In January, the bank's internal auditor said its private sector lending arm, the
The bank's compliance adviser/ombudsman (CAO) said staff had been, in effect, encouraged "to overlook, fail to articulate, or even conceal potential environmental, social and conflict risk".
After a relatively unapologetic initial response, the IFC, which lends to companies in developing countries, acknowledged there had been "shortcomings" in how it had implemented its policies. It said it would not disburse further funding to Dinant until the company strengthened its environmental and social standards and reviewed its security practices. It also accepted that it must look in greater detail at the wider context of its investments.
Campaigners say a proposed
"Given the highly sensitive context in the wake of IFC's Dinant investment, the risk of human rights violations and the history of land conflicts in
The organisations point to IFC project documents that list, as potential risks associated with the investment, pollution, child labour, land disputes, and impacts on indigenous and other vulnerable communities.
They say the lender should fully investigate and disclose whether there are any links between Davivienda and Dinant, noting that the CAO is investigating another Honduran bank and its relationship with the agribusiness giant.
Dinant is the largest landowner in the Bajo AguÁn valley, where it has been accused of links to assassinations and forced evictions. The CAO cites allegations that 102 members of peasant associations in the Bajo AguÁn have been murdered in the past five years. Dinant has repeatedly denied any connection to the killings.
The CAO is investigating IFC lending to Banco Ficohsa in
"The IFC's systemic failures are leading to people losing their lands and livelihoods all over the world. Claims that these are isolated incidents are attempts at wilful blindness to the realities of an organisation that fundamentally is not compliant with its mandate of poverty reduction," he added.
"The risk categorisation is fully consistent with our policy. We remain committed to making a difference in one of the poorest countries in
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