DFI hotel projects can have transformative impacts for workers and communities if labour safeguards are effectively implemented. Safeguards can secure formal employment, often for marginalized workers, in societies where informal work predominates. Many workers stay at these jobs for decades, driving long-term contributions to economic development. Hotels invest in training their employees, leaving lasting impacts on workers’ economic opportunities through new skills and credentials. Safeguards prevent anti-union retaliation and bad faith bargaining, providing an opening for productive negotiations that lead to better job standards. These jobs not only provide for the workers, but also support families, amplifying DFIs’ development impact by ensuring that others can access education,healthcare, and stability.

While DFI clients are required to comply with safeguards on DFI-financed projects, they often do not. Hotel workers have reported extensive violations of safeguards, and despite engagements with DFIs and their clients, they have found it difficult to resolve safeguard violations. This is in part because DFIs lack the workers’ rights expertise needed to identify indications of likely violations. Reluctant to alienate business partners, DFIs rarely use their contractual powers to compel compliance, nor do DFIs or their clients tend to provide remedies to those harmed by safeguard violations.

Shortcomings in human rights compliance can severely undercut the development missions of DFIs. When project managers fail to pay legally owed wages and benefits, they deprive host communities of earned gains and impose added costs as workers must fill the gap left by unpaid healthcare and retirement benefits. Unsafe or unhealthy workplaces burden communities with the costs of illness, disability, and even death.

This section describes six common categories of safeguard violations, drawing on our field work in DFI-financed hotels and our collaboration with the workers and their unions. For each category, we provide a case study drawn from the experience of workers at DFI-financed hotels.