IFC Tightens Labour Oversight After Karot Hydropower Review

The Compliance Advisor Ombudsman launched the investigation after receiving multiple complaints from workers and union representatives between 2019 and 2022. Findings revealed that the IFC failed to adequately assess labour risks or enforce its own performance standards, leading to systemic issues with employment terms and discriminatory practices. While the project now provides electricity to 3.8 million residents, the oversight lapse prompted a formal reckoning with how the IFC monitors its portfolio.

Under the new plan, the IFC is mandating a comprehensive Worker Accommodation Plan and revised employment procedures to ensure transparency. Former employees gain a 12-month window to seek redress for past grievances, including disputes over severance and benefits. Beyond the Karot site, the organization is implementing new risk assessment tools and hiring specialized labour experts to prevent similar lapses in future global investments. An independent review will evaluate the efficacy of these corrective measures in 18 months, with the ombudsman tasked to monitor progress and issue public reports.