Russian invasion of Ukraine has knock-on effect on tea market; estate workers struggle to access benefits, lack land-rights; climate impacts on tea production, calls for voluntary carbon market for tea estates.
Image: Financial Times: Kenyan tea plantation worker Hellen Nyaboke © Andres Schipani/FT https://www.ft.com/content/0deba2c8-4a94-442e-8268-31586a5fb1ab
Dr Bimal Arora
It is with great sadness that THIRST received the news of the untimely passing of Dr Bimal Arora, Founder and Chair of the Centre for Responsible Business and Reader in Enterprise at Manchester Metropolitan University. Dr Arora was one of the expert advisors on THIRST’s Human Rights Impact Assessment of the tea sector, and had been in the process of developing an academic research programme to run alongside it. His valuable contribution to responsible business practices in the tea sector will be greatly missed. We would like to express our heartfelt condolences to Dr Arora’s family, friends and colleagues.
Call for news items beyond India and Kenya
Readers may have noticed that a disproportionate amount of the news shared in these updates is from India and Kenya. While these are major tea producing and exporting nations and important to cover, THIRST is mindful that there is likely to be much more news from other countries that we are not seeing because they are not published in English and therefore may not be picked up by the Google Alert we have set up for tea workers, farmers and human rights. We therefore call on colleagues around the world to inform THIRST of news from other origins on the rights and wellbeing of tea workers and farmers and their environment. Contact us to submit your news items. Thank you.
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Tea News Summary
Disclaimer: The following updates consist of a summary of articles from the media – they are shared in the spirit of learning and do not necessarily reflect the views of THIRST. Please contact THIRST if you spot any factual errors or would like to raise any other issues connected with the Update.
In this month’s summary:
Multiple avenues for ‘fairness’ in tea
…through the courts
Kenyan tea plantation workers were “officially sanctioned by Lord Weir to take forward the multi-million-pound negligence action” against James Finlays (Kenya) Ltd in the company’s base country, Scotland, (rather than Kenya) for negligence leading to injuries. This included allegedly being “given painkillers to mask the pain they were in to allow them to keep working” and pregnant women being asked to work in “extremely difficult circumstances”. (Herald Scotland)
…through market forces
It is issues like this that investors are now increasingly concerned with, as the Financial Times has highlighted, reminding us of the two final bidders for Unilever’s tea business due in part to concerns about worker welfare. The FT says the Unilever deal “has become a testing ground for how private equity groups approach workers’ pay, conditions and safety in a climate where investors are scrutinising their ethics”. The winning bidder, CVC Capital Partners, says, “there is a real opportunity here to act as a responsible ESG-focused investor,” but the Business and Human Rights Resource Centre feels that “The potential for this sale to have really significant ramifications, driving down working conditions and human rights, is very considerable” and asserts that “It’s much harder to hold a private equity company to account.” (Financial Times)
Certification has long been a common route for retailers seeking to signal ‘fairness’ in their tea sales. In 2017 Sainsbury’s – known for its support of Fairtrade – controversially introduced its own, lower priced, “Fairly Traded” label for tea – with a view to expanding it to other products. But The Grocer reminded us that “it faced fierce criticism from charities including Banana Link, Oxfam, CAFOD, Christian Aid, Traidcraft and The WI – who accused it of “risking Fairtrade’s lifeline for the world’s poorest tea producers.” 100,000 people signed a petition against it. Now Sainsbury’s has halted the scheme and moved the tea to Rainforest Alliance certification. Activists feel, however, that this is “a downgrade” which does not “guarantee a non-negotiable independently set minimum price for farmers to cover their cost of production, as well as a fixed premium – which Fairtrade does.” (The Grocer)
…through purchasing practices
Tea companies are being offered a way to improve tea workers’ and farmers’ livelihoods directly by using a Living Income Roadmap and a Roadmap on Living Wages. These online platforms, developed by IDH, the Sustainable Trade Initiative, “provide companies and brands with the resources they need to understand the gap between a living wage and what workers earn”. (Tea Biz)
Vulnerability of estate workers without land rights
After the report we shared in the February update on an Assam tea estate being closed to make way for an airport, two more tea estates in India are facing closure and repurposing.
The final legal hurdle for one Assam tea estate to make way for an oil refinery was removed last month. The state government and tea estate management will share the cost of making varying levels of one-off compensation payments to the estate’s 156 permanent and 222 temporary workers. The refinery “will provide jobs to 100 tea garden workers, half of whom will be on permanent roll and other half will be temporary employees”. (Devi Dicscourse)
Further south, in Tamil Nadu, workers on a private tea estate face an uncertain future as its 99-year land lease, made before India’s independence, draws to an end in 2028. There are rumours that the land – which lies in the middle of Kalakkad Mundanthurai Tiger Reserve forest – may be restored to the forest unless the state government’s TANTEA company takes over. New India Express explains that “the workers have been residing there and working for the tea estate for nearly four generations– more than 90 years” (New India Express)
The vulnerability of tea estate workers to expulsion from their ancestral homes due to lack of land tenure was demonstrated in Darjeeling last month. A tea estate was sacked and directed to leave the estate for building a house on government-owned estate land. Trade unions objected, reminding us that workers have been living on the estate for generations, dating back to the 1840s “when India had not even existed as a country.” Management claim the worker had broken government rules about building a permanent structure on the land and that the worker had ignored frequent directives from the management, adding that “If the worker wants to construct a tin-roofed home and not a concrete structure, the issue could be looked into.” (Telegraph India)
Estate workers struggle to access due benefits
Back in Assam, there are reports that over 40,000 tea estate workers are being “allegedly forced to live in dilapidated homes without access to proper healthcare and education due to an over three-year delay in fulfilment of welfare promises made by their employer.” The estates owners, Assam Company India Ltd, was acquired by by BRS ventures in 2018 whose owner – billionaire B R Shetty – is facing fraud and forgery charges. ACIL refutes the allegations blaming “the COVID-19 pandemic for the delay in the implementation of the proposed welfare plan”. (Devdiscourse)
Meanwile in North Bengal, “over 7,000 workers and their families living in 13 closed tea estates in north Bengal are grappling with financial crisis as they have not received monthly aid from the state government for four months”. They are technically entitled to a monthly stipend from the state government under the FAWLOI (Financial Assistance to Workers of Locked Out Industries) but the responsible department says “the state is in the middle of an austerity drive and payment got delayed over a fund hurdle” Workers say they “have not received any aid since October last year,” and explain that in the winter, when tea production halts they “can neither sell tea leaves nor work as a casual worker in any of the other tea estates.” (Telegraph India)
Tea export upheavals – Russia, Nepal
Russia is one of the highest consuming countries for tea from Sri Lanka, India, and Kenya – its invasion of Ukraine is therefore causing trepidation among tea traders who fear “immediate declines in auction prices, extreme tea price volatility, insurmountable logistics (UK/German flights banned and shipping companies representing 47% of container traffic suspend bookings to and from Russia) and spiking prices for fertilizer exported from Russia”. (STiR)
Nepal’s tea exports have already reportedly “plunged by a third in the first half of the fiscal year” due to the successful lobbying by Darjeeling tea producers to restrict imports of cheaper – though similar – Nepalese tea. The decline was also ascribed to ageing tea bushes and the fact that tea cultivation has not been expanding. Commentators say “Small farmers have little confidence that growing tea will provide a good return,” (The Kathmandu Post) Other suggested reasons for the country failing to carve a niche for itself in the market include “certification, labour shortages and high cost of organic farming to branding, failure to identify new export markets, lack of updated technology and expertise”. (The Kathmandu Post)
Contrastingly, exports including tea helped Rwanda’s GDP to increase in the first nine months of the year by 11.1 percent, “reflecting a broad-based recovery from the 2020 recession… ” But it was not all good news for workers as “Employment conditions have deteriorated strongly for women, with the female unemployment rate now 13.6 percentage points higher” (Global Times)
Government support for (permanent) tea workers
A spokesperson for Assam’s Ministry of Labour and Employment made a number of suggestions for the industry incluing tea workers being “brought under the ambit of the Employees’ Provident Fund Organisation (EPFO) for social security”, converting in-kind benefits into cash payments,and “setting up Employees’ State Insurance Corporation (ESIC) dispensaries and hospitals inside the tea garden premises”. Assam’s Chief Minister urged the industry to take up an under-utilised Rs 250 crore earmarked for the tea sector. (India News).
By contrast, the Indian Tea Association challenges aspects of India’s new Labour Laws such as limiting in-kind benefits to 15% of the total wage, claiming “This would adversely impact the tea plantation sector as a significant component of wage of a tea garden worker comprises of in-kind benefits.” It calls for “full adjustment of the value of in-kind benefits provided by the managements to workers” to be recognised in national minimum wage determination. (Orissa Diary)
Meanwhile, the Bangladesh tea industry’s temporary and seasonal workers are being excluded from a government scheme ” to improve the lives and livelihoods of tea workers”. While there are officially 36,000 temporary workers, including seasonal and unemployed workers in the tea estates would bring the number closer to three hundred thousand, three times as many as the permanent workers. “Leaving this vast population of tea workers out of the scheme will mean that they will slip further into poverty”. [The Daily Star]
Impact of the climate emergency
Last month, the tea growing region of Munnar in Kerala, South India “experienced sub-zero temperatures for the first time since the beginning of winter” delaying the arrival of ready-to-harvest tea leaves. The Secretary of the Kerala Association of Planters, “said climate change is definitely affecting the tea sector in the state, with extreme temperature variations during the day and night and extreme rainfall patterns throughout the year”. (Krishi Jagran)
In response to events like this, the Indian plantation sector, which claims to be “reeling from the effects of changing climatic patterns and volatile price trends” is calling for the “creation of a voluntary carbon market so growers can monetize the carbon sequestration potentials of their estates”. The president of the United Planters’ Association of Southern India said “While rubber plantations offer the maximum carbon sequestration per hectare, other plantation crops such as tea, coffee, cardamom, and cocoa also have the ability to sequester carbon. Multi-cropping, inter-cropping, and agroforestry are poly-culture approaches that can improve these qualities…” (Krishi Jagran)