Pronaca Case Study

Pronaca Case Study

Despite opposition by Ecuadorian y global civil society groups, in Spring 2021 the International Financial Corporation (IFC) awarded a $50 million loan to support the expansion of Ecuador’s largest meat and poultry producer. Procesadora Nacional de Alimentos C.A. (“Pronaca”) is Ecuador’s 4th largest corporation, managing over 115 industrial pig and poultry facilities across the country. Since 2004, the IFC has provided Pronaca with at least $170 million in loans. In 2020, the Inter-American Development Bank made a $50 million loan to the company.

There is a long history of strong community opposition to this company’s operations. In 2010, local Indigenous communities in the province of Santo Domingo de los Tsáchilas filed a formal complaint to the IFC, stating that animal waste from Pronaca’s intensive livestock farms contaminated the rivers that communities use to fish, water their crops and animals, and for bathing and cooking. This led to a surge in health problems including skin, respiratory and gastrointestinal issues. The complaint also cited concerns about how persistent foul odors undermined the local tourist industry and the community’s quality of life. Unfortunately, the complaint was closed without a proper investigation and these serious impacts have continued. Numerous Ecuadorian organizations and local community members outline their concerns with IFC support for expansion of Pronaca’s highly polluting pork and chicken operations across Ecuador in this statement (in Spanish) issued in April 2021.

In Spring 2021, the Stop Financing Factory Farming campaign organized a sign-on letter to all World Bank/IFC Executive Directors (EDs) urging the Bank’s shareholders to oppose the loan due to its harmful impact on rural and Indigenous communities in Ecuador and serious violations of the Bank’s Indigenous Peoples policy. The campaign pointed out that IFC’s support for Pronaca directly contradicts the World Bank’s commitment to the Paris Climate Agreement and Sustainable Development Goals (SDGs) and targets, including promoting sustainable agriculture, ensuring public health, promoting inclusive economic growth, taking action on climate change and halting deforestation. The campaign also mobilized colleagues in the US and Europe to ask the IFC’s government shareholders (Executive Directors) to delay the vote until a more robust environmental review and consultation could take place. While the vote was initially delayed, the Pronaca investment was eventually approved in May 2021 despite concerns raised by government shareholders (especially representatives from Nordic countries, which opposed the loan, and US and Canada, which abstained).  

Friends of the Earth and our colleagues at the Bank Information Center and the Stop Financing Factory Farming campaign continue to work with our partners in Ecuador to monitor the loan and demand accountability from the banks for the harmful impacts of their lending on local Indigenous communities. 

In May and July 2022, Ecuadorian environmental organization CEDENMA (Coordinadora Ecuatoriana de Organizaciones para la Defensa de la Naturaleza y el Medio Ambiente) met with the IDB and IFC to share their research into ongoing negative environmental and social impacts of Pronaca’s pig and poultry operations. Following the meetings, CEDENMA sent a letter requesting that IFC address the organization’s concerns and their questions regarding the operational expansion IFC funds will support.