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World Bank arm's loan to Indorama Kokand Textile irks activists

Four Uzbek nationals have filed a complaint against the World Bank's private sector arm, charging that a $40 million loan to an Uzbek textile company risked stoking the practice of forced labour in the central Asian country's cotton fields. The complaint filed with the International Finance Corporation (IFC) demands an investigation into forced labour related to Uzbekistan-based Indorama Kokand Textile.

According to human rights groups, Uzbekistan operates a massive, state-orchestrated forced labour system that underpins its position as the world's fifth-largest cotton exporter.

The U.S. government's annual report on human trafficking, published recently, said Uzbek government-compelled forced labour of adults remained endemic in the 2015 cotton harvest. The complaint to an IFC ombudsman made public the charges that the private lending group does not have adequate mitigation measures to ensure its investments and are not supporting forced labour.

According to its website, the IFC, which invests in developing the private sector in emerging economies, approved the loan of up to $40 million to Indorama Kokand Textile in December 2015.

The loan aims to finance the expansion of a cotton plant in the Uzbek city of Kokan, the website said, with a view of encouraging exports. Indorama Kokand Textile, a leading cotton producer in Uzbekistan, says on its website that more 90 per cent of its production is for export to Latin America, Europe, Bangladesh, former Soviet countries as well as Turkey.