Uganda: Bujagali Energy-06/Bujagali
Former Bujagali construction workers
The Bujagali Energy project involves the development, construction, and maintenance of a run-of-the-river power plant with a capacity of up to 250 MW on the River Nile in Uganda. Bujagali Energy Ltd. also manages the construction of approximately 100 kilometers of 132 kV transmission line on behalf of the Uganda Electricity Transmission Company Ltd. to improve transfer of electricity from the plant.
Bujagali Energy Ltd. is owned by Industrial Promotion Services (Kenya) Ltd.—the industrial development arm of the Aga Khan Fund for Economic Development and SG Bujagali Holdings, Ltd., an affiliate of Sithe Global Power LLC (US). IFC and MIGA are supporting the $750 million project along with several other international financial institutions, including the International Development Association, African Development Bank and European Investment Bank. IFC’s investment comprises $100 million in A and C loans, and MIGA issued a $115 million guarantee to World Power Holdings Luxembourg S.à.r.l., a subsidiary of Sithe Global Power, for its investment in the project.
The complaint was filed by the Chairman of an informal association of former Bujagali construction workers acting on behalf of himself and over 300 workers at the construction camp and dam site. The complainants raise concerns about unpaid wages and benefits from as far back as 2008.
CAO found the Bujagali Energy-06 complaint eligible for further assessment in April 2013. The assessment concluded in November 2013 with the parties agreeing to engage in a voluntary dispute resolution process facilitated by CAO. During the discussions on the design of the dispute resolution process, the parties were unable to reach consensus on how to move forward. Given this impasse, CAO brought the dispute resolution process to a close in November 2014. In accordance with CAO’s Operational Guidelines, the case was transferred to CAO’s compliance function for appraisal of IFC’s/MIGA’s performance with regard to the project. Considering the similarity of the issues raised, CAO decided to merge this case with an earlier case (Bujagali-04) for the purposes of the compliance process.
CAO released its compliance appraisal related to the Bujagali Energy-04 and 06 cases in April 2015, which concluded that a compliance investigation was merited in relation to the two labor-related cases.
CAO publicly released its compliance investigation report concerning the Bujagali Energy-04 and 06 cases in December, 2017. The report made several non-compliance findings in relation to IFC’s/MIGA’s review of the project. As relates to the Bujagali Energy-06 case, CAO finds that IFC put in place a framework to ensure that sub-contractors working on the project were covered by IFC’s labor standards. During supervision, however, when a dispute arose in relation to payment of wages to construction workers employed by a sub-contractor, IFC determined that these workers were not covered by its labor standards. CAO finds that IFC erred in deciding that the Bujagali Energy-06 complainants were not covered by its E&S requirements. As a result, CAO finds that allegations the construction of the project had significant adverse effects on employees of the subcontractor were not addressed.
IFC provided a public response to the CAO investigation report in December 2017. In accordance with CAO’s Operational Guidelines, the case has remained open as CAO monitors IFC actions taken in response to the investigation’s findings.
On April 12, 2018, CAO merged a later case also concerning worker health/safety and compensation, Bujagali Energy-08, with the ongoing monitoring of the Bujagali Energy-04 and Bujagali Energy-06 cases.
On May 22, 2018, IFC shared with CAO an addendum to its management response to CAO’s Bujagali Energy-04 and 06 investigation, and the separate Bujagali Energy-07 investigation. On June 20, 2018, IFC shared with CAO its Terms of Reference titled: Review of Available Information – Underpaid Construction Workers, Uganda Consulting Assignment. CAO monitoring includes a review of the implementation of the actions listed in the addendum and compliance with the Performance Standards.
In March 2019, CAO published a monitoring report of IFC/MIGA’s response to the Bujagali Energy-04, 06, 07, and 08 cases. In response to the issues raised in the Bujagali-06 complaint, CAO awaited the report of the consultants IFC had tasked with reviewing documentation to determine whether the complainants’ claims for lost wages could be validated. CAO’s monitoring report noted delays in implementation of actions proposed by IFC to address CAO’s findings.
In May 2020, CAO published its second monitoring report of IFC and MIGA’s response to the Bujagali Energy 04, 06, 07, and 08 cases. In response to the issues raised in the Bujagali-06 complaint (subcontractor working conditions and unpaid wages), IFC committed to appraising, the workers' claims through an independent third party to determine whether sufficient evidence is available to determine the merits of the workers' claims. Since the first monitoring report, this appraisal was completed by an IFC consultant. The IFC consultant’s report found insufficient documentation to be able to validate the claims of the former Boschcon workers regarding wages and other benefits. CAO expressed concerns about the methodology used to reach the finding and also noted that the report does not address the Boschcon workers’ claims regarding compensation for workplace injuries.
In September 2022, CAO issued a third monitoring report. It analyzes whether IFC has adequately addressed CAO’s non-compliance findings, building on CAO’s two earlier monitoring reports issued in February 2019 and May 2020.
IFC is initiating an Advisory Services program to support skills and capacity development for some workers injured during project construction. This action, once implemented, should partially address CAO’s findings in relation to the impacts of the project on injured workers. However, the remaining non-compliances identified by CAO and associated impacts on workers remain substantively unaddressed, including for dependents of workers who were killed.
Regarding the issue of unpaid wages and benefits, while evidence of the amount owed the former subcontractor workers has become available and IFC has verified this evidence, IFC does not propose any further action to address this issue. The legally binding commitments made by BEL as a condition of IFC’s investment (requiring subcontractor compliance with IFC’s labor standards) remain unfulfilled given that the project construction workers remain unpaid.
All documents relating to this case are available under the "Case Documents" section.
CAO published the third monitoring report in September 2022, and it is available in the “Case Documents” section.
Given that the Bujagali hydropower project is an active IFC project that remains in material non-compliance with IFC’s environmental and social requirements, CAO will keep these cases open in monitoring. See related cases:
Status as of September 19, 2022