Appeal to the Chairman of Aditya Birla Group to Look into the Hindalco Kollur Plant case.
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Shri.Kumar Mangalam Birla
Aditya Birla Group of Industries
We Condemn the Unethical Production and Human Resource Management Strategies of Aditya Birla Group’s Hindalco Industries Ltd., Kollur Plant and Appeal that Ethics and Humanitarian Concerns must be Respected.
This is to bring to the notice of the society at large the unethical production and labour relations strategies adopted by the Aditya Birla Group’s Hindalco Industries Ltd., Kollur plant, located in Telangana state of India. The unit manufactures Aluminum foils. Earlier during 29/03/2014 the management of the Kollur plant had issued unilateral closure orders and had transferred the employees without either obtaining consent or any prior intimation to various parts of the country. Overnight workers who were engaged in manufacturing were asked to engage themselves as mining workers. It was through this very website that we had raised our voice against what was aptly described as forced relocation of workers. Workers’ concerns about relocating families includes anxiety about the education of their children. The 173 households were suddenly asked to move to Chattisgarh, Jharkhand, Odisha etc., The massive public outcry made the Aditya Birla business-house rethink following which the management negotiated an agreement. On 22/07/2014 the Hindalco management and representatives of the workers’ Union as well as concerned citizens came to an agreement signed in the presence of the Minister for Labour, Telangana Government; the Commissioner of Labour; Commissioner of Industries; Member Secretary PCB; Joint-Commissioner of Labour and Joint-Director Department of Industries. In this agreement, the Hindalco management represented by the CPO ; Business Head; Unit Head; HR Head and GM Engineering had agreed to the following statements:
1. Hindalco Industries shall submit applications for CFO and CFE to the state Pollution Control Board and Industries Department. Member Secretary State Pollution Control Board assured that pending approval of CFO and CFE, the Hindalco industries can commence the production as stated in the CFO and CFE applications;
2. All parties will strive to maintain long term viability of the unit;
3. The transfer orders issued to the workers shall be recalled after the rerating the power to 2000KVA by CPDCL and immediately production will commence;
4. The Union shall defer any demand for wage rise or any other demand putting additional financial impact before 1st May, 2015.
Despite the unfairness of the last statement the workers were magnanimous to agree to this in the interest of reviving the production. Till date there has been no demand from workers to raise wages. However, the Hindalco management seems to have suddenly gone back on the agreement they made and today it claims that it is in no position to run the plant threatening to retrench the workers. The workers have been reporting to us that the unit Head and unit HR are going around intimidating the workers while the Corporate heads have sought time to explore possibilities of making the unit viable. The trajectory of events culminating into this threat by the unit level Hindalco management stand as a glaring example of the unethical dirty quick profits the Aditya Birla Group’s Hindalco seeks to earn by ditching the workers who have been sweating loyally for this unit for the past thirty and odd years. While the agreement of 22/07/2014 was being drawn, the major concerns that the Hindalco management expressed were about the fact that the company was in the red category as per the classification of the polluting industries by the CPCB and therefore it is constrained in terms of being able to expand. The Hindalco management during the discussions had stated that they would like to expand their production from the current 330 tonnes to over 6000 tonnes. They pointed out that one of the major constraints has been the G.O.111 which prevents expansion of the polluting industries. Today these concerns have been addressed. The Ministry of Environment and Forests has brought a new re-categorization of industries in which the foils production has been re-categorized under Orange from Red category (available on http://pib.nic.in/newsite/PrintRelease.aspx?relid=137373 ). Further, the Chief Minister of Telangana has made an assurance to withdraw the G.O.111. In any case, as per the HUDA records itself, Kollur village does not appear as part of the 10kms catchment area (http://www.hmda.gov.in/Greenchannel/13%20-%20G.O.%20Ms.%20No.%20111.pdf ). While the management asked for the CFO & CFE, it seems to have not taken any interest to follow-up on it despite the minister taking keen interest in assuring them of all the permissions and support. This basically means that the original set of reasons that the Hindalco management gave about why they are wanting to close down the plant, no longer held water. The Hindalco management having lost ground in these arguments started to give new reasons. The management started saying that they have no new orders being placed by customers. The workers’ union then procured several outstanding orders placed by various pharmaceutical and other companies in response to which the Hindalco management had not yet scaled up its production. Currently the Kollur unit is operating way below its capacity of 330 tonnes at 70 tonnes, the reasons for which are best known to the Hindalco management itself, say the workers. Having been presented with this evidence, the Hindalco management then came up with another argument viz., that the foil industry in India was a shrinking sector and did not have any future and therefore to invest in foils is to throw good money to make it bad. During the course of second round of negotiations, the representatives of the workers presented to them industry review reports which basically show that the Aluminum foil market is not shrinking as claimed by the Hindalco management but is expected to expand further (http://www.technavio.com/report/global-aluminum-foil-packaging-market-2015-2019 & http://www.safeducate.com/PDF/KPMG%20Report%20on%20Logistics,%20Transportation%20and%20Warehousing%20(2013-2017,%202017-2022).pdf )
Having failed to find any rationality in this claim as well, the Hindalco management went back to Mumbai saying they would find a way to run the unit. While the corporate heads have promised to run the unit, the unit head and unit HR are intimidating workers and threatening a closure. It is this threat and unethical modes of intimidation that have compelled us to take up this mode of campaign.
In what we see are the real reasons why the Hindalco management plans to close down this unit are as follows:
1. The 23 acres of land located in prime realty area today is valued in several Crores of rupees. Earlier, during the first round of negotiations itself, the unit had advertised its land in magicbricks website and today it denies it;
2. The Hindalco Industries is increasingly focusing on extraction and related activities which cause immense damage to ecology and displaces people while it is intending to move out of manufacturing and other downstream activities. This is an immense loss in terms of skill sets and quality of employment opportunities, apart from being an extremely sad statement about the Aditya Birla Group’s Hindalco Industry’s standing as an entrepreneur.
3. In the downward-end stream the Hindalco Industries is choosing increasingly to outsource its production to small and medium industries which have pathetic labour relations and run manufacturing by resorting to sweatshop manufacturing practices with precarious employment for workers lacking all social security and safety standards;
4. The Hindalco managements decisions therefore are not about good money and bad money but about good profits and bad profits. Windfall gains compromising on ethical and humanitarian considerations seems to be the new managerial approach of the Aditya Birla Group’s Hindalco Industries.
In a survey done by the students of Economics of Labour course at the School of Economics, University of Hyderabad, during March 2016, 80 percent of the workers (130 sample size) have said that the Hindalco management intends to make profits by converting the industrial land into a realty property. It’s a shame that 80% of the workers think that the Hindalco management is offering only pretexts and do not trust it anymore. An equally large proportion of workers have pointed out inefficient unit level management responsible for the poor performance. They questioned why the outstanding orders are not being carried-out? If such a large proportion of workers who have worked for over thirty years with Hindalco perceive this, there must be an element of truth in it.
The Birla group has had a glorious past with a close connection with India’s freedom struggle. The Aditya Birla Group has espoused very high ideals in its mission statements. We would like to appeal to the Chairman of the group and others in the commanding heights of the Aditya Birla Group business-house to preserve the ideals underlying the production and human resource managerial strategies and practices. We strive through this campaign to draw their attention to the humanitarian tragedy a decision to close down this unit would unveil for the 173 families of workers who have been committed and hardworking force for over 30 years, on whose shoulders the business-house has built its reputation and prosperity. The business-house risks losing the trust of the workers in all its units through out the country if it resorts to a short-sighted strategy. We hope the decision taken by the Hindalco Management would have considerations for ethics, ideals and humanitarian outcomes. Lets raise our voice to condemn those forces that seem to drive a shift in the Aditya Birla group’s Hindalco Industries towards a pragmatic and cold blooded pursuit of profits at the expense of all the lofty values and ideals undoing the history of the Birla group and unbecoming of an entrepreneur. A business-house can never thrive sustainably through a short-sighted greed for windfall gains losing the trust of workers and the respect for the reputation built by ethical managerial practices. We demand that the management stop artificially manufacturing loses by not executing the outstanding demands for foil placed by its customers and strive to keep its promise made in the agreement to genuinely make the unit viable and profitable.
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