Investing in Murder: Honduran farmers sue World Bank's lending arm for fueling land conflict

Graffiti at the Panamanian border warns, "Entrance is forbidden to Miguel Facussé's workers and guards."

ICIJ ONLINE

The Aguán River in Honduras runs through a fertile valley stretching inland from the country's Caribbean coast. For the past two decades, the lower reach of the river valley, or the Bajo Aguán, has been the site of a violent land conflict that has cost more than 100 farmers their lives and whole communities their security. The strife in the Bajo Aguán is not just locally driven: It has been fueled by the World Bank Group's private-lending arm, the International Finance Corporation (IFC), which provided critical financial support and backing to the Dinant Corporation, a Honduran agribusiness at the center of the deadly dispute. In so doing, the IFC exercised egregious judgment and violated the protocol it ostensibly put in place to protect vulnerable communities.

In late 2013, the bank's internal watchdog released a report, which found that the IFC contravened its own policies by repeatedly financing Dinant. More than three years after this scathing audit, a group of farmers had received no meaningful relief. Represented by EarthRights International, they sued the IFC and a subsidiary in federal court in Washington, D.C., for aiding and abetting human rights violations. Several other human rights lawyers, myself included, are co-counsel in the case. Though it has not remedied the abuses its loans have funded, the IFC claims it enjoys absolute immunity. Lawyers for the farmers dispute that legal argument, adding that immunizing the IFC enshrines impunity, sets a terrible precedent, and leaves the besieged farmers with little hope for justice.

"PEOPLE GET KILLED HERE"

As meticulously detailed by Tanya Kerssen in Grabbing Power: The New Struggles for Land, Food and Democracy in Northern Honduras, the origin of the land conflict in the Bajo Aguán dates back decades. In the 1970s, the government implemented an agrarian reform program that encouraged the resettlement of landless farmers to the area. The transplanted residents, largely from the country's south, cultivated palm as well as subsistence crops, and organized themselves into cooperatives to take advantage of government incentives to farm for consumption and export. To protect against the re-concentration of property, the government restricted the sale of collective land to individuals. Yet the successes of the land reform program were short-lived. Growing profit opportunities for industrialized palm production increased demand for the land, and the World Bank's structural adjustment policies of the 1990s reversed progress toward more equitable distribution. This combination set in motion the conflict that still festers today.

The farmers had their biggest setback in 1992, when the government passed the Agricultural Modernization Law, rolling back prohibitions on the sale of collectively owned land. Along with trade liberalization, currency devaluation, the end of price guarantees for food staples, and austerity measures that reduced public spending, the World Bank-backed legislation ratcheted up economic pressure on small-holder agriculture. Some farmers sold their land out of desperation, while many others were wrongfully dispossessed through a combination of fraud, coercion, and intimidation. Though some restrictions on large-scale ownership remained, corporations could easily circumvent them using a series of frontman owners. The new agribusiness plantations were acquired piecemeal through a series of discrete transactions. This incremental consolidation made organized opposition and legal challenges more difficult to sustain. Three large landowners took over the vast majority of the property in the Bajo Aguán in a process critics call "accumulation by dispossession." Among the main beneficiaries of the loosened restrictions was the patriarch of one of Honduras' oligarchic families and one of the country's richest men, Miguel Facussé, owner of Dinant.

The dispossession encountered quick resistance. The farmers united to protect their land—first through direct advocacy with the government and court processes, and, when that failed, through peaceful protests. By 1998, cooperatives were demanding investigations into fraudulent land sales. But they confronted an inhospitable judicial system. Their lawyers faced intimidation and even death threats, deterring many...