Information on IFC’s Work with APPL to Improve Working and Living Conditions
We continually monitor and supervise client progress and work with them to address all areas of concern.
Over the last five years, IFC has worked with APPL to set in place an Environmental and Social Management System (ESMS), and improve governance practices. We welcome the continued dialogue with Professor Rosenblum and others as we work to ensure a positive development outcome in a very poor area of India.
Prior to IFC’s involvement in the project, APPL had embarked upon a long-term goal to invest in and rehabilitate the plantations, as well as a process of certifications with recognized global certification initiatives, including SA8000 and the Ethical Tea Partnership (ETP). Through the implementation of these systems and related actions, including audits that APPL has completed over the past several years, the company has demonstrated improvements in its plantations.
Towards the welfare of APPL’s employees, IFC has continuously engaged with APPL to resolve issues, identify improvement needs through supervision and audits and to agree on Action Plans with APPL.
These include independent Occupational Health and Safety Audits and site visits completed for all 24 estates by end 2013; stepping up the SA8000 program with 22 of the 24 estates now visited by the auditors as part of the certification 2011-2013 and; a more than doubling of the budget for financial year starting April 2013 towards the renovation/upkeep of housing and sanitation facilities.
IFC agrees with the Report’s contention that “…the weaknesses of SA8000 relate not so much to the standards themselves as to their implementation”. IFC also agrees with the Report’s statements that effective implementation of the SA8000 certified management system would address all the key findings Statements and References at footnotes 412 to 420 of the Columbia Law School Report (pp 102 and 103) of the Report related to labor working and living conditions The Report states at pp 102 “Many of the SA8000 provisions speak directly to problems identified by workers in regard, for example, to unsanitary latrines and inadequate housing”.
In the context of the Report’s findings, it may be noted that SA8000 standards, among other provisions, require compliance with all applicable laws. In APPL’s case, this includes compliance with the Plantation Labor Act (PLA). The SA8000 standards lay down criteria for occupational health and safety including:
provisions for access to clean toilet facilities;
access to potable water and where applicable, sanitary facilities for food storage
requirements that any dormitory facilities provided for personnel are clean, safe, and meet the basic needs of the personnel;
requirements for freedom of association and collective bargaining;
requirements for working hours and overtime;
provisions for overtime wages at premium rates;
requirements for implementation of a management system that includes appropriate procedures for grievance mechanism with confidentiality protection and non-retribution; and
procedures for stakeholder engagement.
Since 2009, APPL has done major renovation of 2856 houses, 461 latrines and 105 bathing enclosures. In addition, APPL has constructed 93 labor houses,442 latrines, 58 bathing enclosures and installed over 400 water points; APPL is committed to increase this pace in 2014.
IFC was engaged with APPL on labor unrest and labor issues in 2009 and 2010. In 2010, when the then South Asia Regional Director was fully informed of all the facts related to cases of human rights violations through a meeting with US Officials, he immediately escalated within IFC senior management, sought an internal review of the facts, and escalated to APPL management. In addition, in that year, IFC hired an independent consultant to perform an Occupational Health and Safety (OHS) Audit of APPL to uncover and address issues. A detailed, on-site audit was carried out for eight estates and a document audit was done for the remaining 16 estates. Since then, APPL has commissioned additional detailed on-site OHS audits, all of which indicate progressive improvement. Through these systems and related actions, the company has improved its plantations, including increasing budgets for upgrades in labor accommodations and related facilities.
IFC and APPL are fully aware that there is more to be done to address living conditions and poverty at APPL and throughout the tea industry. We know plantation workers live a fragile, tenuous existence with few opportunities for economic advancement.
IFC has also monitored the project with information gained from reports at various plantations; information made available through Annual Monitoring Reports and site visits; detailed document reviews; and regular interactions with APPL management. IFC determined that there was a need to improve the effectiveness and consistent application of APPL’s Environment and Social Management Systems (ESMS) including implementation of the SA8000 certified management system.
In implementation of its ESMS, IFC has identified the following areas as requiring improvement:
a) organization structure, staffing and capacity to effectively implement the Environment & Social management system;
b) consistency in implementation of the E&S management system across estates;
c) procedures to effectively follow up and implement corrective actions identified as part of the system audits; and
To address these areas and ensure consistent improvement across its operations, APPL has agreed with IFC to:
a) integrate the various systems (ISO, ETP, SA8000, Rain Forest Alliance and IFC Performance Standards) it has in place to simplify implementation;
b) provide clear and detailed instructions for staff and management that reduce scope for interpretation, so they are easy to communicate, comprehend, implement, monitor and compare;
c) seek expert advice on the interpretation of standards and the detailing of system requirements to identify, adapt and adopt good practices from within the Company, within the industry and from other industries as well;
d) create a core team at the corporate level to enable continuous improvement, advise each plantation management group on interpretation of standards, monitor consistent application and follow up on improvement actions, and to share good practices between plantations and from industry;
e) create a pool of internal auditors, with full understanding of the standards and systems;
f) train all employees through tailored programs; and
g) develop and implement a comprehensive external and internal communication strategy.
IFC will provide guidance and monitor APPL’s implementation of these measures and its progress in meeting the IFC Performance Standards.