“We Can’t Refuse to Pick Cotton”: Forced and Child Labor Linked to World Bank Group Investments in Uzbekistan

Summary

For several weeks in the fall of 2015, government officials forced Firuza, a 47-year-old grandmother, to harvest cotton in Turtkul, a district in Uzbekistan’s most western region, the autonomous Republic of Karakalpakstan. The local neighborhood council, the mahalla committee, had threatened to withhold child welfare benefits for her grandson if she did not go to the fields to harvest cotton. These same officials forced another woman, Gulnora, to harvest cotton for the same length of time. Although Gulnora worked, the government refused to pay her child welfare benefits, promising to consider reinstating them if she worked in the fields the next spring. The Uzbek government forces enormous numbers of people to harvest cotton every year through this kind of coercion.

The government’s abusive practices are not confined to adults. During the 2016 harvest the government forced young children to work in the cotton fields. In Ellikkala, a district neighboring Turtkul, officials from at least two schools ordered 13 and 14-year-old children to pick cotton after school. The Uzbek-German Forum for Human Rights saw children working in one of the cotton fields, and a teacher ordering the children to hide. The World Bank has funded an irrigation project in these districts on the condition that the Uzbek government comply with laws prohibiting forced and child labor. Despite this agreement, the Uzbek government has continued to force people, including children, to work within the project area.

Withholding child benefits and other welfare payments is just one of the penalties the government has used to force people to work. The government has threatened to fire people, especially public sector employees who are among the lowest paid in the country. Students who refused to work faced the threat of expulsion, academic penalties, and other consequences. People living in poverty are particularly susceptible to forced labor, as they are unable to risk losing their jobs or welfare benefits by refusing to work and cannot afford to pay people to work in their place.

Based on interviews with victims of forced labor in September to November 2015, April to June and September to November 2016, and early 2017, leaked government documents, and statements by government officials, this report details how the Uzbek government forced students, teachers, medical workers, other government employees, and private-sector employees to harvest cotton in 2015 and 2016, as well as prepare the cotton fields in the spring of 2016. The report documents forced adult and child labor in one World Bank project area and demonstrates that it is highly likely that the Bank’s other agriculture projects in Uzbekistan are linked to ongoing forced labor in light of the systemic nature of the abuses. The report also finds that there is a significant risk of child labor in other Bank agricultural projects in the country.

Uzbekistan is the fifth largest cotton producer in the world. It exports about 60 percent of its raw cotton to China, Bangladesh, Turkey, and Iran. Uzbekistan’s cotton industry generates over US$1 billion in revenue, or about a quarter of the country’s gross domestic product (GDP), from one million tons of cotton fiber annually. These funds go into an opaque extra-budgetary account, the Selkhozfond, housed in the Ministry of Finance, that escapes public scrutiny and is controlled by high-level officials.

Campaigns by a number of groups against forced and child labor in Uzbekistan’s cotton sector have resulted in boycotts of Uzbek cotton. For example, 274 c0mpanies have pledged not to knowingly source cotton from Uzbekistan because of forced and child labor in the sector. Despite this, the World Bank remains active in the country’s agriculture sector providing a total of $518.75 million in loans to the government for projects in this sector in 2015 and 2016.

In Turtkul, Beruni, and Ellikkala districts in Karakalpakstan, the World Bank has worked with the Uzbek government since April 2015 under a $337.43 million irrigation project. Cotton is grown on more than 50 percent of the arable land within this project area. The World Bank secured a commitment from the Uzbek government to comply with national and international forced and child labor laws in the project area and agreed that the loan could be suspended if there was credible evidence of violations.

Since the World Bank approved this project in 2014, the Uzbek government has continued to force people, sometimes children, to work in the cotton sector in Turtkul, Beruni, and Ellikkala, including within the Bank’s project area. Independent groups, including the Uzbek-German Forum for Human Rights, submitted evidence of forced and child labor to the World Bank during and following the 2015 harvest, which runs from early September until early to mid-November annually. Instead of suspending its loan to the government, in line with the 2014 agreement between the two parties, the World Bank increased its investments in Uzbekistan’s agriculture industry through its private sector lending arm, the International Finance Corporation (IFC).

Shortly after the 2015 cotton harvest, the IFC invested in a government joint venture with a subsidiary of Indonesia’s Indorama Corporation, Indorama Kokand Textile, a leading cotton yarn producer in Uzbekistan. In December 2015 the IFC agreed to loan Indorama $40 million to expand its textile plant, which uses solely Uzbek cotton. Given the scale of forced labor in Uzbekistan and its systemic nature, it is highly unlikely that a company could source any significant quantity of cotton from Uzbekistan at present that has not been harvested, at least in part, by forced laborers. There is also a significant risk of child labor.

According to the IFC, Indorama tracks its purchases from sites where cotton is processed to mitigate the risk of child and forced labor. Together with the IFC, Indorama has developed a system for rating the risk level of districts in which gins are located. But this system is deeply inadequate. The IFC’s Environmental and Social Performance Standards, which are designed to prevent the IFC from investing in projects that harm people or the environment, require clients to identify risks of, monitor for, and remedy forced and child labor in their supply chains. The Performance Standards provide that where remedy is not possible, clients must shift the project’s primary supply chain over time to suppliers that can demonstrate that they do not employ forced and child labor.

The World Bank is also heavily invested in the country’s education sector, where forced and child labor have undermined access to education, and its quality, because teachers, and students, including children, have had to leave school for up to several months to work in cotton fields. Through direct funding and the Global Partnership for Education, a multistakeholder funding platform, the World Bank provides almost $100 million in financing for education projects in Uzbekistan.

The government has greatly reduced the number of children it forces to work since 2013, primarily by ordering government officials down the line of command to mobilize adults rather than children. However, Human Rights Watch and the Uzbek-German Forum documented more cases of state-organized child labor through schools mobilizing children in 2016 than in the previous year. For example, in addition to child labor in Karakalpakstan described above, in 2016 children and teachers in two districts in Kashkadarya and a school employee in rural Fergana told Human Rights Watch and the Uzbek-German Forum that local officials required schools to mobilize children as young as 10 or 11 years old to pick cotton and suspended classes during this period. They noted that in several districts this was worse than 2015, when children received some classes prior to being sent to pick cotton.