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Planters counter UN Rapporteur’s worker living conditions assessment

13 Dec 2021

The Planters’ Association of Ceylon (PA) has expressed concerns over comments made following the recent visit by United Nations (UN) Rapporteur Tomoya Obokata on the living conditions of estate workers, and stated that regional plantation companies (RPCs) have ensured that facilities like housing, water and sanitation, childcare, etc. are being provided without considering the cost incurred to relevant companies while continuously engaging with stakeholders to ensure these facilities are provided uninterrupted. The PA made these points in a response it issued to an article published in The Morning on 6 December, titled “Plantation Ministry to discuss relief for estate workers”, which quoted the assessment made by UN Rapporteur Obokata. The Association, which represents commercial growers of tea, rubber, and other crops, said that while the workforce of the RPCs only amounts to 125,000, the RPCs provide many services for more than one million people residing within estates managed by the RPCs. “As private sector companies involved in the supply of price-sensitive commodities to the global market, RPCs are severely constrained financially. Yet, together with other stakeholders, RPCs have supported the construction of 40,000 new housing units and upgrading of a further 111,000 houses in RPC estates and have invested significantly in establishment of child development centres, water supply, as well as sanitation improvement projects,” it said. Furthermore, the PA said it wishes to highlight that the improvement of housing for residents of estates who are not employed by the RPCs are being carried out with the relevant stakeholders, in order to allocate land and resources wherever possible for the construction of homes. “No other sector in the country provides the range of services, including housing, childcare, and a host of other facilities, which the RPCs provide,” PA Media Spokesperson Dr. Roshan Rajadurai stated. “Despite many RPCs incurring heavy losses in the recent past, we have continued to provide these services to the best of our ability, in collaboration with organisations such as the Plantation Human Development Trust (PHDT), donors, and other stakeholders, despite limited resources to provide welfare services for those who are not employed by us.” Moreover, in prior discussions on the subject of housing, even government officials have acknowledged that the only viable solution is the creation of new townships outside of the estates, instead of continuously reducing the size of productive agricultural land of the tea estates, the statement said. “Besides statutory obligations such as Employees’ Provident Fund (EPF) and Employees’ Trust Fund (ETF) payments provided by other employers in the country, RPCs, at their own expense, additionally provide services relating to housing, water, sanitation, childcare (such as crèches and immunisation of children), social services, and community/support services. More than 1,400 childcare centres are located in RPC estates. Additional initiatives have also been undertaken to improve nutrition standards in estates, through the ongoing establishment of community kitchens, led by the RPCs and PHDT,” it added. With regard to wages, the RPCs said they have strived to provide the best possible level of remuneration for employees, while being mindful of the economic realities. “Many RPCs have been incurring losses on both tea and rubber, given Sri Lanka’s high production costs – due to many reasons including the relatively smaller size of Sri Lankan estates, which limits benefits of economies of scale. Despite this, RPC employees are the highest paid across Sri Lanka’s Wages Board and receive far greater remuneration than employees of competitor nations, despite our labour productivity being much lower than those countries,” it said. For instance, it said that the daily wage of a tea plucker in Sri Lanka who plucks 18-20 kg a day is nearly 50% higher than that of neighbouring countries like India (Rs. 542) who, on average, pluck 35 kg a day. In Sri Lanka, the cost of production of tea has increased by 913% (from Rs. 72 to Rs. 730), primarily driven by the increase in labour wages by 631% (from Rs. 78 to Rs. 570) between 1993 and 2018. Given that the RPCs produce a commodity produced by many other competitors around the world, a further increase in labour wages would financially cripple the industry, it added. “Wages constitute more than 60% of the cost of production of tea. The only meaningful way of reducing these costs is to drastically increase productivity in order to match what is already being achieved by competing countries. Hence, it is well understood by all stakeholders that 18-20 kg is below the bare minimum needed for Sri Lanka’s plantations to achieve financial sustainability.” Given these factors and the aspirations of the employees, it noted that the RPCs have repeatedly proposed models to enable workers to earn higher amounts – including a “revenue sharing” model and productivity-based remuneration. However, labour unions which have been commended so strongly in recent reporting are responsible for rejecting such win-win solutions outright, thereby closing off the only remaining avenues for improving both earnings of workers and productivity, benefiting all stakeholders, it claimed. “With the additional stress of hyper-inflated costs associated with agricultural inputs, any further sharp increases in wages without the requisite reforms to structure of wage to incentivise greater productivity will definitely result in the total collapse of the plantation industry. This would result in drastic reversals of all progress made up to this point, and lead to far greater concerns around all of the issues that are currently being highlighted,” the statement further said. In conclusion, it added that it should be noted that estate sector poverty headcount has also dropped remarkably, from 38.4% in 1995 to 8.8% in 2016. The estate sector has also seen marked progress in aspects such as nutrition and maternal and infant mortality. The RPCs, with the support of other stakeholders, including the PHDT, have consolidated their efforts in order to drive further improvements in these indicators moving forward, it said.


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