Labour issues

Corporate neglect

Print edition : January 06, 2017

Workers gather to weigh plucked tea leaves at a tea estate in Assam's Nagaon district on November 2. Photo: REUTERS

A World Bank report chastises IFC and APPL for failing to improve the conditions in the tea estates of Assam, confirming long-standing complaints by workers and NGOs.

THE Tata Group has been upbraided by an internal audit report of the World Bank Group for failing to ameliorate the conditions of tea plantation workers in Assam.

In 2009, through a $7.8 million investment by International Finance Corporation (IFC), a member of the World Bank Group, the Tatas created Amalgamated Plantations Pvt Ltd (APPL), India. In 2013, the office of the Compliance Advisor Ombudsman (CAO), which holds the World Bank accountable to its own policies, set out to investigate complaints against IFC’s social and environmental performance. It found that low wages and poor working conditions on APPL plantations did not “protect and promote the health of workers and thus [did not] provide a way out of poverty”. It further stated that workers were not given proper information about the risks of share ownership and their rights as shareholders and that they handled hazardous pesticides without proper training or equipment, conditions which even led to the sudden death of one employee.

The report is significant as it confirms many of the complaints being made by workers and non-governmental organisations (NGOs) that have worked in the area for long. Violations of wage and labour laws, restrictions on the freedom of association, poor hygiene and health, hazardous conditions for pesticide sprayers and concerns with the share programme they had raised were also found to be true by the CAO.

In 2011, the International Union of Food Workers (IUF) made a complaint to IFC outlining concerns from unions representing workers on an APPL tea estate. The complaint related to an incident which took place in August 2009, when a pregnant tea worker at APPL’s Nowera Nuddy estate in West Bengal collapsed allegedly after making a request for maternity leave. This incident led to a labour dispute which resulted in two lockouts lasting three months.

In a separate public report, the IUF detailed another incident which occurred in May 2010 at APPL’s Powai estate in Assam. In this case, a worker collapsed and died, allegedly because of exposure to pesticides. The event led to protests and a clash with the police, which resulted in two protesters being killed and 16 others injured.

Subsequently, in 2012 the CAO vice president initiated a compliance appraisal in relation to IFC’s investment in APPL. The report was released in January 2013, which concluded that IFC’s investment in APPL warranted a compliance investigation. In February 2013, the NGOs PAJHRA (Promotion and Advancement of Justice, Harmony and Rights of Adivasis), PAD (People’s Action for Development) and DBSS (Diocesan Board of Social Services) complained to the CAO on behalf of workers on three APPL plantations in Assam—Hattigor, Majuli and Nahorani—and this led to CAO investigations.

India is the second-largest producer of tea in the world and the tea sector is India’s largest private employer, with production concentrated mainly in Assam and West Bengal, followed by Tamil Nadu and Kerala. APPL, the second-largest producer and supplier of tea in India, directly affects the lives of over 1,55,000 people on its plantations. Over 30,000 of them are permanent workers across 21 estates in Assam and four in West Bengal.

“The majority of Assam tea workers belong to Adivasi communities who were forcibly brought from central India under British colonial rule,” said Stephen Ekka, director of PAJHRA. “These workers and their families depend on the plantations for their livelihood and almost all other aspects of their life,” he added.

Under the Indian Plantations Labour Act, 1951, employers are responsible for providing workers with welfare services, including housing, health care, adequate water, and educational facilities. Jobs on the plantations are traditionally passed from one generation to the next. Having limited access to education and economic opportunities outside the plantations, tea workers are highly dependent on their employers.

As stated by IFC, poverty across Assam and other tea plantation areas is deeply entrenched. This was particularly the case in the early 2000s when the tea industry was facing a challenging business environment owing to low productivity and high fixed costs. As a result, during this time, approximately 120 estates were closed and over 60,000 jobs were lost.

It was in this context in 2006 that IFC chose to partner with APPL to support a sustainable business model. IFC’s investment involved the demerging of the tea production business from Tata Global Beverages (TGB) into a new company called APPL, in which workers would be offered the opportunity to acquire equity through an employee share purchase plan. IFC committed itself to acquiring an equity stake in APPL and to acting as an honest neutral broker to support a fair transaction for workers and TGB.

The report noted that IFC expected the development impact from the project to include increased sustainability of the client’s tea operations, preservation of over 30,000 jobs and leadership in initiating change in the industry. The share programme was designed to improve productivity and give workers the opportunity to share in the profits of the company. But it failed in these very goals.

The CAO report took serious note of the issue of child labour prevalent in the tea estates. It pulled up IFC for not addressing the issue when it was raised in 2013. “While IFC initiated an OHS [occupational health and safety] audit in 2011, this did not include questions on child labour,” the CAO said.

It sought to know why neither the Solidaridad report commissioned by TGB nor a Tata Institute of Social Sciences (TISS) study commissioned by APPL indicated that they considered the issue. “IFC’s supervision documentation is similarly silent.... However, CAO finds that the client’s [APPL] participation in these programmes provided IFC with insufficient evidence of compliance,” it said in the report.

“It is very concerning that APPL continues to breach a number of national laws, like the Minimum Wages Act, 1948, which is critical to ensuring protection for marginalised tea workers,” said Jayshree Satpute, co-founder of Nazdeek, an NGO supporting the complainants.

The CAO also found violations of the Plantations Labour Act and IFC Performance Standards and noted that “housing and sanitation facilities are in disrepair, water pumps are inoperable, requiring workers to dig their own wells, electricity supplied to workers is charged at the higher industrial rate instead of the domestic rate, [and] the standard of education provided to children is inadequate. In some instances, the complainants allege that the teacher-student ratio ranges from 1:200 to 1:300, with instruction provided for one hour to each grade per day. Further, they allege, where a creche is available, it closes early, requiring older children to forgo education to care for younger children. The standard of medical facilities and ratio of medical personnel is not in compliance with national regulations. Further, the complainants allege that workers unduly bear the cost of medical treatment for themselves and their dependants.”

The CAO quoted and derived strength from older reports on the health situation at the estates. It cited a 2004 World Bank report on the health sector in Assam as saying that “even though the data on tea garden hospitals and dispensaries are difficult to come by, the limited information available shows that the condition of these facilities is far below the minimum requirement”. It also noted the inadequate supply of medication and staff at the medical facilities in the tea estates.

The CAO report also cited other studies that have examined health indicators of tea workers in Assam, such as a 2006 study of 880 households across eight estates that recorded a 72 per cent incidence of anaemia and a 65 per cent incidence of participants carrying at least one intestinal parasite.

Infectious diseases like tuberculosis (12 per cent) and respiratory illness (7 per cent) were also registered among participants. Further, 60 per cent of preschool children were underweight.

The study concluded: “Most of these diseases among them appeared to be emanated from poor personal and household hygiene, unsatisfactory sanitation and housing coupled with ignorance due to lack of education. Poor nutrition among them also probably makes them vulnerable to infectious diseases and vice versa. Presence of [a] household toilet was found to reduce... transmitted diseases.... However, high prevalence even among toilet holders may be because of contaminations of surroundings due to open field defecation by large numbers of other community members and poor maintenance of toilets facilities. Unfavourable housing may be attributable to higher rate of tuberculosis and respiratory conditions.”

A 2014 study supported by the Assam Medical Centre and Unicef analysed the prevalence of anaemia among adolescent girls on tea estates. Sampling 802 girls in 16 estates, the study found an incidence rate of 96 per cent. The study noted that “the high prevalence of anaemia may be because of frequent occurrence of diarrhoea and high worm infestation related to poor housing condition and environmental sanitation”.

Case study

The CAO also took note of a case study published by the Human Rights Institute at Columbia Law School on APPL in January 2014. The study documented the conditions for APPL workers and their families on its plantations, evaluating them in the context of Indian law and international commitments. Specific violations that the report suggested could be addressed immediately by the company include discriminatory denial of benefits to plantation workers and their dependants; interference with workers’ right to free movement and their right to receive visitors in their own homes; restrictions on workers’ right to form and join a union of their choice; erosion of wages through unfair deductions and high task rates; sale of APPL shares to workers through deception and coercion; and seizure of workers’ agricultural land.

“The World Bank’s investment in APPL was a missed opportunity to confront the historic legacy of impoverishment and abuse of tea workers,” said Peter Rosenblum, co-author of this study. “Unfortunately, the IFC’s initial response to the CAO findings is to resort to the same wishful thinking and credulous reliance on good intentions that the CAO documented in its investigation,” he added.

While IFC agreed to some of the points raised by the CAO, it defended the integrity of the third party audit by Solidaridad, which did not cite any non-compliance with Indian law with respect to workers’ organisations, wages, avoidance of child labour, and disclosure/consultation. “Nevertheless, IFC will seek an updated legal opinion as to whether the current wages paid meet national minimum wage requirements for the tea sector. In relation to grievance redress and worker health and safety, including pesticide use, significant progress has been made to date by the company. But there is also scope for further improvement. In this regard, APPL has committed to completely phase out highly hazardous pesticides (WHO Class 1 a and 1 b) and implement additional measures to strengthen its grievance mechanisms by end of FYI7,” it said.

It also promised to provide working toilets and potable water to each household and a septic tank cleaning mechanism, phase out hazardous pesticides, provide personal protective equipment to workers, link these with the National Rural Health Mission and clean all non-cemented drains by March 2017.

While the CAO did not recommend that IFC pull out of the investment, it noted that IFC had an important role to play in developing long-term remedies and ensuring their implementation.

It advocated that IFC stay fully engaged until the originally stated goals of the project were achieved in compliance with the performance standards. “IFC should intervene promptly to ensure workers’ safety in light of retaliation faced by those workers who attempt to reach out to auditors and grievance redress mechanisms,” it said.

The complainants drew relief from the CAO’s recommendations. Anirudha Nagar, South Asia director of Accountability Counsel, an organisation supporting the complainants, said, “The World Bank Group has an excellent opportunity here to set a leadership example for the rest of the Assam tea industry. It must ensure workers are properly consulted in moving forward, including on the nature of shares, to ensure its investment has an empowering social impact.”

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