Better Cotton has confirmed the suspension of Indorama Agro following a complaint received which raised a flag over human rights violations. Credit: Shutterstock.

In August the Uzbek Forum for Human Rights filed a complaint with the Independent Project Accountability Mechanism (IPAM) of the European Bank for Reconstruction and Development (EBRD) for human rights violations at Indorama Agro, one of Uzbekistan’s largest cotton producers.

Indorama Agro is in receipt of loans from EBRD and the International Finance Corporation (IFC) totalling $130m to modernise cotton production.

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The complaint is understood to have followed “multiple reports from Uzbek Forum and local communities of violations across Indorama Agro’s operations in Syrdarya and Kashkadarya”. The complaints are said to have been communicated to bank staff and company management over two-and-a-half years but “resulted in no tangible improvements”.

“The Indorama Agro project has caused immense harm to local communities since its inception. Farmers’ land was unilaterally transferred to the company without prior, informed consent or compensation. Instead, farmers were given unfulfilled promises of full-time employment and are now struggling to feed their families,” said Umida Niyazova, director of Uzbek Forum for Human Rights. “Despite all the rights abuses we have reported, EBRD this year awarded the company a further loan of $25m. Where is the due diligence?”

Nina Lesikhina, Policy Officer at Bankwatch, added: “The EBRD approved the project despite numerous reports of human rights violations. The Bank failed to effectively assess the project’s environmental and social impacts and ensure meaningful stakeholder engagement required by the Bank’s standards. The EBRD ignored contextual risks associated with Uzbekistan’s cotton sector, resulting in harm to local communities. We expect IPAM to hold the Bank to account and ensure that adequate remedy is provided.”

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Just Style reached out to the press team at Indorama Agro but received no response at time of press. Meanwhile, a spokesperson at Better Cotton confirmed the producer’s license had been suspended.

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“Uzbekistan’s Labour Inspectorate investigated the allegations around labour rights violations at Indorama Agro and recommended a course of action to remediate the issues identified.

“It is important to note that none of the allegations involved child or forced labour.

“Better Cotton has set out its expectations that appropriate remediation is delivered and suspended Indorama Agro’s licence in April, while these activities are being implemented.

“We will assess the company’s compliance before the end of the year to determine an outcome.”