Uganda: Bujagali Energy-06/Bujagali

Date Filed
03 Apr 2013
Status
Open
Phase
Compliance
Country
Uganda

Case Tracker

Eligibility
Eligibility
Assessment
Assessment
Dispute Resolution
Mediation
Transferred
Compliance
Appraisal
Investigation
CURRENT Status
Investi3gation (COMPLIANCE)

Complaint Overview

Complainant

Former Bujagali construction workers

Concerns

Unpaid wages

Cross-Cutting Issues
Labor Unfulfilled Commitments

Project Information

Region
Sub-Saharan Africa
Institution
IFC/MIGA
Name & Number
Bujagali Energy Ltd 24408 (IFC) & 6732 (MIGA)
Company
Bujagali Energy (IFC); World Power Holdings (MIGA)
Sector
Infrastructure
Department
Infrastructure
Category
A
Commitment

$100m A & C loans (IFC), $115m guarantee (MIGA)

Synopsis

Project Overview

The Bujagali Energy project involves the development, construction, and maintenance of a run-of-the-river power plant with a capacity of up to 250 MW on the River Nile in Uganda.  Bujagali Energy Ltd. also manages the construction of approximately 100 kilometers of 132 kV transmission line on behalf of the Uganda Electricity Transmission Company Ltd. to improve transfer of electricity from the plant. 

Bujagali Energy Ltd. is owned by Industrial Promotion Services (Kenya) Ltd.—the industrial development arm of the Aga Khan Fund for Economic Development and SG Bujagali Holdings, Ltd., an affiliate of Sithe Global Power LLC (US). IFC and MIGA are supporting the $750 million project along with several other international financial institutions, including the International Development Association, African Development Bank and European Investment Bank.  IFC’s investment comprises $100 million in A and C loans, and MIGA issued a $115 million guarantee to World Power Holdings Luxembourg S.à.r.l., a subsidiary of Sithe Global Power, for its investment in the project.

Complaint

The complaint was filed by the Chairman of an informal association of former Bujagali construction workers acting on behalf of himself and over 300 workers at the construction camp and dam site. The complainants raise concerns about unpaid wages and benefits from as far back as 2008.

CAO Action

CAO found the Bujagali Energy-06 complaint eligible for further assessment in April 2013. The assessment concluded in November 2013 with the parties agreeing to engage in a voluntary dispute resolution process facilitated by CAO. During the discussions on the design of the dispute resolution process, the parties were unable to reach consensus on how to move forward. Given this impasse, CAO brought the dispute resolution process to a close in November 2014. In accordance with CAO’s Operational Guidelines, the case was transferred to CAO’s compliance function for appraisal of IFC’s/MIGA’s performance with regard to the project.  Considering the similarity of the issues raised, CAO decided to merge this case with an earlier case (Bujagali-04) for the purposes of the compliance process.

CAO released its compliance appraisal related to the Bujagali Energy-04 and 06 cases in April 2015, which concluded that a compliance investigation was merited in relation to the two labor-related cases.  

CAO publicly released its compliance investigation report concerning the Bujagali Energy-04 and 06 cases in December, 2017.  The report made several non-compliance findings in relation to IFC’s/MIGA’s review of the project. As relates to the Bujagali Energy-06 case, CAO finds that IFC put in place a framework to ensure that sub-contractors working on the project were covered by IFC’s labor standards. During supervision, however, when a dispute arose in relation to payment of wages to construction workers employed by a sub-contractor, IFC determined that these workers were not covered by its labor standards. CAO finds that IFC erred in deciding that the Bujagali Energy-06 complainants were not covered by its E&S requirements. As a result, CAO finds that allegations the construction of the project had significant adverse effects on employees of the subcontractor were not addressed.

IFC provided a public response to the CAO investigation report in December 2017.  In accordance with CAO’s Operational Guidelines, the case has remained open as CAO monitors IFC actions taken in response to the investigation’s findings.

On April 12, 2018, CAO merged a later case also concerning worker health/safety and compensation, Bujagali Energy-08, with the ongoing monitoring of the Bujagali Energy-04 and Bujagali Energy-06 cases.

On May 22, 2018, IFC shared with CAO an addendum to its management response to CAO’s Bujagali Energy-04 and 06 investigation, and the separate Bujagali Energy-07 investigation.  On June 20, 2018, IFC shared with CAO its Terms of Reference titled: Review of Available Information – Underpaid Construction Workers, Uganda Consulting Assignment. CAO monitoring includes a review of the implementation of the actions listed in the addendum and compliance with the Performance Standards.  

In March 2019, CAO published a monitoring report of IFC/MIGA’s response to the Bujagali Energy-04, 06, 07, and 08 cases.  In response to the issues raised in the Bujagali-06 complaint, CAO awaited the report of the consultants IFC had tasked with reviewing documentation to determine whether the complainants’ claims for lost wages could be validated.  CAO’s monitoring report noted delays in implementation of actions proposed by IFC to address CAO’s findings.

In May 2020, CAO published its second monitoring report of IFC and MIGA’s response to the Bujagali Energy 04, 06, 07, and 08 cases. In response to the issues raised in the Bujagali-06 complaint (subcontractor working conditions and unpaid wages), IFC committed to appraising, the workers' claims through an independent third party to determine whether sufficient evidence is available to determine the merits of the workers' claims. Since the first monitoring report, this appraisal was completed by an IFC consultant. The IFC consultant’s report found insufficient documentation to be able to validate the claims of the former Boschcon workers regarding wages and other benefits. CAO expressed concerns about the methodology used to reach the finding and also noted that the report does not address the Boschcon workers’ claims regarding compensation for workplace injuries. 

All documents relating to this case are available under "View Documents" below.

 

Status

As per CAO's Operational Guidelines, this case will remain open as CAO monitors IFC's response to the findings.

An error was noticed in the monitoring report published in May 2020.  A revised version of the document with erratum was posted June 10, 2020.

Status as of June 10, 2020

Case Documents

  • Dispute Resolution

    Complaint
    Letter of Complaint from Bujagali Workers
    Mar 27, 2013
    English
    Letter of Complaint from Bujagali Workers
    Assessment Report(s)
    CAO Assessment Report Bujagali-06
    Nov 01, 2013
    English
    CAO Assessment Report Bujagali-06
    Close-out Report(s)
    Bujagali-06 Conclusion Report
    Nov 05, 2014
    English
    Bujagali-06 Conclusion Report
    Bujagali-06 Conclusion Report
    Nov 05, 2014
    Lugandan
    Bujagali-06 Conclusion Report
  • Appraisal Report(s)
    Appraisal of IFC investment in Bujagali Energy
    Apr 08, 2015
    English
    Appraisal of IFC investment in Bujagali Energy
    Audit Report(s)
    Terms of Reference for Compliance Investigation
    May 10, 2016
    English
    Terms of Reference for Compliance Investigation
    CAO Investigation of IFC/MIGA in relation to Bujagali Energy
    Nov 03, 2017
    English
    CAO Investigation of IFC/MIGA in relation to Bujagali Energy
    IFC response to CAO Investigation Report
    Dec 05, 2017
    English
    IFC response to CAO Investigation Report
    Addendum to the IFC Management Response to CAO
    May 22, 2018
    English
    Addendum to the IFC Management Response to CAO
    Terms of Reference in Relation to the Addendum to IFC
    Jun 06, 2018
    English
    Terms of Reference in Relation to the Addendum to IFC
    Monitoring Report(s)
    CAO Monitoring Report of IFC/MIGA in relation to Bujagali
    Feb 27, 2019
    English
    CAO Monitoring Report of IFC/MIGA in relation to Bujagali
    IFC Response to CAO Monitoring Report of IFC's
    May 24, 2019
    English
    IFC Response to CAO Monitoring Report of IFC's
    Second CAO Monitoring Report of IFC/MIGA
    May 01, 2020
    English
    Second CAO Monitoring Report of IFC/MIGA
    Second CAO Monitoring Report of IFC/MIGA
    Jun 01, 2020
    English
    Second CAO Monitoring Report of IFC/MIGA