India: Tata Tea in Assam

Woman plucks tea in Assam, India. Rebecca Gerome.

Woman plucks tea in Assam, India. Photo by Rebecca Gerome.

Tea Workers’ Complaint Headed to Full Investigation by World Bank Group CAO

Accountability Counsel is supporting three local NGOs in Assam, India, in their efforts to end human rights abuses of tea plantation workers resulting from a project financed by the International Finance Corporation (IFC).  The International Finance Corporation, part of the World Bank Group, invested US$7.8 million in a project to enable the setting up of a company, Amalgamated Plantations Private Limited (APPL), to acquire and manage 24 tea plantations in northeast India.  The project included a sustainable “worker-shareholder” model, in which the management and employees would have a significant shareholding.  IFC owns approximately 20% of APPL, and Tata Global Beverages, a subsidiary of the Tata Group, owns just under 50% of the company.  Tata Global Beverages owns and markets the Tetley brand, making Tata Global Beverages the second largest player in the global tea market.

In February 2013, three local NGOs, filed a complaint to the World Bank Group’s Compliance Advisor/ Ombudsman (CAO), raising concerns about inhumane labor and working conditions on the plantations.  The Complaint cites long working hours, inadequate compensation, poor hygiene and health conditions, coercion and pressure of plantation workers, and lack of freedom of association, in violation of the IFC’s Performance Standard 2 (PS2).

Furthermore, the complaint raises concerns about the worker shareholder program.   Though the program is intended to empower workers and provide them with greater agency in the company, workers have instead been pressured into buying shares, often without information about what it means to be a shareholder or the risks of such an investment.

In February 2013, the CAO found the complaint eligible for further assessment. The CAO completed their assessment period on November 25, 2013, transferring the complaint to Compliance, after APPL refused to enter into dialogue with the workers and the civil society organizations who filed the complaint.

A full investigation into IFC’s compliance with social and environmental performance with respect to their investment in APPL was approved, detailed in an appraisal report released on February 11, 2014.  In parallel, the CAO has another moving to investigation under its Compliance function related to the same IFC project.  The investigation into both complaints is expected to be complete by May 2014, according to the terms of reference for the investigation.  For the CAO’s status of the case, please visit their webpage.