CAO Cases

Arne Hoel, The World Bank

Latin America & the Caribbean

Honduras / Dinant-02/Aguan Valley

Complainant
Movimiento Campesino Refundación Gregorio Chávez
Date Filed
July 25, 2014
Concerns
Evictions, land conflict, security concerns
Case Status
Open - Compliance
 

Synopsis

Complaint


IFC provided Corporación Dinant -a vertically-integrated palm oil and food company in Honduras, with a corporate loan to enable it to develop young palm oil plantations, increase production capacity in its snacks and edible oils divisions, expand and upgrade its distribution network, and build a biogas facility to generate electricity for own and third-party consumption. The total project cost was estimated at $75 million, and IFC’s proposed investment was a $30 million loan.

 

Dinant is headquartered in Tegucigalpa, Honduras. It owns palm oil plantations across the Aguan and Lean Valleys and operates two palm oil mills and an edible oil refinery near the cities of Tocoa and La Ceiba. The company also operates a port storage facility at Puerto Castilla; owns vegetable greenhouses and a food processing plant in the Comayagua Valley; and has a snacks plant in San Pedro Sula.

 

In July 25 2014, the Movimiento Campesino Refundación Gregorio Chavez filed a complaint with CAO on behalf of its members in the Aguan Valley.  The complaint raises a number of issues related to land disputes, displacement of communities, violence, use of security forces, and environmental impacts which the complainants link to Dinant’s palm oil operations in the area.

 

CAO Action

CAO found the complaint eligible in August 2014 and initiated an assessment of the issues with the complainants and the IFC client. A CAO team conducted a first trip to Honduras in October 2014 as part of its assessment. After consultation with community representatives, Dinant and the Government of Honduras, the CAO postponed completing its assessment to allow dialogue efforts already underway to make progress.

 

CAO’s decision to postpone completion of its assessment was aimed at respecting dialogue efforts underway under the auspices of IFC and CBI, and avoiding initiating similar initiatives that could duplicate or complicate those ongoing efforts. The decision to postpone the assessment was formalized with the relevant parties in November 2014. 

 

At the request of the complainants, CAO resumed its assessment in June 2016.  The CAO team had conversations with the relevant parties, to help them take stock of the situation, and understand how they would like to move forward in the CAO process in the context of the ongoing dialogue efforts of IFC and CBI.

 

CAO’s compliance appraisal, published in June 2017, noted that a number of issues raised in the complaints are similar in substance to those covered in a 2014 CAO audit of IFC’s investment in Dinant (Dinant-01 case), and thus by CAO’s ongoing monitoring of IFC’s response to the 2014 audit. Thus, while the complaint issues raise substantial concerns regarding project E&S outcomes and compliance with IFC’s E&S requirements, CAO did not consider that they require a separate compliance investigation. As a result, CAO has decided to consider the issues raised by these complaints as part of its ongoing monitoring of the 2014 audit.

 


Status

CAO has concluded its appraisal and decided to consider the issues raised in the Dinant 02 and 03 complaints as part of its ongoing monitoring of the 2014 audit. CAO expects to publish its next monitoring report in the course of 2017. 
 


Status as of June 22, 2017

Project information

Institution
IFC
Project Name & Number
Dinant 27250
Department
Agribusiness
Company
Corporación Dinant
Sector
Agribusiness
Region
Latin America & the Caribbean
Country
Honduras
Environmental Category
B
Commitment
US$30m (A loan)

Case Tracker

Ombudsman

  • Eligible: Completed
  • Assessment Period: Completed

Compliance

  • Under Appraisal: Completed
  • Monitoring: In Process

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