Uzbekistan: Forced labour victim files complaint against IFC over loan to Indorama Kokand Textile which allegedly allows it to profit from forced labor

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8 July 2016

Uzbekistan: Forced labor linked to World Bank corporate loan

Author: Human Rights Watch

A victim of forced labor in cotton production and three Uzbek human rights defenders filed a complaint on June 30, 2016, against the World Bank’s private lending arm, the Cotton Campaign coalition, the Uzbek-German Forum for Human Rights, International Labor Rights Forum, and Human Rights Watch announced today. The complaint against the International Finance Corporation (IFC)...seeks an investigation into forced labor connected to a $40 million loan to Indorama Kokand Textile, which operates in Uzbekistan. The forced labor victim, who requested confidentiality, and the rights defenders Dmitry Tikhonov, Elena Urlaeva, and a third who requested confidentiality, presented evidence that the loan to expand the company’s manufacturing of cotton goods in Uzbekistan allows it to profit from forced labor and to sell illicit goods.

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7 July 2016

Cotton and loans: Bad business in Uzbekistan

Author: The Diplomat

A complaint against an IFC project sheds light on the opaque financial systems underlying Uzbekistan’s cotton industry...The complaint was seek the investigation of a $40 million IFC loan to Indorama Kokand Textile...IKT, a joint venture between Indorama, a subsidiary of a Jakarta-headquartered fiber and filament holding company the Indorama Corporation, and the National Bank of Uzbekistan. Indorama is the majority stakeholder. IKT was established in 2011, and Indorama says the benefit of setting up shop in Uzbekistan is “the “natural advantage of sourcing competitively priced raw cotton fiber from domestic sources.” As the complaint lays out, Indorama has been on the receiving end of favorable policies–such as deferred tax benefits, VAT reimbursement, discounts on export pricing, and the provision by the state of some facilities free of cost. But there are significant restrictions as well, which the complaint argues, makes it difficult for the company to get loans and impossible for IKT to operate without using cotton harvested with forced labor.  

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