World Bank loan to Honduran bank comes under scrutiny
World Bank loan to Honduran bank comes under scrutiny
Criticism of multimillion-dollar loan to private sector comes after internal bank report censured funding of another Honduran firm
Claire Provost
theguardian.com, Thursday 1 May 2014 02.00 EDT
The World Bank's commitment to change its lending practices to the private sector has been called into question by campaigners over a proposed multimillion-dollar loan to a Honduran commercial bank. It comes months after a damning internal investigation into the bank's dealings with a palm oil company in the country.
In January, the bank's internal auditor said its private sector lending arm, the International Finance Corporation (IFC), failed to comply with its own policies and ethical standards when it loaned millions of dollars to Dinant, a Honduran palm oil company with alleged links to assassinations and forced evictions.
The bank's compliance adviser/ombudsman (CAO) said staff had been, in effect, encouraged "to overlook, fail to articulate, or even conceal potential environmental, social and conflict risk".
After a relatively unapologetic initial response, the IFC, which lends to companies in developing countries, acknowledged there had been "shortcomings" in how it had implemented its policies. It said it would not disburse further funding to Dinant until the company strengthened its environmental and social standards and reviewed its security practices. It also accepted that it must look in greater detail at the wider context of its investments.
More:
http://www.theguardian.com/global-development/2014/may/01/world-bank-loan-honduras
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