A Delaware Court has ordered the World Bank’s International Finance Corporation to pay nearly $5 million in reparations to members of Honduran land defense movements who faced violence at the hands of security forces linked to Dinant Corporation, a Central American palm oil corporation to which the World Bank had loaned $30 million dollars in 2009.The IFC, one of the most influential lending institutions in the world, lost its “absolute immunity” granted by the U.S. government that protected it from prosecution after the Supreme Court heard a case regarding its financing of energy project in India — but until now, it has not been forced to pay reparations to a community adversely affected by its investments.Violence continues in the Aguán Valley region where Dinant plantations are concentrated, and land defenders who denounced alleged links between the Dinant Corporation and illegal armed groups have been killed in a resurgent wave of killings of land and water defenders.
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.
Workers on a cooperative run palm plantation cross the Aguán River on a lancha after a morning of exhausting work on January 28, 2024. Image by Jared Olson.
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.”
Dawn breaks on January 29, 2024 at the La Chile Cooperative in Honduras’ Aguán Valley region, where campesinos have reoccupied land they claim was seized by the Dinant corporation and have since faced multiple attacks by military, police, and private security. Image by Jared Olson.
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.
La Chile Cooperative, in conflict with the Dinant Corporation, whose processing plant sits adjacent to the plantation they’ve occupied, at dawn. Image by Jared Olson.
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