Labour Laws, Trade Union


More than 90% of the around 4 lakh regular workers in the public sector coal industry i.e. various subsidiaries of Coal India Ltd.(CIL) in Jharkhand, Bengal, Odisha, Chattisgarh, Madhya Pradesh, Maharashtra and the Singareni Colliery Company Ltd.(SCCL) in Andhra Pradesh went on strike from 6th Jan.2015 in response to the five-day strike call initiated jointly by the 5 central trade unions recognized by the govt. in the coal industry (INTUC, BMS, HMS, AITUC, CITU) and supported by IFTU. The recognized union in SCCL which is linked to the TRS party however did not support the strike and the Telengana Govt. even resorted to repression with IFTU activists being arrested for picketing. Similarly in Bengal the Union linked to Trinamul Congress opposed the strike affecting the success of the strike initially.
Coal India management officials admitted a 75% loss of production. Continuation of the strike for the full period of 5 days could have seriously disrupted power supplies with more than 70% of the country’s electricity production being coal-based. However, despite massive support of the workers and continuing success of the strike even on the second day, 7th January, the 5 unions called off the strike that night following a meeting with the Coal Minister Shri Piyush Goyal and an “agreement” being reached. CITU did not sign the agreement but called off the strike.
The main demands of the strike were for stopping privatization and particularly the provisions of the Coal Mines (Special Provisions) Ordinance 2014 which clears the way for large scale entry of Corporates into the coal mining sector not only for their captive use for power plants, steel plants etc. but also for direct sale of coal in the market which has hitherto been restricted to the public sector companies. The other demands of the strike include stopping of disinvestment, stopping outsourcing and for regularization of these and other contract workers, equal wages for equal work and application of the National Coal Wage agreements to all workers of the coal industry, stopping investment by Coal India abroad, giving budgetary support to public sector coal companies for expansion, etc.
These 5 unions had earlier called for a strike on 24th November on these demands when the Bill was pending in the Rajya Sabha. The strike call had been withdrawn following vague assurances given in a meeting with Coal India management and ministry officials. With the closing of the parliament session without passage of the Bill, the Modi Govt. got this Ordinance issued prompting the present strike call.
The “agreement” nowhere records any clear commitment by the Govt. regarding the main demands. It records that the main issues under dispute are i) permission to private companies for commercial mining through the Coal Mines (special Provisions) Bill and Ordinance, ii) further disinvestment in Coal India and iii) re-organization of Coal India in any form. It further records that the unions demand that provisions which in any way permit private companies in mining operations should be scrapped and all the 204 coal blocks cancelled by the Supreme Court be given to Coal India. The actual agreement is a damp squib. A committee of representatives of unions and management of public sector coal companies and headed by a joint secretary of the ministry will be formed to look into the demands of the unions and will submit its recommendations to the Govt. and in view of the clarifications given by the Minister in the meeting the unions call off the strike. The clarifications recorded are actually a monologue by the Minister justifying the Bill and Ordinance and stating that it will give impetus to the economy, will create jobs and will make the ‘Make in India’ programme successful, will ensure operation of pending power and steel projects, will free Non Performing Assets of Banks, etc.
The Minister further states that after the coming of the Modi Govt. the production in Coal India has increased and the Govt. wants to further strengthen Coal India. This last part is being propagated by some unions among workers to show that there is no threat to existing regular workers. This is an attempt to downgrade the struggle from one against the policies of privatization to one of merely protection of short term interests of existing regular workers. Some unions are repeating the assertion of the Minister that there never was any direct attack on the existing benefits and rights of these workers nor is there any such move of the Govt. at present. Anyway, the reiteration by the Modi Govt. of its intention to go ahead with the next round of disinvestment in Coal India should put an end to such “wishful thinking”.
The coal industry was nationalized in the 1970s with take-over of the hundreds of privately owned, haphazardly managed and unscientifically operated mines. Huge amounts of public funds were invested and production reorganized more scientifically, new mines opened and coal output greatly increased from the then 70 million tonnes to over 460 million tons in 2013-14 by CIL. Privately owned captive coal mines were even then exempted (mainly Tata at that time). The nationalization was very much in keeping with the wishes of the Indian comprador big bourgeois (‘Bombay Plan’) who wanted the state to build the industries requiring large investments and giving returns after a long period. After the advent of the neo-liberal new economic policies in the 1990s, the situation has changed as is well known and privatization of public sector is in full swing.
Privatization of the coal industry is not beginning now. It has been underway from ‘inside’ in CIL and SCCL since two decades and is continuously increasing in the form of outsourcing to private operators with only supervision by the public sector management (a type of contracting out of work). Outsourcing has been facilitated by the shift from underground mining to open cast surface (pit excavation) mining. There is no big initial investment of time and money (and specialized machinery used in modern underground mining in West European countries) required in open cast mining. Just blast, dig out a pit and carry away the coal, leaving behind vast stretches of land barren and pock-marked with craters akin to the lunar landscape. The cost of production is projected as being much lower but this is fallacious because the environmental costs are never calculated and the partial restoration of land required even in the existing law is never implemented. The workers of the private operators of course get paid only 1/4th to 1/5th of the wages of the regular workers of the public sector company as they are excluded from the ambit of the National Coal Wage Agreements. Hand in hand with the increase of outsourcing has been the slashing of the regular workforce through normal retirement or Voluntary Retirement Schemes. In the last 15 years the regular workforce of CIL has almost halved from over 6 lakhs to less than 3.5 lakhs while the coal production has more then doubled from around 200 million tons to 462 million tons.
Secondly, privatization in the form of disinvestment of shares has already begun 3 years ago with disinvestment of 10% shares and now another 10% shares are being sold. Thirdly, allocation of coal blocks to private companies for captive mining had been going on since 20 years although actual mining had not been started by most of the allocatees until the cancellation by the Supreme Court. These 218 blocks are estimated to have around 50 billion tons of the total 247 billion tons of geological coal resources of the country. Now, before the re-allocation of these blocks through auction, the Modi govt. has, through the ordinance, permitted commercial mining for open sale.
The justification given for permitting commercial mining is that the public sector is not able to fulfil the demand and the shortfall has to be made up by spending valuable foreign exchange on imports. This is false. The existing law already provided for private companies in the major coal-consuming sectors- power, steel, cement, fertilizer – to have captive mines for their needs. Apart from this there is already a system in place of having long term Fuel Supply Agreements with the public sector coal companies which have generally not defaulted. Import figures are also misleading. Due to limited availability in the country of coking coal (for steel), import of this has always been there and has shown a continuing gradual increase from 22 million tons in 2007-08 to 32 million tons in 2012-13. However import of non-coking thermal coal (for power plants, etc.) has rapidly risen from 28 million tons to 105 million tons in the same period. In this period, due to worldwide economic recession, international coal prices have decreased greatly. At the same time import duty on coal has steadily been decreased over 20 years from 85% to 5%. Corporates chose to import rather than mine the already allocated coal blocks or enter into purchase agreements with the public sector companies. Whether the soon to be auctioned and re-allocated coal blocks will be actually mined in the near future is a moot question. Simultaneously, CIL is being made to invest in coal mines abroad, in Mozambique, etc. rather than investing in expanding production in the country.
The entire exercise of privatization, while handing over control of coal resources to the Indian and foreign corporates, is mainly aimed at cutting the cost of coal, the basic and main raw material for thermal power plants. This essentially means cutting the wage costs. Consequent to nationalization and unification of a vast mass of workers under a single management, the wages of regular workers have steadily increased over the years through successive National Coal Wage Agreements (NCWA) and are relatively much higher than the average wage in the private sector. In the public sector companies wage costs have already been decreased by cutting down the regular workforce and increasing outsourcing and employment of contract workers at very low wages. Until 10 years ago the private Tata collieries were also part of the NCWA. After the earlier process of allocation of coal blocks to private companies got under way, the private coal producers have been taken out of the purview of the NCWA and are free to decide their wage rates. Now, with permission to private companies for commercial mining for sale, there will be further pressure on public sector companies to keep the wage costs lower.
What next? The recognized unions are unlikely to voluntarily take up any sustained struggle against privatization, given that the political parties to which they are linked are themselves in favour of the new economic policies. The revolutionary forces are organizationally very weak in the industry. The regular workers with their relatively better economic status as yet do not identify with the outsourcing and contract workers and their vision is limited to the short term protection of their existing status. Despite this, the overwhelming response to the strike call, despite relatively lacklustre propaganda, shows that they can be brought into struggle. The workers have to be made to understand the betrayal of the strike by the recognized unions and that with continuing disinvestment of Coal India and entry of private players their position will not remain untouched in the long term. They should be mobilized to pressurize the recognized unions to carry forward the struggle against privatization, for application of uniform wage structure (NCWA) in the entire coal industry-public sector and private-, against outsourcing and for the other demands.