"Germany's state-owned KfW bank linked to rights violations", 10 September 2025

The government's development bank is accused of backing harmful projects in emerging markets. Instead of uplifting communities, a new report says investments fail to protect human rights and silence those who speak out… A new report on KfW Bank’s human rights record says these aren't just hypotheticals; they're real risks and they're not being handled well enough. Known by the slogan "Responsible Banking," KfW is backed by billions in public money. So those failures aren’t seen as just tragic; they're paid for by German taxpayers.

Compiled by the Coalition for Human Rights in Development — a grouping of civil society organizations — the report raises concerns about how KfW's overseas projects are affecting vulnerable communities. The coalition, which includes Urgewald, a German-based watchdog group known to track the social and environmental impacts of global finance, took aim at KfW's slogan, accusing the lender of "irresponsible banking" and causing "hidden harms." Development banks like KfW try to highlight how they are shaping futures in emerging economies. But the report alleges that infrastructure projects funded by the lender led to forced relocations of Indigenous communities in Indonesia and Mexico. Plans to back a graphite project in Tanzania were criticized for taking place without adequate engagement with locals or compensation. Marc Fodor, campaign coordinator at the Coalition for Human Rights in Development, thinks for KfW, social issues are "just an add-on" to business deals. Speaking with DW, Fodor said the report reveals that many projects backed by KfW were launched without prior informed consent from local populations, violating international standards on Indigenous rights and participatory development. Fodor also noted that KfW's own investigation into serious reprisals in Indonesia, where Indigenous people were reportedly arrested and beaten, concluded only that "free, prior and informed consent had not been respected." "It wasn’t just that people weren’t consulted. It was much more serious than that," he said. Apart from naming controversial KfW projects, the report criticized the lender's complaints procedure as lacking "provisions to ensure independence," adding that the lender was failing to "prevent, address and remedy reprisals against those raising concerns" around the impacts of its projects. The report doesn’t accuse KfW of deliberate wrongdoing, but it does suggest that the bank’s due diligence and oversight are falling short and are often unclear. "It's a maze… I was unable to understand what the policies are — even though that’s my bread and butter," Fodor told DW…

In response to the report, KfW issued a statement defending its practices. It says that for all three international business areas of the KfW, respect for human rights and responsible management of environmental and social risks are "a matter of course." "All financing by KfW and its subsidiaries is subject to sustainability guidelines. These require procedures and standards for environmental and social impact assessments for all financed projects," the statement added.

KfW also emphasizes that it employs more than 50 specialists and applies internationally recognized standards such as those of the World Bank, IFC and the Equator Principles — global guidelines banks use to avoid funding projects that harm people or the environment. Furthermore, in cases of serious potential harm to Indigenous communities, those communities are included in the process. "If risks are deemed unacceptable, financing is refused," the statement concluded. KfW later emailed DW with its response to criticism of a project it backed in Ulumbu, Indonesia. The development lender said it has "suspended financing for the planned infrastructure measures" and asked its local partner to fully implement the recommendations in an audit on the project's impact on local communities.