""The More Things Change ..." : the World Bank
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“The More Things Change ...” The World Bank, Tata and Enduring Abuses on India’s Tea Plantations January 2014 “The More Things Change ...” The World Bank, Tata and Enduring Abuses on India’s Tea Plantations Columbia Law School Human Rights Institute January 2014 Cover photo: Woman pruning tea bushes at Nahorani estate, Assam. CONTENTS EXECUTIVE SUMMARY ...................................................................................... 7 History and Context ......................................................................................................................8 Living and Working Conditions on the Plantations ...................................................................9 The 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 ....................................................................................25 Preservation of Social Hierarchies ..........................................................................................25 Compensation and Wages ......................................................................................................27 The Plantations Labour Act of 1951 ........................................................................................27 Compliance with the PLA ........................................................................................................28 PART II: THE REALITY FOR WORKERS AT APPL ............................................. 31 Living Conditions ........................................................................................................................34 Housing ...................................................................................................................................34 Sanitation ................................................................................................................................37 Water .......................................................................................................................................41 Electricity .................................................................................................................................44 ...............................46 Gender Discrimination ......................................................................................................46 Parents, Older Children and Temporary Workers .............................................................49 Health Services .......................................................................................................................50 Wages .....................................................................................................................................55 .............................................................................................61 Casualization and Worker “Shortage” .....................................................................................65 ......................................................................................................67 Audits ......................................................................................................................................67 Restricted Access ...................................................................................................................69 Unions ....................................................................................................................................70 PART III: THE ECONOMIC IMPACT OF RESTRUCTURING: “EMPLOYEE OWNERSHIP” AND DIVERSIFICATION .............................................................. 75 .....................................................................................................................77 No Informed Consent .................................................................................................................79 ..............................................................................................81 5 .............................................85 The Share Plan: Heavy Deductions from Low Wages and Future Uncertainty .....................85 .....................................................87 Fisheries ...........................................................................................................................88 No Job Creation or Improved Job Security .......................................................................91 PART IV: ROLE OF THE IFC AND SOCIAL CERTIFICATIONS ............................ 93 ....................................................................................94 ...............................95 ................................................................96 Standards Applied ............................................................................................................96 Lack of Due Diligence .......................................................................................................98 .....................................................................................................................100 ....................................................100 ........................................................................102 Ethical Tea Partnership ........................................................................................................104 PART V: CONCLUSIONS AND RECOMMENDATIONS ...................................... 105 Living and Working Conditions ...............................................................................................106 .......................................................107 ........................................................................107 ....................................................................................................................108 BOXES ...........................52 ....................................................................58 Under Plantation Rule: Worse Off Than Other Citizens of India? ...........................................72 .......................................82 The IFC’s Response to Complaints: Neutral Arbiter or Tata Partisan? ................................101 EXECUTIVE SUMMARY Tea plantations in India employ more than a operate its extensive plantation operations in the million permanent workers, and perhaps twice as states of Assam and West Bengal. The plan for the many seasonal laborers. This makes the industry new company, Amalgamated Plantations Private the largest private-sector employer in the Ltd. (APPL), included employee share ownership country. But workers depend on plantations for more than just employment: millions of workers Tata would continue to support APPL for a period and their families live on the plantations, and rely on them for basic services, including food off into a publicly traded company, allowing Tata supplies, health care and education. Indian law to focus on marketing its existing retail brands has required plantation owners to provide these and developing new ones. since the adoption of the Plantations Labour Act (PLA), soon after independence. This is a case study of APPL. It documents the conditions for APPL’s workers and their The Tata Group, one of India’s most powerful families on the plantations, evaluating them corporate entities, is also one of the most in the context of Indian law and international commitments. It is a detailed account of the Tata operated a vertically integrated tea business, persistence of abusive practices, and the failure owning dozens of plantations, processing and to comply with the basic requirements of packaging facilities, and major retail brands. In the the PLA, 60 years after its passage. It is also a mid-2000s, Tata reached out to the World Bank’s critical analysis of the transition from Tata Tea private investment arm, the International Finance to APPL, and of the role played in that transition Corporation (IFC), and devised a complicated by the IFC and private organizations intended to plan that would create a separate company to promote decent labor standards. Group meeting at Hathikuli where workers and their families gathered to discuss conditions on the estate. Executive Summary 7 This report focuses on APPL because of the agreeing to support dramatic changes in the structure of the plantation operations, the IFC commitment to corporate social responsibility overlooked problems that should have been and its engagement with the IFC. By partnering considered in advance and then ignored them with the IFC, Tata committed itself to the as they occurred. Key elements of the transition development goals of the World Bank, taking which have obvious appeal on paper – the sale of APPL beyond a mere private business deal. Through its investment in APPL, the IFC has also into commodities other than tea – have actually assumed responsibility.