THIRST News Update - October 2024

Highlights: THIRST joins Typhoo’s Fear Free Council; bonus disputes protests in Asia and Africa lead to disruption, death. Tea sector crisis manifests at country, region and company level. Multiple new approaches are emerging

THIRST News

Last month, THIRST signed an agreement to become a member of Typhoo’s ‘Fear Free Council’ along with Women Working Worldwide and T-Evolve; our co-authors on the briefing paper ‘Consent, Just Consent’ on the risk factors for gender based violence and harassment in the tea sector. Typhoo’s Chair, Mike Brehme, and Responsible Sourcing Manager, Rocio Ortiz, complete the Council. Our paper was an influencing factor in Typhoo’s mission “To end sexual violence against women on tea plantations.” The Fear Free Council’s role is to ensure that Typhoo pursues this mission in good faith, and that the initiative it invests in at grower level are meaningful and effective. More on why we are supporting the initiative.

October Headlines

FEATURED ARTICLE: BONUS WOES

This month’s Update tracks this year’s ongoing protests over the annual bonus paid to tea workers and farmers in South Asia and East Africa respectively, and explores why it causes so much strife year after year.

In other news…

TEA INDUSTRY CRISIS MANIFESTS ON MULTIPLE FRONTS

…At country and regional level
– Darjeeling tea in severe crisis
– Assam tea industry in climate-change induced crisis
– Struggles of the Ugandan tea sector
– Industry reflections on Sri Lankan wage rise

…At company level
– 8,000 jobs at risk at Andrew Yule & Co
– UK tea factory workers strike, Tata strikes back
– Human Rights Commission meeting Manjolai workers

MULTIPLE NEW APPROACHES ARE EMERGING

– Cooperative giant, Amul, turns attention towards tea
– Apolitical tea trade union formed in Darjeeling
– Kenyan tea factories vying for independence from KTDA
– Small Tea Growers call for recognition as farmers
– Kenyan farmers shifting away from traditional fertilizers

Featured article: BONUS WOES Why does the tea workers’ and farmers’ annual bonus lead to so much strife?

This is the season for the annual bonus to be calculated and paid for both tea plantation workers in South Asia and smallholder tea farmers in E Africa. And, as a plethora of news reports in the last month have demonstrated, it has also increasingly become the season for protests over the level of said bonus. So this month’s News Update will focus on the issue, exploring what exactly a ‘bonus’ is in this context and why it leads to so many protests and strikes.

What does ‘bonus’ mean – to management, to workers and farmers? Definition and calculation

The Merriam-Webster dictionary definition of a ‘bonus’ is:
“something in addition to what is expected or strictly due: such as
a: money or an equivalent given in addition to an employee’s usual compensation
b: a premium (as of stock) given by a corporation to a purchaser of its securities, to a promoter, or to an employee

In the case of South Asian tea plantations, the ‘bonus’ is a combination of the two. It is calculated as a proportion of the annual salary of the worker and on the amount of profit made from the sale of made tea. For example, “under [India’s] Payment of Bonus Act, 1965, certain categories of employees are entitled to receive a statutory bonus calculated by reference to the employee’s salary and the employer’s profits: a minimum bonus of 8.33% and the maximum is 20% of wages is payable… to all employees whose wages do not exceed Rs. 21,000 per month.” (Paisa Bazaar, 27 June 2024).

The act applies to all factories and establishments with 20 or more employees. On top of that companies may pay a discretionary profit-share bonus as an incentive to their employees. ‘Employees’ means anyone who has worked for more than 30 days in a year – which excludes casual workers who are increasing in proportion. Permanent employees’ bonuses are calculated as a percentage of their wages including ‘dearness allowance’, but excluding overtime, any other allowance, value of house accommodation, confessional supply of food grains or any other amenity, leave travel concession. Traditionally, tea companies have supplemented their workers’ annual salaries in this way. In the North East the bonus payment is made around the time of Durga Puja – an important religious festival in the region.*

How the bonus is interpreted

In the minds of many tea company managers, this incentive bonus is “in addition to what is….strictly due”. For example, in early September the Assam Government “approved a 20% bonus for Assam Tea Corporation Ltd tea gardens employees and workers, amounting to INR 78.13 crore”, describing this as a bid by the government-owned company to “to assist employees and workers during the festive season, helping to ease financial pressures”. (Guwahati Plus, 5 September).

But from the perspective of a tea plantation worker or a smallholder tea farmer this ‘bonus’ is, in practice, a delayed portion of their earnings. Striking tea pluckers that THIRST’s CEO spoke to in 2015 during the Pempilai Orumai (Unity of Women) strike in Munnar, Kerala, explained that they had incurred debts throughout the year (for example for medical treatment or education services that were not available on the plantation) on the assumption that the bonus would be the same as in previous years. When management explained that this would not be the case due to lower profits, the unrest began. Both parties were in a difficult position; workers in debt that they would now struggle to repay, and managers struggling to balance profits and rising costs. (THIRST, 2019) The rash of strikes that has broken out across South Asia and East Africa are likely to feature a similar impasse.

For example, in Bangladesh “at least 42 gardens are under threat” and “can be closed at any moment… payment of wages to workers in many plantations has become irregular.” As a result “The labor leaders say that if the wages are not paid before the puja, they will call for a collective movement.” “On the other hand, garden management is becoming almost impossible as the expenses of the garden owners increase more than the income.” (Business News24 BD, 28 September)

Prices for made Indian tea are higher this year due to climate and other impacts which led to a reduction in volume. (Fairtrade, July 2024). But this year’s bonus calculation is based on 2023-2024, a year in which profits were much lower which may be seen as an anomaly by protestors.

It is a similar story for farmers who are members of the Kenya Tea Development Agency (KTDA). Each year’s bonus payment “is pegged on last year’s green leaf production of more than 1.4 million kilogrammes (kgs). Bonuses are calculated based on a factory’s total earnings from tea sales over the past 12 months. After deducting operational and overhead costs, the remaining earnings per kilogram are determined.” (The Star, 24 September).

Fears, promises and directives

Amid industry fears that “A persistent glut at the Mombasa Tea Auction following high green leaf production occasioning low prices could lead to a decrease in this year’s annual bonuses for small-scale tea growers.” (Nation, 3 September), the Chair of KTDA suggested it would “not affect the bonus payout to 600,000 small scale tea farmers in the country, claiming the backlog would be cleared by the start of October as direct sales will have resumed. (NTV Kenya, 30 Aug).

The Assam government’s Labour Welfare Department issued a directive to the seven tea management associations of the state to pay bonuses to their garden workers before September 25, 2024, well ahead of the Durga Puja. The letter said: “It is needless to emphasise that the payment of the bonus makes a serious impact on the industrial relations between employer and employees in the industrial scenario of Assam. This is more vital in the state’s plantation sector: payment of bonuses is always customarily made before the Durga Puja festival,” (The Sentinel, 12 September)

Meanwhile, in India The Parvatya Shramik Sanghatan Sammanaya Mach (PSSSM- a conglomeration of all operating tea garden workers unions of the Darjeeling Hills) were preparing to “formulate a united plan to negotiate with planters to fix the annual bonus rate for workers.” (The Telegraph Online, 7 September).

The protests spread and grow in intensity

But by mid-September, unrest over low bonuses for Kenyan smallholder tea farmers was beginning to ferment: One factory claimed that poor prices for orthodox tea – which the government has been encouraging producers to deliver – were to blame for cuts in the annual bonus to the farmers that supply the factory. (Business Daily, 16 September). At another, armed police guarded the factory outside which farmers had gathered to protest against low bonuses. (Nation, 17 September).

While in Bengal, a familiar scenario began to play out once again; “the issue of the Puja bonus for approximately 5 lakh tea plantation workers… remains unresolved, despite three consecutive meetings. The tea garden owners proposed a 10 per cent bonus while the workers have been demanding 20 per cent.” (Millenium Post, 11 September). Workers of at least three tea estates in the Dooars belt threatened to “halt work for two hours every day and demonstrate in the garden” unless they were paid the bonus at 12 per cent (The Telegraph Online, 4 October).

And in Darjeeling, the PSSSM stated that it was “compelled to walk the agitation path with the management failing to open negotiation talks for bonus for tea gardens for the year 2023-24.” (Millenium Post, 16 September).

Towards the end of September, the West Bengal “labour department had to call a reconciliation meeting after several inconclusive bipartite talks between the Darjeeling Tea Association (DTA) and Hill-based trade unions. While the unions demanded 20%, Hill planters offered only 9.5% in the last meeting.” (The Statesman, 25 September) … the meeting ended inconclusively despite management increasing their offer to 13 per cent. (Millenium Post, 27 September)

Eventually, after no less than five rounds of discussions, a consensus was reached between management and trade unions “on a 16% base rate for bonus disbursement.” Yet disruptions continued to be reported in several tea estates, with workers still demanding a 20% bonus. (The Statesman, 25 September). This possibly illustrates an issue raised by many commentators, as reported by THIRST in 2023, of workers not feeling fully represented by their trade unions.

The deadly impact of bonus disputes

These disputes can have serious consequences; for example, the management of Singtom tea in Darjeeling abandoned the plantation claiming this was, “a fallout of the workers’ agitation for 20 per cent bonus ahead of the festive season,” which involved workers preventing made tea from being dispatched. (Telegraph India, 26 September).

By early October, the whole of Darjeeling had virtually been shut down by the strikes (The Hindu, 2 October); state highways were blocked (Telegraph India, 28 September) and hundreds of tourists were left stranded across the region (The Telegraph Online, 4 October).

In Kenya, operations at tea factories in Kericho county were “paralysed after the farmers boycotted tea picking to demand bonus increment [by farmers demanding] an increment from Sh25 to Sh50 per kg. (The Standard, 27 September).

But the most tragic impact of all was the death of Robert Chepkwony a construction worker who happened to be passing by. (Citizen TV, 22 September). He was shot dead – allegedly by police breaking up the protest against another protest against the dwindling bonus, down from KES 30/kg last year to KES 20/kg this year. (Nation, 19 September).

Wages and income too low: “my family is starving…”

Some may see these protests as ingratitude for a generous additional payment beyond workers’ and farmers’ standard dues. But they need to be considered in the wider context of the overall income and aspirations of those at the root of the tea value chain. The protests are not confined to the question of the level of bonus payment alone. They are part of a wider picture of worker unrest and dissatisfaction over many years about levels of pay more generally. Low wages emerged as a strong and ubiquitous issue across the tea sector in THIRST’s 2021 Literature Review For workers and farmers operating on very slim margins, bonuses are not an additional perk, they are a vital element of their annual income.

In Tinsukia district, Assam, for example, “the financial distress of small tea growers has reached an alarming level. Despite persistent efforts, 280 families across 16 villages are still waiting for their rightful dues, plunging the local community into economic uncertainty.” (India Today NE, 28 September)

Tea workers in South India are advocating for the renovation of aging housing, the installation of basic toilets, access to drinking water, and adequate medical care, as well as fair wages reflecting their labor. (Herald India, 23 September)

In Bangladesh, tea workers said they had not received pension contributions for 15 months nor wages, medical services or rations for 21 days “Tea worker Mukta Rani Bauri said that her family members were starving for days as their ration also suspended.” (New Age, 7 September). They are saying that it is impossible to sustain their lives in the face of rising living costs on the minimum wage of Tk 170 set by the Wage Board & Bangladesh Tea Association, and going on strike to demand land rights and a daily wage of Tk 500. (Prothomalo English, 24 September)

This highlights the level of dependency of workers on their employers; while “benefits” such as healthcare and food rations can be helpful, they also effectively trap workers in their employment, and it causes severe problems when they are suspended. The crisis in the tea industry is making such suspensions increasingly common.

As the demand for land rights in that news item highlights, tea plantation workers need more than just higher wages or bonuses. In addition to land, they also need government support. The Chief Minister of Jharkhand, the Indian state where many of Assam’s tea workers were transported from in British times whose descendants form the majority of Assam tea workers today, has urged Assam’s Chief Minister “to initiate measures to grant Scheduled Tribe status to the tea garden communities in the state,” emphasising “the historical and socio-economic importance of the tea tribes… a group that has been historically marginalized despite playing a pivotal role in the state’s economy.” (Borok Times, 26 September).

Other news

TEA INDUSTRY CRISIS MANIFESTS ON MULTIPLE FRONTS

…At country and regional level

Darjeeling tea in severe crisis

Darjeeling tea, often called the “champagne of teas,” has been a global symbol of Indian culture for nearly two centuries. But behind the fame lies a brewing crisis. Tea garden workers in Darjeeling are on strike, demanding fair wages and bonuses, with protests shutting down the region. In this episode of First Things Fast, join Manish Adhikary as he breaks down the ongoing deadlock between tea workers, garden owners, and the West Bengal government. What’s the future of Darjeeling tea? Watch to learn more. (India Today, 3 October)

Assam tea industry in climate-change induced crisis

Assam’s tea industry faces a severe crisis as climate change-induced weather events cause a drastic reduction in production leading to a loss of 100 million kgs of tea in 2024 , impacting millions who rely on the sector for their livelihoods. (Northeastern Chronicle, 10 September)

Struggles of the Ugandan tea sector

The Ugandan Tea Outgrowers Association insist all is lost and have appealed to the government to support their strategy to save the sub sector by investing SH41 billion financing for primary production. (Monitor, 1 October) On the other hand, the price of Ugandan tea exceeded $1 per kg for the first time in 12 months. But this was against a backdrop of fluctuating prices and a drop in volume. (New Vision, 1 October)

Industry reflections on Sri Lankan wage rise

Dilhan Fernando, chairman of Sri Lanka‘s Dilmah Ceylon Tea Company, acknowledges the need for improved wages and conditions, but stresses that sudden, drastic wage hikes threatens the industry’s profitability. He said “The government is vilifying plantation companies, but the reality is, it’s a choice between survival and sustainability [or not],” and added that consumers and supermarket retailers need to be prepared to pay higher prices for tea, saying “We face constant pressure from a colonial economic system that demands low prices. ” Roshan Rajadurai, chair of the Planters’ Association of Ceylon, goes further saying; “If the industry doesn’t change now it will be a slow, sure death.” (ABC, 14 September)

…At company level

8,000 jobs at risk at Andrew Yule & Co

Andrew Yule & Co Ltd., a central public sector unit in India, is facing financial instability, putting over 8,000 tea garden workers in Assam at risk. The company has suffered a significant loss of nearly Rs 100 crores in the 2023-24 financial year. (World Tea News, 18 September)

UK tea factory workers strike, Tata strikes back

Almost 150 GMB members working at Tata Consumer Products, which makes Tetley Tea in Teesside, UK, have voted to walk out in anger at ‘poverty pay’. Echoing comments on the women who pluck the tea that they process, the trade union says; “This loyal, predominately female workforce has endured year after year of real terms pay cuts. (Darlington and Stockton Times, 18 September) “You look at all the skill, craft & effort that goes into making a kg of tea & then you’re seeing a few pence per tea bag. Sustainable pricing is key but it has to be part of moving the dial on value perception.” (Independent, 9 September) “They say the women are unskilled, which they aren’t because there is a lot of high speed, complicated machinery in there,” (BBC, 20 September) Tetley is now taking legal action against striking workers for trespass and engaging in “intimidating” behaviour towards managers. GMB union accuses them of trying to intimidate workers instead of addressing their concerns over pay. (Business Matters, 2 October)

Human Rights Commission meeting Manjolai workers

A two-member team of India‘s National Human Rights Commission team met former Manjolai tea estate workers following complaints of cutting of power and drinking water supply to their houses after they were asked to go on voluntary retirement by their employer, Bombay Burmah Trading Corporation Limited (BBTC), in the wake of the company’s decision to wind-up operations. (The Hindu, 18 September) [See August/September THIRST News Update for background]

MULTIPLE NEW APPROACHES ARE EMERGING

Cooperative giant, Amul, turns attention towards tea

Amul (an Indian dairy brand owned by the cooperative society, Gujarat Cooperative Milk Marketing Federation (GCMMF), which is controlled by 3.6 million milk producers) is looking to move into the tea sector. The “vision was to work with tea coops in S India on the similar model that we have for milk at Amul,” (NDTV, 29 September)

Apolitical tea trade union formed in Darjeeling

Trade unionism in the Darjeeling hills is witnessing a new shift with an apolitical organisation making its presence felt in a landscape that political forces have traditionally dominated. (Telegraph India, 4^th September)

Kenyan tea factories vying for independence from KTDA

Kericho tea farmers demand satellite tea factories are separated from parent factories and bonuses paid directly to the satellite factories that they supply. (NTV Kenya, 9 September) The farmers argue that the satellite factories have grown sufficiently and need independence to operate more efficiently and respond to the unique challenges they face. They believe that separating from the parent factories would allow for greater autonomy in decision-making, especially regarding financial management, bonuses, and use of new technology in tea processing. (Standard Media, 15 September).

Small Tea Growers call for recognition as farmers

Confederation of Indian Small Tea Grower’s Association (CISTA) has urged Centre to recognise small tea growers (STG) as agriculture farmers and include them to form farmer producer company (FPC).(Times of India, 17 September)

Kenyan farmers shifting away from traditional fertilizers

Traditionally, fertilizers have played a critical role in boosting tea yields and ensuring the high quality of Kenyan tea. However, in 2024, there’s a noticeable shift among Kenyan tea farmers — they’re using significantly less fertilizer. But what’s behind this change? A combination of economic, environmental, and social factors is driving this trend. (Medium, 18 September)

*Thanks to N Dharmaraj, for providing background information on bonus calculation. Dharmaraj is the former CEO and whole Time Director of Harrisons Malayalam Ltd , a leading Plantation company in South India.