How EU-banned pesticides ended up in rubber farms in Ghana with funding from EU public banks

In 2007, Peter Boafo signed up for a project that would assist him and thousands of other rubber farmers in Ghana set up their own rubber plantations. Currently based in the Western Region, Boafo spends his time managing his farms at Axim Abora and Sekyere Krobo. The region is filled with forests lined with rubber trees leaking a milky white sap, known as latex — the raw ingredient for producing rubber. He now owns around 15 acres of rubber farm and was provided basic equipment and guidance from the country’s largest rubber plantation company, Ghana Real Estate Limited (GREL), when he started his farms.

Invasive weeds are a big problem when working on rubber farms. They compete for resources with young rubber plants and can act as hosts for pests and disease. Boafo was therefore supplied with chemicals that would help stave them off.

One of these chemicals was paraquat — a highly toxic herbicide that can have severe, sometimes fatal, consequences if ingested and poses a negative impact on the environment.

“The biggest side effect of the job has to do with chemical use,” said Boafo, who used to work for GREL as a truck driver before becoming a rubber farmer. “If you apply the chemicals [paraquat] as instructed, then there will be no issues but if you don’t you will suffer severe medical complications.”

Paraquat has been banned in the European Union since 2007. Yet the rubber outgrower plantation project, which was designed to assist small farmers in rural areas of Ghana and has already been taken up by thousands of people, was funded by a French public development bank called Agence Française de Dévelopment (AFD).

Public development banks are state-owned and support private investments in projects with the goal of helping developing countries. This contradiction — that European public banks allegedly help countries abroad by financing projects that use pesticides and herbicides they themselves strictly prohibit — raises ethical questions about double standards, critics say.

“There is a certain hypocrisy in the EU: we ban pesticides to protect the health of European citizens and our environment but we support their use abroad by funding development projects or by exporting our chemical industries,” said Martin Dermine, director of Pesticide Action Network, a U.K-based charity focused on pesticide-related issues.

The hypocrisy extends far beyond Ghanaian borders. The investigation found similar examples of European public banks funding millions into projects that involve the use of EU-banned pesticides abroad. These include the Dutch Bank, FMO, investing in eucalyptus plantations in Paraguay through a Luxembourg-based private equity fund, Arbaro Fund, and multiple loans of over 100 million Euros by the European Bank for Reconstruction and Development and the International Finance Corporation, the private sector arm of the World Bank, to modernize Uzbekistan’s cotton industry.

In Ghana, AFD said they conduct environmental and social risk assessment prior to funding such projects. They added that the scheme has allowed for a “reduction in poverty in rural areas thanks to the regular income and training rubber plantation farmers get.” They did not deny the use of paraquat on GREL premises.

GREL instead denied the use of the herbicide. Lionel Barré, Managing director of the company, insisted that the company “has never delivered or recommended this pesticide to any farmer.” Gregory Mensah, land use manager at GREL between 2015 and 2020, also denied its use.

Yet, a pan-European investigation including iWatch Africa, Mediapart, Nederlands Dagblad, De Groene Amsterdammer, El Surtidor and led by Lighthouse Reports, a collaborative investigative newsroom, shows otherwise. Three farmers, 2 of which were direct beneficiaries of the rubber outgrowers project, said they were provided paraquat by GREL. A scientific study looking at the costs of using weed killers on AFD-funded smallholder rubber plantations, published in 2021, also explicitly mentions “paraquat-derivatives” as being one of the commonly used pesticides. The study is based on a survey of 80 smallholder farmers.

“What goes on is that people in the global south are being exposed to highly hazardous substances,” said Marcos Orellana, UN special rapporteur for toxics and human rights.

None of the 6 farmers iWatch Africa and Lighthouse Reports spoke to expressed being harmed through pesticide use, although some admitted having little knowledge of its potentially negative health effects and therefore opted not to wear protective equipment.

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The project, known as the Rubber Outgrower Plantation Project (ROPP), dates back to 1995, when the rubber company, GREL, struck a partnership with the government of Ghana, AFD and the German development bank, KfW to pay farmers small loans via two intermediary national banks — the Agricultural Development Bank and National Investment Bank.

Agriculture represents about 20 percent of Ghana’s GDP and the rubber plantation initiative was intended to provide employment and steady income to farmers in rural areas as well as dampen the rising rural-urban migration faced by the country.

The scheme involved 5 phases and provided loans to nearly 9,000 smallholder farmers in three regions of Ghana to help them with growing their own rubber plantations under the guidance of GREL. The final phase of the scheme, which lasted between 2014 and 2020 involved an investment of 17.7 million Euros, but total investments, through intermediary banks, tally up to nearly 60 million.

Farmers are given small loans by the Agricultural Development Bank, which they pay off by selling the product back to GREL at market price. Documents obtained by iWatch Africa and Lighthouse Reports, however, show that some farmers still struggle to pay back loans of up to 4,000 Euros, which fluctuate with the currency and often rise over time. They also often live far away from GREL and can get better deals selling their rubber elsewhere. Some of the farmers iWatch Africa spoke to therefore opt for selling their rubber to a competitor in the Wassa East region called Narubiz, although they are met with resistance from officials of GREL.

“GREL supported us with the farm, but they are now threatening us not to sell our products to other companies,” said Sekyere Krobo, a young rubber farmer from the Western Region. “I am overwhelmed with the loan that my deceased mother incurred which keeps ballooning because of the pricing in Euros.”

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Beyond Ghana, the situation is also dire. The company European Bank for Reconstruction and Development (EBRD) and International Finance Corporation (IFC) jointly funded, Indorama Agro, pledged to uphold strong environmental and regulatory standards and conducted extensive environmental impact assessments in the region, especially given its fraught history with forced and child labour.

Despite these efforts, Lighthouse Reports and iWatch Africa found evidence that several hazardous chemicals were being used, including indoxacarb, chlorates, and chlorpyrifos — all of which have been banned in the EU. Part of this information comes from Indorama Agro’s own list of pesticides from 2022, obtained by Lighthouse Reports via Bankwatch Network, a non-governmental organization that monitors funding by public financial institutions.

Further exclusive documents obtained include a letter addressed to Bankwatch Network, where EBRD states: “The Bank recognises the issue of the Company utilising pesticides banned or restricted for use in the EU,” adding that they had raised the issue with Indorama Agro who had “agreed to consider what EU approved alternatives are regulated for use within Uzbekistan.”

An anonymous monitoring survey of 20 former and current employees, as well as local residents, conducted by Uzbek Forum for Human Rights, a German-based non-governmental organization that works to protect human rights abuses in Uzbekistan, also reveals that Indorama Agro does not always provide protective equipment and instructions. It also confirms the use of hazardous chemicals used by cotton farmers.

Some describe being “short of breath”; others report witnessing relatives and acquaintances working for the company with symptoms including “blurred vision, abnormal hair and tooth loss, liver-gallbladder problems, white pigment disease on the skin, and gastrointestinal tract problem.”

Lighthouse Reports tried to get in contact with people from the monitoring survey on multiple occasions but they preferred not to speak out of fear of losing their jobs. Gulnoz Mamarasulova, director of the Representative Office of Association Central Asia in Uzbekistan, a non-governmental organization that works on democracy and human rights issues in the region, interviewed half of the people in the survey, confirmed the monitoring survey findings.

Indranil Majumdar, chief operating officer at Indorama Agro, declined to respond to questions, but said that the company has “a robust ‘Integrated pest management’ process which addresses all the points mentioned.”

EBRD and IFC did not respond to multiple requests for comment.

In Paraguay, FMO’s indirect financing of eucalyptus plantations via Arbaro Fund in Forestal San Pedro and Foresto Apepu has also been a source of controversy.

In an auditing report, Arbaro Fund lists haloxyfop as one of its pesticides used since 2021 — a herbicide that is not approved in the EU since 2020. The report goes on to explain that the substance will be used on 210 hectares of land in San Pedro between 2021 and 2026. The project also entails the use of 5,000 kg of fipronil, a pesticide linked to cancer and the mass dying of bees and has therefore been restricted in the EU since 2013.

Arbaro Fund acknowledges its use but maintains that “fewer pesticides are used on the farm than in the past.” They add that haloxyfop will only be used exceptionally to treat weeds, and that the company will do everything in its power to protect workers who may have to handle it.

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The reasons for why European public development banks fund such questionable projects are complex. At least part of the answer comes down to EU regulations on pesticides being relaxed enough for these banks not to be held accountable. These banks also have “exclusion lists” which are documents which outline the kinds of projects they will not finance, but they are not legally binding.

There are also no international laws that can outrightly ban the use of pesticides.“Unfortunately, there are no international laws that allow for global bans on pesticides,” said Dermine. “ Worse, when the European Union tries to ban new pesticides on its territory, many states try to dissuade it via WTO rules.”

Another problem lies with the lack of thorough and meaningful on-the-ground monitoring. GREL, for instance, actively supplied smallholder farmers with paraquat and protective equipment, according to farmers iWatch Africa spoke to, but the company had few resources dedicated to actually monitoring the use of Personal Protective Equipment supplied. Local farmers interviewed revealed that there was “only one GREL extension officer” dedicated to monitoring all smallholder farmers at Sekyere Aboaboso in the Wassa East district admitting that they “didn’t always use protective gear” due to limited supervision.

Mensah, the former assistant technical officer and later manager for land use for GREL, said paraquat were not used for industrial production of rubber, but said it’s possible they were used by farmers in the smallholder scheme because it is costly to keep track of their activities.

“When we started with these farmers we gave them planting materials,” said Mensah. “But if we get involved in the maintenance activities it’s going to put a lot of costs on us.”

Yet, the cost to thousands of farmers being exposed to hazardous herbicides may dwarf any monitoring investment by GREL.

Farmer Boafo, currently 60 years old, is sometimes preoccupied with thoughts about his health in the near future. He is aware that the negative consequences of being exposed to hazardous chemicals may not become apparent immediately.

“In the future, I hope that these chemicals won’t pose any health problems to us,” he said.

Writing and reporting by Jonathan Moens and Gideon Sarpong. This report was supported by Journalismfund Europe.

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