Pakistan: Karot Hydro-04/Jhelum River

Date Filed
23 May 2022
Status
Open
Phase
Dispute Resolution (DR)
Country
Pakistan

Case Tracker

Eligibility
Eligibility
Assessment
Assessment
Referred to IFC
Dispute Resolution
Mediation
Status as of August 07, 2023
Compliance
CURRENT Status
Mediation (DISPUTE RESOLUTION)
Status as of August 07, 2023

Complaint Overview

Complainant

Community members living in the Azad Jammu and Kashmir (AJK) community

Concerns

Labor issues

Cross-Cutting Issues
Labor

Project Information

Region
Middle East
Institution
IFC
Name & Number
IFC Project #36008
Company
Karot Power Company Limited (KPCL)
Sector
Infrastructure
Department
Infrastructure
Category
A
Commitment

A loan of up to US$100 million and 15 percent equity investment for US$125 million.

Synopsis

Project Overview

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.

Complaint

In May 2023, 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.

CAO Action

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

In March 2022, 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

Status

A dispute resolution process is ongoing.

Status as of June 04, 2024.

Case Documents

  • Complaint & Assessment

    Assessment Report
    Assessment Report
    Aug 07, 2023
    English
    Assessment Report
    Assessment Report
    Aug 07, 2023
    Urdu
    Assessment Report
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