FMO officePhoto: Flying Puffin | CC BY-SA 2.0

On October 13th 2022, FMO published the final version of its Position Statement on Impact and ESG for Financial Intermediaries (FI statement). As civil society groups which have engaged with FMO on this topic for more than four years, we are extremely disappointed with the result. In the statement, FMO does not show sufficient commitment to ensuring its investments into financial intermediaries – which represent the bank’s largest investment sector 2021 FMO Annual Report – do not violate human rights or contribute to environmental harms.

How FMO invests its funds in FIs – third parties such as private equity funds or commercial banks, which then on-lend to projects – matters. Not only does this form of financing make up around 40% of FMO’s total portfolio 2021 FMO Annual Report , but it is a much higher risk financing model than direct lending. Investments of FMO’s FI clients have been linked to human rights abuses, environmental destruction, and harms to Indigenous peoples among other impacts [1] For example, FMO invested in the Santa Rita and Barillas hydropower projects in Guatemala via financial intermediaries LRIF and CIFI respectively, which were found by the independent accountability mechanism of the International Finance Corporation to have violated safeguards on consultation with indigenous peoples, provoking repression and violence. See: and FMO also invested in FirstRand bank, a South African commercial bank, which financed a gold mine project in Liberia. The project caused several serious issues for local communities (e.g. physical and economic displacement without adequate compensation, loss of income, destruction of agricultural lands and threats to food security, and health and safety concerns). See . For this reason, civil society groups – including Oxfam Novib, Both ENDS, SOMO and Recourse – engaged with FMO over a long period to advise on how to reduce risks in FI lending.

Following years of advocacy on the topic, these groups provided substantial recommendations on a preliminary draft of the FI Statement and on the draft statement posted for the official consultation process in May 2022. Both times FMO failed to include recommendations by civil society experts.  Their concerns centre around the human rights violations through and the environmental and climate impacts of FI investments, as well as the opacity surrounding these investments. This lack of transparency indeed prevents communities impacted by high-risk projects from knowing who is behind investments and what protections they have. This denies them their right to information, and consequently their access to remedy for adverse impacts is significantly limited.

Also, through its financial intermediaries, FMO is exposed to investments in the fossil fuel sector in fragile countries (i.e. via Africa Finance Corporation). We are extremely concerned by the bank’s apparent unwillingness to address climate-related responsibilities throughout its FIs portfolio, as FMO’s Position Statement on Phasing out Fossil Fuels Available on still applies only to its direct investments. The current FI Statement does not guarantee the bank will indeed stop investing in the fossil fuel industry.

“The FMO’s FI Statement is a big let-down and demonstrates a worrying lack of regard not only for the groups that have engaged with FMO for years to try to improve its human rights and climate record, but also for the communities on the receiving end of FI projects which go wrong. FMO has failed to ensure its FI investments will do no harm,” said Anne de Jonghe of Both ENDS.

“Too many communities – from Guatemala to Liberia – have suffered from FMO ‘outsourcing’ development to FI clients. The FI position statement is a missed opportunity to right these wrongs and ensure FMO will avoid similar disasters in future,” said Ruben De Winne of Oxfam Novib.

“FMO has failed to ensure its indirect investments live up to the commitments it made on fossil fuels in direct investing. This makes no sense – why should different rules apply to its indirect investing, which makes up around 40% of its portfolio? The Dutch government should question this anomaly and hold FMO to account,” said Kate Geary, Co-Director of campaign group Recourse.

For further information or questions about this response, please contact:

Anne de Jonghe, Both ENDS: email, +31 6 15960279
Ruben De Winne, Oxfam Novib: email, +31 6 57 10 58 14
Luis Scungio, SOMO: email, +39 3494075230
Kate Geary, Co-Director, Recourse: email, +44 7393 189175