India: Tata Tea-01/CAO Vice President Request

Date Filed
01 May 2012
Status
Open
Phase
Compliance
Country
India

Case Tracker

Eligibility
Assessment
Dispute Resolution
Compliance
Appraisal
Monitoring
Status as of November 07, 2016
CURRENT Status
Monitoring (COMPLIANCE)
Status as of November 07, 2016

Complaint Overview

Complainant

CAO Vice President Request.

Concerns

Labor issues and worker health, safety, and security.

Cross-Cutting Issues
Risk Management Labor IFC/MIGA Due Diligence IFC/MIGA Supervision

Project Information

Region
South Asia
Institution
IFC
Name & Number
Tata Tea 25074
Company
Amalgamated Plantations Private Limited (APPL)
Sector
Agribusiness
Department
Manufacturing, Agribusiness & Services
Category
B
Commitment

$7.87m Equity

Synopsis

Project Overview

In 2009, IFC made an equity investment in Amalgamated Plantations Private Limited (APPL). APPL is the second largest producer and supplier of tea in India, employing over 28,000 permanent workers and over 23,000 temporary workers. Approximately 155,000 people live on APPL’s 25 tea plantations.

Complaint

The compliance appraisal of IFC's investment in APPL was initiated by the CAO Vice President in May 2012 based on unresolved concerns submitted by the International Union of Food Workers (IUF) to IFC's Communication Portal for Performance Standard 2 (PS2).  Concerns in relation to the investment were triggered by incidents on two APPL plantations in 2009/10 which led to disputes with unions representing APPL workers. After completing a compliance appraisal in January 2013, CAO concluded that the issues warranted further investigation.

In February 2013, CAO received a complaint from three NGOs on behalf of tea workers working and living in the company’s tea plantations (Tata Tea-02). The complaint raises concerns about labor and working conditions at three different plantations, specifically citing long working hours, unpaid compensation, poor hygiene, 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. This complaint was transferred to the compliance function in November 2013.

Action

In February 2014, CAO completed its compliance appraisal with a decision that the issues raised in the complaint merited further investigation.

In November 2016, CAO published its combined Compliance Investigation Report. The CAO's investigation found several non-compliance issues with IFC's assessment and management of environmental and social (E&S) risks related to their investment. Despite the potential for significant development impact, IFC's pre-investment E&S review was inadequate, leading to poorly detailed mitigation measures that failed to address key risks. During supervision, IFC did not ensure compliance with its Performance Standards, leaving E&S issues raised by complainants unresolved. The investigation also identified specific non-compliance in IFC’s handling of living and working conditions on plantations, use of banned pesticides, information disclosure, consultation, and response to security incidents.

In response to CAO's compliance investigation, IFC acknowledged that APPL was implementing an Action Plan to address issues in human health, worker safety, housing, and sanitation. IFC committed to: (a) commissioning a third-party annual audit and worker perception survey for APPL's 25 estates; (b) updating its legal opinion on APPL's compliance with national minimum wage laws; and (c) ensuring the Action Plan was disclosed to and consulted with workers.

CAO Monitoring Reports

In January 2019, CAO published its First Compliance Monitoring Report, indicating that APPL reported some progress on the Action Plan. However, complainants claimed that workers were not consulted and expressed concerns about the progress and quality of implementation. CAO reviewed project documentation, spoke with IFC staff, complainant representatives, and the IFC client. The 2019 monitoring report concluded that IFC's supervision was limited and did not satisfactorily address CAO's non-compliance findings. CAO remained concerned that IFC's supervision lacked the necessary information to assess client compliance with Performance Standards, leaving IFC without assurance that compliance was on track.

In May 2024, CAO published a Second Monitoring Report, noting some progress in implementing the Environmental and Social Action Plan (ESAP), but highlighted that critical infrastructure improvements, such as new or repaired houses and sanitation, are still incomplete and lack identified financial resources. As a result, CAO decided to keep the case open.

CAO’s Omnibus Monitoring Report which includes the monitoring report for this case, is available in English.

Status

This case is open in compliance monitoring.

Status as of June 3, 2024.

Case Documents

  • Compliance

    Appraisal Report
    Compliance Appraisal Report
    Jan 08, 2013
    English
    Compliance Appraisal Report
    Terms of Reference
    Terms of Reference
    Feb 06, 2014
    English
    Terms of Reference
    Investigation Report
    Investigation Report
    Sep 06, 2016
    English
    Investigation Report
    Investigation Report
    Sep 06, 2016
    Hindi
    Investigation Report
    IFC Management Response
    Oct 17, 2016
    English
    IFC Management Response
    Communiqué
    Nov 07, 2016
    English
    Communiqué
    Communiqué
    Nov 07, 2016
    Hindi
    Communiqué
    Communiqué
    Nov 07, 2016
    Assamese
    Communiqué
    Monitoring Report(s)
    First Monitoring Report
    Jan 23, 2019
    English
    First Monitoring Report
    First Monitoring Report
    Jan 23, 2019
    Hindi
    First Monitoring Report
    IFC Response to First Monitoring Report
    Mar 04, 2019
    English
    IFC Response to First Monitoring Report
    Communiqué
    Jan 28, 2019
    English
    Communiqué
    Communiqué
    Jan 28, 2019
    Hindi
    Communiqué
    Communiqué
    Jan 28, 2019
    Assamese
    Communiqué
    Omnibus Monitoring Report (Second Monitoring Report)
    May 20, 2024
    English
    Omnibus Monitoring Report (Second Monitoring Report)
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