Farmers in the Global South bear the brunt of European public investments on dangerous pesticides outlawed by the EU
Tomas Statius, Gideon Sarpong, Sara Cincurova, Aida Delpuech, Jonathan Moens, Hanke van den Broek, Or Goldenberg, David Slings
As the climate crisis intensifies and environmental health becomes increasingly urgent, Europe has made moves to limit its domestic reliance on harmful pesticides. The European Union has banned dozens of hazardous chemicals over the past decade, with plans to reduce pesticide usage by 50% by 2030. These actions are meant to protect both ecosystems and human health across the continent.
Yet, behind this progressive front lies a troubling contradiction. While European policymakers tighten restrictions at home, public development banks funded by European taxpayers continue to finance agricultural projects abroad that rely on the same dangerous chemicals banned within the EU. A cross-border investigation by Lighthouse Reports and global media partners has uncovered how farmers in the Global South are being exposed to pesticides considered too toxic for European soil.
This investigation traces the financial flows, chemical trails, and health risks tied to three major cases: eucalyptus plantations in Paraguay, cotton farming in Uzbekistan, and rubber plantations in Ghana. At the center of this issue are European state-owned development banks — institutions established to promote growth and sustainability — now facing accusations of hypocrisy and environmental negligence.
EU Policy vs. Practice Abroad
The European Union’s ban on certain pesticides was born out of well-documented scientific evidence linking these chemicals to cancer, reproductive harm, soil degradation, and the collapse of insect populations. These bans, though sometimes contested by agrochemical lobbies, reflect a public commitment to safer farming practices.
However, EU regulations contain a loophole. While banned pesticides cannot be sold or used within Europe, these same chemicals can still be produced and exported abroad. This inconsistency has come under fire from international watchdogs and environmental groups.
Public development banks — such as France’s AFD, the Netherlands’ FMO, Germany’s DEG, the UK’s CDC Group (now British International Investment), and the European Bank for Reconstruction and Development (EBRD) — are complicit in this system. Though their mission is to support sustainable development in emerging economies, they have repeatedly invested in agricultural projects where hazardous pesticide use is prevalent.
Case Study 1: Poisoned Rubber in Ghana
In the western region of Ghana, thousands of smallholder farmers have been enlisted in a decades-long effort to grow rubber trees, under the supervision of Ghana Real Estate Limited (GREL), the country’s leading rubber firm. The project, funded by the Agence Francaise de Développement (AFD), aimed to boost rural employment and income.
However, interviews conducted by Lighthouse Reports reveal a darker side. Farmers report being supplied with paraquat, a herbicide banned in the EU since 2007 due to its extreme toxicity. Even brief exposure can cause respiratory failure, organ damage, or death. The World Health Organization considers paraquat one of the most dangerous pesticides in circulation.
Farmers described handling the chemical without adequate protective gear or training. “We didn’t know how toxic it was,” said one farmer. “It was just handed to us as part of the program.”
Despite environmental impact assessments and training materials, enforcement and monitoring were weak. NGOs working in the region report rising cases of skin diseases and respiratory issues among local workers.
Case Study 2: Cotton and Contamination in Uzbekistan
Uzbekistan’s cotton sector has long been controversial, previously linked to forced labor and ecological damage. In recent years, efforts have been made to reform the industry, including investments from the European Bank for Reconstruction and Development (EBRD).
Two EBRD loans were granted to Indorama Agro, a cotton producer committed to environmental reform. But documents obtained by Lighthouse Reports and corroborated by watchdog groups reveal that the company continued to use banned chemicals like chlorpyrifos, indoxacarb, and chlorates — all prohibited in the EU.
These substances are known to be harmful to both humans and wildlife. Chlorpyrifos, for instance, can impair brain development in children and is linked to neurological damage. While EU farmers are prohibited from using it, farmers in Uzbekistan are still exposed to it, often without adequate safeguards.
The contradiction has drawn criticism from human rights groups and environmental experts. “You can’t claim to uphold ethical standards while financing projects that violate them abroad,” said one European Parliament member who reviewed the findings.
Case Study 3: Toxic Trees in Paraguay
In Paraguay, the Dutch development bank FMO has channeled funds into Arbaro Fund, which manages eucalyptus plantations through subsidiaries Forestal San Pedro and Foresto Apepu. These plantations are presented as sustainable forestry initiatives that support local employment and climate resilience.
But sustainability claims fall apart under scrutiny. According to internal audits and reports by local NGOs, the plantations have used haloxyfop — a herbicide banned in the EU due to its persistence in soil and potential to harm aquatic life.
The environmental risks are compounded by the fact that eucalyptus monocultures can drain groundwater, disrupt ecosystems, and reduce biodiversity. Farmers near the plantations report declining water tables and unexplained health issues. One activist described the operations as “green colonialism disguised as sustainable development.”
Institutional Failures and Loopholes
Public development banks insist that they uphold strict environmental and social criteria. But experts say these guidelines often lack teeth. Once funding is disbursed, monitoring tends to be limited, and violations are rarely sanctioned.
“It’s a box-ticking exercise,” said one former development bank employee. “There’s little follow-up unless something blows up.”
Moreover, EU regulations that govern domestic pesticide use do not extend to how public money is used abroad. This regulatory blind spot allows Europe to maintain a clean image at home while fueling toxic practices elsewhere.
The lack of transparency further complicates accountability. Many investment agreements are shielded by commercial confidentiality clauses. Environmental assessments, when conducted, are rarely made public. This opacity makes it difficult for journalists, activists, or local communities to hold investors accountable.
Human Cost and Environmental Fallout
The consequences of these financing choices are most acutely felt by farmers, laborers, and rural communities across the Global South. In Ghana, paraquat exposure has led to an uptick in hospital visits. In Uzbekistan, chemicals banned in Europe are sprayed on fields that children sometimes cross on their way to school. In Paraguay, communities near eucalyptus plantations complain of water shortages and unexplained illnesses.
Dr. Marcos Orellana, the UN Special Rapporteur on toxics and human rights, called the situation “a textbook case of environmental injustice.”
“Europe is exporting harm,” he said. “It’s protecting its own citizens while exposing others to risks it has deemed unacceptable.”
Reactions and Calls for Reform
The revelations have triggered calls for urgent reform. Environmental NGOs have urged the EU to close the legal loophole that allows the export of banned pesticides. Lawmakers in the European Parliament have begun to raise questions about the role of development banks in perpetuating harmful practices abroad.
Some progress is being made. The European Commission is reviewing its rules on the export of hazardous chemicals. France has pledged to phase out the export of banned pesticides. But enforcement remains patchy, and there’s little consensus on how to regulate development finance.
Lighthouse Reports’ investigation has sparked internal reviews within at least two of the banks involved. FMO and AFD have both issued statements acknowledging the concerns and pledging to strengthen their environmental safeguards. However, critics say that without binding regulation, voluntary commitments are unlikely to solve the problem.
Europe’s public development banks were designed to support sustainable growth in the Global South. But by financing projects that rely on EU-banned pesticides, they are undermining that very mission — and putting vulnerable communities at risk.
This investigation reveals a pattern of toxic trade, driven not just by agricultural necessity but by regulatory inconsistency and lack of oversight. Until Europe aligns its foreign investments with its domestic values, its commitment to sustainability will remain incomplete.
The fields of Ghana, Uzbekistan, and Paraguay are bearing the cost of this hypocrisy. And unless action is taken, the divide between what Europe preaches and what it funds will only widen.