SVKM’s NMIMS

School of Business Management

Corporate Social Responsibility

FTMBA- 2018-2020

Case Study

Rights Denied In The Name Of Development: The ‘World Bank Approach’ In Assam Tea
Gardens 1

On March 19, 2017, a tea worker died in the Hattigor plantation in Assam. Two days before that,
the 40-year-old worker had collapsed and injured his neck and head while carrying pesticide cans
on his bicycle. He had tuberculosis, but despite having knowledge of it, the authorities assigned
him the task of spraying pesticides. The plantation hospital lacked adequate facilities to treat him
and he was referred to an external hospital.

Another incident that took place on December 14, 2017, involves the baby of a tea worker in the
Majuli plantation. The worker had requested the management to arrange a vehicle to conduct an
ultrasound scan in the 8th month of her pregnancy. The request was turned down by a scathing
remark, “Why are you in a hurry to see your baby?” When labour pain started, she was taken to
plantation hospital where the nurses complained of some unidentified problem in delivering the
baby. On her way to an external hospital, the delivery took place in the vehicle and the baby was
delivered dead. The cause of death was later ascertained to be cardio-respiratory arrest.

These disheartening stories are from World Bank-owned tea gardens in Assam. The two objectives
of World Bank are to end extreme poverty, and to promote shared prosperity. True as always, it is
actions which speak louder than words. The raw realities from World Bank’s tea gardens
exemplify this hypocrisy – rather than ending poverty, it has been exacerbated for tea workers, and
far from sharing prosperity, it has only swelled the pockets of tea managers.

The tea workers have only stories of broken promises to tell; broken promises only add to the woe
of ‘broken backs’, as they are subjected to rampant human rights violation by their employers.
Torture and oppression are not a new thing for this population. In fact, it has a long legacy from
the time of Colonialism.

The tea gardens under scanner are those of the Amalgamated Plantations Private Limited (APPL)
which is the second largest producer and supplier of tea in India, with 25 plantations spread across
the states of Assam and West Bengal and employing around 30,000 workers. APPL is owned by

1Sanil R.( 2018, May 2). Rights Denied In The Name Of Development: The ‘World Bank Approach’ In Assam Tea
Gardens. Youth Ki Awaaz. Retrieved from https://www.youthkiawaaz.com/2018/05/rights-denied-in-the-name-of-
development-the-world-bank-approach-in-assam-tea-gardens/

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Tata Global Beverages, Tata Investment Corporation, tea workers, and the International Finance
Corporation( IFC, private sector side of the World Bank Group).

A new submission to the World Bank’s accountability office by community-based civil society
organizations, Promotion and Advancement of Justice, Harmony and Rights of Adivasis
(PAJHRA) and People’s Action for Development (PAD), with the assistance of US-based human
rights advocacy group Accountability Counsel, underlines the continuing neglect of workers’
rights by the international body.

A Letter of Agony
The letter submitted on April 27, 2018 to the Compliance Advisor Ombudsman (CAO), in the
ninth year of the World Bank’s investment, was prepared after elaborate field consultation with
tea workers, by the aforesaid organizations in three APPL tea gardens in Assam: Hattigor, Majuli
and Naharoni. It reported six cases of deaths (such as the ones mentioned at the beginning) in the
tea plantations in a span of two years. It was argued that these deaths could have been prevented
had proper precautions been taken. These incidents have not come to light so far, owing to the
strict surveillance on the tea plantations, which is carried out to avoid public scrutiny and to
alienate workers. It also speculates more such unreported incidents which might not have surfaced
in fear of retaliation by employers.

Worker’s Plight
The letter also describes the plight of workers in the tea gardens. It concludes that the tea workers
do not have a safe and healthy environment. They lack adequate housing and sanitation facilities.
Houses with leaking roofs and dilapidated toilets with no septic tanks are the norm. Electricity is
erratic and rare.

The plantation medical facilities are inadequate. Most often, hospitals are unhygienic and
understaffed, doctors come rarely, there is non-availability of medicines, and medical coverage for
non-permanent and retired workers is not given. There is also evidence of discriminatory practices
by doctors to adivasi workers.

The daily wages for skilled agriculture labour in Assam is ₹280, but the tea workers are paid a
meagre salary of ₹137. Civil society organizations in Assam conducted various studies and
concluded that tea workers should receive ₹350 per day for leading a dignified life. Workers get
their salary truncated if they do not meet the target of 24kg tea leaves per day in the plucking
season, which creates the conditions for child labour with children helping their parents in meeting
their target.

The only recognized trade union empowered to negotiate with the tea management is Assam Chah
Mazdoor Sangha (ACMS). It is known to be close to the management and has a history of opposing
demands from tea workers regarding pay increases. It does not represent the true cause of labourers
and is authoritarian. Almost a lion’s share of the workforce is women, but this has not translated
into an equally proportionate representation in trade unions. This monopolistic arrangement denies
workers the right to meaningful association as guaranteed by the Indian Constitution.

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Poisoning due to pesticides is another fatal health hazard among tea workers. There is evidence of
use of banned pesticides. Most often, the workers are not given adequate protective gear when
spraying. Also, the provisions for rotation of sprayers and frequent health checks for them are not
carried out.

Furthermore, the IFC ignored the fact that tea workers are indigenous people, despite their having
maintained distinct languages and cultural practices, as well as their history of being brought as
slaves or indentured labourers from outside the state of Assam by the British tea managers in the
time of colonialism.

Worker spraying pesticides without protective gears. Photo Sourced from

http://www.accountabilitea.org

The Story of APPL

Tetley, the 2nd largest tea brand globally, with a heritage of more than 180 years, joined the Tata
Global Beverages family in 2000. In 2006, the International Finance Corporation (IFC), a part of
the World Bank Group focused exclusively on private sector investment in developing countries,
decided to partner with Tata by demerging the tea production business from Tata Global Beverages
(TGB) by forming a new company called APPL. The IFC purchased equity of 20% and an
investment to the tune of US $7.8 billion. The partnership came at a time when the tea industry in

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Assam suffered from low productivity and high fixed costs which had led to many tea estates being
shut down as well as a loss of about 60,000 jobs.

The objective of APPL was to promote a sustainable business model – a “worker shareholder”
programme – which allows tea employees to directly wield equity in the company, thereby having
the potential to impact the lives of its 30,000 workers. When the dependents of these workers are
also counted, the project had a development impact of affecting the lives of 155,000 people of low-
income groups, located in poor areas and conflict zones.

Workers hold about 10% shares of the company and the remaining shares are held by Tata Global
Beverages (41%), Tata Investment Corp (25%) and the World Bank (16%). The workers were
initially offered interest-free loans with which they could buy “preference shares” that had a
guaranteed dividend of 6%. In February 2014, these shares were converted to ordinary shares
which gave them voting rights and decision-making powers. But this did not materialize into
workers finding places on the Board of APPL. Most often, the workers describe that they were
coerced and pressurized into buying shares.

An arrangement like this would have gone a long way in leveraging worker’s rights and increasing
their prospects as the tea workers in Assam have deplorable socio-economic indicators in the state.
The tea worker’s profit in a year is only 0.16 % when compared to rest of the industry. Assam is
one of the states with the highest incidents of Maternal Mortality Rate (MMR) in India and 77%
of MMR incidents in the state are among female tea workers. Only 14% of the meals a day eaten
by female workers are nutritional. And almost 100% tea workers are underpaid.

History of Abuse
Human rights abuses were reported from APPL plantations from the initial days. In 2009, a
pregnant worker, who was denied leave, collapsed during work hours. The following year, another
man died after he was exposed to pesticides. These incidents have drawn the ire of workers, trade
unions and civil society organizations.

An investigation conducted by International Union of Foodworkers (IUF) in 2010 found shocking

incidents of human rights violation in the Powai tea gardens of Assam. The report mentioned
widespread use of pesticides, oppression of tea workers by authorities in connivance with state
machinery and police. The report found APPL operations contravened international laws and
conventions, such as the Universal Declaration of Human Rights, International Covenant on
Economic, Social and Cultural Rights (ICESCR), International Covenant on Civil and Political
Rights (ICCPR), Conventions of the International Labour Organization (ILO) and lastly the
Constitution of India.

In 2013, community organizations (PAD, PAJHRA and DBSS) who work for the rights of tea
workers lodged a complaint with the World Bank’s Compliance Advisory Ombudsman (CAO).
The complaint cites long working hours, inadequate compensation, poor hygiene and health
conditions, coercion and pressure of plantation workers, and lack of freedom of association, in
violation of IFC’s Performance Standards (compliance with this is a minimum requirement of an
IFC investment). The complaint also raised concerns about the worker shareholder program.

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In 2014, Columbia Law School Human Rights Institute published another account of human rights
violations in APPL tea estates, implicating Tata and the World Bank in neglect and demanding
urgent action.

Overflowing toilets. Photo sourced from http://www.accountabilitea.org

CAO Investigation Report

The most important investigation that has come out so far is that of the Bank’s own watchdog, the
Compliance Advisor Ombudsman (CAO). The investigation report, dated September 6, 2016,
shows grave dereliction of duty on the part of the IFC in ensuring that its pre-investment social
and environmental requirements were fulfilled by its client APPL. As mentioned, the IFC
Performance Standards on Environmental and Social Sustainability are a set of non-negotiable
requirements that a client has to meet for receiving IFC investment. These standards cover aspects
like social and environmental risk management, working conditions, health and safety of workers,
prevention of pollution, rights for indigenous people, cultural rights, and land acquisition. Apart
from this, the IFC has its own Environment and Social Sustainability Policy that guides its

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behaviour. The CAO investigation found that APPL operations make a flagrant mockery of these
policies and non-compliance with the Performance Standards. Non-compliance ensures that the
workers are exploited.

IFC’s Farcical Response

The IFC defended its behaviour, despite the plethora of scathing findings. However, the
investigation by the CAO prodded it into taking some action. In 2014, Tata Global Beverages and
APPL agreed to an action plan based on a Tata-commissioned audit in 2014, conducted by an
NGO called Solidaridad. In its response to the CAO report, the IFC annexed this action plan called
‘Project Unnati’ (progress), and prioritised a few actions relating to human health indicators over
the next two years, including housing improvements, sanitation facilities, and access to clean
water. Other findings of the CAO were ignored.

An exposé by organisations, PAJHRA, PAD, Nazdeek, and Accountability Counsel in 2017, called
Project Accountabilitea, revealed that Project Unnati was a farce in itself and little action was taken
to change the status quo even in the agreed areas. It was revealed that workers were not even
consulted in preparing this action plan.

Reckless Development
Various news reports suggest that Tata is planning to sell its stake in APPL owing to high
production costs. Civil society organisations PAJHRA, PAD, Nazdeek and Accountability
Counsel who are closely associated with workers, demand that in such a scenario, the World Bank
should remain invested and work towards the betterment of workers and not be allowed to profit
from selling its shares.

This is not the first time that the World Bank has come under the scanner for human rights
violations in its internationally-financed development projects. There are several such reports from
around the world that implicates the IFC for failing to follow its own environment and social
protocols.

In 2013, the International Consortium of Investigative Journalists and Huffington Post brought out
a report titled, “Evicted and Abandoned”. It found that “3.3 million people were forced from their
homes, deprived of their land or had their livelihoods damaged because they lived in the path of a
World Bank project.” Another report by Inclusive Development International released in 2017,
accuses the IFC of outsourcing its development mandate to opaque and unaccountable private
financial institutions.

Reckless development that ignores the human rights of people and the environment is not
sustainable. However, this has become the norm in this age of neoliberal finance capital. When an
international body like the World Bank has zero commitment to human rights despite its exalted
claims, what can we expect from others? It is high time that we revive a rights-based approach to
development, in which the human rights of individuals and communities forms the core of any
development activity. As Amartya Sen has pointed out, the aim of development should be to
enhance the real freedom of people.