DECEMBER 1995 · VOLUME 16 · NUMBER 12
L A B O R
DECEMBER 1995 · VOLUME 16 · NUMBER 12
L A B O R
CALCUTTA -- By demanding more ecological packaging, global consumers
have unwittingly strengthened the bargaining position of long-exploited Indian
jute workers. Jute workers in West Bengal are discovering new opportunities to
confront jute mill owners, who suddenly face a labor shortfall as they prod
their plants to full capacity.
The East India Company introduced jute to Europe in the late 18th century. As jute replaced hemp as a natural fiber, jute mills proliferated in Scotland, spurring demand for the raw material from India. In 1855, Scottish industrialist George Auckland set up India's first jute mill, just north of Calcutta, the present capital of West Bengal. Mill owners who transplanted to India located near jute supplies and cheap labor. By 1870, five mills with 950 machine-powered looms operated around Calcutta. Competition from these Indian mills drove Scottish mill owners and thousands of Bengali hand-loom jute weavers out of business.
Following Indian independence in 1947, British jute mill owners withdrew from India. Most British mills there were acquired by jute brokers and speculators who sought a quick profit. Production of finished jute goods increased through mechanization, spurring a reduction in the number of mills, which fell from 95 in 1951 to 57 in 1991. The same process triggered widespread layoffs.
Thanks to an awakening environmental consciousness, however, 1995 has been a boom year for the West Bengali jute industry, as consumers have sought out biodegradable packaging. Moving back to the future, agricultural products such as grains, sugar and tea are once again being sold in jute sacks. Out of 57 mills, 53 are now operating at full capacity for the first time since 1980. An industry that has long sold 75 percent of its production locally is finding a growing international market. There are about four million jute growers supplying Bengali mills, which employ approximately 200,000 mill workers.
"We were losing market in the 1970s due to the extensive use of synthetic packaging materials. But now, everyone is becoming environment conscious," says A.K. Lohia, chair of the Indian Jute Mills Association (IJMA). "Internationally, jute is now being accepted as the most eco-friendly and biodegradable packaging material. Besides, we have revived a position in the export market because of the internal problems of the jute industry of Bangladesh, India's largest competitor in the global market. Another area where the jute industry shows prospects is in the export of fine yarn for carpet weaving."
Product diversification has given another big boost to the industry. With research assistance from the United Nations Development Program, value-added diversified jute products are growing. They include many varieties of cotton-jute mixed fabrics, upholstery, linen, pulp for the paper industry, and pressed jute board for car door panels.
Sunsetting workers
During most of the last decade, when jute was regarded as a sunset industry, mill owners fought to protect their profits by demanding huge concessions from workers and threatening workers with plant closures.
One way that owners squeezed workers was by reneging on their social security benefits. Mill owners refused to pay into the state employee insurance fund and the federal Provident Fund, under which the employer is legally required to withhold 10 percent of a worker's salary and contribute it along with employer matching funds into a government retirement program.
Employers also failed to pay other legally required retirement benefits known in India as "superannuation." The industry owes an estimated $30 million in Provident Fund dues, $14 million in state insurance dues and more than $33 million in superannuation payments.
Some mill owners convinced workers to agree to lower wages in order to avoid threatened plant closings during a "crisis period" that began in 1987. During the "crisis," money saved from the lower wages was to be put into a fund and repaid to workers when business picked up. This system, called Katautie, has continued in many mills, though the crisis is over.
Workers revolt
The failure of mill owners to pay back worker contributions at the end of agreed-upon Katautie periods has sparked spontaneous protests in many mills.
In early 1994, an independent trade union representing workers at Kanoria Jute Mill in Phuleswar, 30 kilometers south of Calcutta, forcibly took over the mill after the owner shut it down on the pretext of labor unrest. The workers demanded the refund of their Katautie money. Broad sectors of society mobilized to support the workers through fund raisers and community kitchens. Given this popular support, the government declined to prosecute the workers for taking over the plant and even recognized their independent union. "The struggle at Kanoria Jute Mill proves one point: that if the workers are united, they can take on the management," says Arif Ali, the union president.
At Titagarh jute mill 20 kilometers north of Calcutta, management suspended production and stopped writing paychecks in December 1994, saying it had run out of funds. By September 1995, 34 Titagarh workers had died of hunger and related opportunistic diseases. Since the plant has shut down and is no longer paying Employee State Insurance medical benefits, the employees have been cut off from the state medical system. The only alternative is private medicine, which the workers cannot afford. The government and most of the trade unions have ignored this emergency. Fed up with the apathy of central trade unions, a dozen mills have formed independent unions.
The recent resurgence of the jute industry and the resulting shortage of workers has strengthened the hands of workers in recent months. This labor shortage is due to the "better economic condition" of workers, says IJMA's Lohia. "Since most of the jute workers are migrant laborers from Bihar and Uttar Pradesh [two states west of West Bengal], they have gone back home after working for eight to nine months because the wages they have earned can sustain them for the remaining three to four months," he says.
Naba Dutta, secretary of Nagarik Mancha, says real jute wages have risen, but not as much as worker productivity. "In 1985, for every ton of finished jute product, about 60 to 62 workers used to be involved in the production," he says. "But in 1994 to 1995, this number has gone down to as low as 35 to 40 [workers], which means a reduction of almost 40 percent of the workforce," he says. "Besides, the number of permanent workers has decreased considerably during the last decade. In many mills, casual workers or retired workers who work for daily wages constitute about 50 percent of the total workforce." In most cases, these daily laborers are paid $2 to $3 a day, less than the industry's minimum wage.
Mill owners have increased the work load several times in recent years, says Niren Ghosh, West Bengal state president of the Center of Indian Trade Unions, which is affiliated with the Communist Party of India. Dhunmun Rajbhar, a veteran worker at Kelvin Jute Mill in Titagarh, says excessive work loads are causing escalating rates of illness and absenteeism. Many workers hire another person to take some of their shifts, a practice known as bhagawala, or "sharing."
The jute industry is enjoying a booming market, new products and, in some cases, super profits. In 1994, some mills paid shareholders dividends worth 20 percent of share values. The challenge for emerging independent trade unions is to translate the leverage presented by increasing jute demand into better wages and working conditions that redistribute the fruits of the new jute boom.