Procesadora Nacional de Alimentos C.A. (“Pronaca”) is Ecuador’s fourth largest corporation, managing over 115 industrial pig and poultry facilities across the country. Since 2004, the International Finance Corporation (IFC) has provided Pronaca with at least $170 million in loans, including a $50 million loan made in December 2021. Meanwhile, in 2020, the Inter-American Development Bank’s private sector arm, IDB Invest, made a $50 million loan to the company. However, there is a long history of strong community opposition to this company’s operations, and no indication that community concerns have been addressed.
Pronaca’s operations were previously the subject of a Suit for Pollution of Water, Air, Soil, which resulted in a constitutional court resolution against Pronaca on July 16, 2009. In 2010, local Indigenous communities in the province of Santo Domingo de los Tsáchilas filed a formal complaint to the IFC’s Compliance Advisor Ombudsman (CAO), 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.
In April 2021, Ecuadorian and global civil society groups expressed opposition to the new IFC and IDB Invest loans, since based on prior practices, they expected that expansion of Pronaca’s highly polluting pork and chicken operations would result in new and additional negative impacts on local communities, including Indigenous Peoples and their territories.
More recently, PRONACA was highlighted as one of several projects in which MDB's have dedicated even more funding towards factory farming, going against the objectives of the Paris Agreement.
Pronaca currently benefits from two multilateral bank loans:
1. IFC Project Number 41934, is a US$50 million loan to Pronaca approved on May 21, 2021, with initial disbursement on December 16, 2021. The loan is to finance (1) Pronaca’s capital expenditures through 2022 and (2) funding to distributors. Capital investments are focused on improving efficiency and capacity expansions at its feed mills, pork farms, and pork and poultry processing facilities.
2. IDB Invest Project Number 11598-04 to Pronaca y La Estancia Investment Holding, S.L. (“La Estancia”), was also a US$50 million loan, with a term of up to 8 years with 2 years grace period, approved on June 18, 2020, and signed October 9, 2020. According to IDB Invest, the loan is to partially: (1) finance the 2019-2020 investment plan for growth in Ecuador; (2) refinance the existing IDB Invest loan; and (3) finance La Estancia’s acquisition of a shareholder stake in Panavícola I, S.A. (“Toledano”) in Panama. Per IDB Invest, this will allow Pronaca to (1) increase chicken and swine production, given increased installed capacity; (2) increase productivity; (3) retrofit its productive facilities; and (4) improve its internal policies and corporate efficiency. Pronaca’s international efforts include increasing its presence in the region, diversifying the risk of business concentration in Ecuador, and transferring its knowledge and best [sic] practices to other companies in the region.
BIC seeks to promote improved design, implementation, and monitoring of Pronaca’s operations supported by IFC and IDB Invest, and to improve outcomes for the local communities impacted by them. Research is still ongoing to determine how Pronaca operations are affecting the Tsachilas and other communities and what demands for redress or compensation they may have. Once this is clear, we will work with local partners to define steps to influence both IDB Invest and IFC to require Pronaca to address community grievances. This will include documenting environmental, social, and economic conditions compared to what is required under both the 2009 sentence Pronaca received, and the IFC/IDB Invest Performance Standards. Particular concerns are any violations for standards on Indigenous Peoples (PS7) and Community Health and Safety (PS4), and any elements for a possible claim to MICI and CAO.
