On Those Misguided World Bank Loans

  • Written by  Wendy Griffin

There is a Chinese curse which says, “May you live in interesting times.” Living in Trujillo, next to the lower or Bajo Aguán area which include the highway between Trujillo and the nearby Tocoa and the Garifuna area in the municipalities of Santa Fe, Trujillo, Santa Rosa de Guana, Limón and Irionia which includes Ladinos, Garifunas and Pech Indians, the foreign residents of Trujillo have had front row seats in a number of conflicts. These include the conflict with Miguel Facussé and his Dinant Corporation with the peasants of the Bajo Aguán valley and with the Garifuna towns which extend east of Trujillo, such as Limón/Vallecito. 

Since 2004, there have also been a significant and surprising stream of international and Honduran anthropologists who have shown up at my door in Trujillo associated with a minor part of this World Bank loan, a cohune nut oil processing project of Dinant in nearby Pech communities and the Garifuna communities of Limón and Guadelupe, also part of the financing of the World Bank oil palm project and supported also by SNV, a Dutch development organization.


Janaury 10, 2014 New York Times article about the criticizing of the World Bank for loans made to Hondurans was primarily about the US$30 million loan to Dinant. In the news monitoring reports by the Ombudsman of the World Bank who reacted to formal complaints filed by international organizations accompanying the Hondurans who were affected, it shows that a significant part of the financing for Dinant involved in these conflicts, both directly to Mr. Facussé and indirectly through the Honduran bank FICOHSA of which he is the largest client, is coming from a part of the World Bank that handles private company loans -- the International Finance Corporation (IFC). The actual reports of the Ombudsman are linked to the New York Times  piece. This was described as one of the strongest reproaches of the Ombudsman office ever.


In the two reports, one for Dinant's US$30 million loan to invest in African palm cultivation and its processing, of which they have already received US$15 million, and a separate one for FICOHSA which is now partly owned by IFC through an equity deal, the Ombudsman found that the IFC neither performed good due diligence prior to authorizing the loans, violating rules regarding evaluating social and environmental risk, nor did good follow-up to see if the social, economic, or security situation had changed or deteriorated after the 2009 coup against President Manuel Zelaya, which they judged had grown significantly worse. As a bank, FICOHSA was also concerned that it unknowingly had a great deal of exposure to the problems of Mr. Facussé and his companies. In other words, the bank's officials must have been thinking, “We are worried we could lose our shirts if things go badly for him.”


Indeed, things have not gone well in the Bajo Aguán since Hurricane Mitch in 1998, when the area saw widespread destruction. In 2000, Mr. Facussé, who sold his Cressida company -- maker of Natura-brand tomato paste, fruit drinks and packaged nacatamales  -- to the British company Unilever for around US$15 million, said at the time that he planned to put invest the money in African palms. He was already in conflict with Garifunas, for example, in the Limón/Vallecito area about African palms and in the Limón, Farallones area about a proposed resort where the Garifunas and Ladinos of Limón had had their cattle, but this resort did not open due to the drop in tourism after Mitch. He also bought just prior to Hurricane Mitch a ranch, Hacienda Tumbador, which during Mitch flooded so badly that the alligators at his alligator ranch all escaped and many cattle drowned. That area is now all planted in African palms and Ladino workers said the excavators made a cracking sound breaking and digging up all the ceramics and green stone carvings at the archaeological site there, which had previously been visited by archaeologists such as Gordon Willey of Harvard University.


According to the Honduran Cultural Patrimony law which is on the UNESCO Honduras page in English, it is illegal to knowingly destroy an archaeological site and there is a significant fine, but most Hondurans have never heard of this law, don’t read English, don’t access the Internet, and who would you report it to anyway if you wanted to? Where are they and what is their phone number? How would you know? And who would protect you if the person doing the developing got angry at you? Garifunas report similar destruction of archaeological sites now located in Garifuna villages for tourist developments such as in the Triunfo de la Cruz area, and remained silent for similar reasons. Betulia, the area currently being developed west of Trujillo for Canadian investors has been a source of archaeological finds for years, and the pre-Columbian path over the mountains in the municipality of Santa to the larger archaeological sites in the Aguán valley is now blocked by Canadian housing and a new road planned in the area to connect Betulia directly to La Ceiba, being able to bypass Trujillo and Tocoa.


The Ombudsman report said the IFC knew, or should have known, that releasing significant levels of funding like US$30 million to Dinant’s owner, Mr. Facussé, could have significant social and environmental impact in the area. If the people at the IFC had read the Tegucigalpa newspapers, for example, they could have read the reports of the National Autonomous University of Honduras (UNAH) students regarding the water quality of the Choluteca rivers over the years -- often performed near where Dinant had outlets for chemical waste from its factories. The waste gave the water the appears of some combination of shampoo, soap, and tooth paste. These university biology students were led in their analysis by Becky Myton, an American who came to Honduras as a Peace Corps worker and stayed as a UNAH professor of ground water until her daughter grew up and married. At one point, Mrs. Myton even worked as an employee of the Honduran Ministry of Natural Resources. Not only was the chemical waste a problem for example killing fish in the river, but since the women along the river drank the water as well as bathed in it and so the lead got in their breast milk to the point that it was measurable as to being too high for the babies’ health.


The land struggles in the Bajo Aguán, including in Silin and Guadelupe Carney outside of Trujillo, and Limón, are not struggles that have gone unnoticed in books, newspaper articles in Spanish and English newspapers in Honduras. And they were known to the consultants who were being paid by the World Bank, because some of these consultants in their expensive cars with tinted windows came to my house and said to me, “Oh, I read your article in in the paper about the land problems in Silin”. I responded by saying, “People are dying here over land, as if we were at war.” These World Bank and SNV consultants took copies of my books like Los Garifunas de Honduras  (The Garifunas of Honduras), published in 2005, and Los Pech de Honduras  (The Pech of Honduras), published in 2009.


In Los Garifunas de Honduras, I documented, for example, the death of Euquerio Bernardez, a Garifuna craftsman who was also a composer of Garifuna music and the person who was in charge of the Garifuna warehouse at Vallecito outside of Limón. Those who murdered him has found him alone at Vallecito, proceed to kill him and cut off his ear -- probably to go and demonstrate to their employers that they carried out the job. They did not steal a Lps 3,000 radio that was in the room. The rooms of Garifuna leader Horacio Martinez, formerly a president of OFRANEH and later a teacher in Limón, were also ransacked, and it was assumed that he had ultimately been the real target. Not finding him, the killers went after Euquerio.


This problem of the terrorizing of the Garifunas of Vallecito and Limón had continued ever since the Garifunas obtained land titles to five Garifuna cooperatives in the area of Vallecito following a protest march in Tegucigalpa during the administration of President Carlos Robert Reina (1994-1998). But despite having had the required signatures of those within the Inter-Ministerial Commission, the Garifuna organizations, and President Reina himself, the Garifuna people were unable to protect their lands from Mr. Facussé, who had planted the land title to the Garifuna cooperative Ruguma in African palm anyway and placed armed guards on it.


The Garifunas of Limón took Mr. Facussé to court and won in the Appeals Court of La Ceiba, but the harassment continued -- a warehouse was burned down, a tractor destroyed, watermelon crops were cut up with machetes. In the book Los Garifunas de Hondurasthere is a photo of the house of the former Mayor of Limón, Lombardo LaCayo. The house who was set on fire while Mayor LaCayo's family was inside. The family, which managed to survive, are shown in the photo standing next to the ruins of their home. The fire also destroyed supplies that had been donated to the community. No one was ever found guilty. The World Bank and SNV anthropologist consultants took that book with them, and the violent problems of the Bajo Aguán, where at least 100 campesinos have died, have been covered by La Prensa  and other independent sources since then.


Dr. Sharlene Mollett, now a geographer at the University of Toronto’s Center for Development, has also published writings on the land conflict in Silin, and Dr. Sarah England, now at Soka University in California, has published on the Limón land conflict. So yes, the World Bank should have known there was a problem with Miguel Facussé and the human rights and environmental issues, and that there was considerable social and environmental risk in giving such as a large loan to him.


I stated plainly in Los Garifunas de Honduras  that one of the major menaces to Garifuna lands in Colón are African palm plantations, and there are photos of African palm plantations on the road to Santa Rosa de Aguán. These plantations have also seriously disrupted land holding of the Ladinos in the area south of Trujillo, which is one reason they either invade Garifuna land or become vulnerable renters in San Pedro Sula, and widespread destruction of forest that still had wild peccaries in it in the 1980’s has been reported being associated with new African palm plantations.


The agro-chemicals from the African palm plantations is probably the reason there are no fish in streams and rivers near Trujillo, and it is possible that the agricultural runoff is also what causes sea lice in the Trujillo Bay some years around the time of Holy Week. Mr. Facussé was also behind a proposal to build a Super Refinery in the Trujillo area on land claimed by the Garifunas near Puerto Castilla. Had the idea materialized, the project would have been an environmental hazard waiting to happen.


About three years ago, my Pech friends who had family in Las Marias said African palm company employees began buying in the Las Marias area in the center of the nuclear zone of the Rio Platano Biosphere. They were not sure if they were Facussé employees, but that they were definitely buying land for African palms. Now there are no peccaries within two days walk of Las Marias in Gracias a Dios and no Carrizo in the mountains above 1,500 feet due to the destruction of the forest in this remote area. Jeanette Kawas, the environmentalist who fought for the Punta Sal National Park near Tela, was fighting people who wanted to plant African palm in the wetlands of that park when she was murdered.


Some Dutch friends of mine in Trujillo have told me that African palms are expanding everywhere in their area and that the plantations are destroying the rain forest. Stories published on the Internet seem to confirm this, so it is extremely disingenuous of the World Bank IFC employees to say they thought they could give US$30 million loan to anyone for African palm expansion and it would not have dire environmental and social consequences, especially given the well-documented and long-term environmental and social problematic history of Mr. Facussé’s business ventures. One Honduran taxi driver whose family lost their land to African palm expansion asked me, “If Honduras has 100,000 hectares of African palm plantations, and it is expanding, where are we going to be to grow food? How are we going to be able to eat?”


Despite the strongly worded and well-publicized Ombudsman report, the World Bank originally chose to take no action, preferring to leave it to Mr. Facussé and the Honduran government to work out the issues, even though Mr. Facussé's business projects and security forces and the Honduran government are all implicated in the deaths of Ladinos in the Bajo Aguán. The new World Bank statement saying that it would consider cancelling the rest of the US$15 million dollars in the loan is an improvement over the earlier statement. But the new statement is odd, as it only mentions tensions in the Bajo Aguán in the last five years. The fact is that the land conflict -- the violence and the injustices -- in that zone all date to before 2005, so the World Bank knew the problems and, as the report said... simply may have chosen not to care and opted to issue the loan anyway.


Many people ask me, “Aren’t Americans turning away from palm oil? Isn’t this market disappearing?” While parts of the world are turning away from palm oil as a source of cooking oil (especially the pale bleached palm oil produced in Mr. Facussé's factories and in the those owned by Los Cachiros drug lords in Bonito Oriental in the Bajo Aguán, which has neither the good taste nor the additional nutrients of red palm oil as produced in West Africa or Brazil or Jamaica for cooking), the bleached palm oil is popular for bio-diesel and soap products. Further, palm oil in Honduras is now the main ingredient in “manteca”  (vegetable shortening), having replaced coconut oil, cooking oil -- replacing corn oil even in Mazola brand oil, and even processed cheese slices in Honduras known as “queso kraft”. In some places in Honduras, there have been reports by dairy company employees that they even add palm oil to the milk they sell. (2/10/14) (photo courtesy Bretton Woods Project)



Note: Wendy Griffin is the co-author of the book "Los Garifunas de Honduras" (1995) and was previously a reporter for Honduras This Week about Honduran ethnic groups including the Garifunas and an anthropology professor for the UPN in La Ceiba. Since 1996, she has split her time between living in the US and volunteering and living in Trujillo... in or near the Garifuna neighborhoods there.

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