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Is tea industry really taking steps to be more ethical and sustainable?

04 Jul 2014 - {{hitsCtrl.values.hits}}

With world tea consumption expected to reach 3.36 million tonnes by 2021, the industry must address the ethical issues that leave it lagging behind in sustainability. Challenges are many.

Sustainability code
Recently, the Tea Board of India launched a new sustainability code that it hopes will redefine the way the industry works. Quality compliance, ethical sourcing – including welfare and health and safety standards – and efforts to mitigate the effects of climate change are all expected to be important factors in the new code, which was developed in partnership with the Rainforest Alliance, Hindustan Unilever and two other sustainability organisations. Tea consumption is expected to reach 3.36 million tonnes by 2021, according to the UN’s Food and Agriculture Organisation.

It is not alone in its efforts to improve fairness and sustainability in the world tea industry: certification bodies, NGOs and businesses all have an interest in the conversation. Erinch Sahan, a private sector policy adviser at Oxfam, argues that there is still some way to go and that the food sector broadly is not as engaged with supply chain issues as their peers in the clothing industry.

“When you compare apparel with agriculture supply chains [including tea], there’s a lot less engagement with supply chains in agricultural sourcing. There are fewer boots on the ground trying to understand issues; it is more fragmented and there is less traceability.”

Certification bodies have played an important part in getting ethical issues on to the agenda but they have a ‘blind spot’ when it comes to wages in plantations

Certification bodies have played an important part in getting ethical issues on to the agenda but they have a ‘blind spot’ when it comes to wages in plantations. Sahan said that they need to do more to ensure that workers are paid a living wage rather than simply a minimum wage. Oxfam recently produced a joint report on this with the Ethical Tea Partnership, which represents 29 tea companies.

ETP Executive Director Sarah Roberts would not say whether or not the partnership’s members that represent a “high proportion” of the western market, would be willing to pay more to increase wages.

“The project has taken us several steps forward in understanding the realities and complexities of wages in the tea sector,” she said.

“It is a challenging issue that everyone is looking at the moment. There are gaps between minimum wage and living wage everywhere, including the UK.”

The ETP was set up in 1997 by tea companies that wanted to work together pre-competitively to improve the lives of tea workers and the environment. “We do a lot of work on ensuring that all the producers that members buy from, meet good standards,” she said.

Roberts, who worked in sustainability in trade policy, forestry, garments and cocoa before joining ETP, does not recognise the picture presented by Sahan of a great distance between producers and tea companies; even where ETP members buy from a smallholder collective or at auction, for example, they know which estate or smallholders it is coming from, she said.

Issues and challenges
“What is interesting in this industry is that there are quite a lot of close relationships between buyers and suppliers. You get people who visit suppliers quite regularly and who have been buying from them for a long time… There’s a real sense of wanting to make sure that they are buying from companies that look after their workers.”
Keith Writer, the Commodities Director at Taylors of Harrogate, agreed. “We have a strong relationship with [producers and local communities] that’s at the heart of our business model so we understand who we are dealing with and they understand us,” he said.

“Over the years we have built a good understanding of one another’s needs. At the moment we are looking at how we can change our business model to help face some of the challenges we will see in the tea industry.”

To Writer, it makes straightforward business sense to work together with growers to ensure a quality supply and security for the growers. High ethical standards are also important to consumers, he added.

He is particularly proud of Taylors’ achievements in Rwanda, where it has used money from DFID’s Food Retail Industry Challenge Fund to work with producers to improve the quality of their tea.

“It means we can buy more and we can pay more,” Writer said. “We also work with them towards Rainforest Alliance certification, which has brought improvements around environmental and social conditions as well. The other part of it is how we can face in to climate change at local levels.”

Roberts’s goal for ETP is to take initiatives that have worked on a small scale and make them big enough to get the industry to a tipping point.

“There is lots of good practice; the challenge now is how do we get it so that it becomes the norm?” she said.

“We have very good experience of raising standards. We have really strong partnerships coming together with some of the more difficult issues, such as wages and benefits and supporting better options for women. We could really take some of these approaches to scale.”

For example, a farmer field school project – working now in Kenya – could have huge benefits for communities and for quality production if it was rolled out globally, she said.

Dispute on sustainability
A battle between Unilever (Rainforest Alliance certified) and an Amsterdam-based non-governmental group over the rights of workers on tea plantations in India and Kenya shows the difficulties facing multinational companies that are trying to ensure their products are ethically produced.

Unilever, which makes the popular Brooke Bond and Lipton brands, has committed to sourcing all its tea sustainably by 2020.

But doing so is tricky. First, what does sustainability constitute exactly? Does it comprise basic worker rights and environmental protections? Or should it mean that workers on tea plantations in India and Kenya, poor countries, should be extended the same working conditions as most Europeans and Americans? And who makes sure these companies –often not owned by the multinationals but local suppliers–abide by the standards?

The Netherlands-based Centre for Research on Multinational Corporations, in a report, claimed the existing system of checks and balances has failed to stop abuses of workers on Unilever’s Kenyan estate, including sexual harassment and poor housing conditions.

In India – where Unilever buys tea from producers in Assam and Tamil Nadu, but does not own the estates – the report claims workers are kept permanently on rolling short-term contracts, denying them health and pension benefits, and are often exposed to dangerous pesticides while working.

Unilever, in its response to the report, says the centre has failed to produce evidence to back claims made about its Kenyan operations. The company said it would look into allegations of abuses at the Indian suppliers if given specific information.

At the crux of such battles is a debate about whether the move to sustainable production is a real attempt to improve conditions for workers in poor parts of the world or a kind of “green-washing” carried out by multinational companies under intense pressure from customers in Europe and the U.S.

In reality, it’s probably a bit of both. Companies, for sure, have a real interest in managing their brand image, which means not buying from people that exploit workers. But at the same time, they have to watch their bottom lines and produce enough to meet demand for their product, which they say would be impossible if moving overnight to apply Western-style standards uniformly across emerging market economies.

Tea consumption is expected to reach 3.36 million tonnes by 2021, according to the UN’s Food and Agriculture Organisation

Sometimes it’s difficult to know what is sustainable. Take palm oil, used in products like margarine and cosmetics, which is grown on plantations that have led to the destruction of massive areas of natural rainforest in Indonesia and Malaysia. The red palm oil fruit is collected from hundreds of small plantations and processed at refineries, making it difficult to know whether the end product is sustainable.

Unilever, one of the world’s largest buyers of palm oil, has been instrumental in developing the Roundtable on Sustainable Palm Oil, a group of suppliers, NGOs and producers. But progress toward the RSPO’s goal of sustainability by 2015 has been slow, with lack of clarity on how to ensure a product meets “green” standards.

Tracking difficulties
In theory, tea should be easier to track. But Unilever’s response to the latest report by the Centre for Research on Multinational Corporations highlights the difficulties.
The company said it relies on regular, independent audits of its tea plantations by the Rainforest Alliance, a U.S.-based non-profit environmental group, which has improved rights for workers. Unilever says it has spent €1.2 million on housing upgrades at its estate in Kericho, Kenya, which it claims offers workers among the best conditions in the East African tea industry.

Rainforest Alliance carries out audits for a number of companies according to social and environmental standards set by the Sustainable Agriculture Network, a coalition of leading global conservation groups. During the process, auditors should be allowed to go where they like and meet workers without management presence.

“Attempting to undermine public trust in the Rainforest Alliance scheme is not a responsible approach to addressing these issues,” Unilever said in response to the report.

The centre, known by its Dutch acronym as SOMO, retorts that the Rainforest Alliance auditing process is deeply flawed, based on short visits and not deep investigation.

The report points out instances when management at the Kenyan estate tried to cover up housing problems ahead of auditor arrivals.

The centre says women who have faced sexual harassment are scared to come forward given their lack of belief in the oversight process.

In India, the report claims that many workers are employed by tea suppliers to Unilever on short-term contracts that offer them no benefits, an effort to cut costs after a crisis in the Indian tea industry a decade ago.

In Assam, as many as 50 percent of workers in the tea industry are on short contracts, meaning they don’t get benefits, the report says.

Unilever says that tea production is seasonal and defends its use of contract workers with “clearly defined rights” as a usual practice.The report acknowledges that use of contract workers doesn’t break national or international labour laws. But it argues that heavy reliance on these kinds of workers, who are sometimes employed for decades on rolling short-term contracts, goes against Sustainable Agriculture Network standards that lay down equal benefits to workers for the same kind of work.
In conclusion, globally, companies are increasingly coming under attack for the negative environmental and social impacts of their business activities. Many are systematically addressing this challenge, and eco-labels and certification schemes have proliferated as companies ask for third-party validation of their actions. But now with as many as 700 eco-labels, how does a company know which one to choose? Examples of certification labels include Fairtrade/Max Havelaar, EKO, Rainforest Alliance, UTZ certified, Fair for Life, ProTerra, the Marine Stewardship Council (MSC) certification, etc.

(N. Yogaratnam can be contacted at [email protected])

Features

Is tea industry really taking steps to be more ethical and sustainable?

Certification bodies have played an important part in getting ethical issues on to the agenda but they have a ‘blind spot’ when it comes to wages in plantations

Tea consumption is expected to reach 3.36 million tonnes by 2021, according to the UN’s Food and Agriculture Organisation

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