Complaint lodged for forced labour in IFC-funded project in Uzbekistan

26 September 2016

In June, a victim of forced labour in Uzbekistan’s cotton production and three Uzbek human rights defenders filed a complaint against the International Finance Corporation (IFC, the World Bank’s private sector lending arm) with the Compliance Advisor Ombudsman (CAO, the IFC’s accountability mechanism). The complaint relates to a $40 million loan to Indorama Kokand Textile approved in December 2015 and alleges that the IFC “does not have adequate mitigation measures to ensure its investments … are not supporting forced labour” and that the “IFC is knowingly financing a company that has perpetuated and benefited from forced labour since it established operations in Uzbekistan.” The complaint follows previous calls for suspension of World Bank Group (WBG) lending to the country (see Observer Winter 2016, Autumn 2014).

The 2016 US Department of State Trafficking in persons report gave Uzbekistan its lowest possible rating, noting that the government has been “aggressively confronting, harassing, and detaining independent monitors attempting to observe and document the harvest.” A September report by human rights organisation International Labor Rights Forum documented the Uzbekistan government’s use of forced labour noting that “at present, the WBG continues to finance agricultural projects in Uzbekistan through loans from the IBRD, IDA, and IFC” and that “barring suspension or cancellation of loans, approximately $308 million will be disbursed … in the next five years to support its agricultural industry.” Contributing to a July report by NGO, Human Rights Watch, an Uzbek exiled for fear of retribution for his human rights activities in Uzbekistan stated that “the IFC should support sustainable rural development in Uzbekistan, not projects that perpetuate the government’s forced labour system for cotton production”.