Lockout at ITC’s Nepal unit

ITC makers of the brand Wills Lifestyle has declared an indefinite lockout at its garments factory

in Nepal. The unit used to produce its John Players and Springwood brands of menswear for export to India, Bangladesh and other countries. The move was taken after factory workers went on the warpath and sparked violence.

The state-of-the-art factory in Biratnagar town, whose jute mills were the cradle of the trade union movement in Nepal, was shut down indefinitely after workers held 42 company employees captive for more than 24 hours and clashed with police when the latter sought to rescue the victims. The trigger was a pay cut announced by ITV. Violence erupted after workers staged demonstrations for almost a week over the cut. It may be noted that in April, the workers had called for a strike and the authorities, following a new Industrial Act that says "no work, no pay", decided to stop salaries for the duration of the protest they termed illegal. The decision triggered the rampage with workers locking up 42 employees and refusing to release them. The factory employs nearly 600 people, the majority being women.

ITC had ventured into Nepal in 1986, attracted by cheap labor and the trade concessions. It formed a joint venture, Surya Nepal (SNPL), by which ITC holds 69 per cent stake while the balance shares are owned by 20 Nepali individuals and corporates, including the deposed royal family of Nepal, and British American Tobacco (Investment). From tobacco, the JV diversified into apparel in 2004, first setting up a factory in Nepal and then upgrading it three years later so that 4,000 articles could be produced daily.