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Movimiento 10 de Abril presents letter of concern to Dutch and German embassies in Panama

On Thursday the 4th of June representatives of the Movimiento 10 de Abril presented a letter to the Dutch and German ambassadors in Panama. The letter was written by Movimiento 10 de Abril, the Cacica General of the Comarca Ngabe Bugle, the Cacique local of Müna district, the mayor of Müna disctrict, BothENDS, Urgewald and SOMO. It expressed the concerns of these organisations about FMO and DEG’s investment in the Barro Blanco dam in Panama and asked the authority of the respective governments to ensure that the Dutch and German development banks respect the rights of those affected by the projects they finance.

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Dear Ministers:

We are writing to express our concern about the actions of the Dutch and German development banks in Panama, and ask that you exercise your authority to ensure that they respect the rights of those affected by the projects they finance. A recent report published by FMO and DEG’s Independent Complaints Mechanism (ICM) has confirmed that the banks failed to comply with their own environmental and social policies in assessing and mitigating the environmental and human rights impacts of the Barro Blanco dam. And yet, instead of taking immediate steps to correct their failures, the banks are pressuring the Government of Panama to ensure their client can continue the project.

In August 2011, FMO and DEG each invested 25 US$ million in Genisa to construct the Barro Blanco hydropower project on the Tabasará River in Panama. Once completed, the dam is projected to flood homes, schools, and religious, archaeological, and cultural sites in the Ngabe Bugle Comarca traditional indigenous territory), created by law in 1997. The project will require several indigenous Ngabe Bugle communities currently living on the shores of the river to leave their land. National and international law require that the free, prior, and informed consent (FPIC) of the Ngabe Bugle be obtained before taking their land and forcing their resettlement, but their consent was not and has not been obtained to date.

Indigenous communities directly affected by the dam, represented by the M-10 movement, raised their objections to the project with the banks prior to their decision to fund the project in 2011. This clearly signaled to the banks that there was significant resistance to the project and cast doubt on any agreement Genisa claimed to have reached with local leaders. The banks ignored these signals and signed the loan contract with Genisa over the objections of the indigenous community. At the time, FMO and DEG did not have an independent grievance mechanism. Once the ICM was established in January 2014, the M-10 filed a complaint, citing as the main concern the banks’ failure to ensure that FPIC was obtained for the project.

Last week, almost a year after the complaint was submitted, the ICM issued a critical investigation report on FMO and DEG investments in the Barro Blanco dam. The ICM finds that the banks were not in the position to assure themselves that their client was fully compliant with Performance Standards 1 (Social and Environmental Assessment and Management Systems), 5 (Land Acquisition and Involuntary Resettlement), 6 (Biodiversity Conservation and Sustainable Natural Resource Management) 7 (Indigenous Peoples), and 8 (Cultural Heritage). The response of the banks to the ICM’s report is inadequate. The ICM report clearly concludes that the banks failed to identify environmental and human rights impacts prior to project approval and that critical issues, including whether FPIC had been obtained, remain unresolved. Even now, the banks fail to guarantee that they will not continue with the project unless and until indigenous rights can be respected. In their response, they indicate that they “will strive for a more elaborate formal opinion from lawyers or other experts, with defined expertise in indigenous peoples’ rights and the local legal context, on the matter of the formal representative structures in (indigenous areas like) the Comarca and [we] will structurally consider this recommendation for future investments.”

It is unclear whether and when they will obtain that opinion, whether it will be made public, and what they will do in response. Moreover, they are silent about their own interference in the process, which was recently revealed in Panamanian and Dutch newspapers. In February, the Panamanian government provisionally suspended construction of the Barro Blanco dam and convened a dialogue with Ngabe Bugle and Genisa to discuss the future of the project. Despite FMO and DEG’s claims that “the client and lenders are facing limitations in their influence over the [government-led consultation] process,” FMO and DEG sent a letter to the Vice President of Panama, in February, expressing their “great concern and consternation” about the suspension and noting that the suspension, “may weigh upon future investment decisions, and harm the flow of long-term investments into Panama.” They did not raise any concerns about the impacts to indigenous peoples from the project, but rather requested that the suspension be reconsidered so their client could continue with construction.

The mission of FMO and DEG is to contribute to sustainable development. The banks claim that this project will provide clean energy, jobs, and a reduction in CO2 emissions. These are laudable goals but should not be pursued at the cost of marginalized communities and do not excuse the violation of human rights. We hold FMO and DEG responsible for violating human rights and undermining the historic identity of the Ngabe Bugle Comaraca through the financing of the Barro Blanco dam. We call in the Dutch and German governments, as the majority shareholders of the FMO and DEG, to ensure that the banks respect the rights of those communities affected by this project and ensure that they adopt policies and practices to prevent future harm from occurring by:  

  • Requesting the banks to divest from the Barro Blanco project; and
  • Ensuring that FMO and DEG undertake human rights impact assessments for all high risk projects or projects in high risk countries and refrain from financing projects affecting the lands and natural resources of indigenous peoples without their free, prior, and informed consent.

 

We would like to propose a meeting, coordinated through our partner organisations in the Netherlands. Anouk Franck (af@bothends.org, tel. +31 (0)20 5306600) can provide additional information, if needed, and facilitate arrangements for the meeting. We look forward to your kind response.

Yours sincerely,


Silvia Carrera
Cacica General, Comarca Ngabe Bugle

Chito Callardo
Cacique local, District Müna, Comarca Ngabe Bugle

Rolando Carpintero
Mayor, District of Müna

Goejeth Miranda
President, Movimiento 10 de Abril, M-10

Danielle Hirsch
Director, Both ENDS

Kris Genovese
Centre for Research on Multinational Corporations (SOMO)

Heffa Schücking
Director, Urgewald