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India's tea firms accused of paying off separatist rebels

India's tea industry was mired in fresh controversy on Saturday after an official in the north-eastern state of Assam reiterated that some producers were paying protection money to outlawed separatists.

A senior official of the government-sponsored Assam Tea Plantation Security Force, an elite commando unit specially set up to provide security to tea planters, said some tea firms were still paying money to rebel groups.

Under Indian law, the charge, if proven, would be tantamount to aiding terrorism.

"We have information about some garden managers paying money to the extremists to buy peace," Panna Roy, commandant of the tea security force said.

"These planters prefer paying extortion money to militants than taking our help for reasons best known to them," he said.

The fresh charges come at a difficult time for the tea industry, which has become the target of a stepped-up extortion drive by the rebels.

Assam, the hub of India's $ 1.5-billion tea industry, accounts for 55 per cent of the country's annual production of 865,000 tonnes.

The state has been wracked for decades by ethnic and tribal insurgencies that have claimed thousands of lives.

Prominent separatist groups often raise money by threatening tea companies with attack unless they are paid off.

"There is some tension as a number of gardens have received extortion notices with demands ranging from anything between Rs 2-2.5 million," said Abani Borgohain, a senior planter in eastern Assam.

"Most of the planters have reported to the police, but it seems no action is being taken to instil confidence among the garden workers."

Senior administration and police officials in Assam's Jorhat district, the region worst hit by militancy, refused to comment.

During the past four years, at least 20 planters were killed and more than 50 tea executives kidnapped by militants for ransom in Assam.

At least 300 of Assam's estimated 800 tea gardens are vulnerable to militant attacks from separatist rebels. Tea industry officials privately admit to paying an estimated Rs 20 billion to secure the release of kidnap victims in the last few years.

In 1997, the Assam government had accused several leading tea companies, including Tata Tea and Williamson Magor, of "aiding and abetting terrorism" by financing militant groups.

The industry retorted that it had been forced into "buying peace" because the government was incapable of providing security.

The special commando force set up for tea gardens has proved ineffective because of the huge costs involved. Each tea estate has to pay Rs 1 million annually for the service -- a figure many small plantations cannot afford.