IFC has an active project with Karot Power Company Limited (KPCL), a special-purpose vehicle incorporated in Pakistan and majority-owned by China Three Gorges South Asia Investment Limited (CSAIL). The project involves providing a long-term corporate loan facility of up to US$100 million to support the construction, operation, and maintenance of a 720MW run-of-the-river hydropower plant being developed on the Jhelum River, in Pakistan.

In May 2023, CAO received a complaint submitted by eight community members of the Azad Jammu and Kashmir (AJK) community, citing concerns related to labor issues, including unfair hiring practices at the company; discrimination in hiring practices against local populations because of their community of origin; lack of transparency in the recruitment process; and incidents of unfair dismissal and forced resignation of those who were employed.

In June 2022, the CAO found the complaint eligible for assessment. At the complainants' request, the case was referred to the IFC.

In March 2023, the complainants expressed their desire for the complaint to be referred back to CAO. In August 2023, CAO completed its assessment. During the assessment, both parties expressed interest in engaging in a dispute resolution process to address the issues raised in the complaint. The Assessment Report is available in English and Urdu. 

In August 2023, CAO conducted in-person capacity-building sessions with the complainants and the company to prepare them for a CAO-facilitated dispute resolution process. Between October 2023 and February 2024, the parties held three joint sessions and 18 bilateral meetings to discuss the issues raised in the complaint and potential solutions.

In May 2024, despite the parties' efforts, no consensus was reached on how to resolve the issues in the complaint, and the dispute resolution process ended. 

In September 2024, in accordance with the CAO Policy, the case was transferred to CAO’s Compliance Function for appraisal to determine whether an investigation of the IFC’s environmental and social performance is warranted concerning the issues raised in the complaint.

The Dispute Resolution Conclusion Report is available in English and Urdu.