In September 2023, members of the Indigenous Tsáchila communities in Ecuador, supported by local NGO Cedenma, the Bank Information Center, and Friends of the Earth (FoE) US, submitted a complaint to the Independent Consultation and Investigation Mechanism (MICI), the accountability mechanism of the Inter-American Development Bank (IDB) Group. The complaint identified harms linked to IDB Invest’s financing of the agribusiness company, Procesadora Nacional de Alimentos C.A. (Pronaca). Complainants raised concerns about water, soil, and air pollution; limited access to project information; and the lack of meaningful consultation with affected Indigenous communities in the province of Santo Domingo de los Tsáchilas.
Although the complainants sought remedy through dispute resolution, Pronaca declined to participate, arguing that the process offered no benefit to the company or project.(1) The complainants then requested a compliance review which, following an assessment, MICI recommended in August 2024.
MICI conducted a field visit to Ecuador, interviewing complainants and company representatives, and reviewing project documents that affected communities had not previously been able to access. Following the visit, MICI identified the following shortcomings in IDB Invest’s supervision and oversight of the project:
- Environmental Impacts and Management Measures: MICI found that weak oversight by IDB Invest undermined effective environmental and social risk management. Most notably, IDB Invest did not require or conduct an analysis of historical water pollution in Santo Domingo, a province with a long record of river contamination linked to agro-industrial activity, including with judicial cases involving Pronaca. Without this context, IDB Invest did not adequately evaluate whether Pronaca’s operations contributed to ongoing pollution or what mitigation measures were warranted. MICI concluded that this omission weakened environmental management and limited IDB’s ability to respond to community concerns. The investigation also identified failures to support the development of an adequate Environmental and Social Management System (ESMS) for breeding farms, the identification of Tsáchila communities as part of the project’s area of influence, and an assessment of odor impacts, despite the proximity of facilities to Indigenous communities and longstanding complaints about air pollution.
- Access to Information: MICI found that IDB Invest failed to comply with its Access to Information Policy and related environmental and social requirements. Project information was incomplete, difficult to access, and did not clearly explain how funds were being used or which activities were happening in Santo Domingo. Key documents, such as the Environmental and Social Impact Assessment,(2) were not publicly available, limiting communities’ ability to understand impacts and risks. MICI also found that IDB Invest classified certain information as commercially sensitive without sufficient justification, further restricting transparency and opportunities for engagement.
- Consultation with Indigenous Communities: MICI found that IDB Invest failed to meet its consultation obligations to the Indigenous Tsáchila people. The investigation concluded that IDB Invest did not properly identify Indigenous communities within the project’s area of influence, including the Peripa community located less than 300 meters from a Pronaca facility. IDB Invest did not conduct a vulnerability assessment or support the development of a participation plan tailored to Indigenous communities. Affected communities were not given timely opportunities to engage, raise concerns, or influence project decisions, despite potential impacts on their health, livelihoods, and cultural practices.
To address these findings, MICI issued eleven recommendations. These include developing an ESMS for breeding farms, preparing an odor management plan, and, most critically, conducting an analysis of Pronaca’s role in historical water pollution — an issue central to the requesters’ complaint. MICI also called for a participatory monitoring system to oversee the implementation of the odor management plan, stronger information disclosure, and updated mapping of the project’s area of influence to identify all potentially affected communities. IDB Invest must now prepare an action plan, in consultation with MICI, to implement these recommendations and address the identified harms.
The Pronaca MICI investigation highlights persistent gaps in IDB Invest’s supervision of high-risk agribusiness projects, particularly in contexts involving Indigenous communities and environmental degradation. As one of the first MICI compliance reports to center access to information in its findings, this case sets an important precedent.
Effective implementation of MICI’s recommendations will be essential to addressing harm, rebuilding trust with affected communities, and promoting institutional learning. BIC, Cedenma, FoE, and the requesters have called for consultation during the development and implementation of the action plan. BIC will continue to monitor IDB Invest’s response, with close attention to whether it leads to tangible improvements for the Tsáchila people.
Additional media coverage of the case is available here.
(1) - The Assessment report of the MICI Consultation Phase notes that Pronaca expressed it found “no reason for a MICI Consultation Phase, as we have no conflicts to resolve with the complainants and, moreover, because we did not invest the funds in the Santo Domingo area”. This contrasts with the findings of the MICI investigation.
(2) - The ESIA has been classified as confidential several times by the company.