People's Democracy

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


No. 06

February 11, 2007



CITU Asks PM To Review Deal


CHARGING the Sterlite with flagrantly violating the shareholders agreement in labour matters in the Bharat Aluminium Company (BALCO), the Centre of Indian Trade Unions (CITU) has asked the prime minister, Dr Manohan Singh, to review the whole privatisation deal and take appropriate corrective measures including cancellation of the agreement. 


Addressing a news conference at New Delhi on February 1, CITU president Dr M K Pandhe and secretary Dipankar Mukherjee drew the prime minister’s attention to the study “Impact of Privatisation on Labour: A Study of BALCO Disinvestment,” published recently by the V V Giri National Labour Institute, an autonomous body under the union labour ministry, which brings to light that most of labour related provisions in the shareholders agreement between the government and the company are being flouted. 


Released on this occasion, Pandhe’s letter to the prime minister on the subject said that subsequent to the discussion with all central trade unions on October 18, 2002, the then prime minister was convinced about the violations by the Sterlite and had constituted a fact finding committee on the matter. In its report in September 2004, the committee felt that the strategic partner did not pay sufficient heed to the sprit of the shareholders agreement, which protects the interest of the workers. It also candidly observed the inadequate retraining and rehabilitation measures followed by the Sterlite while carrying out its programme of rationalisation of workforce.


And now the National Labour Institute’s aforementioned study, based on the analysis of both secondary and primary data, finds that most of the labour-related provisions in the shareholders agreement between the government and the Sterlite have been flouted with specific instances of coercion and of harassment to the employees who have been forced to accept the voluntary (sic!) retirement scheme (VRS) with deferred payment. The report says that the Sterlite management lagged behind in social responsibility, as can be seen from decline in the school enrolment rate leading to closure of the junior school which is now being used as the company’s godown. More shockingly, the report gives a vivid picture as to how local development has been hit through job losses to the local workmen and a visible non-preference policy to local job seekers by the present BALCO management.


The study, in a nutshell, reconfirms the veracity of the torrent of complaints received from hundreds of harassed BALCO employees who were the victims of privatisation and blatant violations of the shareholders agreement. The CITU pointed out that obligation under this agreement could not be a one-sided affair and its violation by one party requires the other party (the government in this case) to review the whole deal and take appropriate measures.


The CITU has therefore demanded that the prime minister review the whole deal and take appropriate corrective measures including cancellation of the agreement. It has also demanded that the government’s nominees on the BALCO board take up the issue, based on the aforesaid study, as a special agenda item in the next board meeting, which should be convened at the earliest. 
Besides, the CITU has also sought the prime minister’s immediate intervention regarding the role of M/s Vedanta Resources, a company listed in London Stock Exchange, which now controls BALCO as the holding company. The company’s annual report 2005 states on page 111:


“Political and Public Awareness Trust


During the year, the Group contributed $ 1.3 million to the Political and Awareness Trust (2004: $1.2 million). This trust makes contributions to political parties and related causes. The trust is a related party as it is controlled by members of the Agarwal family.”


To the CITU, contributions by a group operating from outside India to political parties within the country is obviously violative of the laws of the land. It has therefore demanded an investigation as to how such funding has been done and publication of the name of its recipients. In this connection, it has also pointed out that, as the present finance minister had been on the board of Vedenta Resources, he should also absolve himself and his ministry in regard to all the decisions pertaining to BALCO’s disinvestment. (INN)