A Cooperative of Tribal Workers

The Saongaon Tea and Allied Plantation Workers’ Cooperative Ltd. comprised workers from the Sonali Tea Estate, located in the Jalpaiguri district in the northern region of West Bengal. The cooperative had about five hundred workers, half of whom were women. All the workers were tribals from the Chotanagpur region of Bihar—among India’s most impoverished states—and most were descendants of rural residents brought to the teagrowing region as indentured labor (Bhowmik 1988, 2705).

In September 1973, due to the company’s accumulated losses, management decided that it would no longer operate the plantation. The company’s board of directors passed a resolution handing over the plantation and its liabilities to its workers. In September 1974 the workers formed a cooperative society, and the plantation showed a marked improvement under its management. By 1977 the annual production of the plantation had recorded the highest yield of green leaves in its history, concomitantly improving the conditions of the workers. All the development activities were carried out by the cooperative’s income from the sale of green leaves. It received no loan, subsidy, or grant from any source (ibid., 2705).

The workers of the Sonali Tea Estate were inspired in their new venture by their union, Cha Bagan Workers’ Union, and especially motivated by its general secretary, who took up the Sonali cause as his personal challenge and mission. One unique feature of the cooperative was that the plantation was operated exclusively by the workers without professional assistance; management was performed by the workers with guidance from the union. The cooperative decided to discard traditional methods of maintaining discipline, such as charge sheets, summons, etc. Persuasion, rather than coercion, was used to discipline erring workers. Meetings were held frequently in the labor lines to encourage the workers to understand that any harm done to the plantation would harm them as well (ibid., 2705–06). Remarkably, managers from nearby tea gardens visited Sonali to inquire whether the cooperative had disciplinary problems. They were reportedly astonished by the fact that the Sonali workers normally arrived at work between 6:00 and 6:30 a.m., whereas nearby gardens had difficulty ensuring their workers arrived by 7:00 a.m. (Sen 1986, M-77).

The success of the Sonali cooperative was short-lived because the former owners, upon seeing the success of the plantation, decided to stage a comeback. They filed a suit in Calcutta High Court challenging the validity of the cooperative. In July 1978, the cooperative had to hand over possession of the plantation to a court receiver. In the late 1980s, the cooperative was involved in litigation over the ownership of the plantation and its operations had been stayed by a court order (Bhowmik 1988, 2706).

The Jute Industry Experience

Calcutta (now Kolkata), a once-vibrant industrial metropolis, fell into an economic downturn during the late 1960s, when the city witnessed the decline of several large-scale industries, including the closure of many engineering and jute manufacturing units. Almost thirty years into this depressing industrial scenario, a large number of workers’ cooperatives were found to have survived for more than a decade. A survey conducted in 1989 identified more than twenty such cooperatives in medium-scale industries in Calcutta (Bhowmik 1995, 29).

The New Central Jute Mills (NCJM) of Calcutta, a large enterprise, started running as a workers’ cooperative in 1989, subsequently increasing its turnover by 50 percent: from Rs. 56 crore in 1988–89 to Rs. 84 crore in 1991–1992, with an operating profit that year of Rs. 4.69 crore (Roy 1994, 2534).¹⁵⁷

The NCJM had been owned by the Sahu Jain industrial family since the early 1950s. The company went through a financial crisis in the 1980s and workers faced lockout four times during 1982–87. The last lockout, in 1986–1987, had continued almost a year. Many workers faced starvation for days. Some workers returned to their native states of Bihar and Uttar Pradesh (UP), some committed suicide, and others turned to begging.

The workers’ cooperative was formed in 1989 primarily to save jobs. The managing director (MD) of the company, together with the local government and local political leaders, held protracted discussions with the fourteen trade unions of different political persuasions representing workers in the company. Eventually, all the unions agreed to negotiate with the top management to discuss the possibility of reopening the company. After a number of meetings, some unions expressed support for the idea of forming an industrial cooperative. All the unions collectively called a mass workers’ meeting to gain the workers’ support for forming a cooperative (Kandathil and Varman 2002).

Subsequently, an application was sent to the Board of Industrial and Financial Reconstruction (BIFR), a governmental agency authorized to assist legally and financially in the revival of dying industrial units. Ultimately, with the support of the West Bengal government, the NCJM was legally converted into a worker-owned cooperative. By the late 1990s the company employed approximately seven thousand workers, of which about 60 percent were migrants from the rural areas of Bihar and UP (ibid.).

A plant-level consultative committee (PLCC) was constituted in 1989 to ensure a “democratic decision making system” and to create “a sense of belonging and confidence among the employees in the functioning of the company.” Yet the cooperative could not pay the full wages of the employees consistently. The trade unions tried to explain the financial difficulties to the workers; however, upon obtaining factual evidence that trade union representatives (TURs) and some staff members were provided travel allowances, paid leave for attending union meetings, and dearness allowances (DAs),¹⁵⁸ the workers did not believe the cooperative was deficient in funds. Moreover, the workers raised the complaint that unions nominated only “loyal” members to the PLCC, excluding shop-floor members who really understood the workers’ problems. In response, many unions replaced their PLCC members with shop-floor representatives.

Thereafter, the workers’ representatives took up the issue of payment frequently and vigorously. During the period 1994–96, the payment of wages and salaries was often delayed. But many of the workers belonging to the more powerful unions managed to get loans secretly from the employees’ provident fund with the MD’s approval, while such an opportunity was denied to others on account of the alleged poor financial health of the company. This contributed to tension between the workers and the unions. Subsequently, a strong workers’ protest led to the manhandling of union officials and finally resulted in a factory-wide layoff. After nine months, the layoff was revoked in 1997 with the appointment of a new MD (ibid.).

The most spectacular assertion of workers’ power took place in the Kanoria Jute Mill, located in the town of Phuleswar in the Howrah district. In response to a crisis in the state jute industry, the mill was taken over and run by the Mafatlal Group from 1987–91. In 1991, the Board of Industrial and Financial Reconstruction (BIFR) found a new financier, Shiv Shankar Pasari, to run the mill, and he took over the reins the same year. Over the next two years, Pasari introduced various repressive measures, including taking a deduction from the workers’ daily wages (katouti), paying workers by the voucher system, denying benefits like PF (provident fund), ESI (employees’ state insurance), and so on, employing retired and retrenched workers at one-third the wages of regular workers without legal benefits, and denying payment to the regular workers. One of the veteran workers recounted that Pasari “unleashed a reign of terror” (Mukherjee 2001).

In May 1992, the Kanoria Jute Mill workers staged a “rail roko” demonstration—a disruption of train service—to take their demands public. During the action they made contact with a group of non-mainstream left workers who had worked with the legendary trade union leader Shankar Guha Niyogi.¹⁵⁹ In 1993, the group of political activists took the initiative in forming a radical union, the Kanoria Jute Sangrami Sramik Union (KJSSU), and a large number of the four thousand total jute mill workers gave the new union their support. On November 23, 1993, the mill workers started a tool-down strike demanding better treatment and DAs. Pasari retaliated and hung a lockout notice on November 26. On the same day the workers forced open the gates and captured the mill canteen. This unprecedented event initiated a ten-month occupation (ibid.).

The majority of the Kanoria workers hailed from neighboring villages, where they held a series of meetings to convince the local farmers of the sincerity of their struggle. Capturing the mill canteen and starting a community kitchen were just the first phase; with the help of local farmers, community kitchens were also opened in the villages. All over the country meetings were organized to win support among other workers, farmers, and democratic-minded persons and organizations. In the lengthy struggle that followed, the Kanoria leaders used tactics including “rail roko,” road blockade, and hunger strike to motivate the workers and strengthen support for their cause (ibid.).

One of the top-ranking leaders of the Kanoria struggle, Kushal Debnath, described how the initial strike over DAs transformed into a workers’ movement, fighting for the survival of the mill through a plan to establish a workers’ cooperative. According to Debnath, the workers put forward four proposals:

The promoter himself (Pasari) could run the mill himself after paying the workers what they were owed;

Any other individual owner could run the mill after paying the workers what they were owed;

The government itself could run the mill;

If all the above-mentioned proposals failed, the workers would run the mill by forming a cooperative of their own (2003).

On October 1, 1994, the mill reopened under Pasari’s ownership after a tripartite agreement was signed between the BIFR, the management, and the Kanoria workers’ unions. According to the agreement, the management would pay the workers’ wages and allowances as per the industry’s stipulations. Over the next six years, Pasari betrayed the agreement and there were six closures. In 2000, due to flagging morale and differences within the movement, the KJSSU split and a sizable number of the workers formed the Sangrami Sramik Union (SSU), which enjoyed majority support. The BIFR rejected a revival scheme proposed by Pasari, but also rejected KJSSU’s earlier proposal to run the mill as a workers’ cooperative on the grounds that the union no longer had majority support among the workers. The BIFR opined that the mill “was not likely to become viable on a long term basis and hence it was just, equitable, and in public interest that it was wound up,” in other words, permanently closed down (see Mukherjee 2001).

The KJSSU went to the Appellant Authority for Industrial and Financial Reconstruction (AAIFR) to appeal the BIFR order. But the AAIFR rejected the appeal and upheld the BIFR order for liquidation of the mill. The union presented a writ petition before the Calcutta High Court to challenge the BIFR and AAIFR orders, claiming that the reopening of the mill would be possible with a proper revival package. After hearing all the parties, the Calcutta High Court asked the BIFR to reconsider the matter in June 2008. The case is still pending in court.