This case study is included in the report “Financing Repression” – find out more in this page.
In Uzbekistan, several DFIs (EBRD, IFC and ADB) are financing the cotton company Indorama Agro, despite reprisals – perpetrated by the company, government officials and security services – against workers, union members and human rights defenders.
Indorama Agro, a Singapore-based private company, is one of the largest cotton producers in Uzbekistan. Since 2021, the IFC and the EBRD have invested US$ 60 and US$ 70 million, respectively, to support Indorama in modernizing cotton production, while the ADB provided the company another US$ 15 million for COVID-19 recovery and climate change mitigation.
Indorama Agro has been linked to numerous documented human rights violations and negative environmental and social impacts. These include land grabbing and violations of farmers rights, coercion, labor rights violations, poor working conditions, contract violations, non-compliance with health and safety standards, and environmental degradation such as contamination of water streams.
Security services, government officials and company representatives systematically threaten and harass workers and farmers who attempt to speak out, making it nearly impossible to document these rights violations. Security agents have also physically prevented workers from attending labor rights workshops and union activities. Retaliation has extended to independent rights monitors, who have been threatened with criminal charges for carrying out their legitimate work of monitoring the project. These violations are a serious set-back to the progress made in the 2021 cotton harvest, when Uzbekistan – as a result of a global boycott of Uzbek cotton – officially eliminated state-imposed forced labor.
Cotton picking in Uzbekistan – Credit: Bernard Gagnon
Over the last three years, CSOs have documented at least 80 cases of retaliations carried out by officials, security services and the company’s management, including dismissals, threats and withheld wages. International organizations such as Uzbek Forum for Human Rights and CEE Bankwatch Network have raised these concerns with the DFIs financing the project, but to date, development banks have failed to take effective action to address these reprisals.
Retaliations occur in a general context of extremely tight governmental control and repression of the media, CSOs and political opponents, who face arbitrary arrests based on fabricated charges, pre-trial detentions, criminalization, physical violence, and other forms of harassment. Since 2020, repression of media freedom and persecution of bloggers and activists have escalated and registration of independent human rights NGOs remains nearly impossible.
Uzbek law criminalizes the online and offline dissemination of “false” information, defamation and insult, with insulting the president online punishable by up to five years in prison. These vaguely constructed laws are commonly used to target opposition and silence any criticism of government policies and practices, as well as corruption allegations.
During the 2023 presidential election campaign, over 60 media and CSOs websites were blocked, limiting access to information. The government has also been known to deny access to foreign funding and appoint a state agency as a partner to supervise NGO projects. There have been credible reports of forced psychiatric institutionalization of government critics, alongside allegations of torture and ill-treatment of detainees.
In July 2022, the government violently suppressed mass protests in Karakalpakstan against proposed constitutional amendments. According to official sources, 18 people were killed, 243 were injured, and at least 516 people (including journalists) were detained. Non-governmental sources report that at least 64 people disappeared during the crackdown. To date, no one has been held accountable.
Why DFIs should care
The example of Indorama’s operations in Uzbekistan highlights how problematic DFIs’ support to private actors in countries with closed civic space can be. In such contexts, companies often have close ties to government officials, posing a high risk of corruption. When authorities have vested interests in certain companies or sectors, ensuring effective oversight and accountability becomes difficult.
Moreover, in countries like Uzbekistan – where freedom of expression and other civic freedoms are severely curtailed – workers, human rights defenders and affected communities have no safe avenue to voice their concerns or participate meaningfully in decisions that impact their lives, in direct contradiction to DFIs’ policies on public participation. Yet, despite the widely documented risks around reprisals and corruption, and the serious challenges in conducting safe and meaningful stakeholder engagement, the IFC, EBRD and ADB continue to financially support Indorama’s operations in Uzbekistan.