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.

 

Concurrently, CAO is monitoring IFC’s actions to address findings from a CAO investigation of IFC’s environmental and social performance with regard to its investment in the client. CAO’s investigation report was released in January 2014. 

 


Status

CAO has concluded its assessment. Due to lack of agreement between the parties on pursuing a dispute resolution process facilitated by CAO, the complaints are being referred for a compliance appraisal of IFC’s due diligence.
 

Note: A CAO assessment does not entail a judgment on the merits of the complaint. Rather, the aim is to listen to the parties’ concerns, understand the different perspectives, and explain the different options available through CAO to help address the complaint.

Status as of February 14, 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: In Process

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