German Bank Won’t Lend to CO2 Project, CDM Watch Says
(Corrects reference to land acquisitions and killings in fifth paragraph.)
DEG Deutsche Investitions- und Entwicklungsgesellschaft mbH, a German development bank, won’t pay out on a loan to the owner of an emissions-cutting project in Honduras, said CDM Watch, the Bonn-based environmental lobby.
The bank last week “declared that it will not pay out an already approved loan to Grupo Dinant, the value of which Dinant owner Miguel Facusse reportedly put at $20 million,” CDM Watch said today in an e-mailed statement. Cordula Rinsche, a spokeswoman for DEG in Cologne, Germany, didn’t immediately respond to a voice mail message and e-mail seeking comment.
Last week, the Aguan biogas project in Central America said it was evaluating Electricite de France SA’s termination of a contract to buy carbon credits. EDF terminated its involvement after CDM Watch alleged the facility’s owner committed human rights abuses. The project is owned by Exportadora del Atlantico, a unit of Grupo Dinant.
“Our lawyers are currently in the process of evaluating” a letter from EDF terminating the contract, Roger Pineda, corporate treasurer at Tegucigalpa, Honduras-based Dinant, said in an e-mailed response to questions from Bloomberg News.
CDM Watch said in a February report that Grupo Dinant may not hold legal claims to the land and may be linked to killings of members of the Unified Peasant Movement and the Peasant Movement of the Lower Aguan Valley. Twenty-three peasants were killed in the Bajo Aguan region from January last year to February 2011, CDM Watch said today, citing a report by international human rights groups led by FIAN, the FoodFirst Information and Action Network, a Heidelberg, Germany-based group that identifies abuse.
‘Allegations Deplorable’
The United Nations Clean Development Mechanism’s Executive Board was due to discuss whether the project is eligible to earn carbon credits, with a potential decision at a meeting that ends June 3, CDM Watch said in today’s statement.
The board has “so far failed to respond to human rights abuses linked to a carbon offsetting project in Honduras that is currently pending registration,” the lobby said.
“The allegations are deplorable,” said David Abbass, a CDM spokesman in Bonn. “If human life has been taken, or human rights violated in any other way, it is a flagrant violation of the most fundamental principles of the United Nations,” he said today in an e-mailed response to questions.
Public Comment
The board may discuss the project at the meeting ending June 3 or the one following, Abbass said. At the next meeting the board would examine whether “procedures for public comment are sufficient,” he said. This would include a look at the role and responsibility of developing nation governments that host and approve projects, the role of audit firms that verify projects, as well as provisions allowing members of the public to comment on projects, he said.
Factories and power stations in Europe’s carbon cap-and- trade program can use some UN credits to comply with greenhouse- gas-pollution limits. This allows companies to invest in emissions-cutting projects abroad, which may be cheaper.
The company is investigating killings of 10 security guards and a 13-year-old boy in relation to “trespassing” on the site, Pineda said last week. Land ownership rights and deaths related to land rights are currently being documented “to prove that those deaths are not related to our company,” he said.
The board, the body that approves individual CDM projects, has stated that it has no mandate to investigate human rights abuses and that any matters related to the sustainable development of the project are determined by the government that hosts the project, in this case the de-facto government of Honduras, CDM Watch said.
‘Not Surprising’
“This places a crucial decision into the hands of a government that has obvious interests for the project to go ahead,” Eva Filzmoser, program director of CDM Watch, said in the statement. “It is therefore not surprising that so far no project has ever been rejected for non-compliance with the sustainable development criteria.”
EDF Trading’s move was “a highly encouraging decision that prioritizes the protection of human rights over” economic benefits, Filzmoser said.
Chris Huhne, the U.K.’s energy and climate change secretary, sent letters seeking further information on the allegations to the board, the Honduran authorities and EDF Trading, according to a government official, who declined last week to be named in line with department policy. The U.K., representing buyers of credits, has approved the project.
To contact the reporter on this story: Mathew Carr in London at m.carr@bloomberg.net Catherine Airlie in London at cairlie@bloomberg.net
To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net
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