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Exit Still Pending Despite Investors’ Claim of Pulling Funding for Honduras Dam

June 2017

The Guardian recently reported that international investors plan to pull $44 million in funding from the Agua Zarca dam megaproject in Honduras—a project opposed by Indigenous and social movements for years. COPINH, the Civic Council of Popular and Indigenous Organizations of Honduras and a Grassroots International grantee and ally, has been fighting the construction of this dam on the sacred Gualcarque River for years despite harsh repression and violence, including numerous assassinations.

According to COPINH, however, investors have not yet withdrawn their funding for the dam. In correspondence with us, COPINH stated, “The community of Río Blanco, COPINH and a large part of Honduran and international society continue to wait for this final exit to end the financing of death in the Lenca communities.”

“The community of Río Blanco, COPINH and a large part of Honduran and international society continue to wait for this final exit to end the financing of death in the Lenca communities.”

According to COPINH, rather than a final exit, investors continue to make vague promises with no termination date.  COPINH notes, “A news item appeared in the Guardian [which] implies imminent exit. However, to date [investors] have not officially left the investment in the Agua Zarca Project.”

COPINH points out that the Central American Bank for Economic Integration (BCIE) has not responded to complaints about its responsibility as the main investor of the Agua Zarca dam, nor to their links with the Honduran company DESA, which has been implicated in the murder last year of COPINH founder and Indigenous leader Berta Cáceres.

Awarded the prestigious 2015 Goldman Environmental Prize, Berta had been one of the most important voices in Honduras and on an international level defending the lives, territories and rights of Indigenous Peoples, and working against the environmental exploitation. Last year, the beloved Honduran Indigenous and environmental rights leader was assassinated in her home.

Berta’s murder last year triggered international outrage and increased pressure on international financial backers of the dam. Nearly 1,300 Grassroots International supporters joined international calls for an end to the Agua Zarca hydroelectric dam project, respect for Indigenous Peoples’ rights to informed consent, protections for COPINH members, and an independent investigation by the Inter American Commission of Human Rights into Berta’s assassination.

According to Bertha Cáceres Zuniga, the daughter of Berta Cáceres and newly elected General Coordinator of COPINH, “We have undertaken an international battle to demand that the international institutions which finance these multinational companies—companies which come to plunder, to exterminate our people, to shed blood in our territories and to create territorial conflicts—that they stop funding the companies that bring death to our people.”

Berthita warns that the claim of the Agua Zarca dam financiers that they are withdrawing funds needs to be met with skepticism, because they have made similar claims in the past. She explains that is why COPINH demands that the Honduran government revoke concessions to companies intend on building hydroelectric dams now and in the future, and that companies also make reparations for damages done in the community.

COPINH adds, “The most recent communication from the FMO [another funder of the dam] indicates that they intend to make the exit announcement in the coming weeks. The community of Río Blanco, COPINH and a large part of Honduran and international society continue to wait for this final exit to end the financing of death in the Lenca communities.”

The Guardian reports that three financial institutions had pledged loans worth $44 million for the Agua Zarca dam. Desarrollos Energéticos SA (Desa), the private company behind Agua Zarca, has two major shareholders: Potencia y Energía de Mesoamérica (Pemsa), a Panama-registered company whose president—former military intelligence officer Roberto Castillo—is also president of Desa. The other, Inversiones Las Jacaranda, is owned by the powerful Atala Zablah family, who are also on the Desa board.

Desa secured loans from Dutch bank FMO, Finnish finance company FinnFund and the Central American Bank of Economic Integration. FMO and FinnFund suspended their loans after police arrested a Desa employee in connection with Berta’s murder in May 12016. Now, all three investors have reportedly agreed to withdraw investments from the Agua Zarca project, though their financial pullout is still pending. And after decades of lies and violence, the Lenca people will remain unconvinced until the exit is final, and companies take responsibility for the damage they have already wrought.

The hydroelectric project had aimed to expropriate Indigenous Lenca territory and privatize the Gualcarque River, a common resource of Lenca and Honduran people. At the same time, it threatened access to water and destroyed a sacred area of the Lenca people.

The concession granted by the government to carry out the Agua Zarca project did not have the free, prior and informed consent of the people living in the affected area, in violation to the Convention 169 of the ILO and the United Nations Declaration of the Rights of Indigenous People.

As COPINH’s statements make clear, they will continue to stand strong to protect their territory and human rights: “COPINH holds the FMO, Finn Fund and BCIE are allied to the murderous company DESA for any acts of violence, threats, murder or attacks that result from the process that banks seek to impose as part of their exit or delay in their departure. Berta vive, COPINH continues! With the ancestral force of Berta, Lempira, Mota and Etempica, our voices are full of life, justice, dignity, freedom and peace!”

At Grassroots International, we join COPINH in holding out hope that financiers will indeed pull out of the Agua Zarca project—completely and finally. And when they finally do, it will be a true testament to the courage and hard work of COPINH members. We continue to demand an end to the murder, persecution, militarization, and criminalization of all defenders of the Honduran people, and a final and permanent withdrawal of investments in land and water grabs in Honduras.

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