IFC’s project with Indorama Kokand Textile (IKT or “Indorama”), a cotton yarn producer, supported the expansion of the company’s textile plant in Fergana Valley, Uzbekistan to increase exports of local cotton yarn, as well as supplies of good-auality raw material to the local weaving and knitting industry. IFC’s projects with Hamkorbank, a licensed commercial bank headquartered in Andijan, Uzbekistan,  include a combination of equity and loan investments to support the bank’s micro, small, and medium enterprises (MSMEs) program, as well as a Global Trade Finance Program (GTFP) to support select Hamkorbank export/import transactions.

In June 2016, CAO received a complaint from a coalition of non-governmental organizations (NGOs)—the International Labor Rights Forum (ILRF), the Uzbek-German Forum for Human Rights (UGF), Human Rights Watch, and the Cotton Campaign—on behalf of Uzbek human rights monitors and alleged victims of forced labor in the cotton fields (the “Complainants”) in relation to two IFC clients: IKT and Hamkorbank. The complaint raised concerns about the existence of forced labor in Indorama’s supply chain and concerns that Hamkorbank was financing companies involved in, or benefiting from, forced labor in the cotton sector.

In August 2016, CAO found the complaint eligible for assessment. During the assessment, complainants, Indorama, and Hamkorbank agreed to engage in a voluntary dialogue process facilitated by CAO. CAO issued an Assessment Report in March 2018 in English, Russian, and Uzbek.

In July 2018, CAO convened a meeting between IFC and the complainants, along with other local Uzbek human rights defenders, related to the case and the ongoing dispute resolution process. The meeting focused on IFC’s due diligence and supervision related to Indorama and Hamkorbank and the application of IFC’s policies to both projects in particular related to forced labor and supply chain. After the meeting, a communique, drafted jointly by IFC and the complainant group, was issued in English, Russian, and Uzbek.

The complainants and local human rights defenders that were invited to participate in the process organized themselves into a “Group in Mediation” (GM). In January 2019, three of the complainants split off and left the Group in Mediation. CAO convened multiple meetings between the Group in Mediation and Hamkorbank, and as a result, the parties signed a Framework Agreement in July 2019 (Available in English, Russian and Uzbek) and an Interim Agreement in October 2019 (Available in English, Russian and Uzbek). The parties decided to keep the original agreements confidential. As per the provisions of the Interim Agreement, the Group in Mediation monitored the occurrence of forced labor among Hamkorbank employees (direct involvement, as well as indirect participation) from October 21 to December 20, 2019. In July 2020, the Group in Mediation declared that they were satisfied with the results of the monitoring and that they believed the claims against Hamkorbank indicated in the complaint were resolved. The parties drafted a joint statement available in English, Russian, and Uzbek.

Between 2018 and 2020, CAO also convened joint meetings between Indorama and the Group in Mediation. The parties signed an interim agreement in November 2020, which they decided to keep confidential, but they issued a joint statement regarding the results of their collaboration during the 2020 cotton harvest, which is available in English and Russian. Additionally, the parties decided to continue their collaboration through the 2021 cotton harvest season and jointly selected an independent expert to advise them in developing a mutually acceptable methodology for labor monitoring practices related to Indorama’s cotton supply chain. The work of the expert was funded by PeaceNexus, a private Swiss foundation which agreed to provide methodological input and funding for the parties to conduct the agreed activities.

In 2021, one of the three complainants that had split off from the Group in Mediation indicated that they no longer wished to be involved and decided to withdraw from the case. CAO continued discussions with the other two complainants, one of whom was in exile outside Uzbekistan. Due to COVID-19-related restrictions, the process was delayed.

As a result of the monitoring activities conducted by the parties during the 2021 cotton harvest season, the Group in Mediation agreed that there was no systemic forced or child labor in fields that are part of Indorama’s cotton supply chain. One of the complainants not in the Group in Mediation participated in the monitoring activities with the Group in Mediation. The parties finalized a report on the activities performed during the 2021 monitoring period, including a section related to joint recommendations. 

The parties signed a final settlement agreement in August 2022 having established that the central issue in the complaint, forced labor and child labor in the cotton fields, was resolved. The parties decided to continue to collaborate, particularly in monitoring and addressing concerns related to working conditions in the fields from which Indorama sources cotton. This was captured in a collaboration agreement signed by the parties in August 2022 (Available in English and Russian).

In May 2023, after finalizing a joint monitoring report regarding the situation in the fields during the 2022 cotton harvest, the parties decided to continue to collaborate through the 2023 cotton season harvest. In accordance with the provisions of the collaboration agreement, CAO monitored the implementation of the agreements. 

In keeping with the provisions of the renewed Collaboration Agreement for the 2023 cotton harvest, the Group in Mediation conducted the agreed monitoring activities from September to December 2023 after which it drafted a report with recommendations for Indorama to inform the next cotton harvest season. Both parties confirmed to CAO that the provisions of the agreements had been implemented to their satisfaction. 

In September 2023, CAO hosted a roundtable in Tashkent where the parties shared insights from the CAO process and spoke about the value of collaboration between civil society and the private sector to help resolve disputes. CAO convened the parties in May 2023 for a final facilitated joint meeting and held an informal case closure ceremony. CAO continued discussions with the only non-Group in Mediation complainant who was unable to participate in the dispute resolution process in Uzbekistan. Their views are reflected in the appendix of CAO’s Conclusion Report, which was released in November 2024 documenting all outcomes from the dispute resolution process related to both Hamkorbank and Indorama.

In November 2024, CAO closed the case, and the Dispute Resolution Conclusion Report is available in English, Russian and Uzbek.