Government to introduce new laws to alter management agreements of RPCs

• Says management agreements of RPCs that fail to grant Rs.1000 daily wage will be changed
• Says “alternative investments” will be set up in unsatisfactory RPCs

With biennial wage negotiations for a new Collective Agreement in plantation sector approaching early next year, the government plans to present a legal framework in Parliament in January next year to change the management agreements of Regional Plantations Companies (RPCs) which fail to increase the proposed daily wage of plantation workers to Rs.1000.

“I intend to present to Parliament in January a legal framework that will change the management agreements of plantation companies that are unable to pay this salary and provide opportunities for companies with successful business plans,” the Prime Minister and Minister of Finance, Mahinda Rajapaksa announced in Parliament yesterday delivering the maiden budget of the government. 

The Prime Minister has also proposed to increase the daily wage of plantation workers to Rs.1,000 from January next year citing that plantation workers receive low daily wages.

Further, he said that the privatisation agreements of unsatisfactory RPCs would be reviewed and measures would be taken to setup “alternative investments” that can be commercially developed.

Comparing RPCs with the tea smallholder sector, he pointed out that smallholders have increased their total tea production while the contribution of RPCs had fallen to about 25 percent at present. 

“Diversification has not materialised in many of those estates. Only a few companies have developed high value brand of their own and only a few companies developing into a true export industry. Non-cultivated lands can also be seen in many estates under these companies,” he elaborated.

However, RPCs maintain that the outdated wage model as one of key obstacles to enhance productivity and output in their plantations while resisting pressures to increase minimum basic daily wage up to Rs. 1000.

Meanwhile, the Prime Minister bemoaned that some RPCs even failed to pay their taxes while the government continues to provide basic facilities such as hospitals, schools, houses, roads, electricity and water that enable the ongoing operations of these companies.