According to a Financial Times report, Amalgamated Plantations Private Ltd (APPL) is currently the subject of a probe by the World Bank over allegations of poor working conditions for its 31,000 permanent workers. Tata Global Beverages, who makes world-famous Tetley Tea, is the largest shareholder of APPL.
Social activists are clamoring for an investigation to be opened at the Indian tea plantation operator after a complaint has been lodged on three APPL estates which claimed that workers lived in poor health and hygiene conditions, insufficient water while working excessively long hours and has no freedom of association. The FT report said that all allegations, if founded to be true, violate Indian law that govern plantation labor. The allegations rose from earlier incidents recorded in 2009, when workers were on a three-month lockout, and 2010, when police suppressed demonstrations after the death of a 25 year-old worker at one of the plantations, which led to three deaths and several workers injured.
IFC's independent grievance redress mechanism, the Compliance Advisor Ombudsman, said late Tuesday that it will find out whether the IFC conducted due diligence prior to the investigation launched in APPL and the subsequent supervision of the company.
FT said the decision to launch a probe was after a Columbia Law School Human Rights Institute report had criticized a share-purchase scheme of the plantation company for its plantation workers, who were already impoverished, and are mostly illiterate.
The Ivy League report revealed that some 21,000 workers have invested an equivalent of five months net pay at pay rates this year, which is INR8,000 or $128 in APPL shares, which is funded by interest-free loans that will be repaid in seven years' time through deductions in pay checks.
In an initial assessment conducted by CAO last year, IFC was found to have not exercised proper due diligence as the regulator assumed that APPL implemented standard labor practices on the basis of Tata's reputation as a leader in exemplary corporate practices, FT said.
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