The Inter-American Development Bank (IDB) is considering a $200 million loan to the Government of Paraguay for upgrading a road connecting the cities of Mariscal Estigarribia and Minas Cué. This segment forms part of the Bioceanic Road linking the Port of Santos and São Paulo in Brazil with Pacific ports in northern Chile.
According to project documents, the program’s general objective is to improve access for the population in Paraguay’s Western Region to productive markets and social services, and to facilitate international trade in the area influenced by the Bioceanic Corridor.
Weak stakeholder engagement and Free, Prior, and Informed Consent. Field visits conducted by our local partners have revealed the absence of a systematic approach to engaging with the Ayoreo Indigenous Peoples (IP) and other communities living in the area. Initial meetings organized by IDB staff and government representatives were informal, lacked the presentation of project documents, and did not allow sufficient time for communities to understand and discuss internally the project’s implications. These shortcomings, along with the failure to clearly communicate expected impacts and risks, have generated mistrust toward the project, the process, and the intentions of the implementing agencies. Also, there is evidence that IP consent in support of the project was rushed, and the IP communities that signed formal documents were not informed of any potential Indigenous Peoples Plan (IPP).
Risks of relocation, illegal expropriation, and loss of livelihoods. The construction of the road poses potential harm to local Indigenous communities, some of whom may be relocated as part of the project. Additionally, some traditional lands used for agriculture and hunting could also be severely affected by the road and associated infrastructure, as well as the overwhelming impact of the economy and commerce on their local economies. The project’s analysis of alternatives, which examined three options – including the expansion of an existing road already used for cargo transport – recommends paving the current 102.5 km dirt road as the most socio-environmentally viable option. However, this recommendation was made without consulting the local population. A compensation and resettlement plan was prepared, but it failed to identify several of the local communities and was developed without formal consultations.
Impacts on cultural and natural heritage. Ayoreo communities express concerns that the construction of the road will permanently alter the landscape, resulting in increased truck traffic, associated infrastructure, and a broader push for agricultural and commercial development in the area. This will threaten their territories and access to natural resources. There is no clarity on how the project plans to mitigate these risks.
Risks of sexual exploitation and abuse. The construction of the new road also raises concerns about increased risks of sexual exploitation and abuse, particularly for Indigenous Ayoreo women, children, and other marginalized groups in nearby communities. The influx of outside workers during the construction and operation, as well as the increased mobility in previously remote areas, can heighten exposure to trafficking, gender-based violence, and exploitation.
Labor risks: It remains unclear how the road construction project will address the heightened risk of informal or precarious employment associated with the direct and indirect economic activities expected to emerge in the area.
Risk of biodiversity loss: Potential risks include habitat degradation and the loss of connectivity among the few remaining natural areas in Paraguay. These impacts may be driven by the expansion of agricultural activities facilitated by improved access to resources. The existing Environmental Impact Assessment dates back to 2018, and significant changes have occurred in the region since then, making it inadequate to address current conditions and risks.
Investment Loan
Amotocodie
