The European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC) are proactively undermining their own environmental and social safeguards by awarding new loans to Indorama – while harm they facilitated at the Indorama Agro cotton project in Uzbekistan remains unremedied.
On paper, multilateral development banks (MDBs) demand that their clients comply with environmental and social (E&S) safeguards and domestic laws in the country of project operations. However, the case of Indorama, a global conglomerate comprising multiple entities in numerous jurisdictions, reveals how easy it is to avoid these safeguards and accountability for harm done – and yet still receive new loans from the same banks.
According to EBRD’s and IFC’s guidelines, clients who fail to comply with MDB safeguards must take corrective actions or face consequences. But Indorama appears to enjoy a very special relationship with MDBs, having scooped up hundreds of millions of dollars in loans over the last 25 years for projects around the world, despite repeated reports of human rights violations and environmental harm, including the use of forced and child labor in Uzbekistan’s cotton fields or severe pollution linked to its fertilizer factory in Nigeria.
In 2021, the EBRD and the IFC jointly lent Indorama Agro, one of the largest cotton companies in Uzbekistan, $130 million to “support the modernization of agriculture and enhanced economic opportunities for the local population.” What unfolded was the polar opposite and an unmitigated disaster. An estimated 10,000 people in two regions of Uzbekistan lost their livelihoods, following coerced transfers of 54,000 hectares of farmland to the company in exchange for verbal promises of jobs which turned out to be low paid and with poor working conditions.
For years, affected communities, civil society groups and workers reported and documented Indorama’s lack of compliance with MDB safeguards and did so at great personal risk. In repressive contexts such as Uzbekistan, those speaking out and monitoring abuses have repeatedly faced retaliations.
In August 2023, Uzbek Forum for Human Rights and Bankwatch filed a complaint on behalf of 15 workers with IPAM, EBRD’s independent accountability mechanism, raising concerns about labor rights violations, forced land lease terminations, union busting, health and safety negligence, and environmental harm. IPAM has since been conducting a compliance review which is expected to conclude in the following weeks, more than three years later.
In November 2024, the IFC conducted an independent labor audit, confirming many of the labor and human rights violations that had been raised. Following publication of the audit, Indorama Agro promptly prepaid its loans in January 2025, conveniently releasing the company from lender obligations to implement outstanding safeguards. According to IFC management at the time, Indorama Agro had nonetheless committed to implementing identified corrective measures, even though the client relationship “had ended” and was no longer bound by MDB safeguards.
However, Indorama Agro did not uphold its promises and labor rights violations did not stop. In January 2026, Indorama Agro Workers filed a second complaint, raising similar concerns, followed by a third complaint by a farmer in August 2026, alleging the illegal transfer of his land to the company without consent or compensation.
While IPAM’s compliance review was yet to be completed, EBRD nonetheless pressed ahead with a new loan of $65 million to Rustavi Azot in June 2025, a fertilizer plant belonging to Indorama in Georgia, despite E&S concerns from civil society that were raised directly with Board members. During this time, 89 CSOs from around the world had signed a joint letter demanding remedy for Indorama Agro workers. EBRD took the position that remedy could not be considered until IPAM’s review had reached its conclusion on compliance and justified the new loan on the grounds that Indorama in Georgia was a separate entity from Indorama in Uzbekistan. In fact, both are owned by Indorama Corporation. In July 2026, both EBRD and IFC announced they were considering yet another combined loan to Indorama Corporation worth $348 million, this time for a fertilizer plant in Egypt.
EBRD and IFC are simply ignoring the concerns of civil society, workers and communities, while failing to meet even the minimum standards of human rights due diligence. This is particularly concerning in contexts with restricted civic space, such as Uzbekistan and Egypt, where people are often too afraid to even speak out. Egyptian rights defenders working in exile have identified multiple shortcomings in the Environmental and Social Assessment of the proposed loan for the fertilizer plant but affected communities have little prospect of publicly voicing their concerns or meaningfully participating in any consultations.
Nonetheless, the combination of authoritarian contexts where independent monitoring and reporting on development projects carry personal risk for rights defenders, along with a disregard for client due diligence, does not appear to ring any alarm bells with either EBRD or IFC Board members or management.
The remarkable relationship of unbroken trust between MDBs and Indorama, despite so much evidence of harm and avoidance of responsibility, is as incomprehensible as it is dangerous. EBRD and IFC are undermining their own E&S standards and signaling to rogue companies everywhere that non-compliance will have no consequences, while simultaneously refusing to take responsibility for the harm they have facilitated.
The double standard that has been applied by EBRD on the question of remedy for Indorama Agro workers is equally questionable: remedy cannot be considered until IPAM concludes its review, but meanwhile, new loans are approved. Would anyone offer a suspected thief the keys to the safe while police are still investigating?
If E&S standards are to have any credibility, MDBs must ensure they are properly implemented and impose penalties on those clients that repeatedly fail to respect them, in the same way that those conducting fraudulent activities are sanctioned and blacklisted. This should include sanctions against clients responsible for retaliations against those raising concerns. The claim of “zero-tolerance policies” towards retaliations is equally worthless, when retaliations are not just tolerated, but actually rewarded with new loans.
First and foremost, EBRD and IFC must uphold their stated commitments to “do no harm”. That means taking responsibility for harm that has occurred on their watch and ensuring remedy for those affected, as well as closing loopholes such as early prepayment by clients that allow them to avoid responsibility. Above all, MDBs need to set a precedent to show that their proclaimed commitments to improving livelihoods have at least some bearing in reality.
This article by Lynn Schweisfurth was first published by Eurasianet on September 23, 2026
