By Witness Radio Team
Germany’s state-owned development bank, KfW, is facing renewed scrutiny as Civil Society Organizations (CSOs) issue detailed recommendations to reform its Complaint Mechanism, citing systemic failures to prevent harm, address reprisals, and ensure accountability in projects it finances across developing countries.
The recommendations follow the release of “Irresponsible Banking”, a report by the Coalition for Human Rights in Development launched in September 2025, which documented alleged links between KfW-backed projects and land dispossession, environmental degradation, and threats against human rights defenders (HRDs).
The report documented cases in Indonesia, Mexico, and Tanzania in which affected communities claimed to have faced intimidation, livelihood losses, and violations of their right to Free, Prior, and Informed Consent (FPIC) by KFW-backed projects.
In response, a coalition of organizations, including Asia Indigenous Peoples Network on Extractive Industries and Energy (AIPNEE), Community Empowerment and Social Justice Network (CEMSOJ), Defenders in Development Campaign (DiD), and Protection International, has submitted over 20 detailed recommendations aimed at fundamentally strengthening the independence, transparency, and effectiveness of KfW’s Complaint Mechanism.
Some of the key recommendations include a call for structural independence, a separate budget for the mechanism established and managed independently of the management of the KFW Bank, taking into consideration reprisals suffered by project-affected people, and mentioning that the Complaints Office will commit to implementing a more comprehensive approach, looking beyond individual complainants, among others.
These proposals stem from documented concerns that communities affected by KfW-funded projects struggle to access meaningful remedies.
According to the KFW irresponsible banking report, projects branded as sustainable and pro-development have, in several cases, been linked with forced displacement, inadequate consultation, and reprisals against those who speak out.
“KfW calls it ‘responsible banking’, but it’s using German taxpayers’ money to bankroll projects that displace Indigenous Peoples, destroy ecosystems, and endanger human rights defenders. If KfW wants to demonstrate real responsibility, it needs to listen to local communities and ensure their voices are not silenced.” Dalile Antunez, collaborative researcher at the Coalition for Human Rights in Development.
Being fully owned by the German government, CSOs emphasize that its operations must align with the United Nations Guiding Principles on Business and Human Rights and Germany’s Supply Chain Due Diligence Act.
According to the United Nations Guiding Principles on Business and Human Rights, business enterprises are expected to respect human rights, meaning they should avoid infringing on others’ human rights and address adverse human rights impacts with which they are involved. This is in addition to Germany’s Supply Chain Due Diligence Act, which requires enforcement of corporate accountability for human rights and environmental standards across global operations.
But such standards have never been adhered to by development projects such as KFW-funded projects.
KfW bank is further urged to adopt a comprehensive anti-reprisals framework, including concrete measures such as suspending project disbursements where threats persist, documenting all reported reprisals in a public registry, providing emergency assistance where needed, and communicating incidents to oversight bodies such as the German Institute for Human Rights.
Civil society groups argue that these recommendations demonstrate the need not only for stronger safeguards but also for genuine participation by affected communities in remedial processes.
The recommendations, therefore, propose that complainants have the authority to choose whether their case proceeds through dispute resolution, prior resolution, or compliance review.
They also call for guaranteed access to all information used in decision-making, publication of both admissible and inadmissible complaints, and extended deadlines for filing complaints to account for delayed discovery of harm.
Additionally, CSOs advocate for a simplified complaint process that allows grievances to be submitted orally or through accessible channels, recognizing the barriers faced by remote or marginalized communities.
“Many Indigenous communities in remote areas may face barriers such as limited access to technical support or a lack of experience in preparing formal written complaints, particularly in the absence of supporting NGOs. So, they should be able to file complaints verbally or in other forms and through various channels. The current system is overly complex, creating barriers for communities to submit grievances independently without supporting NGOs,” reads part of the recommendations.
CSOs argue that unless KfW Bank strengthens the independence of its Complaint Mechanism and adopts enforceable protections against reprisals, its sustainability commitments risk remaining utopian rather than realistic and transformative.
