Tata Tea under scanner for poor living condition and coercion of workers

World Bank authorises enquiry after investing US $8 million in the global beverages company

By Sayantan Bera
Published: Wednesday 12 February 2014

Bollywood actress Kareena Kapoor, Tetley’s brand ambassador, at a promotional event in January this year

The World Bank, which invested nearly US $8 million in Tata Tea’s plantation company through its investment arm International Finance Corporation (IFC), has authorised an investigation into alleged labour and human rights violations in Tata’s gardens in Assam. The investigation will be carried out by the bank’s independent accountability office—the authorisation came after workers complained of inhuman working and living conditions, coercion and violation of their rights to “freedom of association”.

Tata Global Beverages, which owns Tetley, the second largest tea brand worldwide, sources its black tea from Assam’s tea plantations, in north-eastern India. The complaints were filed by three non-profits in January 2013. Three gardens—Majuli and Hathigarh in Udalguri district and Naharani in Sonitpur district of Assam—are under scrutiny.

“The living conditions of plantation workers are pathetic. There are no provisions for sanitation or drinking water supply at their homes. Women workers don’t have access to toilet when they go for plucking in the gardens,” said Wilfred Topno, secretary of the non-profit People’s Action for Development. “Workers are regularly abused by their supervisors. The management are not allowing new unions which can address their demand,” Topno added.

The violations, especially those relating to lack of housing, come under the purview of the Plantations Labour Act, 1951. Under this Act, tea estates are responsible for housing, medical, rations and other welfare benefits of estate workers. To account for these benefits, cash wages are kept low. “The management cheats the workers of welfare benefits. We also want a revision in the Rs 95 per day wage rate that is abysmally low,” Topno said.

“The investigation team should see that nothing has changed since the World Bank got involved. The supposedly ethical and sustainable company continues to make large profits from the mistreatment and exploitation of plantation workers,” said Stephen Ekka, director of PAJHRA, another co-complainant.

‘Enduring abuses’

A damning report was released in January this year by the Columbia Law School in New York, titled, The more things change: the World Bank, Tata and enduring abuses on India’s tea plantations. The report, based on three years of research and visits to 17 out of 24 plantations, describes pervasive violations of workers' rights on the plantations owned by Amalgamated Plantations Private Ltd (APPL) in the states of Assam and West Bengal.

“Attracted by Tata's reputation for social responsibility and its promise to empower the company's workers through share ownership, the World Bank's private investment arm, IFC, provided technical and financial support. IFC now owns nearly 20 percent of the shares of company,” said Peter Rosenblum, professor of International Law and Human Rights and faculty director at the Human Rights Institute of the Columbia Law School.

He added that IFC acted with an excess of enthusiasm and an absence of attention to the known problems in the plantation sector. On the basis of a thin record that included visits to only three plantations over the course of three days, the IFC found the project to be in compliance with law and World Bank standards; its assessment was ‘positive without reservation’ as stated by the IFC's own Compliance Advisor/Ombudsman (CAO), said Rosenblum. “IFC failed even to note the appalling living conditions that plague tea plantations generally, and are immediately visible to anyone visiting worker residences at APPL estates,” he added.

 “Together, the World Bank and Tata trumpeted the change, not as an abandonment of the plantations' 31,000 workers, but as a model for the social responsibility and sustainability movement... In reality, not only do conditions at APPL fail to meet the higher standards of the World Bank and the private certification bodies such as Social Accountability International that gave the plantations their seal of approval, but they violate the 60 year old standards of Indian law. In a number of stark instances, the corporate changes at the former Tata plantations have actually made life worse for workers and their families,” notes the report of Columbia Law School.

“On every plantation visited, workers showed researchers around dilapidated homes lacking protection from rain and wind, each dwelling often housing the families of several workers.  Latrines were also in visible disrepair on all of the plantations visited, sometimes critically. Health care raises issues of both access and quality.  Management confirms the shortage of doctors, but workers complain of unreasonable demands for sick leave—for example, that they must present themselves three times a day at the hospital for verification—and abusive behaviour by medical staff.” 

“The investigation is an important first step towards ensuring that workers receive fair and dignified treatment, but IFC must follow up to guarantee that working and living conditions meet all domestic and international standards,” said Komala Ramachandra of Accountability Counsel , a civil society organization supporting workers and non-profits in their complaint.

Responses and responsibilities

Satya Muniasamy, head of corporate communications at Tata Global Beverages, in an email response to Down To Earth, wrote, “While Tata Global Beverages has equity stake in APPL, APPL operates as a separate corporate entity... The Management of APPL has informed us that they do not agree with the contents of the said report, and that they have responded to the authors of the report with a detailed statement, strongly refuting specific allegations contained in the report published on the Columbia Law school website.”

“We at APPL look after our workers and are compliant with the law. We are also part of the Ethical Tea Partnership and also conduct regular Occupational Health and Safety audits. We confirm that full co-operation will be extended to the IFC Compliance team during their audit based on the Ombudsman Report,” Kaushik Biswas, APPL’s company secretary, said in his email response.
In its response to the Columbia Law School report, APPL had earlier said that ‘the report fails to appreciate the fact that tea industry is cyclical in nature’ and ‘went through a long period of recession from 1998 till 2007’ when ‘conservative spending becomes an industry wide necessity’. The APPL response thereafter listed its welfare expenses, initiatives in healthcare, skill development and organic farming.

“As the report highlights, significant work remains to be done and IFC has an important obligation... Given the large number of estates, the company’s large workforce and other legacy issues, the implementation of standards may vary between tea estates. An ongoing review by IFC’s compliance and accountability mechanism will also inform our continued work with APPL,” reads IFC’s response to the Columbia Law School study.

The study documented the erosion of worker’s wages through unfair deductions and high task rates, and instances of deaths due to starvation and waterborne diseases. Among others, it narrated a gruesome incident from 2010.

“Worker anger boiled over at Powai Tea Estate in Assam, triggered by what workers perceived as management contempt for workers’ health and safety. On May 28, 2010, a 25-year-old worker named Gopal Tanti, assigned to pesticide spraying, collapsed and died on the job. Workers reacted strongly, protesting both the conditions that they believed contributed to his death and the disrespectful treatment of his body once it was found. During the protests that broke out following Tanti’s death, local management called in the police. The police fired into the crowd, killing two people and injuring 15.”

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