German bank denies access to information of investment in Paraguay
FIAN files suit against German state-owned KfW Bank
The human rights organisation FIAN, with the support of the European Center for Constitutional and Human Rights (ECCHR), has filed an action for information against the German state-owned “Kreditanstalt für Wiederaufbau” (Reconstruction Loan Corporation Bank) KfW at the Administrative Court in Frankfurt.
KfW refuses to provide access to the environmental and social action plans of the Luxembourg agricultural investor PAYCO, which is active in Paraguay.
The KfW subsidiary „Deutsche Investitions- und Entwicklungsgesellschaft“ (German Investment and Development Company) (DEG) had acquired over 15 percent of PAYCO in 2013.
With 146,000 hectares, PAYCO is the second largest landowner in Paraguay. The agricultural company mainly cultivates soy and raises livestock, and also sells genetically modified seeds. Deforestation and land conflicts with indigenous peoples have been documented repeatedly on PAYCO farms. The western part of Paraguay has one of the highest deforestation rates in the world.
"The projects of KfW and DEG are bound to the goals of German development policy. However, control by MPs, the media and the critical public is only possible if they receive the necessary information," says Philipp Mimkes, Executive Director of FIAN Germany.
KfW and DEG had denied information on PAYCO for years, even to members of the German Bundestag. "In the present case, DEG puts private land ownership claims from the time of the dictatorship in Paraguay above basic human rights. This is an indictment of an actor charged with development policy. The Supervisory Board of DEG, which is chaired by the Development Ministry, must finally take action here," Mimkes continued.
"Projects that are indirectly financed by KfW and DEG must be in line with human rights and environmental protection as well as publicly accessible," adds Christian Schliemann from ECCHR. "The Administrative Court of Frankfurt has already stated in its ruling of November 2019 that KfW must release information in the sense of the Freedom of Information Act."
"KfW and DEG refuse to allow access to PAYCO's environmental and social action plans on the basis of alleged business secrets. But KfW and DEG could use this argument to refuse to disclose any information, since almost every one of their projects is tangential to a so-called business," says lawyer Anna Gilsbach, who formulated the complaint for FIAN and ECCHR.
According to UN figures, around ten percent of the population in Paraguay is undernourished. Large parts of the indigenous population live in extreme poverty. This is closely related to the high concentration of land: Paraguay is one of the countries with the highest land concentration worldwide. Around 2.6 percent of landowners hold more than 80 percent of the agricultural land.
Read also a Background paper on Payco