Nigeria: Eleme Fertilizer II-01/Port Harcourt

Date Filed
11 Apr 2018
Status
Closed
Phase
Compliance
Country
Nigeria

Case Tracker

Eligibility
Eligibility
Assessment
Assessment
Dispute Resolution
Compliance
Appraisal
Investigation
Monitoring
September 17, 2021-May 30, 2024
Closed
CURRENT Status
Closed (COMPLIANCE)

Complaint Overview

Complainant

IEFCL employees

Concerns

Labor, violation of PS2, low wages, discrimination, safety

Cross-Cutting Issues
Labor Community Health and Safety Discrimination

Project Information

Region
Africa
Institution
IFC
Name & Number
Eleme Fertilizer 30967; Eleme Fertilizer II 40420
Company
Indorama Eleme Fertilizer and Chemicals Ltd.
Sector
Manufacturing
Department
Manufacturing, Agribusiness & Services
Category
B
Commitment

Includes two A loans (resp. US$150 M & US$120 M)

Synopsis

Project Overview

IFC has several active projects with Indorama Corporation and Chemicals (Indorama) and is leading a debt financing package to Indorama Eleme Fertilizer and Chemicals (IEFCL), part of Indorama, for the construction of a third urea fertilizer line (“Line 3”). 2016, IFC supported the construction of the first urea fertilizer facility (“Line 1”) and the second urea fertilizer line (“Line 2”), located at the same site as "Line 1" and "Line 2" in Port Harcourt, Nigeria.

Complaint

In April 2018, CAO received a complaint submitted by 134 IEFCL employees raising a series of concerns regarding the company’s labor and working conditions and use of security forces, including salaries/welfare, discrimination, unionization, tax calculation and union dues withholdings, retaliation against complainants and protesters, workplace safety, hazards and hazard allowance, and healthcare coverage.

CAO Action

In May 2018, CAO found the complaint eligible for assessment, and conducted an assessment trip in September 2018. During the assessment, there was a lack of consensus amongst the parties to engage in a dispute resolution process. In accordance with CAO’s Operational Guidelines, the complaint was referred to the compliance function.

In December 2019, CAO completed its compliance appraisal of the case. The appraisal found that complainants’ issues were potentially serious, prompting enhanced IFC supervision since July 2017 to address labor and security concerns. IFC documented corrective actions for identified gaps against Performance Standards (PS). However, concerns remained about IFC's response to allegations of the company's retaliatory actions against workers who raised grievances. CAO concluded that this issue raised significant concerns about the application of PS2 to IFC's investments and warranted further investigation, focusing on IFC's review and supervision of the company's disciplinary procedures and grievance handling.

In June 2021, CAO finalized the Compliance Investigation Report in relation to the case. The investigation found non-compliance in relation to IFC’s supervision of the environmental and social (E&S) risks and impacts of the project, and was the report was sent to IFC for formal response.

CAO’s investigation found that, despite IFC's enhanced supervision and documented improvements since 2018, there was insufficient evidence that the Company’s Worker Grievance Mechanism (WGM) met PS2 requirements. Particularly, there was no assurance that the WGM provided workers with a safe and fair way to address concerns.

The investigation also found IFC's response to allegations of company retaliation against workers inadequate, marking non-compliance with PS2, which ensures workers can organize and raise grievances without fear of reprisal. An appropriate response would have included actions such as engaging with workers alleging reprisals and thoroughly reviewing the WGM's effectiveness and the application of disciplinary procedures. The lack of guidance on handling retaliation allegations at the IFC and client level contributed to this non-compliance finding.

Finally, CAO concluded that the available evidence, in this case, was insufficient to make findings of adverse outcomes in relation to the complainants’ allegations of retaliation.

In response to CAO’s Investigation Report, IFC committed to hiring a third-party consultant to review client implementation of PS2 regarding the “fair treatment” of workers and their ability to raise grievances “without any retribution.”

In September 2021, CAO published its Compliance Investigation Report, and following clearance from IFC’s Board, the IFC’s Response and Management Action Plan.

CAO Monitoring Reports

In May 2023, CAO completed its first Monitoring Report in relation to this case with a decision to keep the case open under monitoring phase.

In May 2024, CAO completed its Second Monitoring Report, which was included in the Second Omnibus Monitoring Report, with the decision to close the case after monitoring. CAO reached this decision on the basis that IFC’s supervision confirmed that the company updated its employee policies to provide for handling anti-retaliation concerns and that all employees could access these provisions. CAO noted that it was not in a position to review the effectiveness of these provisions since no specific incident had been received by the company via its anti-retaliation process (as reported to CAO in late 2023).

The Second Omnibus Monitoring Report is available in English.

Status

The case is now closed.

Status as of May 30, 2024.

Case Documents

  • Assessment Report
    Assessment Report
    Feb 01, 2019
    English
    Assessment Report
    IFC Response to Assessment Report
    Feb 25, 2019
    English
    IFC Response to Assessment Report
  • Compliance

    Appraisal Report
    Compliance Appraisal Report
    Dec 04, 2019
    English
    Compliance Appraisal Report
    Terms of Reference
    Terms of Reference
    Dec 09, 2019
    English
    Terms of Reference
    Investigation Report
    Investigation Report
    Jun 09, 2021
    English
    Investigation Report
    IFC Management Response and Management Action Plan
    Jul 16, 2021
    English
    IFC Management Response and Management Action Plan
    Monitoring Report(s)
    Management Monitoring Report on Implementation of MAP
    Sep 22, 2022
    English
    Management Monitoring Report on Implementation of MAP
    Omnibus Compliance Monitoring Report
    May 25, 2023
    English
    Omnibus Compliance Monitoring Report
    Management Monitoring Report on Implementation of MAP
    Oct 06, 2023
    English
    Management Monitoring Report on Implementation of MAP
    Omnibus Monitoring Report (Second Monitoring Report)
    May 20, 2024
    English
    Omnibus Monitoring Report (Second Monitoring Report)
  • Mailchimp Survey

     

    We Value Your Feedback

    Thank you for visiting CAO’s new website. Help us improve your experience by taking our short survey.

    Give Feedback No thanks