Guinea: Palma Guinea-01
Current and former hotel workers of the Sheraton Grand Conarky (SGC) hotel in Conarky, Guinea and trade unions.
Labor issues, rights to association and representation, intimidation and retaliation, health impacts, compliance with IFC standards.
The project was approved the Board in 2013 for the construction of a 280-room 5-star hotel in Conakry, Guinea (the “Project”). The Project is implemented by the Guinea-incorporated Palma Guinée S.A. (“Palma Guinea”). Fully owned by the Topaz Group of companies, Palma Guinea has been incorporated specifically to develop and own the Project hotel, to be operated under the Sheraton brand. The purpose of the Project is to reduce the imbalance between supply and demand for quality hotel accommodations in Conakry. At the time of the project approval, Guinea’s capital had no 5-star hotels. That gap in the hospitality market has been hindering travel to Conakry and slowing down the city’s development into an important national and regional business destination. The projected hotel is expected to help change this situation and become an important part of Conakry’s business infrastructure. The total Project cost is estimated at US$61 million. IFC’s investment is a secured senior loan package of up to US$26 million to Palma Guinea. The loan package is comprised of: (i) an A loan for IFC’s own account of up to US$15 million and (ii) a syndicated B loan of US$11 million. Palma Guinea prepaid the entire outstanding loan balance on September 15, 2022.
A complaint was filed to CAO on January 19, 2023 by the International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco, and Allied Workers’ Associations (IUF) and Global Labor Justice-International Labor Rights Forum (GLJ-ILRF) on behalf of the workers of the Sheraton Grand Conakry hotel. The complainants alleged labor-related issues, particularly unpaid wages, unsafe working conditions, lack of health benefits, interference with their rights to participate in and be represented by a trade union, such as delaying the election of workers representatives; discouraging trade union activity through misinformation, intimidation, and retaliation; unfair and unlawful termination practices with no alternatives to retrenchment or assurances of future employment which resulted in financial consequences. The complainants also raised concerns about failure to properly inform workers of the health impacts of closure of Sheraton Grand Conakry hotel due to mold contamination found in December 2021, and lack of due diligence ensuring that the client was compliant with IFC’s Performance Standards.
When making the eligibility determination, CAO applied Paragraph 49 of the CAO Policy, as the complaint was submitted within 15 months after the project’s exit, and the additional criteria were met because: a) CAO found that the complainants’ participation in good faith negotiations with IFC constitutes a compelling reason why the complaint could not be made before exit; b) The complaint is related to the IFC exited project with Palma Guinee S.A, raises environmental and social issues within CAO’s mandate, and was presented on behalf of current and former workers of the Sheraton Grand Conakry, who are or may be affected by the issues raised; and c) After consultation with IFC, CAO found that accepting the complaint will be consistent with its mandate, as it could contribute to enhancing the environmental and social outcomes of projects or sub-projects, and foster public accountability and learning regarding labor issues and the application of Performance Standard 2 in the tourism sector.
On August 17, 2023, CAO found the complaint eligible and commenced the assessment.
The case is currently under assessment.
*Note: The CAO assessment process does not entail a judgment on the merits of the complaint, rather, it seeks to understand the facts and empower those involved to make informed decisions on how to address the issues raised.
Status as of October 18, 2023