ITC not to lift Nepal lockout till 'rogue' workers are reined in

Sanjiv Keshava, managing director of Surya Nepal, ITC's subsidiary in Nepal, said about 20 leaders, who instigated workers to go on the warpath Tuesday and break furniture as well as window panes of the state-of-the-art garments factory in Biratnagar town in eastern Nepal, had been identified as regular trouble makers who had fomented an illegal strike in April as well.

Surya Nepal has decided to press charges against the workers, who also imprisoned 42 managers inside the factory Tuesday and clashed with police when a rescue operation was mounted, resulting in both sides receiving injuries.

"If we can't get rid of rogue elements, instil productivity norms and enforce discipline, we'd rather shut the factory down," Keshava said.

Surya Nepal, the biggest tobacco manufacturer and seller in Nepal, diversified into garments in 2004. The Biratnagar factory employs almost 600 people, most of whom, including the rogue workers, are women.

Besides manufacturing almost 40 percent of ITC's John Players and Springwood brands of apparel for men, Surya Nepal also exports to Europe and the US, with its clients being well-known names like Bossini and Walmart, Mexico.

While Surya Nepal's tobacco factory in Birgunj in southern Nepal has been functioning smoothly with over 90 percent production, Keshava said the garments factory has been performing dismally, with production slumping to about 42 percent of capacity.

Labour trouble has been a chronic issue with a militant work force and numerous unions making "unreasonable demands" and also fighting with one another.

The eight-hour factory shifts have dwindled to seven or less with factory hands taking long breaks in between and at times not coming back to work.

Keshava, who is also the chief of the Nepal-India Chamber of Commerce, says the Surya Nepal lockout and other incidents, including arsonists burning down Indian group GMR's hydropower project office and site camp in western Nepal this month, will discourage foreign investors.

"To generate employment, Nepal needs industrialization and to improve the manufacturing share in the GDP, it needs foreign direct investment," Keshava said. "It's a global world today and if Nepal wants to compete, it needs major core competence. Productivity and quality can be the core competence but if people are going to be militant what is the option left for industries?"

After the workers' standoff Tuesday and the rescue of the imprisoned managers more than 24 hours later, Surya Nepal formally declared a lockout of the factory Thursday.
The company will now press charges against the rogue workers and expects the district administration to take action against them.

Since 2008, after Nepal saw the formation of the first Maoist government, there has been an upsurge in militant trade unionism, leading to frequent strikes.

Industries are also aggrieved at what they call a unilateral hike in workers' pay and daily wages and one of the largest trade associations, the Federation of Nepalese Chambers of Commerce and Industry, has said it would fight the government-endorsed pay hike in court.