IFC provided a loan of up to US$36.5 million to Bidco Africa, a major Kenyan manufacturer and distributor of consumer goods, to support its US$46 million expansion project. The loan funded the construction and operation of new facilities in Kenya to increase production capacity. Bidco prepaid the loan in October 2023, concluding its active relationship with IFC.

In June 2016, CAO received a complaint on behalf of a group of former and current workers of the Thika plant. The complaint raised concerns related to labor and working conditions, including terms of employment, occupational health and safety, and freedom of association. 

In June 2016, CAO found the complaint eligible for assessment and conducted a field visit to discuss options for addressing the complaint with the relevant parties. After its field visit, CAO was unable to get a clear indication from the complainants on how they wished to proceed, and the assessment process could not be completed. In accordance with CAO Operational Guidelines, CAO transferred the case to its Compliance function for appraisal.

In March 2017, CAO finalized an appraisal for this case, concluding that a compliance investigation was merited. This decision was made as the complaint potentially impacted many of the client's employees. Although the complainants noted some improvements in the client's labor practices, they still had ongoing concerns about various issues under IFC Performance Standard (PS) 2.

In April 2017, CAO published the Terms of Reference for the investigation and conducted a site visit to Kenya in May 2017.  

In March 2018, CAO merged this case with a subsequent complaint, received in May 2017 (Kenya Bidco 4).

In October 2018, CAO completed its Investigation Report related to the Bidco 01 & 04 complaints, with the following findings:

i) Terms of employment and termination of casual workers: CAO found that IFC’s review and supervision were insufficient to ensure the client's employment policies for casual workers complied with national law. Specifically, IFC did not ensure that termination payments to former casual workers met Kenyan legal requirements.

ii) Occupational health and safety conditions: Although the client’s Occupational Health and Safety (OHS) conditions are better than many other factories in Kenya, CAO found that IFC lacks assurance that the client’s OHS performance meets IFC's "good international industry practice" standards.

iii) Union recognition: CAO found no compliance issue from IFC’s perspective because a 2012 union recognition agreement, upheld by Kenyan courts, remains in force.

iv) Grievance procedure, discrimination, and retaliation: CAO noted shortcomings in the client's grievance procedures, which IFC has identified and requested corrective actions to address. Further IFC supervision is needed to ensure compliance with non-retaliation and anti-discrimination requirements.

In December 2018, IFC provided a response to the CAO Investigation Report and proposed a series of actions in response to CAO’s findings at the project and systemic level.

At the project level, IFC committed to:

1. Require the client to submit quarterly and detailed labor reports, inform IFC about the resolution of pending labor cases, and commission a labor audit.
2. IFC’s supervision will review Bidco’s human resources practices, support the client in following good international industry practice for OHS, and focus on the implementation and effectiveness of non-discrimination policies and procedures, given the multiple ethnicities of staff at different levels within Bidco.
3. IFC will also continue to engage with the client on the management and effectiveness of its worker grievance mechanism.

At the systemic level, IFC committed to improve how project teams identify labor issues during pre-investment environmental and social (E&S) due diligence (ESDD) by updating its Labor Handbook, revising its Environmental and Social Review Procedures (ESRP), providing staff training, retaining a specialist labor consultant to help IFC E&S staff on projects with high-risk labor issues, and assigning an OHS Lead from among its E&S specialists to act as a resource on OHS matters across IFC projects.

CAO Monitoring Reports

In May 2024, CAO released its Omnibus Monitoring Report, encompassing eight cases under monitoring with the CAO Compliance function and including the First Monitoring Report for Bidco-01 and Bidco-04 cases. CAO examined the actions carried out by IFC since the disclosure of the Investigation Report.

CAO determined that, while some of IFC’s commitments would benefit from further supervision, the monitoring for all project-level actions would be closed because there is no reasonable expectation of any further action from IFC given the client's prepayment in October 2023. Regarding the systemic actions, the CAO found some IFC commitments were fulfilled while others were still pending completion. The case remains open for monitoring systemic-level actions.

CAO’s Omnibus Monitoring Report, which includes the First Monitoring Report for this case, is available in English.