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.

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.

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.