CAO Cases

Arne Hoel, The World Bank

Sub-Saharan Africa

Kenya / Bidco Bev. & Det.-04/Thika

Complainant
A group of Bidco’s former workers
Date Filed
May 23, 2017
Concerns
Unfair dismissal, payment of employment benefits, rights of casual workers
Case Status
Open - Compliance
 

Synopsis

Complaint

IFC has an active project with Bidco Africa, a Kenyan private limited liability company, which is one of East Africa’s leading manufacturers and distributors of fast moving consumer goods. IFC’s investment consists of a loan up to US$36.5 million to support the US$46 million expansion of Bidco Africa. Specifically, the proceeds of the loan will be used for the construction and operation of new facilities to expand Bidco’s production capacity in Kenya.

 

In May 2017, a former employee of the Bidco Oil Refineries Limited lodged a complaint with CAO, claiming to represent more than 480 other former employees (the complainants). The complainants allege that their contracts were unfairly terminated in response to their demand to receive overdue benefits, including leave allowance accrued during their employment. The workers also claimed working under poor conditions while employed at the client’s facilities. They also claimed the client prevented them from joining a trade union. 


CAO Action 

CAO found the complaint eligible for further assessment in July 2017. During CAO's assessment, the company expressed willingness to engage the complainants in a dialogue process facilitated by CAO. However, the complainants could not agree among themselves how to engage the CAO. Therefore, in accordance with CAO's Operational Guidelines, the complaint was referred to CAO's compliance function.

 

Considering the similarity of the issues raised, CAO decided to merge this complaint with the ongoing Bidco Bev. & Det.-01/Thika compliance investigation.

 

On October 2, 2018, CAO completed its investigation report related to the Bidco 01 & 04 complaints. CAO’s findings are summarized below:

 

i) Terms of employment and termination of casual workers: CAO finds that IFC’s review and supervision in relation to this issue were not sufficient to provide assurance that the client’s employment policies with regard to casual workers were consistent with national law as required by IFC Performance Standard 2. In particular, CAO finds that IFC has not ensured that payments to former casual workers upon termination were consistent with Kenyan legal requirements as provided by the Employment Act. 

 

ii) Occupational health and safety conditions: While, the client provides an Occupational Health and Safety (OHS) environment that is above the standard likely to be encountered in many other factories in Kenya, CAO finds that IFC lacks assurance that the client’s OHS performance meets the IFC requirement for “good international industry practice.”

 

iii) Union recognition: CAO found that this is not a compliance issue from an IFC perspective, since Kenyan Courts have ruled on this issue resulting in a 2012 union recognition agreement that remains in force.

 

iv) Grievance procedure, discrimination and retaliation: Regarding grievance handling CAO notes that IFC has identified shortcomings in the client’s procedures, which confuse grievance redress with a process for disciplinary, ethical and anti-corruption enforcement. IFC communicated this to the client and requested corrective actions in accordance with Performance Standard 2. This is consistent with IFC’s supervision duty. In relation to discrimination and retaliation CAO finds that further supervision by IFC is required to verify compliance with the non-retaliation and anti-discrimination requirements of PS2, paras. 14 to 16.

 

All documents relating to this case are available under "View Documents" below.


 

Status 

In accordance with CAO's Operational Guidelines, this case will remain open as CAO monitors IFC's response to the investigation’s findings.

 

Status as of March 4, 2019


Project information

Institution
IFC
Project Name & Number
Bidco Bev & Det 33385
Department
Global Manufacturing & Services
Company
BIDCO AFRICA LIMITED
Sector
F-Al - Other food
Region
Sub-Saharan Africa
Country
Kenya
Environmental Category
B
Commitment
US$23 million A loan and up to $13.5 million B loa

Case Tracker

Ombudsman

  • Eligible: Completed
  • Assessment Period: Completed

Compliance

  • Under Appraisal: Completed
  • Under Audit: Completed
  • Monitoring: In Process