The World Bank has agreed to investigate Amalgamated Plantations Private Limited (APPL) in India for abusive working conditions on tea plantations in the north-eastern Indian state of Assam, following a formal complaint by workers. A Columbia Law School team has confirmed the workers allegations.

In 2009, the International Finance Corporation (IFC), an arm of the World Bank, invested $6.7 million into the newly created APPL to take over 25 plantations from the Tata Group, a major Indian multinational. In return, the IFC got a 19.9 percent in the new entity while Tata kept 41 percent ownership. The 31,000 workers on the plantations were allowed to buy shares in the new company at Rs 10 ($0.20) per share.

The APPL holdings number among the roughly 1,000 Assamese tea plantations that were established on tribal lands during the days of the British empire and now supply one sixth of the world’s tea supply. To this day the workers on many tea estates are the direct descendants of the families whose land were taken to create them in the first place and who live in a relationship of total dependence on the plantation with little intervention by the state.

All told, tea estates in India employ some one million permanent workers and another two million temporary workers, making the industry probably the largest private sector employer in the country. For Tata, a company that has managed tea estates since India’s independence from Britain, however, the major profits lay in marketing tea, rather than growing it.

The IFC saw the plan as an opportunity to pioneer a new system of worker ownership. At the time that the IFC made the investment, the Washington DC based multilateral bank sent staff to visit three plantations to check if the new company was in compliance with Indian laws as well as World Bank standards for environmental and social sustainability. The IFC staff issued an assessment that was “positive without reservation.” Read more

Courtesy: corp watch