Kenya: Bidco-04/Thika

Date Filed
23 May 2017
Status
Open
Phase
Compliance
Country
Kenya

Case Tracker

Eligibility
Eligibility
Assessment
Assessment
Dispute Resolution
Compliance
Appraisal
Investigation
Monitoring
Status as of March 04, 2021
CURRENT Status
Monitoring (COMPLIANCE)
Status as of March 04, 2021

Complaint Overview

Complainant

A group of Bidco’s former workers

Concerns

Unfair dismissal, payment of employment benefits, rights of casual workers

Cross-Cutting Issues
Labor Community Health and Safety Children Women Violence / Abuse Loss of Life

Project Information

Region
Sub-Saharan Africa
Institution
IFC
Name & Number
Bidco Bev & Det 33385
Company
BIDCO AFRICA LIMITED
Sector
Manufacturing
Department
Manufacturing, Agribusiness & Services
Category
B
Commitment

US$23 million A loan and up to $13.5 million B loa

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 in the "Case Documents" section below.

 

Status

Based on CAO's Operational Guidelines, this case will remain open as CAO monitors IFC's response to the findings of investigation.

Status as of March 4, 2019

Case Documents

  • Dispute Resolution

    Complaint
    Letter of complaint
    May 02, 2017
    English
    Letter of complaint
    Assessment Report(s)
    CAO Assessment Report - Kenya Bidco-04
    Nov 01, 2018
    English
    CAO Assessment Report - Kenya Bidco-04
    IFC's Response to CAO's Assessment Report
    Nov 28, 2018
    English
    IFC's Response to CAO's Assessment Report
  • Appraisal Report(s)
    CAO Compliance Appraisal Report
    Mar 06, 2018
    English
    CAO Compliance Appraisal Report
    Audit Report(s)
    CAO Compliance Investigation Report
    Oct 02, 2018
    English
    CAO Compliance Investigation Report
    IFC Response to CAO Investigation Report
    Dec 17, 2018
    English
    IFC Response to CAO Investigation Report