IFC has an active project with Karot Power Company Limited (KPCL), a special-purpose vehicle incorporated in Pakistan and majority-owned by China Three Gorges South Asia Investment Limited (CSAIL). The project involves providing a long-term corporate loan facility of up to US$100 million to support the construction, operation, and maintenance of a 720MW run-of-the-river hydropower plant being developed on the Jhelum River, in Pakistan.

In May 2022, CAO received a complaint submitted by eight community members of the Azad Jammu and Kashmir (AJK) community, citing concerns related to labor issues, including unfair hiring practices at the company; discrimination in hiring practices against local populations because of their community of origin; lack of transparency in the recruitment process; and incidents of unfair dismissal and forced resignation of those who were employed.

In June 2022, CAO found the complaint eligible for assessment. At the complainants’ request, the case was referred to IFC.

In March 2023, the complainant requested the resumption of the CAO process and the end of their engagement with IFC. CAO conducted an assessment, which was completed in August 2023. During the assessment, both parties expressed their interest in engaging in a dispute resolution process to address the issues raised in the complaint.

In July and August 2023, CAO carried out in-person capacity-building sessions with the complainants and the company to prepare them for a CAO-facilitated dispute resolution process.

In October 2023, the parties had their first joint session to discuss the ground rules that would guide the dispute resolution process, and the complainants presented their claims. This joint session was followed by several bilateral meetings to prepare the parties for a second joint session, which was held in November 2023.

In February 2024, CAO facilitated two additional joint sessions, during which the parties continued their discussions regarding the issues related to the complaint. Since then, CAO has continued to meet bilaterally with the parties monthly.

The assessment report is available in English and Urdu.