With two recent incidents, the government is rushing to control damage to Karnataka’s image as an industry-friendly state.
Within days of the violence at Wistron in Karnataka’s Kolar, reports have emerged that the Taiwan-based company is reconsidering its expansion plan. Wistron, which currently has 1,200 permanent employees at its Kolar plant, reportedly intended to increase its workforce to 25,000 by the end of 2021. This comes in the context of the lockout of the Toyota plant in Bidadi, where employees they have been on strike for almost 40 days. The factory that arrived on the outskirts of Bengaluru in 1999 has faced accusations of unfair human resource practices by employees, as has Wistron.
While the two incidents can be dismissed as unrelated, the government is now slipping away to control the damage to Karnataka’s image as an industry-friendly state. OLA’s decision to establish the first Rs 2.4 billion electric scooter factory in Tamil Nadu has also put additional pressure on the Yediyurappa government, CMO sources report to TNM.
The events at Wistron that have now received global news coverage have long-term political ramifications, on the manufacturing industry and on the future of labor rights.
Read: Land report: 37 days later, why Toyota Kirloskar workers in Bidadi continue to protest
Political consequences
Opposition party leaders have raised concerns regarding Brand Karnataka, urging the state government to implement stricter measures to ensure that violence is not repeated. Many within the ruling BJP have also spoken out, pushing for an investigation into the violence that led to the destruction of property at the Narasapura plant in the Kolar district.
CMO sources tell TNM that Chief Minister BS Yediyurappa has come under pressure from various sectors of the government and the party to seriously consider the long-term ramifications of the state government failing to guarantee timely intervention to prevent such incidents. Yediyurappa and Jagadish Shettar have been accused of not being dynamic enough to attract investment to Karnataka and if more companies pull out, it would also be a major political blow.
The reaction of the state government has been evaluated as “passive” by the Center. The sources add that the CM was warned that such incidents will not be taken lightly by global companies and that the state will not only lose its current investments in states like Tamil Nadu, Telangana and Andhra Pradesh, but will also lose any future investments. A high-ranking leader in Delhi reportedly told Yediyurappa that if the right message is not sent, investors cannot choose to leave Karnataka alone, but India entirely.
Just one day before the violence at the Wistron plant, a Taiwanese delegation met with the Chief Minister of Karnataka and discussed future investment opportunities in the state. The delegation headed by Taipei Economic and Cultural Center (TECC) Director General Ben Wang was reportedly assured of all possible cooperation from the state.
Read: Apple statement and 4 developments in the violence at Wistron Corp in Karnataka
The potential for large-scale investment in the state to be hampered was a huge concern to the government, which has made it reluctant to detain Wistron for violations of labor laws.
This possibly also explains why three investigation teams that inspected the manufacturing unit (Boiler Factories and Industries Departments, Labor and Industries) did not contradict Wistron’s claim of losses of Rs 437 million.
Rights of workers violated
“15 of us quit our jobs in a local factory in the hope of obtaining better wages and working conditions in this foreign company. But we have faced many problems: late payments and reduced overtime pay. When we used to talk to the contractor, he blamed HR. Finally, after many months, we went straight to HR, but they blamed the contractor, ”says Ravi Kishore * an employee who says that although no one presented a formally complained to the labor department, his distress was well known to management and they had approached the District Collector.
In recent days, several such stories have come to light about various violations of labor law. But while the government was quick to issue statements in support of the company, employees are disappointed that their voice is not being heard even now. They say they do not support violence, but that does not mean that other issues should be overshadowed.
Read: Violence at Wistron iPhone Plant: Workers Say Months of Suppressed Anger Behind Outbreak
The Department of Industries had issued a statement in which it said: “The Karnataka government is deeply concerned about the events that recently occurred at the Wistron factory premises in the Narasapura industrial area, Kolar. We strongly condemn the violence that took place at the plant’s premises. Police investigations are ongoing and the strictest measures will be taken against the criminals ”.
While the Department of Labor’s preliminary report also admitted several violations at Wistron, the government has yet to issue a strong statement acknowledging this publicly. Union members say some of them tried to get appointments with some ministers to air their complaints, but have not been successful so far.
While the violence has been tolerated by all, the accounts of labor law violations at both the Toyota plant and the Wistron unit should be a red flag that highlights the problems facing the workforce. From unreasonable pay cuts to being treated unfairly during health problems, complaints are also a fitting case for human rights violations.
Also read: Karnataka government reports highlight labor violations at Wistron iPhone factory
Another Wistron employee, Jagadish * says Wistron employed seven contractors so that if a contractor refused to comply with their demands, no matter how unreasonable they might be, they could sway by saying that we have another six to provide us with a workforce. Jagadish says that many of the employees at the company that hired him used to say that if the ‘Chinese factories style of operation’ did not work, then these factories would end and thousands would lose their jobs.
Worried industry
With global brands contemplating withdrawing from China or diversifying their manufacturing centers, fears are being voiced that India will lose out due to the bad publicity of such incidents.
Speaking to TNM, brand specialist Harish Bijoor said: “What happened in these last two incidents, particularly the Toyota incident, makes you want to reexamine labor issues. It creates a scar on the image of Karnataka as a positive industrial center. I am concerned that this could send a bad signal to those who are considering investing in India, possibly withdrawing from China. Whenever one thinks of moving business from one geography to another, due diligence is performed. This is the time when due diligence is done throughout India. If investors see these cases as a trend, it will be cause for concern. So we have to handle this very carefully because small has a habit of becoming large. “
The former president of the Federation of Karnataka Chambers of Commerce and Industry (FKCCI), Dinesh MC, also put the responsibility on the Yediyurappa government and suspected a crime. “I think there should be an investigation, it is not about a single company, it is about the image of Karnataka and its culture.”
Read: Wistron plant violence is not a reflection of India or its culture: Industry body ICEA
While the industry and the BJP want the government to send a strong message to the workers by cracking down on them, the unions and lawyers who have been working with these employees fear that the violence could be used as an excuse to let the companies slip away. with the rapes. They say the responsibility will fall on the Chief Minister to strike a balance between ensuring multinationals a pleasant atmosphere to do business with and ensuring that workers are not exploited in the future.
(* Name changed)
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