World Bank urged to suspend loans to stop forced labour in Uzbek cotton industry

World Bank urged to suspend loans to stop forced labour in Uzbek cotton industry
About a million adults and children are involved in cotton harvesting in Uzbekistan every year.
By bne IntelliNews March 10, 2016

The World Bank cannot ignore a state-sponsored system of forced labour in Uzbekistan’s cotton industry that earns the government $1bn a year and should suspend loans to the country’s agriculture sector until the government changes its policy, believes the Cotton Campaign, a global coalition of labour, human rights, and investor and business organisations.

The campaign against the forced labour of children and adults in the Uzbek cotton sector has collected about 140,000 signatures from around the world under a petition to World Bank President Dr Jim Yong Kim, calling on the bank to suspend payments to the government of Uzbekistan until it stops using forced labour. The delivery of the petition on March 9 coincided with the release of a new report by the Berlin-based Uzbek-German Forum for Human Rights (UGF) documenting why the World Bank should suspend the loans worth $500mn for agricultural projects in Uzbekistan.

The campaigners allege that, “in 2015 the government of Uzbekistan forced more than a million citizens under threat of punishment to pick cotton and farmers to grow cotton” for the state. “The Uzbek government’s use of forced labour violated its contracts with the World Bank for agricultural projects totalling more than $500mn, which required the government to abide by its own labour laws – including laws that ban the use of forced and child labour – in the areas where the World Bank projects were to operate,” the Cotton Campaign noted.

The World Bank issued a $150mn loan to fund the Horticulture Development Project in April 2015 and another a $261mn loan for the South Karakalpakstan Water Resource Management Improvement Project, which was approved by the bank in June 2014.

As part of its agreement with the World Bank, the Uzbek government allowed the International Labour Organization (ILO) to conduct monitoring of forced and child labour in the 2015 cotton harvest. “The ILO monitoring report found: (1) the practices of officials responsible for meeting cotton quotas did not change; (2) there were indicators of forced labour related to widespread organised recruitment of adults to pick cotton; and (3) public-sector workers in the education and health-care sectors were compelled to contribute labour or payments,” the campaign said in a press release.

The UK-based Anti-Slavery International confirmed many of these findings in video interviews with forced labour victims.

While the Uzbek government allowed the ILO to monitor the cotton-harvesting campaign in 2015, it also used “unprecedented deception and repression, including arrests and persecution of independent monitors to cover up the use of forced labour of more than a million of its citizens to harvest of cotton”, read UGF's report entitled, “The cover-up: whitewashing Uzbekistan’s white gold”. “The government warned people to lie to international monitors, to tell them they were picking cotton voluntarily, even though they risked losing their jobs and other penalties if they refused.”

The World Bank has left bne IntelliNews’s repeated requests for comment on the allegations unanswered, but World Bank press secretary David Theis said that the bank didn’t “condone forced labour in any form” after receiving the petition in Washington on March 9. “We take very seriously the reports of such practices in the cotton production system of Uzbekistan.” The spokesman said the bank’s “long-term strategic engagement” with the Uzbek government “ultimately” aims to help Tashkent “reform labour practices in the cotton sector and liberalise, diversify and modernise the country’s agricultural sector more broadly”.

$1.50 a day

While the ILO asserted that many workers view the harvest as an economic “opportunity”, the report says teachers, nurses and other public sector employees have been pulled from their jobs to work “gruelling hours in the heat” and suffer abysmal living conditions for wages that were an “equivalent of $1.50 per day”. “In fact, the harvest imposed an economic burden on many,” it says.

“The stakes of this cynical enterprise are high: cotton, a strategic resource in Uzbekistan, nets the government some $1bn per year in revenue from sales. While proclaimed ‘the people’s riches’, the cotton industry is a corrupt enterprise directly subsidised by the people of Uzbekistan through their labour and forced payments extorted by government officials. The forced labour system, which exploits the vulnerability of more than a million people, contributing to their impoverishment, generates revenues for a tiny elite,” the report concludes.

Uzbekistan intends to cut its annual cotton harvests to 3mn tonnes of raw cotton by 2020, down from 3.35mn tonnes in 2015, Uzbek President Islam Karimov announced in January. The decision was prompted by the declining global demand for cotton fibre and falling world cotton prices, and it will allow the country to free up 170,500 hectares of farming land that will be repurposed for farming vegetables and fruit. The country intends to export 700,000 tonnes of cotton fibre in 2016 against 580,000 tonnes in 2015

“Unfortunately, the World Bank doesn’t want to listen to independent activists and organisations, and we can see that the World Bank doesn’t have enough will to openly urge the Uzbek government to change its policy of en-mass coercion of citizens to pick cotton,” Umida Niyazova, the author of the UGF report, tells bne IntelliNews. “The World Bank doesn’t have the right to ignore the fact that the current cotton production system encourages poverty and backwardness in Uzbekistan’s agriculture and the country in general.” About 16% of Uzbekistan’s population lived below the national poverty line in 2013, three-quarters of whom lived in rural areas, according to the UNDP.

“For some reasons the bank doesn’t want to see the root of the problem and in essence it is not interested in the real development of agriculture in Uzbekistan,” Niyazova concludes.