An arm of the World Bank has been faulted in an internal investigation released Friday for its dealings with a Honduran palm oil company accused of murder and involvement in drug trafficking.
The ombudsman’s report is being called one of the most serious reprimands the bank has faced.
The Bank’s International Finance Corporation (IFC) did not take sufficient precautions in making a multimillion-dollar investment in Honduras’ Corporación Dinant, the report found.
Dinant has been accused of violating land rights, allowing its land to be used for drug trafficking and of being complicit in the killings of 132 peasants.
The IFC’s internal investigation conducted by its ombudsman’s office, found that the IFC “did not identify conflict and security risks associated with the project that should have been evident given information available at the time.”
It also failed to investigate the reputation of Dinant or consult with local communities.
Perhaps most troubling, the report found “IFC did not assure itself that the use of force by client security personnel was exclusively for preventative and defensive purposes.”
In an official response, the IFC said that it disagreed with some of the findings but would apply others to improve its risk management processes.
The Financial Times quoted a spokesman for Dinant denying any connection to the killings of peasants.
“We have absolutely nothing to do” with the killings, spokesman Roger Pineda was quoted as saying.