IFC has an active project with Karot Power Company Limited (KPCL), a special-purpose vehicle incorporated in Pakistan and majority owned by China Three Gorges South Asia Investment Limited (CSAIL). The project involves providing a long-term corporate loan facility of up to US$100 million to support the construction, operation, and maintenance of a 720MW run-of-the-river hydropower plant being developed on the Jhelum River in Pakistan. 

The complaint was submitted to CAO by a former employee of the Karot project. The complaint raised concerns about the lack of payment of exit wages, as well as discrimination against local workers in relation to access to drinking water, accommodation conditions, and transportation at the project site. Irregularities regarding employment contracts and salary increases are also mentioned.

On August 3, 2020, the complaint was found eligible for further assessment. During the assessment process, CAO lost contact with the complainant and was unable to re-establish communication and advance the process. Since the dispute resolution process requires the respective complainant and the IFC client to voluntarily agree to participate in mediation, this case was referred to the Compliance function, in line with the 2013 Operational Guidelines.  

In January 2022, CAO conducted an appraisal (available in English and Urdu) of the case under the 2013 Operational Guidelines, based on the transitional arrangements agreed upon in the adoption of the 2021 CAO Policy. CAO conducted a preliminary analysis of the concerns raised by the complainants regarding labor issues. 

In December 2024, CAO merged this case with the ongoing Karot-03 and Karot-04 investigation process in relation to issues of unfair dismissal practices and forced resignation. The Terms of Reference for the investigation are outlined in Annex C of the Karot-02/03 Appraisal Report (available in English and Urdu.)

In December 2025, CAO finalized its compliance investigation and submitted its report to the IFC Board. Once the Board approves IFC’s Management Action Plan (MAP), CAO will publish both the investigation Report and IFC’s Management Report, including the MAP.