CAO Cases

Arne Hoel, The World Bank

Sub-Saharan Africa

Kenya / Bidco Bev. & Det.-01/Thika

Complainant
A group of Bidco current and former workers
Date Filed
June 10, 2016
Concerns
Labor conditions, terms of employment, occupational health and safety, freedom of association, rights of casual workers, employee grievance mechanism
Case Status
Open - Compliance
 

Synopsis

Complaint

IFC has an active project with Bidco Africa, a Kenyan private limited liability company that is one of East Africa’s leading manufacturers and distributors of fast moving consumer goods. IFC’s loan of up to US $36.5 million will 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.

 

The complaint was filed with CAO on behalf of a group of former and current workers of the Thika plant. The complaint raises concerns related to labor and working conditions, including terms of employment, occupational health and safety, and freedom of association. 

 

CAO Action

CAO found the complaint eligible for assessment in June 2016, and conducted a field visit to discuss options for addressing the complaint with the relevant parties. Subsequent to its field visit, CAO was unable to receive a clear indication from the complainants about how they wish to move forward. As such, CAO was unable to conclude the assessment process. In accordance with CAO’s Operational Guidelines, the complaint was referred to CAO's Compliance function for appraisal.

 

The purpose of CAO’s compliance appraisal is to determine whether or not an investigation of IFC's role in the project is merited in order to provide assurance to the World Bank Group President and the public of IFC’s compliance with relevant social and environmental policies and procedures.

 

This complaint raises concerns that potentially affect a large number of the client’s employees. While the complainants acknowledge improvements in some areas of the client’s labor practices, they raise ongoing concerns regarding a range of issues that are governed by IFC Performance Standard 2. CAO decided to conduct a compliance investigation of IFC’s E&S performance in relation to this project, and the Terms of Reference for the compliance investigation were published on April 4, 2017.  CAO conducted a site visit to Kenya in May, 2017.

 

In March 2018, CAO merged this case with a subsequent complaint, received in May 2017, on behalf of a former employee of the client claiming to represent more than 480 other former employees (Bidco Bev. & Det.-4/Thika). Complainants allege that Bidco Oil Refineries Limited unfairly terminated their contracts, subject them to poor working conditions, and prevented them from joining a trade union. 

 

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: Transferred

Compliance

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