JULY 8 2016 (The Conway Bulletin) — The World Bank denied allegations that it was fuelling forced labour in Uzbekistan after local human rights campaigners complained about the indirect consequences of a loan from the World Bank’s financial arm to an Uzbek-Indonesian textile joint venture.
The complaint targets a $40m loan approved in December 2015 by the International Finance Corporation (IFC) to Indorama Kokand Textile (IKT), the Uzbek subsidiary of Indorama TBK, a Jakarta-based textile company.
The IFC said that it gave the loan to IKT because it has verified the company’s labour practices.
“[IKT] can trace its cotton supply to ensure it sources only from areas covered by third-party monitoring against child and forced labor,” IFC spokeswoman Elizabeth Price told Reuters.
IKT also refuted the allegations.
“Indorama Corporation has a strict policy of zero tolerance on use of any form of forced labor,” IKT spokesman Prakash Kejriwal said.
The claimants are three local human rights campaigners and one Uzbek alleged victim of forced labour. They said that this loan would reinforce the system of forced labour in the country.
“The IFC loan to IKT and support to commercial banks in Uzbekistan risks perpetuating the forced labor system,” the claimants said in their statement filed with the IFC.
The loan was issued to finance the expansion of the company’s textile plant in Kokand, east Uzbekistan.
The claim highlights the reputational problems of doing business in Uzbekistan for foreign countries. It will likely direct international attention to the issue of forced labour in the country’s cotton picking industry. Uzpahtasanoateksport, the state owned company responsible for the collection and the sale of cotton, is IKT’s sole supplier.
Since 2009, the United States has banned imports of Uzbek cotton and in 2013 it blocked a shipment of IKT cotton at the port of Los Angeles.
Indorama TBK owns 89.26% of IKT, while Uzbekistan’s Central Bank owns the rest.
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(News report from Issue No. 289, published on July 15 2016)