German Development Bank obliged to provide information on agricultural investment in Paraguay

The Administrative Court of Frankfurt am Main, Germany, upheld an action for information brought by the human rights organisation FIAN Germany against German Development Bank KfW (Kreditanstalt für Wiederaufbau) . For years, KfW had refused to provide access to the environmental and social plans of PAYCO, an agricultural investor active in Paraguay.

The KfW subsidiary DEG (Deutsche Investitions- und Entwicklungsgesellschaft ) holds a 15.8 percent stake in PAYCO. The court ruled that KfW, as a public authority, is obliged to provide information under the Freedom of Information Act (IFG) and must obtain the information in the public interest from DEG.

FIAN Germany Executive Director Philipp Mimkes affirms: "The ruling is a great success. PAYCO is responsible for land conflicts with indigenous peoples, environmental damage and deforestation. Now the public and politicians can get a better picture of this investment in the near future. From our point of view, it is alarming that German development funds finance industrial agriculture and that information has to be fought for through costly legal proceedings."

PAYCO Paraguay Agricultural Corporation is one of the largest landowners in Paraguay with 146,000 hectares. The company grows GM soy, owns tree plantations and raises livestock. PAYCO also sells genetically modified seeds to third parties.

The lawsuit was supported by the European Center for Constitutional and Human Rights (ECCHR). Sönke Hilbrans, Senior Legal Advisor in the ECCHR's Business and Human Rights Programme Area, emphasises: "It is not only landmark that the Administrative Court obliges KfW to provide information on the activities of its subsidiary DEG under the Freedom of Information Act. According to the court, DEG fulfils public tasks. The state bank's strategy of pretending that its subsidiary had nothing to do with its development mandate did not work. This also means that DEG, like any other public body, has human rights and environmental responsibilities. This will have consequences beyond the right to access information."

In January 2013, DEG had invested 25 million euros in the Paraguay Agricultural Corporation PAYCO based in Luxembourg. As a result, DEG received 15.8 % of the shares in PAYCO.

FIAN is aware of two land conflicts on the land areas acquired by PAYCO. Two indigenous communities of the Mbya Guarani people live within the Estancia Golondrina. They lay claim to 2,015 hectares of land on the estancia, which is the community's core land. In 2013, they initiated formal steps to have the land transferred - to date unsuccessfully.

"The enforcement of the indigenous communities' unequivocal human rights claim has thus not been resolved in almost ten years of DEG co-ownership. From our point of view, DEG puts private economic interests above human rights," Philipp Mimkes criticises.

Even within the largest PAYCO farm, Lomas (36,408 hectares), communities claim land that was granted to them on the basis of the agrarian reform. As early as 2011, the municipality of Segunda Reconstrucción submitted a corresponding application to the competent authority. According to the municipality, about 1,000 hectares of land lie within the farm. Despite the pending proceedings, according to the municipality, it is precisely on this land that part of the eucalyptus plantations have been established since 2013 - since DEG became involved.

Background paper on PAYCO: www.fian.de/wp-content/uploads/2021/07/2021_06_FIAN_Hintergrund_PAYCO-DEG.pdf

Contact:
FIAN: Philipp Mimkes; P.Mimkes@Fian.de
ECCHR: presse@ecchr.eu