Labour trouble brewing at Tata Tea plantations

Second complaint filed by labourers with CAO of IFC against company management

It could be more labour trouble brewing for the management of Amalgamated Plantations Private Limited (APPL) an associate company of Tata Global Beverages Limited (TGBL), as a second complaint by labourers there has raised issues of undue compensation, poor working and a lack of freedom to association.

The complaint by the labourers working and living in APPL's tea plantations in Assam was filed through three NGO in February this year with the  Ombudsman for International Finance Corporation (IFC), a member of the World Bank Group which has 19.9% stake in the tea plantations.

Office of the Compliance Advisor Ombudsman (CAO) of IFC, has found "the complaint eligible for further assessment" and has begun an assessment of the issues raised by the labourers.

"The complaint raises concerns about labor and working conditions at three different plantations, specifically citing long working hours, undue compensation, poor hygiene and health conditions, and a lack of freedom to association among plantation workers," the CAO stated on its website about the nature of complaint.

"Furthermore, the complainants question the worker share-buying program, contending workers have been pressured into buying shares, often without proper information about the risks of such an investment," the website further stated, adding that the complainants have requested confidentiality.

Commenting on the recent complaint Managing Director, APPL, Deepak Athal said, "The identity of the NGOs has not been revealed at their request, therefore their interest in the matter is not clear.  The complaint is of a general nature as the wage structure, working hours are governed by industry wide agreements between the registered trade union and managements and revised every three years."

He further stated, "The working conditions are governed by the Plantation Labour Act and other acts which are closely monitored by the state government machinery. There are no disputes pending with the trade unions that represent the workmen. The workmen are free to join a trade union of their choice."

Athal assured, "The IFC Ombudsman will receive  full cooperation from APPL management to investigate the genuineness of the complaint."

A complaint of similar nature was first filed with the CAO in May 2012, by the International Union of Food Workers (IUF) raising concerns over AAPL's non-compliance of  IFC's Performance Standard 2 (PS2) which deal with issues of labour and working conditions. Based on this complaint CAO had order compliance audit of IFC's investment made in APPL. The audit was still on.

APPL is the emergent entity from divestment of the plantation business of Tata Tea Ltd in Northeast India. Its stakeholders include IFC, the Tata Group, partner investors and employees including estate workers. TGBL hold less than 50% shares in APPL.

IFC's investment in APPL was designed to enable the setting up of a company which would acquire and manage the 25 tea plantations located in Assam and West Bengal previously owned by Tata Tea Limited (TTL) and implement a sustainable employee-owned plantation model in which the management and employees would have a significant shareholding (15%-20%). IFC's commitment to the project was an Rs 30 crore equity investment for 19.9% of the common share capital of APPL.