Production is booming and workers are working overtime at the “Lipton tea factory” in Pakistan. This is happening in the weeks leading up to the sale of Unilever’s tea business under the new global tea company ekaterra. But it is not the unionized Lipton tea factory in Khanewal owned by Unilever – and now ekaterra – that is ramping up production. It is a dubious third-party manufacturer called AGA PACK Private Limited in Karachi.
Known in the Federal B Industrial Area as “the Lipton factory”, the AGA PACK factory has no sign boards or any indication of its registered name. This in itself is a legal violation that has not been reported by either Unilever or ekaterra in their due diligence. As a disguised factory, AGA PACK uses Unilever machinery and equipment and only provides minimum wage labour to manufacture one of Unilever’s global brands of purpose.
Unilever Pakistan moved machinery and equipment from its Lipton factory in Khanewal to AGA PACK in 2013 and again in 2018. This undermined jobs and job security at the Khanewal factory while increasing production under precarious employment arrangements.
Even as production increases in advance of the sale of the global ekaterra tea business on 1 October, management at AGA PACK refuses to pay the new legal minimum wage announced by the government in June 2021. Workers remain on PKR 17,500 (USD 106.30) per month, which is the legal minimum wage set in 2019.
As the 199 workers at the Unilever/ekaterra Lipton factory in Khanewal protest against an uncertain future, the 288 workers packing Lipton tea at AGA PACK are in perpetual uncertainty. Only 52 of the 288 workers are legally registered for mandatory social security and health insurance. This suggests that 82% of workers do not actually work for AGA PACK. They are most likely casuals hired through third-party labour contractors.
It is still unclear who these contractors are and whether they are paying mandatory social security and health benefits. It is also unclear whether mandatory pensions are being paid and this is also under investigation by the Labour Department.
Workers at AGA PACK do not know because they do not have written employment contracts. This not only contravenes Pakistan labour law, but is one of the internationally recognized indicators in assessing the risk of forced labour. The absence of written employment contracts could be just another layer of deception, underpinning what seems to be a disguised employment relationship with Unilever Pakistan, and now ekaterra.