Arne Hoel, The World Bank

Uzbekistan: Indorama Kokand/Hamkor Bank-01/Uzbekistan

CASE INFORMATION

 

Case Name

Indorama Kokand/Hamkor Bank-01/Uzbekistan

 

Complainants

Cotton laborers and human rights monitors (cotton fields)

 

Date Filed

June 30, 2016

 

Concerns

Forced labor, supply chain

 

Status

Open

 

Phase

Dispute Resolution

 

PROJECT OVERVIEW

IFC has an active project with Indorama Kokand Textile (IKT), a cotton yarn producer, to finance the expansion of a textile plant in Fergana Valley, Uzbekistan. IFC also has seven active projects with Hamkorbank, a licensed commercial bank headquartered in Andijan, Uzbekistan.  These projects include a combination of equity and loan investments, as well as a Global Trade Finance Program. According to IFC, its loans aim to enable Hamkorbank to expand the scope of its lending program to micro, small, and medium enterprises (MSMEs), with a focus on remote areas, which is aligned with IFC’s financial markets strategy for Uzbekistan. IFC’s Global Trade Finance Program (GTFP) supports selected Hamkorbank export/import transactions.

 

COMPLAINT

In June 2016, CAO received a complaint related to several IFC projects in Uzbekistan.  CAO found the complaint eligible in August 2016 in relation to two IFC clients: IKT and Hamkorbank. The complaint was filed by a coalition of non-governmental organizations (NGOs) on behalf of Uzbek human rights monitors and alleged victims of forced labor in the cotton fields (the “Complainants”). The complaint raises concerns about the existence of forced labor in IKT’s supply chain. With regard to Hamkorbank, the complainants state that there is significant risk that Hamkorbank participates in a “coercive financial system and is not conducting adequate due diligence to ensure its participation is not supporting forced labor and the related attacks against independent labor monitors.” The complaint also states that IFC’s investment in Hamkorbank may finance companies that utilize or benefit from forced labor in the cotton system, and that IFC has not fulfilled its due diligence and supervision responsibilities. 

 

CAO ACTION

CAO found the complaint eligible for assessment in August 2016. During the assessment, the Complainants (with the exception of one individual), IKT, and Hamkorbank agreed to engage in a voluntary dialogue process. CAO will facilitate this process, including assisting the parties as they prepare for dialogue, agree on ground rules, and work together in a collaborative way to try to reach resolution of the issues raised in the complaint. CAO’s assessment report is available at the below links in English, Russian and Uzbek.

 

STATUS

A dispute resolution process is underway.

 

DOCUMENT LINKS

 

CAO Assessment Report, March 2018

English

Russian

Uzbek

 

IFC’s Response to CAO Assessment Report, March 13, 2018

English

 

Letter of Complaint, June 2016

English

 

Status as of April 20, 2018