Casualisation and (Re-)Privatisation

Submitted by Django on July 31, 2011

During the late 1980s and early 1990s the Dhanbad-Munidih area witnessed a series of ‘independent’ mining workers strikes, which challenged CIL management as much as they defied the main unions and the mafia itself. On 16th of December 1988 the piece-rated workers in all mines of area 7 went on strike. Unrest continued till July-August 1990, workers actively fought back mafia attacks. Subsequently two workers were killed in a police firing during a state attack on strikers. In late 1992 several thousand workers went on wildcat strike in area 6 open-cast project and forced management to take back on workers who they had dismissed earlier on. Workers had tried to prevent management from introducing 26 days pay for a 30 days working month.

These movements demonstrated that the clutch of the main trade unions and the mafia had weakened. The problem for the Dhanbad CIL workers was that ironically the repressive union and mafia apparatus was dissolved by the same force which also managed to isolate and undermine the very position of the workers themselves: the liquid and dissolving force of the neoliberal regime. During the 1990s the personal clout of moneylenders was increasingly replaces by the impersonal terror of micro-credits, the paternalistic regime of the old village leaders by internationally funded NGOs, the ‘illegal mines’ became outsourced ‘logistics’ departments, the old union leader cum labour contractor were increasingly replaced by human resource management and the old mafia don shifted their business interest from the dirty sphere of production process towards the emerging real estate bubble. Having escaped the paternalistic grasp of the union-mafia, the hard-core of mining-workers of Dhanbad did not find an answer to the slow-motion of de-composition during the 1990s.

During the 1990s the mining industry witnessed a kind of reversed repetition of the pre-nationalisation period: a slow default of the industry, a loan from international credit institutions (World Bank), which was used in order to finance re-structuring; major shifts in the composition of the work-force. This time, instead of ‘nationalisation’, the regime moves in the direction of ‘formal privatisation’. The ‘privatisation’ is accompanied by a general hiring stop for permanent workers – wages for the post-1992 hired contracted workers are around 10 per cent of the wages of the CIL permanent workers. The prestigious Munidih Project mine, which employed over 8,000 permanent workers in the early 1980s now employs less than 2,000 permanents. The other main shift is the brutal expansion of open-cast mining. The main investments go into dynamite, diggers and trucks – what is left is a labour-saving battle-field of extraction, a ripped landscape. Open-cast mining increases the division between a relatively small work-force and a local impoverished proletariat. The open-cast drive explains the rapid increase of total CIL coal production from 200 Mt in 1992 to 430 Mt in 2010.

In the following we have a brief look at the ‘controlled default’ of CIL during the 1990s. The accumulated losses of CIL had reached 25,000 million Rs by 1991, which were mainly outstanding liabilities to the government of India. In 1993 the CIL approached the World Bank for a 500 million USD loan for investments into the company – actually most of the money was used to finance the retrenchment of about 140,000 workers during the following years. Referring to the ‘external pressure’ and the conditions attached to the World Bank loan the CIL management and the Indian state started to provide the legal steps for further outsourcing and casualisation of the industry. In 1994, the state in India amended its Coal Mines Nationalization Act allowing foreign companies to hold a 51 percent stake in Indian coal mines. In order to attract investment the government of India waived 9,000 million Rs liabilities for CIL in 1995. In the same year a major conference hosted by CIL and 50 NGO’s took place in Kolkata in order to find ecologically and socially ‘sustainable’ ways for the large-scale open-cast mining drive. The ‘agreements’ of the conference later on appeared as proof for the ‘developmental character’ of the World Bank loan. According to government sources – not the most critical source – less than 35 per cent of displaced people get re-habilitated and the fact that CIL pledged to cut down its workforce in return for the loans also meant that displaced people would never get a permanent job in the actual mines.

After 2000, mining became big international business again – fuelled by the energy demand of the emerging markets and the general shareholder and commodity speculation boom. Total coal production in India increased nearly seven-fold during 1980 to 2010 – but the higher degree of integration into the world market does not mean that ‘India’ resources are plundered by imperialism, like some lefty critics of ‘liberalisation’ keep on preaching. Since the ‘wider opening of the market’ in 1991, coal imports have increased significantly in addition to the hikes in total domestic production. The quantitative and qualitative shifts in the energy regime also reflect the changing position of India in world capitalism.

Today single open-cast mines in the Dhanbad area are outsourced to international logistics companies with their own workforce, while ‘Indian’ steel companies like Tata or Mittal source directly from the global market by buying mines in Australia, Africa or the US. Part of this ‘shining mining boom’ is the increasing militarization of the mining areas. The tension between an increasingly marginalised rural proletariat and a hyper-productive mining industry is expressed in the ‘anti-development’ struggles of the early 2000s and the ‘Operation Greenhunt’ – the mobilisation of over 100,000 paramilitary state forces in the mining-jungle areas as part of the ‘anti-Maoist’ counter-insurgency. The military has to guarantee investment friendly conditions, last but not least because with the onset of the global crisis in 2008 the Indian state finance itself depends on stable share prices: in October 2010 the Indian state sold ten per cent of its shares in Coal India Ltd. It was India’s biggest initial public offering ever and raised more than 3.5 billion USD to be thrown into the black hole of state fiscal deficit.

There have been various short strikes and mobilisation by CIL mining workers against ‘retrenchments and privatisation’. The fact that these mobilisations remained rather insignificant cannot be explained by the ‘collaborating’ character of the main unions, but by the already very undermined position of the permanent work-force by the end of the 2000s. The final part of this report is a more impressionistic account of the situation in Dhanbad today, based on a two weeks visit and conversations with mining workers.