CAO Cases

Arne Hoel, The World Bank

Sub-Saharan Africa

Uganda / Bujagali Energy-04/Bujagali

Complainant
Former employees of project contractor
Date Filed
March 21, 2011
Concerns
Worker health & safety and compensation
Case Status
Open - Compliance
 

Synopsis

Complaint
The Bujagali Energy project involves the development, construction, and maintenance of a run-of-the-river power plant with a capacity of up to 250 MW on the River Nile in Uganda.  Bujagali Energy Limited also manages the construction of approximately 100 kilometers of 132 kV transmission line on behalf of the Uganda Electricity Transmission Company Ltd. to improve transfer of electricity from the plant.

 

Bujagali Energy Limited is owned by Industrial Promotion Services (Kenya) Ltd. – the industrial development arm of the Aga Khan Fund for Economic Development and SG Bujagali Holdings, Ltd., an affiliate of Sithe Global Power LLC (US). IFC and MIGA are supporting the $750 million project along with several other international financial institutions, including the International Development Association, African Development Bank and European Investment Bank.  IFC’s investment comprises $100 million in A and C loans, and MIGA issued a $115 million guarantee to World Power Holdings Luxembourg S.à.r.l., a subsidiary of Sithe Global Power, for its investment in the project.

 

In March 2011, eleven former employees involved in the construction of the plant filed a complaint with the CAO on behalf of themselves and more than 30 former employees.  The complainants believe they have not been properly compensated by the plant’s sub-contractor after they suffered injuries sustained in the course of their work.  The complainants also raise concerns regarding the transparency of the compensation process and intimidation against workers requesting their benefits.

 

CAO Action
CAO found the complaint eligible for further assessment in March 2011. During the assessment process, the parties agreed to address their concerns through a CAO dispute resolution process, which led to the resolution of 86 out of 93 individual workers cases, amongst other outcomes. These include the establishment of a new community-based organization to create and sustain livelihood activities for the complainants and other disabled workers; the resuscitation and strengthening of a Medical Arbitration Board, one of the mechanisms available for resolution of individual worker compensation cases under Ugandan law; and a workshop convened by CAO in Uganda focused on strengthening company-level grievance mechanisms. In December 2013, six out of the seven unresolved cases were transferred to the CAO compliance function for appraisal.

 

In April 2015 CAO completed the compliance appraisal with regard to both the Bujagali 04 and 06 complaints. On the basis of the appraisal, CAO decided to conduct a compliance investigation into IFC's investment in Bujagali. The CAO investigation will assess whether IFC reviewed and supervised labor-related aspects of the project, in particular occupational health and safety issues, as required by Performance Standard 2. The investigation will also consider IFC’s approach to the issues of workers’ compensation given the commitments to “avoid […], minimize, mitigate prevent or compensate for adverse impacts on workers” set out in in its Policy on Social and Environmental Sustainability and Performance Standard 1.

 

Status

CAO finalized its investigation report and sent it to IFC/MIGA's management for official response on November 3, 2017. IFC/MIGA have 20 days to submit a response to the investigation report.

 

 

Status as of November 3, 2017

Project information

Institution
IFC & MIGA
Project Name & Number
Bujagali Energy Ltd 24408 (IFC) & 6732 (MIGA)
Department
Infrastructure
Company
Bujagali Energy (IFC); World Power Holdings (MIGA)
Sector
Utilities
Region
Sub-Saharan Africa
Country
Uganda
Environmental Category
A (IFC)
Commitment
$100m A & C loans (IFC), $115m guarantee (MIGA)

Case Tracker

Ombudsman

  • Eligible: Completed
  • Assessment Period: Completed
  • Facilitating Settlement: Transferred

Compliance

  • Under Appraisal: Completed
  • Under Audit: In Process

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