Business

Planters deny Reuters’ claims on wages, working conditions and workers’ health

The Planters’ Association of Ceylon (PA) has issued a media statement rejecting allegations made in an article titled ‘Tea Label Giants Vow Probe after Sri Lanka Labour’ written by freelance journalist Lisa Fuller and initially published by Thomson Reuters Foundation recently. The statement particularly highlights allegations regarding wages, working conditions and the health and wellbeing of workers as “totally false”.

We reproduce the statement of the PA in full below:

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 US$ 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 health care 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 organized Mid-wife programme
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 privatization 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 5 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, vaccinations from birth up to 5 years for children on estate itself with paid leave for mothers. There are
61 hospitals, 323 dispensaries, 1474 Child Development Centers 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 1 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.

“Unauthorized wage deductions” – illegal and impossible

The article persistently claims that illegal unauthorized 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 unauthorized.

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 unauthorized 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 unauthorized 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, 3 months fully paid maternity leave, free maternal and
child care on the estate itself from conception to 5 years, allowances of milk powder, flour and rice, free
issue of medicines, drugs, vaccinations and vitamins, total Custodial Child Care on estate account from 3
months to 5 years, all vaccinations from birth up to 5 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 1 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 6
additional non-working souls for every worker

Allegations that are factually impossible
In that context, the PA reiterates that the unauthorized 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, 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 USD 4.6 per day whereas even today, other Tea economies are paying closer to USD 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 9 districts mainly Urban districts like Colombo, Gampaha,
Kalutara, Kandy, Kurunegala that have poverty head counts that are better than the Nuwara Eliya
District.

Anemia is another problem that has been cited in the story. Rates of anemia 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 anemia 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 takes 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 2 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 Ms. 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 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.