CAO Cases

Arne Hoel, The World Bank

Sub-Saharan Africa

Uganda / Bujagali Energy-06/Bujagali

Complainant
Former Bujagali construction workers
Date Filed
April 03, 2013
Concerns
Unpaid wages
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.

 

The complaint was filed by the Chairman of an informal association of former Bujagali construction workers acting on behalf of himself and over 300 workers at the construction camp and dam site. The complainants raise concerns about unpaid wages and benefits from as far back as 2008.

 

CAO Action
CAO found the complaint eligible for further assessment in April 2013. The assessment concluded in November 2013 with the parties agreeing to engage in a voluntary dispute resolution process facilitated by CAO. During the discussions on the design of the dispute resolution process, the parties were unable to reach consensus on how to move forward. Given this impasse, CAO brought the dispute resolution process to a close in November 2014. In accordance with CAO’s Operational Guidelines, the case was transferred to CAO’s compliance function for appraisal of IFC’s/MIGA’s performance with regard to the project.
 
In April 2015, CAO issued a compliance appraisal with the decision to conduct an investigation in relation to the two labor related complaints regarding the Bujagali project (Bujagali-04 and -06).
 
CAO released its compliance investigation report concerning both complaints on December 12, 2017. The report made several non-compliance findings in relation to IFC’s/MIGA’s assessment of project. As relates to the Bujagali-06 complaint, CAO finds that IFC put in place a framework to ensure that sub-contractors working on the project were covered by IFC’s labor standards. During supervision, however, when a dispute arose in relation to payment of wages to construction workers employed by a sub-contractor, IFC determined that these workers were not covered by its labor standards. CAO finds that IFC erred in deciding that the Bujagali-06 complainants were not covered by its E&S requirements. As a result, CAO finds that allegations the construction of the project had significant adverse effects on employees of the subcontractor were not addressed.

 

IFC provided a public response to the CAO investigation report.

 

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

 

Status

As per CAO's Operational Guidelines, this case will remain open as CAO monitors IFC's response to the findings.

 

Status as of December 12, 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: Completed
  • Monitoring: In Process