WB probes Tata project over worker abuse in India

The World Bank (WB) said on Thursday it was investigating allegations that Indian tea plantation workers at a project it is jointly financing with tea giant Tata Global Beverages were being subjected to labour and human rights abuses.

TataThe International Finance Corporation (IFC) – a member of the World Bank Group – said its accountability office decided to probe the project run by Amalgamated Plantations Private Limited (APPL) in the northeastern state of Assam after charities had alleged that tea pickers were being exploited.

“The Compliance Advisor Ombudsman (CAO) has announced an investigation into whether IFC followed its policies and procedures in the case of APPL,” an emailed IFC statement said in response to questions from Thomson Reuters Foundation.

“IFC takes all concerns in relation to its investments/projects that are expressed by stakeholders and affected communities seriously. The CAO compliance investigation is currently under way, IFC will await the outcome of the process.”

The IFC’s $7.8 million investment in the “Tata Tea” project began in April 2009 with the aim of promoting the idea of workers owning shares in a company. The APPL was then set up to acquire and manage tea plantations previously owned by Tata Global Beverages.

The IFC, which owns 20 percent of APPL shares, said it saw the divestment project – where the tea workers can become major shareholders in APPL – as an opportunity to secure employment for over 30,000 workers.

The total project cost is $87 million and Tata Global Beverages – which owns Tetley, the second largest tea brand in the world – controls a 41 percent stake in APPL.

APPL told Thomson Reuters Foundation there was no violation of workers’ rights and the company would extend full cooperation to the CAO probe.

“We at APPL look after our workers and are compliant with the law,” said Kaushik Biswas, APPL’s company secretary, adding that the company followed international standards on health and safety conditions for workers.

“Wages are paid as per industry agreements. Cash wage plus benefits total up to 189 rupees ($3) per man day. Working hours are as specified in the Plantations Labour Act, 1951,” he said.


Three non-governmental organisations complained to the CAO in February last year, raising concerns about  violations of workers’ rights at three of APPL’s 25 plantations.

The complaint cited long working hours, inadequate compensation, poor hygiene and health conditions, including the unsafe use of pesticides. It said there was restricted freedom of association among workers and there were barriers to voicing grievances.

Productivity targets are so difficult to meet that workers engage other family members, including children, to help them do enough work to receive a single wage, it said.

The charities also questioned the worker share-buying programme, saying tea pickers were being pressured into buying shares, often without proper information about the risks of such an investment.

“We invite the investigation team to see with their own eyes that nothing has changed on the plantations since the World Bank got involved,” said Stephen Ekka, director of PAJHRA, one of the charities which complained to the CAO.

“The supposedly ethical and sustainable Tata company continues to make large profits from the mistreatment and exploitation of plantation workers. This cannot continue.”

Tata Global Beverages voiced “strong disagreement” with the allegation made by PAJHRA, adding that it was committed to the fair and ethical treatment of people across its supply chain.

“Regarding the specific complaints made, the APPL management has let us know they comply fully with all requirements of the Plantations Labour Act,” Tata Global Beverages said in a statement.

“They treat their workers fairly and in compliance with all legal norms, and their employees receive benefits over and above many other tea plantation companies in India.”

Despite Tata’s majority share in the project, APPL operates as a separate corporate entity and is managed independently with its own board of directors and management, it said.

A damning report on the project by ColumbiaUniversity earlier this month said tea pickers faced “dire living and working conditions, in violation of Indian law and the World Bank’s standards for environmental and social sustainability.”