Aguan Biogas Project linked to serious Human Rights Violations in Honduras (Newsletter #12)

One of the CDM projects currently seeking registration is the “Aguan biogas recovery from Palm Oil Mill Effluent ponds and biogas utilisation” (Project 3197).  The company behind the project, Grupo Dinant subsidiary Exportadora del Atlantico, is implicated in assassinations and other serious human rights abuses in Honduras and there are grave concerns that additional funding through the CDM, could be used to to pay for more armed paramilitaries.

A second CDM application by the same project participants – Exportadora del Atlantico and EDF Trading, authorised by the UK government – is awaiting validation by TUV SUED, which also wrote the validation report for the Aguan project.  That project is called “Lean Biogas recovery from Palm Oil Mill Effluent (POME) ponds and biogas / biomass utilisation”.  The Aguan and Lean projects would, if approved, generate around 23,000 and 25,500 CERs annually, generating about €276,000 and €306,000 respectively.

Following the registration request, a review related to concerns about additionality was requested by Board members. Indeed, additionality concerns seem valid: the validation report accepts assertions made in the PDD according to which the company had only obtained a private bank loan, not loans or grants from international development banks.  Yet in 2009, Exportadora del Atlantico obtained a $30 million loan from the World Bank’s International Finance Corporation and a $7million loan from the Inter-American Investment Corporation.  Both loans were partly granted for biogas production from palm oil residues but are not mentioned in the PDD. However, a letter to the CDM Executive Board by Biofuelwatch, Salva la Selva/Rettet den Regenwald and CDM Watch outlines additional concerns that should also be addressed when reviewing the project.

Grass-roots organizations in Honduras have reported that at least 16 and possibly as many as 35 peasant activists were murdered in land conflicts in the Bajo Aguan valley in 2010 alone. Grupo Dinant’s owner, Miguel Facusse, is one of three large landowners at the centre of this violence.  His company claims ownership over 17,000 hectares of land in the Aguan and Lean valleys.  Many of his land claims are contested and likely illegal under agrarian reform legislation passed before the military coup in June 2009, which brought the current government to power. Furthermore, in April 2010, the de-facto government of Porfirio Lobo signed an agreement with the peasant organisation MUCA in Bajo Aguan under which MUCA was to receive 11,000 hectares of land within one year, much of it claimed by Facusse’s Grupo Dinant.  However, instead of handing over the land, Miguel Facusse and the two other large landowners, with the support of the army, police and his own armed paramilitaries increased the militarisation of the area and repression and human rights abuses intensified.  During April 2010, the palm oil mill which is the site of the Aguan CDM project was used to accommodate militaries and paramilitaries involved in repression and intimidation of peasant communities.  The violence continues: In January this year, two young peasants were beaten and seriously injured by police and men reported to be paid by Miguel Facusse. Journalist and MUCA member, Juan Chinchilla, was kidnapped in the municipality of Tocoa, close to the palm oil mill in question. He was tortured but managed to escape. He reported that his captors had worn uniforms of the military, police and Facusse’s private guards. For a more detailed report please see this article.

Action by the Board

Supporting the complaints against Grupo Dinant´s subsidiary Exportadora del Atlantico, 75 human rights and environmental organisations have sent an Open Letter to the UK Government which has authorized the project for EDF Trading. In the context of the recent human rights abuses related to the project, civil society organizations are now calling on the UK Government to withdraw authorisation. Perspectives GmbH which initially drafted the PDD has already publicly distanced itself from the project. Civil society representatives are now calling on other Parties involved to follow this example and to take a stand against human rights abuses in Honduras, especially in the context of the CDM.

The CDM Executive Board must take this issue seriously. If there are no rules in place that allow for the rejection of the project based on human rights abuses, it is time to change this now.