In 2013, IFC’s Board approved a project for the construction of a 280-room 5-star hotel in Conakry, Guinea. The project was implemented by Palma Guinée S.A., which is fully owned by the Topaz Group of companies. Palma Guinée S.A was incorporated specifically to develop and own the hotel, to be operated under the Sheraton brand. At the time of approval, Guinea’s capital had no 5-star hotels and the projected hotel was expected to help change this situation and become an important part of Conakry’s business infrastructure. The total project cost is estimated at US$61 million. IFC’s investment is a secured senior loan package of up to $26 million to Palma Guinée S.A comprising an A loan for IFC’s own account of up to $15 million and a syndicated B loan of $11 million. Palma Guinée S.A prepaid the entire outstanding loan balance on September 15, 2022

A complaint was filed to CAO on January 19, 2023 by the International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco, and Allied Workers’ Associations (IUF) and Global Labor Justice-International Labor Rights Forum (GLJ-ILRF) on behalf of the workers of the Sheraton Grand Conakry hotel. The complainants alleged labor-related issues, particularly unpaid wages, unsafe working conditions, lack of health benefits, interference with their rights to participate in and be represented by a trade union, such as delaying the election of workers representatives; discouraging trade union activity through misinformation, intimidation, and retaliation; unfair and unlawful termination practices with no alternatives to retrenchment or assurances of future employment which resulted in financial consequences. The complainants also raised concerns about failure to properly inform workers of the health impacts of closure of Sheraton Grand Conakry hotel due to mold contamination found in December 2021, and lack of due diligence ensuring that the client was compliant with IFC’s Performance Standards.

In August 2023, CAO found the complaint eligible for assessment. When making the eligibility determination, CAO applied Paragraph 49 of the CAO Policy, as the complaint was submitted within 15 months after project exit, and the additional criteria were met because: a) CAO found that the complainants’ participation in good faith negotiations with IFC constitutes a compelling reason why the complaint could not be made before exit; b) the complaint relate to the IFC exited project with Palma Guinee S.A, raises environmental and social issues within CAO’s mandate, and was presented on behalf of current and former workers of the Sheraton Grand Conakry who are, or may be, affected by the issues raised; and c) after consultation with IFC, CAO found that accepting the complaint would be consistent with its mandate, as it could contribute to enhancing the environmental and social outcomes of projects or sub-projects, and foster public accountability and learning regarding labor issues and the application of Performance Standard 2 in the tourism sector.

In January 2024, CAO concluded the assessment phase. During the assessment, Palma Guinée S.A indicated that it is no longer a client of IFC and abstained from participating in the CAO process. At the request of the complainants, the complaint has been transferred to CAO’s Compliance function for appraisal.

CAO’s Assessment Report is now available in English and French under the “Case Documents” section below.