Modern Food Industries Employees Union
Lawrence Road, New Delhi - 110 035
(Regd.-3238) & Recognised
Office: B-89, Gulmohar Park, New Delhi 110 049

April 26, 2005

Yet another act in the unfolding tragedy of the destruction of the former Public Sector Company, Modern Food Industries (India) Limited, which was the premiere Bread Manufacturing Company of India at the time of its sale to the multinational Hindustan Lever Limited (HLL), is being played out these days. HLL has signed an illegal "agreement" with two so-called Federations, which do not represent the workmen of any of the units. Even while the earlier "agreement" is being challenged in court, the new "agreement" states that HLL will close down several "loss-making units", including the biggest bread-producing unit in the country, Bread Unit-I at Lawrence Road. "Voluntary Retirement Scheme" notices have been pasted on the Delhi bread Unit-I notice board as well as in other units' across the country and enormous pressure is being applied on workmen to quit. HLL has already carried out widespread asset stripping and is producing bulk of the bread on contract basis by small sweatshops in different parts of the country. The land of the Bangalore unit has been sold and advertisements have been taken out for the sale of land of the Faridabad unit. HLL is desperately trying to convert the leasehold land of the Bread Unit-I in Lawrence Road Delhi and the Fruit Juice Bottling Plant in Lawrence Road Delhi, into free hold, and plans are afoot to sell them to Pepsi, Bon Bread or some other multinational.

Modern Food Industries (India) Limited (MFIL) has been repeatedly hailed as a "success story" of privatisation by the ministers, industry circles and the monopoly controlled media. On January 30, 2000 the government of India sold 74% shares of MFIL to HLL for a paltry sum of Rs. 105.45 crores. Subsequently, two years later, it sold the remaining 26% shares to HLL despite widespread and continuos opposition from the workers represented by Modern Food Industries Employees Union as well as mounting evidence that HLL was carrying out asset stripping, retrenchment, and closures on a massive scale. The workers have been on continuous dharna outside the gates of MFIL Bread Unit -I, Lawrence Road, for THREE years now. They have organised numerous demonstrations and protests in the past 5 and half years. Repeated clean chits were given to the HLL management by succesive ministers of disinvestment in the NDA government.and the dozens of memorandum and appeals by the workers, the union, and progressive public opinion, were greeted with a conspiracy of silence. The HLL management became so brazen that right when Mr Arun Shourie was defending its so-called 'pro-worker' track record in parliament in August 2003, it put up an illegal notice of closure ouside the Fruti Juice Bottling Plant in Delhi. It is a year since the UPA government has come to power. While this government looks on in silence, MFIL has closed down a majority of the 21 units all across the country. It is making the final moves to exit from Modern Foods, keeping only the brand name, while throwing out the entire workforce. As of today, nearly 70% of the workforce that existedon January 30, 2000 has been forcibly retrenched. Now the axe is abou tto fallon the remaining workmen. HLL is once again repeating the time tested practice of Unilever, its parent company - buy companies with a good brand name, retrench the workforce, carry out production through sweat shops and super exploited labour. Only this time, the victims are the workers of the "success story of privatisation".

Former Disinvestment Minister Mr. Arun Shourie had assured parliament that "While drafting the Share Holders' and Share Purchase Agreement in consultation with prospective bidders, we have striven hard to ensure that provisions are included to strengthen the health and prosperity of the company, to protect the interests of employees, and, most of all, to safeguard the security of the country. Provisions have also been included to preclude malpractices about which apprehensions have been expressed - like asset stripping."

Finance Minister Mr. Jaswant Singh, referring to the land of Modern Foods, made a statement in Rajya Sabha on April 27, 2004 that "...Land is there only notionally. It is a leasehold land. It is meant specifically for the function, it is specifically for the purpose of food processing...".

MFIL sold 88,239.70 sq foot of its plot (31 A) on Tumkur Bangalore Road to one M/s Bikaner House Ltd for Rs. 2.48 crores. An HLL spokesperson when contacted denied this was "asset stripping".

On February 22-23 2005, MFIL took out advertisements in Hindustan Times and Navbharat Times respectively for the "outright sale" of "free hold property" of 4.91 acres on the Mathura Road, in Faridabad next to the Delhi Public School. It advertises the "excellent location" 10 Km from South Delhi and 1.5 KM from Ansal Plaza, Faridabad. The land belongs to one of the units closed down by MFIL. The advertisement specifically calls for bids for 1.54 acres of residential and 3.64 acres of factory land.

In March 2004, MFIL applied to the DDA in Delhi for conversion of the plots of Delhi Bread Unit-I (B-4-8 Lawrence Road) and Fruit Juice Bottling Plant (Rasika) (C-4 Lawrence Road) from lease hold to free-hold land. On 26-3-2004, a Secretary in the Ministry of Food Processig Industries wrote to the DDA to assist the HLL management to convert the above properties speedily to freehold.

In October 2004, the Fact Finding Committee set up by former Prime Minister Atal Bihari Vajpayee to investigate into the workings of MFIL and BALCO after privatisation submitted its report to current Prime Minister Manmohan Singh. The four member Fact Finding Committee was headed by the President of the Bharatiya Mazdoor Sangh, Shri Hansubhai Dave, and included representatives from the ministries of labour and disinvestment as also of the employers association. In its report the Committe noted many labour malpractices of the HLL management and admitted "Their (HLLs) only interest is in the land".

In January 2005, a newsreport appeared that Hindustan Lever may be planning to exit from Modern Foods.

Meanwhile, in March 2005, MFIL management signed an illegal agreement with two so-called Federations to close down a number of units all over the country in the name of being unviable and simultaneously put forth a new "Voluntary Retirement Scheme" package. It must be noted that already, nearly 70 % of the workforce of MFIL at the time of privatisation in January 2000 have been laid off in one way or the other. A majority of the 21 units of MFIL are closed down, and several plants in the remaining units have been sold off. HLL is carrying out outsourcing of bread production in sweat shops where there is no quality control and where labour is on a contract basis paid even below the notified minimum wages. In its six monthly report to the BIFR in January 2005, MFIL has admitted that its "turn around plans" are not working out very well. It has indicated that it will pursue a course of asset stripping, layoffs, and closures as the way to "turn around" the company.
On April 16, 2005, MFIL took out an advertisement in the Times of India requesting for an industrial shed to set up "a bread manufacturing unit" on lease. The intention is very clear. The Bread Unit-I will be closed down after forcibley retrenching the workforce. At the same time, another unit would be set up and recalcitrant workmen who refuse to take "VRS" despite threats and blandishments will be transferred to this leased unit. Bread Unit-I will then be sold off.

It is extremely clear that the worst fears of the workers of Modern Foods about privatisation are coming true. All through the struggle over the past five and half years, the workers of MFIL have been pointing out that HLL, the multi-national company which bought MFIL at a throw away price, was not interested in reviving the company, which anyway was in good health until it was selected for divinvestment by the United Front government in 1997. HLL was interested only in the real estate and prime property, which MFIL occupies in various cities and towns around the country.

The total land occupied by MFIL is 4,42,301.58 sq meters. There is 36,000 sq meters of land in Delhi alone, apart from flats and other properties. There is 22,257 sq meters land in one of prime areas of Mumbai. HLL has from day one has its eye on this land.
The workers of MFIL have submitted numerous memorandum to the Prime Minister Manmohan Singh as well as his colleagues, during the past year, right from the time the UPA government took office, to look into the goings on in Modern Foods. The answer from the Prime Minister's office and the government at large is deadly silence. The UPA government has been advertising itself as a government that promotes "reforms with a human face". The fact that in its nearly one year of rule, it has not bothered to even table the Fact Finding Committee's Report on privatisation of MFIL and BALCO in parliament for discussion, reveals the actual content of this "human face".

The struggle of the working class against privatisation has reached a crucial phase. The UPA government is carrying on the same privatisation program of the previous NDA government with a change of method. The change involves, as in the case of Modern Foods, killing by a conspiracy of silence, of letting HLL carry out its entire plans "in peace" while hoping that the blame if any will fall on the previous government. This is the UPA strategy with respect to already privatised units like MFIL.

Parliamentarians and trade unionists with a conscience, all those who have the interests of the workers and the country at heart, all those opposed to the anti-social offensive of privatiation, liberalisation and globalisation, must not allow this to pass.
The battle lines are drawn. We call on all workers and trade unions, all anti-globalisation and anti-privatisation forces, to take up the heroic struggle of Modern Food workers as their own, recognising that it has been from January 2000, and remains till today, the cutting edge of the struggle of the class against privatisation. Through heroic and persistant struggle, we MFIL workers have put successive governments as well as a giant multinational like HLL on notice. Through different kinds of actions, workers and trade unions must force the government to clearly state where it stands in the struggle. Does it plan to table the report of the Hansubhai Dave Committee in parliament or not? What does it propose to do regarding asset stripping? If the assurances of former ministers Shri Arun Shourie and Shri Jaswant Singh have been violated, what action does the government propose against the guilty party. Should workers not demand that the privatisation of Modern Foods be reversed?

The time is here and now to step up the struggle in parliament and in the streets, on this question of vital importance to the Indian working class.

The Modern Food Industries Employees Union calls upon each and every one of you to make your invaluable contribution to our common struggle against privatisation, against the loot of the exchequer, against the criminal destreuction of public assets, and against the destruction of the livelihood of workers.

Signed:

(Prakash Rao)
General Secretary

ANNEXURES:

• Advertisement for sale of Faridabad land
• Advertisement for land on lease in Delhi
• Time of India report on "HLL sells some Modern Food Land"
• News Report "Hindustan Lever exiting Modern foods" by Mohin Bhatnagar
• Application of MFIL for conversion of leasehold to freehold (Fruit Juice Bottling Plant, Lawrence Road, Delhi)
• Application of MFIL for conversion of leasehold to freehold (Bread Unit-I, Lawrence Road, Delhi)
• Letter of J Vasudevan, Secretary, Ministry of Food Processing Industries, to Vice Chairman, DDA, dated 26 March 2004 requesting DDA expedite conversion of leasehold to freehold of MFIL land to assist HLL.
• Letter of Modern Food Industries Employees Union to Vice Chairman, DDA, requesting that HLL be not granted permission to convert from leasehold to freehold.
• Report of the Committee constituted to look into labour related issues in the context of disinvestment in MFIL and BALCO pages 14-20

CC: For Urgent action

• Honourable Prime Minister Shri Manmohan Singh
• Shri Laloo Prasad Yadav, Honourable Minister of Railways
• Shrimati Shiela Dikshit, Chief Minister, Delhi
• Shri Atal Bihari Vajpayee, former Prime Minister
• Shri Arun Shourie, former Disinvestment Minister
• All Members of Parliament
• President/General Secretary CITU
• President/General Secretary AITUC
• President/General Secretary BMS
• President/General Secretary TUCC
• President/General Secretary UTUC
• President/General Secretary UTUC (LS)
• President/General Secretary AICCTU