People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 39

September 26, 2004

BALCO After Privatisation

S Kumar


AFTER two years of 67 days strike in Balco, there was total one-day strike on July 22, 2004. The 67 days strike was against privatisation and this time strike was against the sale of 49 per cent share by central government. The 67 days strike was withdrawn due to the betrayal of INTUC leadership and also of the Chhattisgarh state government. The strike call was given by same BALCO Bachao Abhiyabn Samiti, which gave call and led the 67 days strike excluding INTUC. This time CITU, AITUC, BMS and HMS are in the BALCO Bachao Abhiyan Samiti.

The INTUC’s explanation is that they are not concerned about selling of 49 per cent share but as per their assertion they are more interested that 5 per cent share should be sold to the workers. The INTUC openly opposed the strike, issued a leaflet and made mike propaganda against the strike.


This time there was no picketing as the workers on their own did not go for duty. The contractor workers also went on strike. The CITU played the leading role in organising the leaders and cadres and we were in the forefront.


After privatisation the condition of the workers has been deteriorating day by day and the number of workers is decreasing. Table 1 given below indicates the same.


Table 1

(Disinvestments: 2001-02 to 2003-04)





Fresh Recruits Retirement etc

Executive/Officers Workmen Trainees



















Retirement etc

March 31, 2004

Executive / Officers














In BALCO there is 150-bedded Hospital with all facilities. After privatisation, majority of doctors either resigned or have taken VRS. Now doctors are appointed on ad hoc basis. Even nurses are appointed on ad hoc basis. Medicines are not available in the hospital.

Appointment of women workers on compassionate ground has been stopped. Women workers appointed before privatisation on compassionate ground were given work in those places, where skill and training is required. Now, they have been asked to operate overhead crane without proper training. There is a possibility of serious accident.


There is no maintenance of quarters. The workers are suffering from fear psychology. There is no job security. There are a number of private schools in BALCO township which used to get aid from BALCO. That is now stopped. Schools have thus increased the fees, which is a burden on the workers.


The Sterlite management has started construction of a new power plant and smelter. There are 6000 contract workers from different states like Tamilnadu, West Bengal, Orissa, Bihar, and Rajasthan. The contractors are also from these states. These workers are brought in groups from their native places by the contractors or their men and keep them in camps. Workers are not allowed to go anywhere except place of work, just like bonded labour.


Now local workers are not recruited. Even contractors are not from local areas. The thinking of the Sterlite management is that if local workers are recruited, they may get organised and workers movements may start.


Labour laws are openly violated. Minimum wage is not paid. Safety norms are not followed. Except helmet and shoes no other safety appliance is given. There were four fatal accidents. In first accident 7 workers died. But nobody knows what happened to the dead bodies. Whether compensation has been paid is also not known. There was another accident and 3 workers died. The CITU Union intervened and did not allow to take out the dead bodies unless compensation was paid. Ultimately the management agreed to pay compensation.


Another accident took place where 4 workers died. This is the condition of contract workers. There are no safety norms, no minimum wage, no labour laws; just like bonded labour these workers have to work. The CITU is in forefront of the movement. There were two strikes of contractor workers led by the CITU union. The first strike was on February 24, and the second 3 day strike from July 1 to 3, 2004 on 19-point demands. Both the strikes took place at the call of CITU and demands were settled. Recently on August 14, 2004 one more accident took place in which a contractor worker died by getting crushed in the generator. It is to be noted that all the victims of accidents were contractor workers.


At the time of selling of BALCO to Sterlite, there was a shareholder agreement. In that agreement there is a part concerning workers. There has been open violation of this part of agreement.



The details in respects of violation of shareholder agreement are provided in the annexure enclosed. After the sale of BALCO there were many complaints regarding violation of shareholder agreement. The NDA government appointed a committee for disinvestment. Review committee consisting of Hansu Bhai Dave, general secretary, BMS, Disinvestment Secretary and Labour Secretary was constituted to review the condition of BALCO after disinvestment. Hansubhai Dave was made the chairman of the committee. This committee has not submitted its report till this date. This shows the sincerity of the NDA government to review the disinvestment of BALCO.

There is a captive thermal plant for BALCO, which was run by NTPC, Korba unit. The NTPC decided to leave the management of this captive thermal plant and handed it over to BALCO. All the employees whose service condition was governed by the NTPC rules suddenly became the employees of BALCO. These workers have lost their seniority and got the new appointment. The Sterlite got this plant free, as it has not paid anything. Now another thermal plant is under construction. The aim of Sterlite management seems to be to sell the BALCO’s captive thermal power station which was earlier under NTPC. The workers of this plant will suffer a loss on account of this deal.


This is the condition of BLACO after privatisation. This industrial unit was earlier making profit. The workers had played a major role in running the plant on profit. Now their condition is worsening day by day. The management wants to remove all permanent workers and recruit new workers as trainees. The main concern of the workers is that government should not handover 49 per cent share to Sterlite, and initiate an enquiry on the functioning of BALCO. Having great faith in the CITU, CPI(M) and other Left parties, the workers expect that the CPI(M) and Left parties would pressurise the government for initiating an enquiry in BALCO.    


Table 2

Violations of Shareholder Agreement


Clause No.   24    

Statement of the Agreement

Compliance with laws: In carrying out the allegations specified herein the parties shall comply with all applicable Laws. 

Acts of Violation: 

1) Factories Act. (a) Denial of overtime at double hour payment basis as stipulated in the Clause 59 of the Act.

(b) Detaining women employees at work after the sunset against clause 66 (b) of the Act.

(c) Operating the factories without qualified safety and welfare officers. Factories do not have a even qualified fire officer.

2) Contract Labour Regulation and Abolition Act: Minimum wages, overtime and other benefits not being given to the contract workers.

3) Environmental Laws: Started setting up the plant at Korba and Lanijigarh without proper clearance from the ministry of environment.

4) Forest Conservation Act: Indulgence in indiscriminate felling of trees without proper authorisation from the Forest Department. A police case has also been registered at Jamnipali.

5) Motor Vehicle Act: In contravention to the Act trucks overloaded with bauxite are being plied with impunity.

6) Registered Agreement with the Recognised Union:  (a) Appointment on compassionate grounds stopped. (b) Appointment of B. Sc. trainees on posts other than the intake point. (c) Pay structure of unionised employees adhered by merging DA.

7) Pay Commission: (a) Age of retirement reduced for a section of the employees i.e. the executives and the officers. (b) The pay structure and other packages like LTC etc. of the executive and officers changed.

8) Apprenticeship Act: (a) No apprentice inducted. (b) Apprentices trained at BALCO not considered for employment in the company.

9) Workmen Compensation Act: Compensation not being given as per provisions of the Act.      


Clause No.   5.1    

Restriction on Transfer of Shares: Except as expressed by provision of this agreement or as may be unanimously agreed there shall not, for a period of 3 years from the closing, directly or indirectly, sale or transfer assignment charge, mortgage in other ways to dispose off or incumbency. Such, a “transfer” or any purchase of share or the legal or the beneficial owning purchase of share or any of the rights, litigations incur this agreement invalid. 

Acts of Violation: 75 per cent shares of this company were first given to M/s Sterlite Copper and then to Twinstar Company. Finally, it has been made a part of Vedanta Resources - a London based organisation.    


Clause No. 7.2 (e) 

Statement of the Agreement: Notwithstanding anything opened to the contrary in this agreement shall not retrench any part of labour force of the company for a period of one year from the closing other than dismissal or termination of employees of the company from their employment in accordance with the application of regulations any standing order of the company or applicable laws.     

Acts of Violation: Contract workers have been retrenched in the very first year.


Clause No. 7.2 (f)

Statement of the Agreement: Notwithstanding anything opened to the contrary in this agreement subject to clause(e) above, any restructuring of labour force of the company shall be in the manner recommended by the board and in accordance with the applicable laws.

Acts of Violation:

1) Labour engaged in the Profile & Tube Ship and Bidhan Bag Unit have been placed in other units at Korba without any formal training etc.

2) BALCO employees transferred to other units of Sterlite without any deputation allowance etc.

3) Almost entire workforce of all the regional offices & Head Office and the Bidhan Bag Unit have been transferred to Korba and kept without work. Thus humiliated, harassed, ignored and unwanted persons left the company on VR on terms inferior to the one offered by the company and referred to in the Schedule 7.4 of the Shares Purchase Agreement..

4) BALCO’s employees have been kept without any work, marginalised, side tracked and even made to leave the company on VR etc and outsiders without any experience have been brought in at better conditions of employment higher salary and better perks etc.


Clause No. 7.2 (g)

Statement of the Agreement: Not withstanding anything contained to the contrary in this agreement, but subject to sub-clause (e) above, in the event of reduction of strength of the company’s employees the SP shall ensure that the Company offers its employees an option to voluntarily retire on terms not, in any manner, less favourable than the Voluntary Retirement Scheme offered by the Company which is referred to in the schedule 7.4 of the Shares Purchase Agreement.

Acts of Violation:

1) Offered a VR Scheme inferior to the one in vogue; payment of ex gratia was distributed in 5 to 8 instalments.

2) In the name of offering VRS, the SP had adopted a mechanism to force the employees to leave the company by opting for VR, even though inferior to the scheme in vogue.

3) To reduce employees strength the company humiliated, harassed, ignored, insulted and discriminated BALCO employees so that their old company became a hostile place to stay any further.

To reduce manpower it has even obtained resignation virtually on gunpoint. Instance of SB Lodh, Fire Officer is illustrative of this. He was manhandled in the presence of vice president and threatened to be implicated in a police case for riotous behaviour in the office of a senior executive of the company. This happened on the same day Lodh submitted his application for VR. Similarly, other employees were made to resign by creating humiliating conditions some of the people who have been victimised are Thomas of Purchase Department, S Basu, GM (Marketing-Korba), Khundia, GM (Marketing, Delhi), Akhtar Hussain, DGM (Mines), Gautam Mazumdar, GM (Fabrication).