouk Franck of Both ENDS is surprised by FMO's reaction: "Instead of insisting on resuming the project, the bank should have shown us that it takes the interests of the local population seriously and that it acts in accordance with its own policies. Whenever we have meetings with its representatives, FMO assures us that it supports its clients to improve their social and environmental policies and practices. But in the case of Barro Blanco, the bank has shown it does exactly the opposite. In light of the conclusion of the ICM’s reports, indicating the bank did not comply with its standards, we urge FMO to withdraw from the project. Furthermore, to prevent similar situations in the future human rights impact assessments should become standard procedure at FMO. This is an important instrument to ensure that human rights and environmental standards are guaranteed in future projects."
Also read the press release of Both ENDS, SOMO and others, published on the 1st of June.
Dutch newspaper 'De Volkskrant' also covered the story on the 1st of June (in Dutch): Nederlandse ontwikkelingsbank zat fout met stuwdam Panama
You can also read a summary of the report of the complaints mechanism.
For previous news on barro Blanco on our website:
19 May 2015: FMO pushed Panama to continue Barro Blanco dam
6 May 2015: Construction of Barro Blanco dam will be resumed
11 Feb 2015: Construction Barro Blanco dam finally suspended
7 May 2014: Complaint against FMO on grievance mechanism.org
3 March 2014: Parliamentary questions about construction Barro Blanco dam in Panama
18 Feb 2014: Situation tense for indigenous Ngäbe people near Barro Blanco dam
14 Feb 2014: Filing a complaint with the FMO?
19 June 2013: Will VN-rapporteur James Anaya investigate Barro Blanco dam in Panama?
In this 'long read' on Barro Blanco you can find a short overview of what has happened around the dam in in the past few years.
Read more about this subject
-
Dossier /Indigenous communities threatened by Barro Blanco dam in Panama
The Barro Blanco dam project in Panama, which has Dutch financial support, is causing indigenous lands to disappear under water. Both ENDS is working to protect the rights of indigenous communities living near the dam.
-
Letter / 22 juli 2024
Joint Call to Action: International Civil Society Demands Justice for Berta Cáceres' Murder Victims in Honduras
This is a joint call to action by international civil society organizations to call upon the Honduran authorities to ensure there is justice for the victims of the murder on Berta Caceres. Eight years and four months have passed since the crime against Berta and the Honduran justice system has not confirmed the sentences of those convicted and has not prosecuted the intellectual authors. We are extremely concerned that independent administration of justice and international agreements on human rights are not being upheld.
-
Publication / 18 juni 2024
-
News / 13 december 2023Response from Both ENDS and OxfamNovib to new FMO climate fund
Both ENDS and Oxfam Novib welcome the new SDG Loan Fund launched by FMO. The fund aims to invest more than a billion euros in loans to small and medium-sized enterprises in low- and middle-income countries, in the energy, inclusive financial services and sustainable agriculture sectors. At the same time, both organisations are concerned about the impact of money from the fund on normal people in future recipient countries.
-
News / 6 november 2023Response to FMO investments in Nicaragua
On 27 October, RTL Nieuws reported that the Steungroep Nicaragua considers the millions of euros that the Dutch development bank FMO is investing in Nicaragua irresponsible. When asked, FMO stated that 'it had to continue to support its entrepreneurs in difficult times'. Both ENDS believes that the choice to continue to invest in Nicaragua brings substantial risks, which FMO does not take sufficiently into account when deciding on financing. Previous FMO investments have caused harm to people and the environment and, in some cases, even led to violence – with, as its lowest point, the murder of Berta Cáceres in Honduras in 2016.
-
Publication / 23 juni 2023
-
Publication / 25 mei 2023
-
Publication / 21 maart 2023
-
Publication / 15 maart 2023
-
Publication / 15 maart 2023
-
Publication / 14 december 2022
-
Press release / 5 december 2022Groups react with dismay to FMO’s position statement on Financial Intermediaries, pointing to outstanding human rights and climate concerns
On October 13th 2022, FMO published the final version of its Position Statement on Impact and ESG for Financial Intermediaries (FI statement). As civil society groups which have engaged with FMO on this topic for more than four years, we are extremely disappointed with the result. In the statement, FMO does not show sufficient commitment to ensuring its investments into financial intermediaries – which represent the bank's largest investment sector* – do not violate human rights or contribute to environmental harms.
-
Press release / 3 november 2022The Netherlands breaks major climate promise to end public financing for international fossil fuel projects
Today, a week before the international climate summit in Egypt, the Dutch Government has broken a major climate promise it made last year to end public financing for international fossil fuel projects. International and Dutch NGOs argue that the new policy published by the Dutch Government on restricting finance for fossil fuels has such significant loopholes, that it essentially means The Netherlands has reneged on its promise.
-
News / 26 oktober 2022Senegal: 26 innocent people including Both ENDS' partner arrested in Senegal
Update October 27th:
Today our friends have been released after five nights in detention. We welcome this great news and we are happy and relieved that Babacar Diouf and the others who were arrested will soon be back with their loved ones.
Nonetheless this was a very bad signal from Senegalese authorities and police and an indication of the growing restriction on civic space in Senegal. It is unacceptable that freedom of expression is restricted, people should not have to go to jail for peacefully expressing their opinion - especially when their livelihood is at stake.
-
Dossier /Finance for agroecology
The lion's share of public budgets for climate, agriculture and development still goes to conventional agroindustrial projects that contribute to the current climate, food and biodiversity crises. Both ENDS and our partners are calling for a transition to agroecological practices that are people- and environment-friendly.
-
Blog / 12 oktober 2022Op-ed in Trouw: "Give more money to local sustainable food producers in developing countries"
The Dutch government and Dutch businesses spend a lot of money on food production in developing countries. But, according to Karin van Boxtel, policy officer at Both ENDS, far too little of that money finds its way to sustainable, nature-inclusive producers.
-
Press release / 5 oktober 2022Independent research confirms FMO’s responsibility for destruction caused by Barro Blanco dam, recommends compensation
Utrecht, 5 October 2022 - Dutch development bank FMO bears responsibility for the destruction of livelihoods, economic losses and environmental damage caused by the construction of the Barro Blanco dam in Panama, according to a report by the bank's Independent Complaints Mechanism (ICM). Indigenous communities affected by the dam are pleased that their complaints have been confirmed and reiterate their call for apologies and compensation.
-
Publication / 23 augustus 2022
-
News / 22 augustus 2022Complaint to development banks about the Nachtigal dam in Cameroon
Both ENDS partner IFI Synergy has filed a complaint to the World Bank on behalf of local inhabitants about the Nachtigal dam in Cameroon. The dam is causing considerable problems for local communities and local people feel that the compensation they receive is inadequate. They also feel that they were insufficiently informed and consulted before construction of the dam started.
-
News / 12 augustus 2022In Memoriam: Sandra Smithey
This week we heard the sad news from Flint, Michigan, that Sandra Smithey has passed away. Sandra was for many years our pillar of support at the CS Mott Foundation. The foundation has supported the work of Both ENDS and of partners like Casa Fund and the NGO Forum on the ADB for more than 20 years, both financially and with its wide-ranging knowledge. One of Sandra’s ambitions was to make international money flows, such as development funding via the World Bank but also, for example, export credit insurance, fairer and more sustainable.
