Complaint filed against EBRD: labour rights violations, land grabs and exploitation at cotton producer Indorama Agro in Uzbekistan

Berlin, September 5, 2023 – Indorama Agro is in receipt of loans from EBRD and the International Finance Corporation (IFC) totaling USD 130 million to modernize cotton production. The complaint comes after multiple reports from Uzbek Forum and local communities of violations across Indorama Agro’s operations in Syrdarya and Kashkadarya regions of Uzbekistan were communicated to Bank staff and company management over two-and-a-half years but resulted in no tangible improvements. 

Uzbek Forum has interviewed dozens of workers and farmers who have reported the loss of livelihoods caused by illegal land confiscations, lack of access to land, mass redundancies and abuse of labour contracts, as well as attempts to dismantle the trade union. Furthermore, farmers contracted to deliver cotton to Indorama Agro complain of delayed payments for the cotton they have delivered and exploitative contracts that include no minimum price for their cotton.

Workers and stakeholders who speak out, risk retaliation and intimidation. Following interviews with Uzbek Forum monitors, farmers and workers have been interrogated by security service officials and warned against speaking to “international organizations”. 

 “The Indorama Agro project has caused immense harm to local communities since its inception. Farmers’ land was unilaterally transferred to the company without prior, informed consent or compensation. Instead, farmers were given unfulfilled promises of full-time employment and are now struggling to feed their families,” said Umida Niyazova, Director of Uzbek Forum for Human Rights. “Despite all the rights abuses we have reported, EBRD this year awarded the company a further loan of $25 million. Where is the due diligence?”

“The EBRD approved the project despite numerous reports of human rights violations. The Bank failed to effectively assess the project’s environmental and social impacts and ensure meaningful stakeholder engagement required by the Bank’s standards,” said Nina Lesikhina, Policy Officer at Bankwatch. “The EBRD ignored contextual risks associated with Uzbekistan’s cotton sector, resulting in harm to local communities. We expect IPAM to hold the Bank to account and ensure that adequate remedy is provided.”

Background

Indorama Agro is a part of the Singapore-registered Indorama Group, a global chemical and fiber conglomerate that was established to produce wheat and cotton in 2018 by decree of the government of Uzbekistan. 

Indorama was also the subject of a complaint filed by Uzbek Forum on behalf of cotton pickers to IFC in 2016 relating to child labour in its operations at Indorama Kokand Textile in Fergana region. Nonetheless, Indorama continues to receive loans from other banks, including the Asian Development Bank (ADB) which recently awarded the company USD 15 million for Covid-recovery and climate change mitigation.

For press enquiries:

Umida Niyazova, Uzbek Forum for Human Rights (English, Uzbek, Russian)

umida.niyazova@gmail.com

Nina Lesikhina, Bankwatch Network (English, Russian)

ninalesikhina@bankwatch.org

For more background to this case, see:

Uzbek Forum, May 17, 2021, Will Indorama Agro Stand in the Way of Uzbekistan’s First Independent Trade Union?: https://www.uzbekforum.org/will-indorama-agro-stand-in-the-way-of-uzbekistans-first-independent-trade-union/

Sourcing Journal, February 14, 2023, Controversy Rocks Better Cotton’s Uzbek Program: https://sourcingjournal.com/topics/labor/better-cotton-uzbekistan-indorama-agro-labor-rights-farmers-union-collective-bargaining-417230/

Bankwatch Network, January 26, 2021, Pulling the ‘cotton’ over Uzbek eyes at latest EBRD investment: https://bankwatch.org/blog/pulling-the-cotton-over-uzbek-eyes-at-latest-ebrd-investment

Joint Statement Regarding the Establishment of an Independent Trade Union in Uzbekistan, March 26, 2021:  https://www.uzbekforum.org/joint-statement-regarding-the-establishment-of-an-independent-trade-union-in-uzbekistan/

Ozodlik, December 15, 2022, Farmers: The cluster has enslaved us (Uzbek): https://www.ozodlik.org/a/32176667.html

RFE/RL, March 27, 2021, Celebrations Over Uzbekistan’s First Independent Union Cut Short By Threats, Harassment: https://www.rferl.org/a/uzbekistan-trade-union-agricultural-workers/31172316.html

Ozodlik, May 21, 2021, Indorama Agro workers dissatisfied with reduction of wages organized demonstration (Uzbek): https://www.ozodlik.org/a/oyliklar-qisqarganidan-norozi-indorama-agro-ishchilari-betonka-da-velonamoyish-uyushtirdi-(video)/31265705.html