Response to the Observer article on tea wages in India

21 July 2013

Today’s Observer article How poverty wages for tea pickers fuel India’s trade in child slavery draws attention to child trafficking in Assam, India. The article highlights the role of poverty, including low wages on tea estates, in this serious human rights issue.

Fairtrade takes a strong stand against human trafficking, including child trafficking.  The Fairtrade Standards prohibit the Worst Forms of Child Labour (as defined by ILO C 182) and Forced Labour (ILO C 29 and C 105),which include trafficking issues. Over the last three years, Fairtrade has been tackling this human rights issue in our global operations. In India, we have, with partners, obtained general knowledge on the patterns of human trafficking flows from the north of India to the rest of the sub-continent and beyond.  We have conducted targeted trainings with producers in South, Central and North India, including Assam, and with our staff to address these issues.

The current Fairtrade requirements on wages require Fairtrade certified plantations to pay workers at least legal minimum wages, regional average or industry/local wages. The Fairtrade Hired Labour Standard also protects workers through the stipulation that minimum labour standards are adhered to with sanctions for non-compliance. Tea workers on Fairtrade plantations must have permanent written contracts, written pay slips, regulated working hours, paid overtime, and entitlement to holiday and sick pay, maternity leave and pension provision. While these benefits are often required in national law, the law is not always diligently applied in practice. The benefits of certification means that these entitlements are audited and employers must comply to remain in Fairtrade, vital to workers in countries with little or no social security.

However, Fairtrade wholeheartedly welcomes the spotlight which the article shines on the realities facing workers on tea estates, and the gap between current wage levels in Assam and what would be considered a living wage, sufficient to lift workers out of poverty. In Assam legal minimum wages fall short of international poverty benchmarks. Fairtrade Standards require that certified plantations work to improve wages over time. However addressing wage structures and minimum wage is a difficult issue, and it is hard for Fairtrade plantations, twelve out of over 900 in Assam, to deviate from such a collective deal due to the instability it would cause in the sector and the wider community of tea pluckers.

The only answer is for the whole tea sector to take serious action together to tackle this problem – with plantations, trade unions, Government of India, NGOs, brands and retailers. Plantations can increase wages if brands, retailers and consumers pay higher prices for tea.

Fairtrade is already participating in trying to drive change across the industry. We worked with Oxfam and the Ethical Tea Partnership on the report ‘Understanding Wage Issues in the Tea industry’ issued earlier this year. Since then we have been able to use the findings to accelerate our work on a new workers’ rights strategy and are addressing the issue of low wages in the current review of our Hired Labour Standard. A core element of this strategy is Fairtrade’s work to develop Living Wage benchmarks for the regions where we operate, with a more clearly defined process for plantations to pay a living wage. We are seeking agreement on our methodology for calculating living wage to have wider industry consensus on living wage levels. Working with the companies who must be in the equation if we are to bring real change to the lives of tea workers, it is our ambition to be able to factor such consensus on living wage levels into future negotiation and agreement of Fairtrade minimum prices.

Recent impact studies have shown a range of tangible benefits accruing to workers on Fairtrade certified tea plantations, their families and communities, although also told us we need to further strengthen the empowerment of workers. Thus we are currently reviewing the current guidelines for spending of Fairtrade premiums by workers on plantations, including tea estates, so as to strengthen workers’ ability to allocate this money according to their own expressed priorities. Supporting the empowerment of workers themselves to negotiate better terms and conditions is core to the Fairtrade model.

We need to go further. As yet, only 1-2 percent of global tea is bought on Fairtrade terms. The Fairtrade certified tea estates in Assam are only selling less than 10 percent of their tea on average on Fairtrade terms and the rest is sold on conventional terms. The more that consumers demand Fairtrade tea, the more Fairtrade tea the companies will be encouraged to purchase, ensuring more benefits to workers from the products we buy. This will also give Fairtrade more leverage in influencing tea estate management on issues such as wages. Consumers will also need to play their part in delivering benefits to tea workers beyond Fairtrade. Simply, tea is too cheap. Prices have improved in recent years, but compared to a can of coke or a jar of coffee, the price of an individual tea bag is very low. 

In the meantime, we are working collaboratively with other certifiers, leading tea companies and industry bodies, NGOs, trade unions, civil society and governments to advocate improved wages for workers on tea estates through initiatives such as the Tea 2030 project. This joint collaboration could facilitate a new approach to setting tea industry wage benchmarks and the promotion of wage bargaining, so that better wages become a commitment of everyone along the tea supply chain.

Fairtrade will thus continue to work toward a living wage while delivering additional worker benefits through the payment of Fairtrade premiums, linked to sales volumes.

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