Public Development Bank Investigation slams Giant Meat Company for decades of pollution and rights violations in Indigenous communities in Ecuador
An independent investigation by the Inter-American Development Bank highlights policy compliance failures within IDB Invest and issues recommendations to strengthen accountability and address the harm caused by Pronaca to Indigenous communitiesSanto Domingo de los Tsáchilas, Ecuador – The Independent Consultation and Investigation Mechanism (MICI) of the Inter-American Development Bank (IDB) has released a powerful new report revealing seven serious violations of the Bank’s social and environmental policies in its 2021 $50 million loan to Ecuadorian agribusiness giant Pronaca, whose factory farm operations in Santo Domingo de los Tsáchilas have harmed Indigenous communities and local ecosystems.
“We hope that this scathing report is the beginning of the end of public financing of industrial animal agriculture projects that pollute, fuel the climate crisis, and trample on community rights,” said Ashley Schaeffer Yildiz, Agriculture and Climate Finance Program Manager at Friends of the Earth U.S. “These findings should force a reckoning at the IDB — and spell the end of unchecked financing for industrial livestock projects that harm people and the planet.”
The investigation, launched after complaints from Indigenous Tsáchila communities, documents seven violations of the bank’s own environmental and social safeguards. These include the failure to consult Indigenous communications, cover ups of relevant environmental data, and the company’s failure to address the longstanding contamination of local rivers with untreated waste.
“The Tsáchila Indigenous communities maintain that the rivers in their territory are contaminated, which has prevented them from continuing to use the water as their main source of food, hygiene, recreation, and for certain cultural practices,” the report states. “This could cause harm not only to their health but also to their culture due to the spiritual significance of the river and the traditional practices they carry out there.”
To address the harms caused by this project, the MICI report recommends the creation of an action plan for the Bank and Pronaca to evaluate, mitigate, and repair the damage, including damages from historical contamination. The recommendations call for a transparent process that ensures the participation and access to information of affected communities, recognizes the rights of the Tsáchila people, and prioritizes the restoration of rivers that have been historically polluted.
Historical pollution, ignored by the Bank
The MICI report determined that Pronaca discharged untreated pollutants for several years into the rivers of Santo Domingo de los Tsáchilas prior to 2000. Since the 1990s, civil society organizations had filed complaints regarding the contamination of these rivers, allegedly caused by direct discharges. In 1998, even the parish government of Puerto Limón publicly stated that the company had committed human rights violations.
Although the company introduced partial changes to its management of untreated water for some of its farms starting in 2000, MICI verified that prior to that date discharges into the Peripa River had indeed taken place. “However, MICI notes that there are 9 other breeding farms operating in Santo Domingo de los Tsáchilas under the traditional system—along with 1 farm that uses a combination of systems—that generate wastewater, which, after being treated, is used for fertigation.”
The investigation further concludes that IDB Invest did not adequately verify whether the company may have contributed to this historical contamination, nor did it establish appropriate mitigation measures in the face of potential responsibility.
The report emphasizes that this omission represents a breach of Performance Standard 3, as Pronaca’s socio-environmental liabilities were neither sufficiently considered nor documented. In particular, it highlights the lack of analysis regarding the company’s responsibility and the absence of actions to mitigate the accumulated impacts on the surface waters of the Peripa River.
Failure to consult Indigenous communities
Despite the presence of a Tsáchila community just 290 meters from a Pronaca facility, the company did not engage them in its project planning. The report found no evidence that the community was included in any consultation or even considered with the project’s area of influence.
This failure, the MICI concludes, is a violation of Indigenous people’s policy and rights and undermines the legitimacy of the project.
“The publication of the MICI report confirms what communities have been denouncing for years: these farms have contaminated and affected our territory. This acknowledgment is a fundamental step toward achieving environmental and social justice.” – Ricardo Calazacón, member of the Tsáchila Nation.
Lack of oversight and transparency
The MICI report also criticizes the IDB for allowing Pronaca to classify vital environmental impact documents as “confidential,” depriving communities of access to key information. This secrecy, combined with the absence of clear impact assessments, has fueled community mistrust and social tension.
The MICI found that:
- Project documents lacked transparency and disclosure.
- No socio-environmental oversight was conducted under the Capital Expenditures (CAPEX) financing modality.
The absence of an adequate Environmental and Social Management System (ESMS) for the breeding farms represented a breach of Performance Standard 1, which requires maintaining a system that is proportionate to the nature and scale of the project. This noncompliance is especially significant considering that Pronaca operates more than 100 facilities across the country.
“Civil society demands full transparency from development banks when granting multimillion-dollar loans to companies with histories of pollution and harm to Indigenous Peoples. These banks must uphold the Rights of Nature and ensure their financing stops perpetuating violations — and instead drives true accountability and environmental justice.” said Natalia Greene, Global Director of GARN and member of Cedenma.
Implications for the future of industrial agriculture financing at IDB
MICI recommends that IDB Invest develop specific guidelines to ensure meaningful consultation processes and effective participation with communities potentially affected by adverse impacts, even when projects are linked to existing assets; guarantee the timely and adequate disclosure of information in all cases, whether for new facilities or for expansions and upgrades; and strengthen the implementation and effectiveness of the environmental and social management instruments applicable to each project.
These general recommendations have a direct impact on IDB’s operations and financing plans, and may help ensure that other stakeholders in the future benefit from updated transparency and socio-environmental accountability policies in these public development banks.
As MICI concludes its work, the communities are now initiating a similar process through the CAO, the independent accountability mechanism of the International Finance Corporation (IFC), to assess the harms caused by its $50 million loan to Pronaca in 2021.