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PA responds to Reuters ‘expose’ on allegations of labour abuse in the RPC sector

Comments / {{hitsCtrl.values.hits}} Views / Friday, 5 April 2019 00:00



The Planters’ Association of Ceylon (PA) wishes to draw the general public’s attention to serious factual misrepresentations and inaccuracies initially published by Thomson Reuters Foundation and authored by freelance journalist, Lisa Fuller in her article titled: ‘Tea Label Giants Vow Probe after Sri Lanka Labour Abuse Expose’. 

At the outset, the PA notes with disappointment the lack of journalistic rigor that has gone into the above captioned article, given that no comment had been sought from the PA or its constituent members, in contravention of standard journalistic ethics.

With regard to the content of demonstrably false allegations levelled in the story, claims are made that: 

  • Workers are sick and unable to afford healthcare
  • Illegal wage deductions have been made from worker salaries that amount to cuts of as much as 87% of wages
  • Slashing wages by more than three-quarters is illegal 
  • 17 wage slips examined by the author showed workers taking home an average pay of $ 1.54 (approx. Rs. 270.2) daily ‘after debt repayments, salary advances and fees’
  • Fees and deductions have been levied against workers ‘without their consent’ and in violation of domestic laws and Rainforest Alliance and Fairtrade certification standards, and the Collective Wage agreement
  • Estate worker communities are the most impoverished and malnourished communities in Sri Lanka
  • Tea harvesters are paid ‘for a half day’ if they failed to meet the estate plucking norm of 18kg 
  • Worker wages are ‘halved’ if workers arrive late by just 15 minutes
  • Certification standards are only complied with during an audit and that protective gear is only given to employees during that time 
  • Conditions for workers in Sri Lanka are comparable with those in Assam and Kerala

On behalf of its membership, the PA categorically denies each of these totally false allegations. 

‘Unable to afford healthcare’

The PA draws attention to the fact that healthcare for the estate community, as with all Sri Lankans is the responsibility of the State. Every citizen of Sri Lanka has equal entitlement to free healthcare at any Government hospital. In addition, the RPCs themselves too have managed healthcare for employees, particularly in relation to antenatal and post-natal care through an organised mid-wife program across the estates while maintaining their own dispensaries, maternity wards and hospitals to treat estate workers. 

Transport, and ambulance services are also provided free of charge to take patients to the nearest hospital in all RPC estates. This has been the standard practice on estates even before privatisation and has remained the case since. Some estate hospitals have also been taken over by the Government to be run under the oversight of the

Ministry of Health. 

Additionally, the RPCs provide total maternal care from the time of conception to delivery and thereafter total custodial child care up to five years for all their workers resident on the plantations. In addition, they get allowances of milk powder, flour and rice, free issues of medicines, drugs, and vaccinations from birth up to five years for children on estate itself with paid leave for mothers. There are 61 hospitals, 323 dispensaries, 1474 Child Development Centres with fully qualified trained and competent child development officers and support staff. They along with a Plantation Family Welfare Staff cadre of 400, cares for 250,000 families with a total population of one million resident in 453 RPC estates in 13 districts of our country.

Nevertheless, RPC management has always remained sensitive to the medical requirements of estate sector communities. In many instances where special medical circumstances arise, including cases like what has been described in the article with regard to a tea harvester, Sumathi, and her daughter who was born with a heart condition, the RPCs have often made available special assistance for such cases. If such cases are brought to the attention of the management, the management will intervene to provide the support required to its employees. 

‘Unauthorised wage deductions’ – illegal and impossible

The article persistently claims that illegal unauthorised wage deductions are being made despite acknowledging the numerous legal and procedural mechanisms specifically in place to make such deductions impossible. Despite acknowledging in her own article that many of these deductions are made on salary advances ‘taken on request from the employee’, the author fails to grasp the evident contradiction in claiming that such deductions are unauthorised. 

Moreover, every deduction made against an employee’s salary is carried out purely on the request of the employee and after written permission of the employee is obtained and produced before the Assistant Commissioner of Labour. 

In practice, requests for salary advances are typically made by employees for recurring expenses which they personally incur. The reasons for such advances are stated on the employees wage slip for the month representing food stuff advances, donations to places of worship and other voluntary obligations such as settlement of easy-payment loans on common electronic items like TVs which the employees take on in their personal capacity. 

Employees are also provided a half a kilo of tea per month, for which only Rs. 1.80 is deducted. While the author drew attention to such a deduction, she conveniently ignored its nominal nature. Worse, she disregards entirely the voluntary nature of all requests for salary advances which by definition are early payments on a portion of the salary earned – which removes the possibility of receiving that payment a second time at the end of the month. To reiterate, this is how a salary advance works by definition. 

The author demonstrates her lack of research into even the easily verifiable claims that deductions above three quarter or 75% of an employee’s salary contravenes the labour laws of the country. In truth, deductions above 50% are a violation of the law. 

In the event that unauthorised deductions are made above 50% of an employee’s salary as the article claims, the employee has several options to file a grievance against management through their estate Trade Union Representative, Regional Trade Union Representative, or with the Assistant Commissioner of Labour in the region. The author implies that the estates apply coercion to prevent such complaints from being made, yet grievances against management for matters far more trivial than an alleged 87% deduction in salary are frequently lodged against the management by employees with zero retributive action being taken against employees. Even at the present moment, employees who have alleged that such unauthorised deductions have been made, can easily take their wage slip to the Assistant Commissioner of Labour in the region who is thereafter obliged to take the employee’s grievance into account and provide them with necessary assistance. 

The author has also conveniently failed to mention the number of days the particular workers cited in her story have actually reported for work during the month, which would have a direct bearing on their earnings and consequently their balance wages after the permitted recoveries are made. 

The RPC managed estates are mandated to offer 300 days of work per year irrespective of a harvester’s output or the field productivity, weather conditions or the availability of crop on the estate or even the viability of the estate. 

Out of the total agriculture sector employees of 2.5 million in Sri Lanka, the 150,000 RPC workers constitute only 6% of the agriculture workforce whereas there are 426,000 tea smallholders and 200,000 rubber smallholders. The RPCs constitute only 25% of all the workers engaged in the tea sector. 

Of the workers engaged in the agriculture sector in Sri Lanka which is 2.4 million people in total, 70% are own account and family workers and these workers have no guarantee of regular daily employment, monthly wages, statutory dues and benefits, facilities, services that the RPC workers currently enjoy exclusively. 

In contrast, RPC Plantation Workers get fully secured, guaranteed lifetime family employment with the mandatory 300 days’ work per year from 18 to 60 years until they retire. The RPC workers are also paid EPF, ETF, Gratuity, 20 days paid holidays per year, 14 days paid sick leave per year, attendance bonus, profit bonus, profit share, maternity benefits, three months fully paid maternity leave, free maternal and child care on the estate itself from conception to five years, allowances of milk powder, flour and rice, free issue of medicines, drugs, vaccinations and vitamins, total custodial child care on estate account from three months to five years, all vaccinations from birth up to five years for children on the estate itself with paid leave granted for mothers. In the event of deaths material, monetary and labour assistance as funeral aid is also provided free of charge. In addition, health, sanitation, housing, water supply, social services, sports, welfare, community and support services, religious places maintenance and many other facilities and amenities are provided free of charge from birth to death to the plantation resident community in the RPCs not just its direct workforce. 

However, what is most obviously ignored in the article is the fact that although the RPCs care for a resident population close to one million people resident on the estate only around 145,000 workers actually contribute their labour to the estates and the RPCs have to provide facilities and care for six additional non-working souls for every worker.

Allegations that are factually impossible 

In that context, the PA reiterates that the unauthorised deductions and other varied allegations published in the article simply cannot have taken place. Nevertheless, the Rainforest Alliance and other certification bodies are launching their own investigations into noncompliance in order to conclusively verify this claim. 

In relation to allegations that worker wages were ‘halved’ if employees arrived more than 15 minutes late to work or ‘paid for a half day’ if they failed to meet the plucking norm, the PA notes with disappointment that such allegations totally disregard facts on the ground and display a failure to grasp even the most basic structure of the Collective Agreement that dictates the method and rate of payment. 

Given that the Collective Agreement that is in force was only successfully re-negotiated in December 2018, it is assumed that the author is speaking of wages which were paid till October 2018. 

Under the previous agreement, employees were provided with a basic wage of rs. 500, an attendance incentive of rs. 60, a productivity incentive of rs. 140, and a price share supplement of Rs. 30. In total with EPF/ETF payments, this amounted to a daily wage of Rs. 805. 

Moreover, every kilo that employees plucked over the norm attracted a payment of Rs. 25, essentially enabling a removal of a cap on the total earnings possible for an employee. This was the productivity incentive which the RPCs had sought to introduce in order to enable workers to earn more when they harvested more. 

Furthermore, Sri Lanka continues to pay the highest daily wage rate to its tea pluckers even in terms of UD value at $ 4.6 per day whereas even today, other tea economies are paying closer to $ 2.5 per day. However, Sri Lanka tea harvester output is only 18 kilos per day compared to the more than 30 kilos output per day in all other economies. 

At the recently concluded Collective Wage Agreement, an attractive salary was proposed to enable workers to earn the desired Rs. 1,000 per day; however, the unions opted for a different wage model. An increase of 40% on the basic wage and a further 40% increase was granted on the over kilo rate.

Keeping these basic facts in mind, it must therefore be clearly understood that it is mathematically impossible to ‘halve’ a daily wage figure that technically has no cap. 

In order to attribute greater accuracy than what was published in the story, we will assume that the allegation of ‘halving’ was in relation to a failure to receive the Rs. 140 productivity incentive, and disregard entirely the over kilo payments. 

Half of the maximum daily wage of Rs. 805 paid under the previous agreement is Rs. 402, not Rs. 140. If workers did not attend work on time, they would not be able to harvest the required norm or if they absent themselves, they would lose the additional Rs. 60 attendance incentive, meaning that they would not be eligible for a total of Rs. 200 out of the Rs. 805. 

This still does not come close to the ‘halving’ described in the article. If an RPC was to overstep this limit, trade unions would be swift to respond with a claim on behalf of the employee. Such mechanisms are functioning quite vociferously to this day as the unions are very vigilant and jealously guard the worker rights in order to maintain their support among estate communities. 

Moreover, these models have been completely removed with the establishment of a new collective agreement that provides RPCs with even less authority to make ‘deductions’ on daily wages.  

Poverty and malnourishment 

The author quotes the Minister of Plantation Industries as stating that estate workers are the most impoverished with the highest rates of malnourishment. While once accurate a few decades back, these statements are misleading in the present day. 

According to the Medical Research Institute of Sri Lanka, the daily recommended nutritional allowance on average is 2,030 kilo calories and the Nuwara Eliya District which is composed of 62% of RPC workers, the kilo calories are 2,307 according to the Household Income and Expenditure Survey. 

This is the highest in all 25 districts in Sri Lanka and is even more than the rural sector which stands at 2,147 kilo calories according to the same report. Moreover, in terms of national poverty, Mullative, Mannar, Kilinochchi, Batticaloa and Monaragala Districts are reported as the worst districts and Nuwara Eliya is grouped along with the Districts of Kegalle, Kurunegala, Anuradhapura, Trincomalee, Polonnaruwa and Matara which are predominantly rice-growing districts. 

The poverty head count in the Nuwara Eliya district according to the HIES is 6.6 which is even better than the national rate of 6.7. There are only nine districts mainly urban districts like Colombo, Gampaha, Kalutara, Kandy, Kurunegala that have poverty head counts that are better than the Nuwara Eliya District. 

Anaemia is another problem that has been cited in the story. Rates of anaemia in estate communities is higher than average. This is largely due to the fact that while the required calorific intake is being consumed, a number of other dietary, cultural, and lifestyle factors result in reduced iron uptake. 

Coordinated campaigns have been launched by RPCs specifically to target this issue and there have been numerous instances where such campaigns have made a major impact in reversing anaemia in estate communities. Meanwhile, the infant mortality rate of 1.9 is only bettered by one district in the whole country and in terms of underweight children there are only 12 districts better than Nuwara Eliya. If the author had merely questioned any Estate Manager or Medical Officer, these details could easily have been provided. 

Ethical journalism 

At a time when globally, standards of factual journalism are being called into question, the lack of depth and accuracy in the article is unfortunate but sadly not unexpected. In February 2018, local newspapers carried a story titled: ‘Lack of proper nutrition, housing and education plague Sri Lanka’s tea plantation community’ by a foreign author. In a similar fashion, the author of that article confidently made claims in relation to wages, malnutrition and education that were utterly false. 

Upon a single visit to an estate that author had claimed that workers were being paid Rs. 380 as their daily wage whereas the wage at that time was Rs. 805. There too the claims were proven to be false. No response was given when inquiries were made to verify the claims. No response was given to the PA’s Right of Reply at that time. The writer had left their interest in the plight of Sri Lankan tea harvesters in their vacation scrap book and would no longer engage in any further discussion once the errors were pointed out. 

Locally too, the alleged flaws of the RPCs take up a disproportionate level of analysis, with local journalists, pundits, and politicians alike seeking to use straw-man tactics to add to their own prestige. This despite the fact that labour wages in Sri Lanka have increased 14 times since RPCs took over management in 1992 in the face of 10 fold increase in tea sale prices at the auctions during the same period while the wages component paid directly to the workers is 67% of the total cost of a kilo of tea sold at the Colombo Auction. 

The writer has not bothered to mention the fact that even in USD terms in 1980 to 2017, the prices at the Colombo auction have increased only two-fold and according to a study done by ‘War on Want’ in the UK, whenever the producers make a profit they get less than 1% while the retailer gets 53%. If the producers are paid more by the supermarket retailers surely that benefit can be passed down to the workers. 

It is our hope that in the case of Fuller, she will at least be willing at this late juncture to meet with representatives from the PA and at the very least, publish the proceedings of such a meeting in a fair and unbiased manner in keeping with established standards of journalistic ethics. 

Blinded to progress

The PA notes with further concern that a failure to adhere to such basic journalistic standards results in the author, and their readers being blinded to the tremendous progress that has been made across every measurable indicator within the RPC sector with regard to the financial, social, environmental and ethical sustainability of the industry.

Worker wages in the Sri Lankan tea industry are the highest among major tea producing nations globally despite productivity being among the lowest in the world. The push to make Sri Lanka’s tea more environmentally and socially sustainable came from the RPCs. Such standards have not been achieved by other stakeholder producers that account for the vast majority of Sri Lankan tea production. 

Yet it is precisely because the RPCs have made these investments and cleared a path to a more sustainable future, that the knowledge and technical abilities that are being developed in Sri Lanka could produce a more sustainable path not just for the domestic tea industry, but globally as well. Certainly, more work remains to be done, however mechanisms are in place to preserve and enhance worker welfare. When comparing wages, benefits and conditions of employees in Sri Lankan RPCs with those in the smallholder sector, the Government sector, and relative to regional competitors, this disparity is thrown into stark contrast.

While the PA acknowledges that irregularities in performance and standards across the RPCs are bound to emerge from time to time – given the large numbers of the resident population and the wide dispersion of the estates – the vast majority of the sector is not only successfully enduring unprecedented challenges, but also working sincerely to resolve socio-economic disparities within estate communities. These efforts are being carefully balanced against the financial limitations of an industry that is in turn subject to challenging international market dynamics. This is no mean feat, and constructive criticism is not only required, but welcome. However informed debate must at the very least take into consideration the actual viewpoints of all stakeholders and be based on claims that are substantiated by verifiable data. 

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