India / Tata Tea-02/Assam
IFC’s project with Amalgamated Plantations Private Limited (APPL) is to enable the setting up of a company which would acquire and manage the 24 tea plantations located in Assam and West Bengal currently owned by Tata Tea Limited (TTL) and implement a sustainable “worker-shareholder” model, in which the management and employees would have a significant shareholding. The total project cost including capital expenditure and working capital is estimated at $87 million; the IFC investment comprises an equity investment of $7.8 million.
In February 2013, three local NGOs filed a complaint on behalf of tea workers working and living in the company’s tea plantation areas. The complaint raises concerns about labor and working conditions at three different plantations, specifically citing long working hours, unpaid compensation, poor hygiene and health conditions, and a lack of freedom to associate among plantation workers. Furthermore, the complainants question the worker share-buying program, contending workers have been pressured into buying shares, often without proper information about the risks of such an investment.
CAO found the complaint eligible for assessment in February 2013 and an assessment of the issues raised in the complaint was initiated. Given that CAO was not able to find agreement among the stakeholders on a dispute resolution process, the case was transferred to the CAO compliance function in November 2013. In February 2014, CAO completed a compliance appraisal in relation to this complaint. The appraisal determined that CAO would 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 the issues discussed in the January 2013 appraisal related to the Tata Tea-01 case (see link below).
CAO's appraisal report and terms of reference for a compliance investigation are available at the link below. CAO has another case open under its compliance function related to IFC's involvement in APPL. Details of that case (India/Tata Tea/CAO Vice President Request) can be found through the link at the bottom of this page. The terms of reference posted under this cover both cases.
The Compliance Investigation is ongoing. The CAO compliance team completed a field visit to APPL plantations in August 2015, including meetings with workers and management. CAO is preparing its investigation report in relation to this case.
Status as of September 09, 2015
- Project Name & Number
- Tata Tea 25074
- Amalgamated Plantations Private Limited (APPL)
- South Asia
- Environmental Category
- $7.87m Equity
- Eligible: Completed
- Assessment Period: Completed
- Under Appraisal: Completed
- Under Audit: In Process