LONDON (Reuters) - EDF Trading, subsidiary of French utility EDF, said on Thursday it has ended its involvement in a biogas project in Honduras which an environmental group claims is linked to human rights abuses.
"We have taken the situation in Honduras very seriously and have spent the past few months looking at our options in respect to our withdrawal," said John Rittenhouse, chief executive of EDF Trading, in a statement.
"We have therefore issued our notification of termination to the seller and will no longer be involved in this project," he said.
The Aguan biogas project in Honduras is applying for registration under the United Nations' Clean Development Mechanism (CDM), which rewards firms for investing in emissions-cutting schemes in developing countries.
Environmental watchdog group CDM Watch claims the project, which is being developed by Grupo Dinant subsidiary Exportadora del Atlantico, is linked to human rights violations including the killing of more than 20 peasants in the past year who were occupying the land.
German Rodriguez, named in a U.N. project design document as a contact at Exportadora del Atlantico, told Point Carbon News that he did not "agree with the findings of the report."
This week, the Carbon Markets Investors Association said, should any human rights abuse be proven, all companies involved in the project should terminate their commercial relationship with it.
CDM consultants Perspectives was a project participant but terminated its involvement in the project in January.
The German Investment and Development Bank had pledged a loan of more than $20 million to the project but canceled its contractual commitments on April 8, CDM Watch said.
The CDM's executive board, is likely discussing the project at its meeting in Bangkok, which draws to a close on Friday.
Reporting by Nina Chestney