Development cooperation: German credit institution disregards human rights in Paraguay and must now disclose information

Paraguay – Investments – KfW

Germany’s largest development bank, Kreditanstalt für Wiederaufbau (KfW), spends billions of euros abroad on so-called aid projects, such as on rural development. KfW subsidiary Deutsche Investitions- und Entwicklungsgesellschaft (DEG) invests in companies that operate in countries in the Global South. However, these projects often neglect human rights and environmental protections in the respective countries. In Paraguay, for example, DEG works with the Paraguay Agricultural Corporation (PAYCO), which buys up land in Paraguay on a large scale. Land ownership in Paraguay is already in the hands of only a few. In addition, some of the lands are traditional settlements of indigenous groups. After they are bought, these lands are blanketed with pesticides in industrial agricultural projects.

Although DEG and PAYCO have an “action plan,” which is supposed to be based on an environmental and social impact assessment, it is not public. This is where ECCHR and its partner FIAN want to intervene. There are well-founded suspicions that human rights standards and environmental protections are being disregarded in the project.


In November 2022, the Frankfurt Administrative Court upheld an action for claim in June 2021. With claim under the Freedom of Information Act and the Environmental Information Act, ECCHR and FIAN want to find out which points the agreement between DEG and PAYGO covers - and which points it does not. Projects that are indirectly co-financed by the German state, which owns KfW, must comply with human rights and be publicly accessible. The court ruled that KfW must obtain the information in the public interest from DEG and release it to the public under the Freedom of Information Act.  

Investors and financial institutions like KfW too often evade responsibility for their funded projects. We argued that KfW, as a public institution, is already bound by applicable law, including human rights and environmental protection. DEG, although organized under private law, also has human rights and environmental responsibilities under the OECD Guidelines on Business and Human Rights. These aspects of its business activities are therefore in the public interest and must be made accessible.


ECCHR has been working with its partners on human rights violations and environmental pollution in industrial agriculture for several years. It primarily focuses on European companies’ economic activities, especially the distribution of highly toxic pesticides in the Global South. We demand that the manufacturers Bayer and Syngenta stop the export of chemicals that damage health – many of which have long been banned in Europe.


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OECD Guidelines for Multinational Enterprises

The OECD Guidelines for multinational enterprises are recommendations for corporations and governments to promote responsible and sustainable corporate behavior.

The guidelines include recommendations on transparency, labor relations, the environment, corruption, consumer protection, transfer of technology, competition and tax. States adopting the guidelines are obliged to implement them to the best of their ability. They must set up a National Contact Point (NCP) to coordinate the implementation of the guidelines. A complaint may be brought before an NCP in cases of a suspected breach of the guidelines.

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In Europe and North America, it goes without saying that a pesticide may only be sold if the producer explicitly warns the consumer and public of the product’s risks. Consumers are even required to have official safety certification before purchasing certain pesticides. This is not the case, however, when international agrochemical corporations sell their products in the Global South. India is one example of a country where international companies sell pesticides that are strictly regulated or even banned in the companies’ home states.

In some cases pesticide companies ignore both local rules and internationally-recognized standards. It seems that when it comes to the right to health, life and the preservation of natural resources, the law does not apply equally to all. This is clear from several cases examined by ECCHR in India and the Philippines since 2013.

Wrongdoing by agrochemical companies has to date rarely come before the courts. The liability of pesticide producers for health and environmental harm has been recognized in only very few cases, largely because of the legal obstacles. ECCHR tries to overcome these difficulties by using alternative legal tools such as lodging complaints with the Panel of Experts on Pesticides Management at the UN Food and Agriculture Organization (FAO).


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