member country surveillance and monitoring it was decided that the mid-term review of demands put up by the workers
up by the workers in 1982
would mean that GATT has been given a
shot in the arm, at a much needed time.
The most important area o f disagreement
at Montreal, indeed the subject on which the
Uruguay Round was poised to derail, was
that of agriculture and the problem of farm
subsidies. This was on top of the US agenda
and the US insisted that the Montreal
meeting agrees to resolve that in the long
term all trade-distorting farm subsidies be
'eliminated'. The conference got stuck on
words with the EC willing to use the term
'reduced' rather than 'eliminated' According
to press reports the Roger's Thesaurus was
brought in to find an acceptable third word
and failure to do so forced the meeting to
be extended by a day. At the end of the day
Mavoor Rayons Accord
Left-Front Government on Its Knees
K T Ram Mohan
K Ravi Raman
The recently-concluded settlement at the Birlas-owned rayon pulp
and fibre factory at Mavoor in Kerala marks a strange
denouement of the historic struggle of the workers there: while
the workers' demands have been rejected, those of the
management have been fully met.
Everytime radio is tuned, I hear only
The flourish of enemy trumpets
— Bertolt Brecht
STRANGE indeed has been the outcome of
the historic struggle of the workers of the
Birlas-owned rayon pulp and fibre factory
at Mavoor in Kerala. The recent settlement,
it is hoped, would pave the way for the
reopening of the factory which has remained
closed for the last three-and-a-half years. But
the long-standing grievances of the workers,
for which a remedy was sought through the
agitation of July 1985, remain unredressed.
On the contrary, the present settlement clear-
ly indicates that their condition would in fact
worsen: at least some of tbe workers are sure
to face retrenchment.
Announcing the signing o f the tripartite
accord, the chief minister had to admit that
"the government could not claim that it pro-
tected all the interests of the workers". But
one thing is obvious: The L D F government
which failed to protect the interests of the
workers has taken every measure to protect
the interests o f the management. In future
raw material would be available at less than
half the rate at which it was being supplied
to the factory at the time of its closure; the
management would be entitled to receive
cash compensation from the government if
the latter fails to fulfil its commitment of
raw material supply; and after allowing a
paltry increase, the management has been
able to effect a wage freeze for the next five
years. To Add to it all is the five-year strike
holiday which is the first of its kind in the
state. The present settlement thus marks the
16
would be reconvened in A p r i l 1989 to find
a consensus on all outstanding issues. In the
meanwhile the GATT director-general will
negotiate with the US, EC and other
members to prepare an acceptable docu-
ment. Until then all agreements in other
areas will be put in the freezer to be thawec
at the April meeting. As Arthur Dunkell,
GATT's director-general, shuttles across the
Atlantic through the winter, trying to ham-
mer out a consensus between the EC and the
US on farm subsidies (attempting to achieve
in four months what was not possible over
two years) he will have Shelley on his mind:
" I f winter comes, can spring be far behind?"
But, will the spring of 1989 see the greening
of GATT?
culmination of workers' agitation in a
ludicrous situation: while the demands put
forward by the workers are rejected, those
of the management are fully met.
To say that the CPI(M)-led government
in Kerala collaborated with the Birlas may
sound too severe a statement, but clearly the
agreement has been reached on terms dic-
tated by the Birlas. Equally clear is the fact
that the settlement throws the doors wide
open for the Birlas to further fleece Kerala's
economy and environment. A Vasu, general
secretary of the Gwalior Rayons Organisa-
tion of Workers (GROW) which led the
agitation, characterises the agreement as a
'total surrender'—by the state government to
the Birlas and by the workers to the govern-
ment. But pitted against a very powerful
enemy and with little support from the
government which continuously expressed its
'helplessness', the workers had no alter-
native but to call off the forty-month long
agitation.
Earlier we had reported in this journal
('Kerala Worker Rises against Indian Big
Capital', July 2, 1988) the events that led to
the closure of the factory, the emergence of
GROW as the workers' radical alternative to
collaborationist trade unionism, and the
course of the GROW-led agitation that
generated mass mobilisation of an unprece-
dented order. The July 1985 agitation was
launched to press three major demands-
renewal of long-term wage agreement, the
last one having expired in 1981; payment of
bonus for the period 1982-85 on par with
that paid in the preceding years; and full
employment for reserve workers. The charter
Economic and Political Weekly January 7, 1989
had insisted upon an increase of Rs 250 in
basic wages. It also demanded a fixed
dearness allowance of Us 200 up to 50 points
of the cost of living index. The present set-
tlement offers enhancement of basic wages
by merely Rs 32. Taking into consideration
the twin facts that the last wage agreement
was entered into as far back as 1978 and that
the present settlement would be in force for
the next five years, we find that the increase
in basic wages of a Mavoor worker over a
period of fifteen years is merely Rs 32. Fixed
dearness allowance is maintained at Rs 50.
Increase in variable dearness allowance as
per the present settlement is only one paise
per point over 500 points of the cost of living
index.
White during the period 1978-82 the
workers had received an annual bonus of 40
per cent on the average, for the years 1982-88
workers would be paid only the minimum
bonus of 8.33 per cent plus ex-gratia bonus
of 10 per cent, 5 per cent and 4 per cent
respectively for the years 1982-83, 1983-84
and 1984-85. Annual increment would not
be paid for the period during which the
factory was closed.
The agreement does not provide for any
increase in employment for reserve workers;
they would have to be content with 13 days'
employment a month. Abolition of contract
work, another long-standing demand of the
workers, has also been rejected in toto. The
accord clearly states that the status quo.
would be maintained in respect of contract
work.
A perusal o f the terms of the agreement
vividly brings out its labour oppressive
character. Clause 6 of Article I I I of the set-
tlement which has attained infamy as the
'deadliest clause' reads: " . .they [workers]
will not resort to any direct action, such as
strikes, go-slows, stoppages o f work, refusal
to carry out the orders of their superiors, etc,
on any matter agreed to in this settlement".
Since every detail like basic wages, incre-
ment, bonus, workload, upgradation of
technology and retrenchment of workmen
is covered by the settlement the said clause
forestalls any form of labour resistance
during the next five years.
The agreement empowers the manage-
ment to adopt improved technology for pro-
cesses and production, it is clearly laid down
that workers would not be entitled to any
increase in remuneration when such tech-
nology is adopted. Nor would there be any
increase in workforce when improved tech-
nology is introduced.
Unfortunately, what the chief minister
chooses to describe as "the small sacrifices
the workers should make for the industrial
development o f the state" do not end here.
Subjected to Birlas' draconian labour prac-
tices for long, the Mavoor workers have
strongly resisted workstudy schemes. But the
present settlement accords sanction to the
management to conduct one and re-fix the
strength of the workforce. What would be
the fate of workers declared 'surplus'?
Clause 9 of Article V of the agreement vests
with the management "all the rights to deal
with such surplus workmen as they consider
appropriate". Of the 'Surplus' workers, a
maximum of 50 would be accommodated
in the reserve workforce, i e, they would have
only 13 days' employment a month. The rest
of the workers would have to accept 'volun-
tary retirement' or face retrenchment. But
it is clear that with the threat of retrench-
ment staring them in the face, 'voluntary
retirement' is only an euphemism for
retrenchment.
The government's silence on the agree-
ment with Birlas regarding supply of raw
material which forms an integral part of the
present settlement is intriguing. By keeping
the agreement a secret the state government
is violating a basic right of the people, the
right to know. Forests are the common pro-
perty of the whole people and the pillage of
these resources has already become a politi-
cally volatile question in Kerala. The possi-
ble repercussions of this disastrous agree-
ment with the Birlas, if it is made public,
would not be very desirable for the govern-
ment. It is difficult to locate any other
reason why the government is silent on the
vital clauses of the present agreement.
It is understood from reliable quarters that
the terms of the new agreement are simply
outrageous. As per the agreement, the
government undertakes to supply two lakh
tonnes of raw material to the company every
year. The contract area can offer only 40,000
tonnes of bamboo and reeds and 60,000 ton-
nes of eucalyptus per year. The agreement
allows the management to meet the deficit
from outside the contract area. Any short-
fall in supply of eucalyptus is sought to be
met by bamboo and reeds, thereby depleting
further the natural forests of the state. Most
importantly, the agreement empowers the
management to adopt clear felling in respect
of certain varieties. The serious environmen-
tal implications of this agreement for a state
like Kerala where the forest cover has already
come down to 8 per cent of the total land
area—though official estimates put the
figure at a magnificent 25 per cent—need
no elaboration.
The Birlas have evidently done quite a bit
of homework in formulating the terms of
the agreement. The government estimate of
availability of eucalyptus for the next five
years is 8.35 lakh tonnes. The state govern-
ment is already committed to supplying 1.5
lakh tonnes to the public sector newsprint
factory at Velloor near Cochin. The annual
requirements of the Punalur Paper Mills is
estimated at 1.62 lakh tonnes. Obviously the
government cannot be expected to fulfil all
these commitments; hence the compensation
clause in the agreement. This clause would
imply that in future even if the factory were
closed for want of raw material, the com-
pany would stand to make money by way of
compensation claims. The amount of com-
pensation to be paid by government in case
of default in supply of raw material would
be decided by a tribunal consisting of a
representative each of the management and
the state government and a chairman
mutually agreed upon.
What price would be charged for raw
material supplied to the company? Earlier,
the Kerala Forest Produce (Fixation of Sell-
ing Price) Act 1978 had fixed royalty rates
Economic and Political Weekly January 7, 1989
for the period 1979-88. Price of bamboo was
fixed at Rs 305 per ton and of eucalyptus
at Rs 550 per ton for the year 1987-88. On
the eve of signing the recent agreement, the
government promulgated an ordinance to
facilitate re-fixation of the selling price.
Titled Kerala Forest Laws (Amendment) Or-
dinance 1988, the new legislation amends
certain important provisions of the Kerala
Forest Produce (Fixation of Selling Price)
Act 1978, As per the new ordinance, clauses
5 and 5(A) of the Act—clauses relating to
prices—would not apply to industrial esta-
blishments using more than 50,000 tonnes
of forest produce per year and employing
not less than 1,000 persons. The ordinance
lays down that no tax would be levied on sale
of forest produce to such large industrial
establishments. Therefore, in future, raw
material would be available to the company
at Rs 250 per ton and not a paisa has to be
paid by way of additional price, forest
development tax, sales tax and additional
sales tax. It is worthwhile to remember here
that earlier when a dispute arose between the
management and state government regar-
ding raw material price, a cost accountant
had been appointed to go into the whole
question. He reported that Mavoor Rayons
would be a viable unit even if the raw
material price were Rs 800 per ton. In-
terestingly, at the time of closure the
management had pressed for parity with the
Karnataka rate, whereas the price now
agreed upon is much tower than the Kar-
nataka price which is Rs 600 per ton. Open
market prices of bamboo and eucalyptus are
of course much higher than even the
Karnataka rate. Savings for the management
on raw material costs alone over the next five
years amount to Rs 80 crore.
Further, the present settlement frees the
management of massive debts owing to the
government on account of raw material pur-
chased during earlier years. The government
has agreed to write off thus over Rs 6 crore
and to withdraw all cases against the com-
pany. Moreover, the management stands to
save substantially on electricity bills in
future. The recently promulgated the Kerala
Electricity Duty (Amendment) Ordinance
which amends the Kerala Electricity Duty
Act 1963 reduces the duty on electricity
payable by high tension and extra-high ten-
sion users to 10 paise per unit. With such
massive concessions pouring in, it is not
surprising that the management is now en-
thusiastic to reopen the factory and to
undertake upgradation of technology. ~
Any fairly competent observer would ad-
mit that this is a peculiar way to revive a
factory. The present reopening is a cruel joke
played by the Birlas and the state govern-
ment not only on the Mavoor workers but
also the whole people of Kerala. In any case,
after five years the machines at Mavoor
would screech to a halt forever, throwing out
of employment nearly 5,000 workers; and by
then Kerala's remaining forests would be
denuded.
The closure as well as the present revival
of the factory bring into sharp focus certain
disquieting features of Kerala's development
and point to the hapless situation of the
Kerala economy functioning within the
dominance of Indian big capital. While it
is to the credit of GROW that it could
spearhead a massive agitation raising these
vital issues, it is evident that GROW could
not carry the struggle to a successful
culmination. It is foreseeable that after five
years Mavoor would again become the scene
of a mighty agitation—an agitation by the
entire working people of Kerala against the
pillage of the region by all-India monopoly
houses with the active collaboration of the
Indian state and its representatives in Kerala.
It is to be hoped that it will be an agitation
on a much stronger footing, enriched by the
lessons of the present debacle.
APPOINTMENTS
17