Empowering locals with ownership stake: New path for multinational tea companies as JFK offers 15% shares in estates

  • 7 Aug 2023
  • 3 Mins Read
  • 〜 by Kennedy Osore

The tea industry in Kenya has long been dominated by big multinational corporations, and among them, James Finlay Kenya Ltd (JFK) stands out as a prominent player. However, recent times have brought a wave of challenges that have forced JFK to reevaluate its approach. These issues run deep, ranging from allegations of sexual harassment on tea farms to historical land injustices, concerns about mechanisation, and negative media coverage. Clearly, something needs to change.

In response to these pressing concerns, JFK has taken a significant step forward by offering 15% shares in its estates to the local communities where it operates. This move is part of their new strategy to involve a strategic investor and foster a more inclusive and mutually beneficial relationship with these communities. By giving locals a stake in the ownership, JFK aims to promote transparency, a sense of ownership, and fair distribution of benefits from tea production.

The decision to bring in a new strategic investor for JFK was driven by Finlay’s refreshed global strategy, focusing on sustainable growth in their tea and coffee extracts business. Despite negative media coverage from a BBC documentary, JFK asserts that the decision was not influenced by it, but that it took immediate action to address the issues raised in the testimonies of workers. They commissioned an independent investigation to improve employee safeguarding, and the chosen strategic investor, Browns Investment Plc (Browns), is committed to implementing the investigation’s recommendations.

Having previously acquired Finlay’s Sri Lanka Tea Estates, Browns is a familiar entity to JFK and shares its commitment to sustainable growth, employee welfare, and community development. Their mutual agreement to transfer a 15% stake to a locally-owned cooperative makes them a perfect match as JFK’s strategic investor, safeguarding the interests of all parties involved and ensuring the long-term prosperity of the business under Browns’ ownership. Upon finalising the deal, the cooperative will have the authority to appoint a representative to Browns’ board.

The challenges faced by JFK and other multinational tea companies are indeed formidable. Allegations of sexual harassment have cast shadows on their reputation, raising questions about the safety and well-being of their workers. On another front, historical land injustice claims have left local communities feeling dispossessed and discontented, as they see their ancestral lands transformed into tea estates.

The trend towards tea mechanisation has also triggered concerns among locals, particularly tea pickers who fear potential job losses. Misleading reports have only fueled their anxieties, and negative media coverage has further sullied the image of large-scale tea producers.

But JFK’s response is a glimmer of hope amidst these challenges. By sharing ownership with the communities, they aim to bridge the gaps and build a stronger bond of trust. This move isn’t just a business decision; it’s a commitment to make things right and be accountable to those who call these lands their home.

The Constitution plays a crucial role in this endeavour. It recognizes the rights of communities to own their ancestral lands, making it pertinent to address historical injustices. By offering shares to local communities, JFK is not only taking a step towards reconciliation but also aligning itself with the constitutional principles of sustainable development and social justice.

Engaging in extensive consultations with affected communities is the next logical step for Browns. The Constitution of Kenya emphasizes public participation in decision-making, giving the local people a voice in shaping the policies that will impact their lives and livelihoods. Browns’ willingness to listen and involve the community will foster a deeper understanding of their needs and aspirations.

The ongoing legal dispute faced by JFK in Scotland serves as a clear reminder of the significance of complying with local labour laws and prioritising employee safety. This case centres on present and past employees of the JFK Tea Company in Kericho, who are accusing the company of causing injuries due to unsafe working conditions. The Court of Session in Scotland has granted permission for more than 700 workers to proceed with a class-action lawsuit against JFK. These workers claim to have endured “musculoskeletal injuries” as a result of extended work hours without breaks and receiving low wages.

The emerging issues faced by multinational tea companies are driving a much-needed transformation in the industry. The move towards local equity participation represents a pivotal shift towards inclusivity, fairness, and accountability. By engaging in meaningful consultations, JFK and others can pave the way for a sustainable future, where tea production not only thrives but also benefits the communities and workers that make it all possible. It’s time to embrace this new path and create a brighter, more equitable tomorrow for Kenya’s tea industry.