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  • The More Things Change ...

    The World Bank, Tata and Enduring Abuses on Indias Tea Plantations

    January 2014

  • The More Things Change ...

    The World Bank, Tata and Enduring Abuses

    on Indias Tea Plantations

    Columbia Law School Human Rights Institute

    January 2014

    Cover photo: Woman pruning tea bushes at Nahorani estate, Assam.

  • 5

    CONTENTS

    EXECUTIVE SUMMARY ...................................................................................... 7History and Context ......................................................................................................................8Living and Working Conditions on the Plantations ...................................................................9The Transition to APPL ...............................................................................................................11

    ..........................................12 .......................................................................14

    PREFACE ........................................................................................................... 16

    METHODOLOGY ................................................................................................ 18

    PART I: HISTORICAL AND LEGAL CONTEXT: APPL AND THE BROADER STORY OF INDIAN TEA PLANTATIONS ......................................................................... 21

    ......................................22 ...................................24

    Evolution of Conditions on Plantations ....................................................................................25Preservation of Social Hierarchies ..........................................................................................25Compensation and Wages ......................................................................................................27The Plantations Labour Act of 1951 ........................................................................................27Compliance with the PLA ........................................................................................................28

    PART II: THE REALITY FOR WORKERS AT APPL ............................................. 31Living Conditions ........................................................................................................................34

    Housing ...................................................................................................................................34Sanitation ................................................................................................................................37Water .......................................................................................................................................41Electricity .................................................................................................................................44

    ...............................46Gender Discrimination ......................................................................................................46Parents, Older Children and Temporary Workers .............................................................49

    Health Services .......................................................................................................................50Wages .....................................................................................................................................55

    .............................................................................................61Casualization and Worker Shortage .....................................................................................65

    ......................................................................................................67Audits ......................................................................................................................................67Restricted Access ...................................................................................................................69Unions ....................................................................................................................................70

    PART III: THE ECONOMIC IMPACT OF RESTRUCTURING: EMPLOYEE OWNERSHIP AND DIVERSIFICATION .............................................................. 75

    .....................................................................................................................77No Informed Consent .................................................................................................................79

    ..............................................................................................81

  • .............................................85The Share Plan: Heavy Deductions from Low Wages and Future Uncertainty .....................85

    .....................................................87Fisheries ...........................................................................................................................88No Job Creation or Improved Job Security .......................................................................91

    PART IV: ROLE OF THE IFC AND SOCIAL CERTIFICATIONS ............................ 93 ....................................................................................94

    ...............................95 ................................................................96

    Standards Applied ............................................................................................................96Lack of Due Diligence .......................................................................................................98

    .....................................................................................................................100 ....................................................100

    ........................................................................102Ethical Tea Partnership ........................................................................................................104

    PART V: CONCLUSIONS AND RECOMMENDATIONS ...................................... 105Living and Working Conditions ...............................................................................................106

    .......................................................107 ........................................................................107

    ....................................................................................................................108

    BOXES ...........................52

    ....................................................................58Under Plantation Rule: Worse Off Than Other Citizens of India? ...........................................72

    .......................................82The IFCs Response to Complaints: Neutral Arbiter or Tata Partisan? ................................101

  • Executive Summary 7

    EXECUTIVE SUMMARY

    Tea plantations in India employ more than a million permanent workers, and perhaps twice as many seasonal laborers. This makes the industry the largest private-sector employer in the country. But workers depend on plantations for more than just employment: millions of workers and their families live on the plantations, and rely on them for basic services, including food supplies, health care and education. Indian law has required plantation owners to provide these since the adoption of the Plantations Labour Act (PLA), soon after independence.

    The Tata Group, one of Indias most powerful corporate entities, is also one of the most

    Tata operated a vertically integrated tea business, owning dozens of plantations, processing and packaging facilities, and major retail brands. In the mid-2000s, Tata reached out to the World Banks private investment arm, the International Finance Corporation (IFC), and devised a complicated plan that would create a separate company to

    operate its extensive plantation operations in the states of Assam and West Bengal. The plan for the new company, Amalgamated Plantations Private Ltd. (APPL), included employee share ownership

    Tata would continue to support APPL for a period

    off into a publicly traded company, allowing Tata to focus on marketing its existing retail brands and developing new ones.

    This is a case study of APPL. It documents the conditions for APPLs workers and their families on the plantations, evaluating them in the context of Indian law and international commitments. It is a detailed account of the persistence of abusive practices, and the failure to comply with the basic requirements of the PLA, 60 years after its passage. It is also a critical analysis of the transition from Tata Tea to APPL, and of the role played in that transition by the IFC and private organizations intended to promote decent labor standards.

    Group meeting at Hathikuli where workers and their families gathered to discuss conditions on the estate.

  • This report focuses on APPL because of the

    commitment to corporate social responsibility and its engagement with the IFC. By partnering with the IFC, Tata committed itself to the development goals of the World Bank, taking APPL beyond a mere private business deal. Through its investment in APPL, the IFC has also assumed responsibility. Decades of activism from inside and outside the World Bank led the IFC to adopt elaborate rules, known as Performance Standards, which are intended to ensure that IFC projects are implemented in compliance with its social and development goals. APPL is a test of the IFCs will and capacity to enforce its standards when faced with a real world investment.

    As the report shows, th