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World Bank to audit tea plantation project in Assam

Last Updated: Friday, February 14, 2014 - 20:40

New Delhi: World Bank's audit arm Compliance Advisor Ombudsman (CAO) will investigate claims of labour and human rights abuses at a tea plantation project in Assam that is jointly financed by IFC and Tata Global Beverages.

In a document, CAO said the investigation was in response to complaints about conditions of workers in three plantations belonging to Amalgamated Plantations Private Limited (APPL), a company which manages tea plantations in the Northeast of India, in which International Finance Corporation (IFC), lending arm of World Bank, has an active investment.

CAO took up the issue following a compliant by three NGOs from Assam on behalf of workers concerned about labour and living conditions on three of APPL's tea plantations in Assam.

This compliance appraisal builds on a January 2013 compliance appraisal in relation to the same project triggered by the CAO Vice President," CAO said.

At that point it was decided that a compliance investigation of IFC's Environmental and Social (E&S) performance in relation to this investment was warranted, it added.

"CAO decides to conduct a compliance investigation of IFC's E&S performance in relation to its investment in APPL, considering both the issues raised by the current complaint and those discussed in its January 2013 compliance appraisal," CAO said.

The complaint is made on behalf of workers from the plantations of Nahorani, Majuli, and Hattigor. CAO determined that the complaint met its three eligibility criteria and began an assessment of the complaint, it said.

Reacting on the development, Tata Global Beverages said it is committed to the fair and ethical treatment of people across its supply chain and take their welfare seriously.

"The company is aware of the compliance enquiry on IFC's investment in APPL. APPL is cooperating fully with the enquiry and will extend every cooperation required," it said.

According to CAO, the investment on the project, which is run by APPL, was designed to establish a company to acquire and manage the 24 tea plantations located in Assam and West Bengal previously owned by Tata Tea Ltd (TTL), now known as Tata Global Beverages Ltd (TGBL).

CAO reviews complaints from communities affected by development projects undertaken by the two private sector lending arms of the World Bank Group: the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA).

IFC's commitment to the project was Rs 30 crore equity investment for 19.9 percent of the common share capital of APPL.

TGBL holds a 49.6 percent shareholding of APPL with the remaining balance held by other investors.

While Tata Global Beverages has a minority equity stake in APPL (the tea plantations company referred to in the report), APPL operates as a separate corporate entity and is managed independently with its own Board of Directors and management team, the company said.

TGBL further said as a shareholder in APPL, it was concerned about the allegations... And "the APPL management disagrees with these allegations".

Regarding specific complaints made, the APPL management has assured stakeholders that it complies fully with all requirements of the Plantations Labour Act, treats its workers fairly and in compliance with all legal norms, and that employees receive benefits beyond what many other tea plantation companies in India offer, it said.

"We will, however, further study the results of the CAO enquiry when it is submitted and decide on our next steps thereafter," the company said.

First Published: Friday, February 14, 2014 - 20:40
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