IFC “doubts” labour fears in Haiti, approves loan

17 November 2003

On 9 October, the World Bank’s private sector lending arm, the International Finance Corporation (IFC) approved a loan of some US$ 20 million to the Dominican Republic’s largest Export Processing Zone operator, Grupo M, for a new development on the border with Haiti.

During the recent World Bank Annual Meetings in Dubai, labour union representatives had lobbied Peter Woicke, head of the IFC, for assurances that support would only be given on the condition that Grupo M agreed to protect core labour standards. Woicke committed to the application of the core labour standards to future IFC loans and said he would “consider” their application to the pending Grupo M case. However, according to management recommendations made to the IFC Board, “these additional standards are beyond IFC‘s present corporate policy so we are not proposing to include them.”

Despite “serious doubts” about the credibility of ICFTU charges of labour violations against Grupo M, the IFC advised the company to commission an independent investigation of the allegations. “We will only commit the proposed investment if this investigation confirms our provisional assessment and the allegations are shown to be unfounded.” ICFTU General Secretary Guy Ryder described this requirement as “an important step forward”, however he reasserted the need for the investigation into Grupo M’s record to be “truly credible and transparent”. The investigation is currently underway, and the IFC has committed to do a briefing on its findings with interested parties before it goes to the Board.

We will only commit the proposed investment if this investigation confirms that the allegations are unfounded

The first factory in the new free trade zone along the Haitian-Dominican border opened in August. Three hundred workers have been hired to assemble Levi’s jeans in the first of three factories to be built by Grupo M. The Haitian NGO, Groupe d’Appui aux Rapatries et Refugies, reports that employees have been forbidden to organise themselves or discuss politics while inside the zone. Concerns for workers’ rights have increased following the 16 July report in the Haiti Progres newspaper that Grupo M’s private security force for the new free zone is headed by a “renowned criminal”.

Villardouin Joseph, a member of a local peasant farmers association, was released from prison on 4 September. Joseph had been arrested by police on 22 May for supposed involvement with resistance to the seizure of farmland for the construction of the free trade zone. No paperwork relating to his arrest and detention was presented to him, and during his three and half months in prison he did not appear before any judge. In the management proposal to the IFC Board, the issue of ‘economic displacement’ was addressed through a Social Compensation Plan for 96 farmers, which is to be implemented over a seven year period. Critics argue that this massively underestimates the number of individuals affected. Inward migration, another major concern of Haitian NGOs is to be mitigated through “encouraging support for infrastructure development”, urban planning, small business support and HIV/AIDS awareness programs.