Rise and fall of a legendary jute mill

After working for more than 20 years at the Biratnagar Jute Mills, Khadga Rai, 46, is now jobless. He is looking for a new job at this age, and quite hopeless in his search.

“Who will give me job in my age of retirement?” he wonders. “I’m no longer able to carry loads of jute on my back due to my age.” [break]Khadga was an unskilled manual laborer at the legendary Biratnagar Jute Mill which existed for more than five decades and shut down for good earlier this month.

With the closure of the country’s first ever industry that has had played a vital role in every political uprising for over the past 60 years, more than one thousand laborers are forced to seek jobs in their retirement years. Most of them have started working in different private jute mills on wages. And for some, like Khadga’s, the future is oblivious.

Khadga has already married off his daughter – a big burden off his shoulder. However, his younger son is yet to complete his high school. He, therefore, is planning to start a cold-drinks shop with the gratuity he will get from the mill. His wife Radha also worked in the mill for 12 years. Both wait desperately for their gratuity fund so that with hope, they can start something of their own during their old age. In his calculation, they should get at least Rs 600,000 as gratuity.

“Once my business takes off, I’ll be able to sustain my family without working anywhere else,” he says. A noticeable sign of pleasure runs across his face as he gets candid about his plans and dreams.

Another mill worker is Nanikaji Shrestha who expresses his wishes to sell timber in the market. He was the coordinator of the joint struggle committee of laborers formed to exert pressure on the government to run the historic mill properly. Unable to comply with the government to run the mill, he ended up signing an agreement to pay off its laborers and shut down the pioneer jute industry of the country for once and all.

“I wasn’t happy at all to sign such an agreement,” he says. “But we didn’t have any other alternatives.” Ever since the restoration of multi-party democracy in 1990, the mill has been shutting and opening up time and again, and for the last time it opened two years ago. The workers were deprived of their salary and perks during the recurring closures of the mill. They, thus, wanted the government to run it properly or pay its personnel off and shut it forever. A few even demanded that the workers’ union run the mill.

The government, too, wanted to get rid of the poorly managed mill since all efforts went in vain to run it with the new management. On 10 September, the government, in its capacity to take decision as the major shareholder of the mill, struck a deal with the agitating laborers to pay all staff off. Accordingly, the government should have paid off all the staffs no later than 17 October. But the payoff dateline is already over, with no progress made on the workers’ front to receive any amount of compensations and gratuity.

According to sources, the government has already calculated the amount of money required to pay off all the 1,039 laborers and 46 other administrative staff.

“The government will start the payoff process after the Ministry of Finance (MoF) allocates the budget,” one source told Republica. But the ongoing political stalemate has prevented the government from doing so. The MoF has informed that the money to be paid to civil servants will freeze due to the Maoists disrupting the Parliament to pass the budget.

In this chaos, the government has failed to think for those laborers who have become the victims of mismanagement and apathy of the government. Also, the longer it takes to pay off the workers, the larger the amount it has to provide them. The agreement states that the laborers are entitled to their salary and perks until the government gives them their dues.

According to an official at the Ministry of Industry, it costs the government around seven million Rupees for one month’s delay. “We’re wasting money out of the state coffer by delaying it,” he says.

The downfall

Gone are the days in which workers at the Biratnagar Jute Mill flaunted higher social status compared to laborers working for other and private industries.

“Our income was higher than most of the workers and those who went to India to work,” recollects Gyan Bahadur Rai, who worked in the mill for 38 years before retiring.

Set up in 1936 by Indian businessman Radhakrishna Chimariya with 25 per cent share of the Nepal government, Biratnagar Jute mill turned out to be a fertile ground for trade union politics. Nepali Congress president and former prime minister Girija Prasad Koirala started his political career from this very mill as a local union leader. He has time and again and publicly and proudly admitted to have worked at the mill. Former CPN-UML chairman and prime minister Manmohan Adhikari also worked in the mill with Koirala.

A sizeable section of politicians belonging to the second generation of the top rungs, including the current Prime Minister Madhav Nepal, had disguised themselves as mill workers in a bid to fight for democracy. The mill was always a safe haven for the iconic democratic leader of the Nepali Congress, B.P. Koirala, who found an overwhelming support in the factory of his hometown. He spearheaded the first ever democratic movement in Nepal against the Rana oligarchy from this very mill. All other subsequent uprisings saw some form of outrage in this mill. And thus, the mill has remained a historically important pilgrimage for democrats and union members.

Whether fighting against the autocratic Panchayat system that lasted for 30 years, or the April movement of 2006 that helped topple the 240-year-old monarchy, the mill played a key role.

“We took to the streets when told by the leaders during the anti-Panchayat movement,” says Gyan Bahadur. He, however, has only memories of those days that eventually shaped the political courses of Nepal. And the saddest fact is that the leaders seem to have forgotten about the place and where they came from.

Unionism reigns

Lack of raw materials and shrinking market for jute products are often mentioned as the two major reasons that led to the downfall of this historic industry that made profits until the 1990s. But these are minor reasons. The main reason behind the demise of the mill is poor management caused by recurrent political interventions.

With the restoration of democracy in 1990, all the political parties that came to power appointed their own cadres or loyal supporters as chairmen and general managers of the mill rather than appointing professionals. Nepotism ran rife. The appointees had no idea of the industry and lacked management skills.

Unionization of workers also grew stronger for the management to handle.

“We were never able to control the unionization of the workers because they often belonged to the same party that appointed us,” confides a former chairman. “We would lose our positions had we ever tried to confront them.”

Unionism, as an idea, is good. But it often leads to acts of hooliganism, fulfilling the vested interests of a bunch of leaders instead of protecting the rights of workers. In Biratnagar Jute Mill, too, unionism remained in principle but not in the practice of the workers. They siphoned off fuels to sell in the local market. They purchased inferior raw materials for the sake of commissions. Some stole spare parts of the mill. But no one could do anything because of the union. The lack of a firm management team meant the union had their way.

The management instead turned a blind eye to all the ills. Khadga confesses in private that the union destroyed the mill to protect its corrupt workers.

“I had to protect even those workers whom I caught red-handed while stealing spare parts,” he says. “Had my party not protected them, some other party would have come to gain their support and votes.”