The UK development bank has been accused of failing to protect workers from exposure to dangerous pesticides and paying “extreme poverty” wages on palm oil plantations in the Democratic Republic of the Congo.

Human Rights Watch said the CDC group, along with three other European development banks, had failed to properly oversee its investments in Feronia, one of Africa’s largest palm oil companies.

This lack of oversight has enabled Feronia and its subsidiary, Plantations et Huileries du Congo (PHC), to commit rights abuses and damage the environment, said HRW. The alleged abuses include the exposure of workers to harmful pesticides and dumping untreated industrial waste into waterways that provide drinking water.

The four banks – CDC, the Belgian development bank Bio, DEG from Germany and FMO of the Netherlands – have invested $100m (£77m) in the loss-making company since 2013. The banks all aim to promote economic opportunities in poorer countries.

The CDC has received £2bn from the aid UK budget over the past three years to invest in projects. In DRC, it owns 38% of Feronia.

The bank is currently investigating the alleged murder of a land activist by a Feronia security guard in July, amid claims by villagers they are harassed by plantation guards.

“These banks can play an important role promoting development, but they are sabotaging their mission by failing to ensure the company they finance respects the rights of its workers and communities on the plantations,” said Luciana Téllez Chávez, author of the HRW report into the abuses, published on Monday. “The banks should insist that Feronia remedies the abuses and commits to a concrete plan to end them.”

Boteka plantation in Équateur province, DRC. Photograph: Luciana Téllez Chávez/Human Rights Watch

HRW researchers interviewed more than 200 people, including 100 workers at three plantations in the north of the country, as well as Feronia’s former CEO and PHC’s director general.

Two-thirds of the workers exposed to pesticides, aged between 25 and 49, told researchers they had become impotent since starting work. They described skin irritation, pustules, blisters, eye problems and blurred vision, symptoms described in scientific literature as health consequences of pesticide exposure.

Christian Lokulo*, 30, has worked on a plantation in Lokutuin Tshopo province for three years, spraying 300 palm trees with pesticides every day, six days a week, for $1.90. He told HRW: “They didn’t warn me of sexual weakness [impotence], if they’d say it, we’d protest.

“They told us we need to protect ourselves, but they didn’t tell us what the risks are … We have discussed this a lot, a lot with the [company] doctors. The [company] doctor in Lokutu told us: ‘The work isn’t good but it’s better than unemployment.’”

With long-term use, some of the pesticides used on the plantations cause cancer or other lasting effects, the report found. PHC has compulsory medical testing for workers, but none of the workers interviewed had received the test results.

Dominique Azayo Elenga, a local leader, told HRW he filed a complaint with Feronia last year alleging the company’s untreated waste was contaminating its drinking water.

“My population [in Boloku] uses water that has dirt from the factory,” Azayo Elenga said. “They’re using it. I discussed it with Feronia but nothing has been done about it yet.”

The director general of PHC told the rights group he was not aware of complaints about contaminated water.

The four banks have described their investment in the company in one of the world’s poorest countries as a success story, providing thousands of jobs and social infrastructure in very remote communities.

But many plantation workers said their low wages left them struggling to feed their families. Managerial staff told researchers PHC frequently underpays wages and uses temporary contracts to withhold cash benefits, a violation of Congelese law. These allegations were denied by the company.

A palm fruit harvester in Boteka, Équateur province, DRC. Photograph: Luciana Téllez/Human Rights Watch

Women reported the lowest salaries, earning as little as $7.30 a month gathering fruit, with no protective equipment.

HRW said the development banks should ensure the businesses they invest in pay living wages to their workers. The organisation also said risk assessments should be carried out to evaluate the effect of projects on human rights and carry out mitigation, and that he complaint system should be strengthened.

Téllez Chávez said the banks, which have invested billions of dollars in developing countries, should carry out reforms “not only to protect the thousands of workers in oil palm plantations in Congo, but to set a standard that could prevent similar abuses by other companies that they finance”.

In a statement, a spokesman for CDC said the group was committed to resolving the issues highlighted by HRW. The statement said that, in the past six years, wages had doubled at Feronia and that $10m had been spent on medical and educational facilities, clean water and housing. The workforce is unionised and employees and their families get free healthcare, added the spokesman, with the average worker earning $3.30 a day, as agreed with unions – which he said was higher than a nurse or teacher would earn locally.

“Even the lowest paid workers earn one and half times the national minimum wage in DRC,” said the statement.

CDC said its palm oil mill effluent is “a mixture of waste oils and fats” and “does not threaten human health”, but recognised that “agrochemical application is an ongoing challenge at PHC”.

“The challenge has been compounded by the difficulty in sourcing equipment that is compatible with the local climate and ensuring regular supplies of equipment from Kinshasa to the company’s sites,” said the group.

PHC requires workers using pesticides to wear protective equipment at all times, and staff have been trained in its use, said CDC.

All four development banks were contacted for comment, but Bio, DEG and FMO referred the Guardian to the CDC for a response.

A spokesman for Feronia said they took the matters raised in the HRW report seriously and recognised that more needed to be done.

“The issues are not the result of lack of intent, awareness, or monitoring on the company’s behalf. They are mostly the result of economic realities where funding has never been sufficient to tackle all of the company’s ESG commitments at once. They are though important to the company which is committed to tackling them,” he said.



* Name has been changed.