Paraguay - Investments - KfW

Under the guise of development aid: German bank allegedly disregards human rights in Paraguay

Paraguay - Investments - KfW

Under the guise of development aid: German bank allegedly disregards human rights in Paraguay

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.

Case

Starting June 2021, ECCHR and FIAN use freedom of information lawsuits under the Freedom of Information Act and the Environmental Information Act to find out what is covered by the agreement between DEG and PAYGO – and what is not. Projects that are indirectly co-financed by the German state, which owns KfW, must comply with human rights and be publicly accessible.

Moreover, investors and financial institutions like KfW often evade responsibility for the projects they fund. We argue that as a public institution, KfW is already bound by existing law, including human rights and environmental protections. 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. If this does not happen, KfW and DEG will continue to label numerous projects as development aid, despite civil society criticism.

Context

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.