Police Attack Peaceful Sugar Workers Protest; Profiteering
Amid Factory Closures and Layoffs
At a time when sugar
prices have reached record levels in Pakistan a group of unemployed
sugar mill workers and their families have been attacked by police
at a peaceful demonstration in Karachi on 11 May. The workers were
protesting against the failure of the Sindh provincial government
to implement an agreement reached in September 2005 following the
closure of the Dadu and Thatta sugar mills owned by the Sindh Sugar
Corporation, a state enterprise.
source: Dawn, 12 May 2006
The mills were closed in the 1990s, destroying the jobs of 2,400 workers
and the livelihoods of their families. It was estimated that at the
Dadu mill alone a further 4,000 workers earned their living through
the loading of sugar cane and 20,000 families were in various ways
(cane farming, transport etc.) dependent on the mill (The
Nation, 2 May 2006).
The closure of the mills was on the surface the result of huge financial
losses, but it is reported that the root causes of these losses were
significant and endemic levels of corruption. There is evidence pointing
to mill managers and state bureaucrats using mill funds to loan money
to local landlords and to selling sugar at below market prices to
favoured traders and skimming the difference (The
Nation, 2 May 2006).
Following the closure
of the mills, the workers and their unions, members of the IUF-affiliated
Pakistan Sugar Mill Workers' Federation (PSMWF), initiated a series of
campaigns and protests to secure proper compensation and alternative employment.
Finally in September of 2005 representatives of the two unions reached
an agreement with the Chief Minister of Sindh province which would provide
compensation payments to workers over 50 and new jobs for those under
50. The peaceful protest in Karachi on 11 May was designed to highlight
the government's eight-month failure to implement the agreement. Following
the assault by police the IUF wrote to the Chief Minister protesting the
police actions and calling for the implementation of the agreement.
President Gul Rehman addressing a rally of the Dadu and
Thatta Sugar Mill workers, September 2005.
The problems faced by the workers of the Dadu and Thatta mills exemplify
the reality of Pakistan's sugar sector which is beset with gross mismanagement,
corruption, hoarding, profiteering and tax evasion. The consequences of
this are not only the loss of jobs and union busting (see related stories
below) but also people in Pakistan suffer from enormously high costs for
a basic good vital for daily life.
Despite a very high per capita sugar consumption rate in Pakistan and
huge production, Pakistanis pay roughly the same price for sugar as people
in Australia, yet the average income of a Pakistani is around one-tenth
that of an Australian.
Of Pakistan's 78 sugar mills, 20 mills were recently classified as in
crisis. These mills are owned by government ministers and those close
to the government, all of which have failed to release their full production
into the local market, thus inflating prices.
According to comments before the Public Accounts Committee, the average
final cost for purified sugar is around Rs21-22/kg (US$0.35/kg) and
is selling in the local market for Rs42/kg (US$0.70/kg). However,
mill owners have only been paying sales tax at the rate of Rs29/kg
(US$0.48/kg), thus avoiding tax on approximately Rs13/kg (US$0.22/kg).
While there is no complete figure on total tax evasion, a number of
cases already under investigation show tax evasion by sugar millers
in the amount of Rs326 million (US$5.5 million) (Dawn
11 May 2006).
The reality of the sugar sector in Pakistan is that it is owned and
controlled by unaccountable elites. These elites draw their power
from control over state bureacracies, the army, concentrated land
holdings and market domination. Such a configuration will never deliver
decent jobs, democratic rights and livelihoods to people.
Management Orders Mill Union to Dissolve the
Day After Joining National Sugar Industry Federation [2003.05.27]
Ending Fragmentation and Confronting Restructuring
- Pakistan's First National Sugar Workers' Federation Emerges [2003.05.22]
Union Busting in Pakistan’s Sugar Mills: Workers
Face Dismissal and Illegal Detention [2001.10.29]