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New Report Documents Social and Environmental Harms of PRONACA’s Animal Agriculture Operations on Indigenous Communities

June 5, 2023

A new report, published today by the Ecuadorian Coordinator of Organizations for the Defense of Nature and the Environment, CEDENMA, an alliance of 52 environmental organizations, finds that loans from the Inter-American Development Bank’s private sector farm, IDB Invest, and the World Bank’s private sector arm, International Finance Corporation (IFC), to PRONACA, the country’s largest pig and poultry producer, have violated the banks’ own policies by failing to consult locally impacted indigenous communities or adequately mitigating environmental damage in the community. It also calls attention to the failure of the banks and local and national government authorities to ensure that PRONACA followed all relevant indigenous and environmental laws and procedures.

“Our extensive interviews with community members found that PRONACA’s intensive pig farms in the Santo Domingo de los Tsáchilas region have continued to pollute the air and contaminate rivers, killing off fish which local people rely on for food and jobs, and are harming local tourism. CEDENMA is deeply concerned about IFC and IDBInvest’s failure to adequately enforce its standards and mandates with respect to PRONACA’s severe impacts on the water and the health of locally affected indigenous communities,” said Natalia Greene, Vice President, CEDENMA. “We are urging the public development banks and the government to enforce their policies and laws and help resolve long standing impacts of PRONACA’s operations on the health and wellbeing of indigenous communities.”  

Since 2004, the IDB and the IFC have provided more than $200 million USD in loans to PRONACA, Ecuador’s 4th largest corporation, the last being 50 million dollars each in 2021 to increase the production of chickens and pigs, among other activities. The report finds that the most recent loans violate several of the policies of these public development banks – whose purpose is to promote the protection of natural resources and social equity – affecting the communities and indigenous peoples of the province of Santo Domingo.

“We used to have a thriving tourism industry, and now we only have polluted air and water. The expansion of pig farms in our community will bring even more pollution to our already contaminated communities. We have filed many complaints about the company to the local authorities but they have not listened to us or done anything to resolve the problems,” said Ricardo Calazacon, a local indigenous leader and medicinal plant expert.

“By giving millions of dollars of public money to PRONACA, IDB Invest and the IFC are violating their own policies and causing negative impacts to Indigenous communities and fragile ecosystems in Santo Domingo de los Tsáchilas. This report is more evidence that every dollar spent on factory farming harms communities and jeopardises development progress. Public development banks must stop propping up a failing system, stand alongside Indigenous groups and stop financing factory farming,” said Kari Hamerschlag, Deputy Director, Food and Agriculture, Friends of the Earth U.S. 

In order to raise awareness about the harms of these loans and PRONACA’s operations, CEDENMA and its NGO partners are launching a social media campaign using the hashtag #PRONACAContamina. They are also releasing a new short video based on the testimonials of local community members that were presented in Detrás de la Carne. 

The report documents significant harms and policy violations: 

• Local communities close to the pork and poultry operations in the communities of Peripa and Chigüilpe are unaware of the company’s expansion plans, despite bank policies that require the disclosure and dissemination of “environmental and social information relevant to the interested parties”.
• Indigenous communities in the area of ​​influence were not informed or consulted about these new operations as required by Ecuadorian law and IDB policies.
• Lawsuits and the company’s inaction regarding the 2009 court ruling establishing a commission to monitor and document environmental impacts in the communities of Puerto Limón, Valle Hermoso, San Gabriel del Baba and Peripa were not taken into account. This  court order has so far not been applied.
• Failure to ensure that PRONACA obtains new licenses for expansion activities, despite the fact that the IDB documents mention that these expansions are likely to require new licenses.
• Residual impacts were not addressed. The rivers downstream of this industrial operation, on which the communities previously depended for their livelihoods, are no longer usable. The company has not addressed these or other significant residual impacts, as required by proper application of the Banking Performance Standards.
• Odorous emissions have not been mitigated and have long been one of the negative impacts of intensive animal husbandry and slaughter operations.

Since the banks and government authorities have neglected their own policies that require genuine stakeholder participation, informed consent, transparency and accountability, local communities and their Ecuadorian and international NGO partners request IFC and IDB Invest to undertake the following actions:

1. Greater disclosure of information. IFC and IDB Invest should require the company to transparently disclose the following information:
   1. Current and planned numbers and types of animals, with precise locations.
   2. Operating permits for said facilities and expansion plans.
   3. Cumulative impact assessments and specific environmental management plans.
   4. Comprehensive environmental monitoring and compliance reporting for all groundwater/aquifer withdrawals, wastewater treatment discharges, and gaseous emissions.
2. Require the company to have a surface and groundwater quality monitoring program and ensure those results are publicly available.
3. Establish meaningful consultation with affected indigenous communities, so that community members can raise concerns without fear of retaliation.
4. Require the company to install deep bedding materials on all of its hog farms owned and contracted to improve animal welfare and sanitary conditions and to minimize impacts on air quality in local communities.
5. Establish more stringent requirements to reduce supply chain impacts. With the company sourcing animal feed from approximately 800 suppliers, it is critical that it put in place a much more rigorous system of assessment, monitoring, reporting and verification to understand the impacts of feed producers on biodiversity, GHG emissions and deforestation. This system must be independent and related data available to interested parties.
6. Encourage the implementation of the judicial resolution of 2009 (No. 0567-08-RA of July 16, 2009), which establishes a commission of representatives from the government, the company and the community to monitor, evaluate and mitigate the damages related to the “operation of the biodigesters, the consumption of water, and the management of organic and inorganic waste that is dumped into bodies of water”.
7. Investigate the impacts of business operations to determine if compensation is warranted to indigenous communities.

We request that the National Government:

1. Activate a joint commission.
2. Ensure all licenses are granted necessary and that the environmental plans are presented and executed.
3. Implement an environmental audit.
4. Recognize the constitutional rights of local communities.

Implementation of the above recommendations can alleviate the suffering of affected communities, restore impacted ecosystems, and provide a model of good environmental and social governance. Taking these steps is also required by bank policies and Ecuadorian law.

Recording of the press conference livestream here

Communications contact: Haven Bourque, [email protected], 415-505-3473