Assessment the Labor and Working Conditions at Khantex Cotton Cluster

Title of task:

Assessment the Labor and Working Conditions at Khantex Cotton Cluster

Country: Uzbekistan

Location within country: Andijan, Kurgantepa

Name of client:

Landesbank Baden- Württemberg (Germany)

Implementation period(month/year):

April,2018 - Ongoing

Name of senior professional staff of your firm involved and functions performed (indicate most significant profiles such as Project Director/Coordinator, Team Leader):

Isroiljon Khakimjonov- Social Due Diligence Specialist

Project description:

On 20 June 2017, LLC “Khantex Group”, At-Termiziy Str. 7-a, Kurgantepa district, 170710 Uchqun village, Andijan region, Republic of Uzbekistan (“Importer”) and Rieter Machine Works Ltd, Klostergasse 20, CH-8406 Winterthur / Switzerland (“Exporter”) entered into a Contract No. 21519401 for the supply of spinning machinery and equipment with related services.
Under the terms and conditions of the Contract, 85 % of the Total Contract Value as well as costs related to Swiss Export Risk Insurance (SERV) shall be financed by a Loan granted by the Landesbank Baden- Württemberg (Germany) to the National Bank for Foreign Economic Affairs of the Republic of Uzbekistan. At the same time, National Bank for Foreign Economic Affairs of the Republic of Uzbekistan will grant a Loan to its client “Khantex Group”.
On February 6, 2018 SERV approved the project as per basic insurance commitment No. GV 17-88768/1. However, this approval contains some specific conditions. The reason for this, there have been some allegations of abusive labor practices in cotton industry of the Republic of Uzbekistan in past. Specifically, forced labor during the cotton harvest is still recognized as a risk. Therefore it is necessary, that even a textile producing company in Uzbekistan must make sure, that proper labor conditions are met in their supply chain. Consequently there should be presented a third party assessment and monitoring to make sure, that labor and working conditions of the project comply with IFC Performance Standards 2