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The Wistron Infocomm plant in Narasapura area of Bengaluru. Mint
The Wistron Infocomm plant in Narasapura area of Bengaluru. Mint

Karnataka pledges to help iPhone supplier

  • The Wistron incident may make it challenging to attract investors and promote the Centre’s ‘Make in India’ campaign

The Karnataka government, whose investment-friendly image has been left bruised by workers who rioted at an Apple Inc. supplier factory over alleged non-payment of wages, on Tuesday assured investors of its support while talking up the need to protect labour rights.

Wistron is a very important project and a flag bearer of India’s ambitions to become a global hub for electronics manufacturing. The state government is committed to its success and business continuity," the Karnataka government said in a statement. Around 156 people have been arrested after more than 7,000 workers ransacked and looted Taiwanese manufacturer Wistron’s facility in Kolar district on Saturday.

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“Assuaging investor sentiment is (done) by talking to them and telling the industry that we are behind you. We first want to investigate and punish the guilty, assess and restore what is damaged and make sure labour, industrial and worker relations are put on the same level," Gaurav Gupta, principal secretary of Karnataka’s industries department said in an interview.

India is one of just three countries in the world that manufactures Apple products, besides Brazil and China, and the Wistron incident could make it challenging to attract investors and promote the Centre’s ‘Make in India’ campaign.

On Tuesday afternoon, a police van with security personnel and riot gear was parked outside Wistron’s Kolar plant. Another police jeep patrolled the 43-acre campus, with 70 more policemen stationed in and around the factory.

Production has been stalled since the incident, and there is no clarity on when it will resume, even though the plant remains open.

The Wistron factory in Kolar is better known as the “iPhone company" in Karnataka, which takes pride in the global firm’s presence. The incident has not helped Karnataka’s investment-friendly image as thousands of crores of rupees now hinge on how the state—and Centre—can help ease the growing tension between workers and management.

Around 45km away, in Bidadi, the deadlock between workers and management in car-maker Toyota Kirloskar Motors has continued for over a month now, which the company said is one of its most problematic sites globally.

“I was hired at a monthly pay of 21,000, but I ended up getting less than 13,000 despite working 12-hour shifts in which we get four breaks totalling 50 minutes," said a contract worker at Wistron’s plant, which employs around 1,400 permanent and 8,500 contract workers.

Wistron in its police complaint said it suffered losses to the tune of 437 crore, including 412 crore of iPhones, laptops and precision machinery, that were looted during the incident.

Wistron officials could not be reached for comment on Tuesday.

Apple has launched an investigation into the incident and allegations of labour law violations.

“This incident has sent a very wrong message. We do not have investors coming in or creating new jobs, and the government is neither on the industry’s side nor on the worker’s side," Congress legislator Priyank Kharge said. Kharge was the state’s IT/BT minister when Wistron started manufacturing iPhones in 2017.

Contract workers at Wistron allege that there are salary dues, unexplained cuts in wages and that no overtime was being paid. Anger boiled over and resulted in the violence on Saturday.

However, the damage to Wistron’s production lines is unlikely to dent Apple’s supply chain as its factories in China and Brazil can step up to overcome the shortage of phones if any.

Apple had suspended new business to its manufacturing partner Pegatron in China after it discovered violations at the plant.

Industry bodies like India Cellular and Electronics Association, among others, have come out in solidarity with the company and employees. The conflict has raised questions over labour practices in Wistron.

The company has informed the state government that it has paid all its dues to the contractors through whom casual workers are hired.

An independent report submitted by the All India Central Council of Trade Unions (AICCTU) cites multiple violations, including the system of contracts and work conditions.

Police are using technology like mobile tower triangulation, WhatsApp group messages and examining footage from over 450 CCTVs to try and identify the culprits, Karthik Reddy, Kolar district superintendent of police said.

The government agreed that there were delays and unexplained cuts in wages, but is yet to determine the role of contractors who are central to this dispute.

There are seven workforce vendor firms that have partnered with Wistron.

A source at the industries department just sent this letter from Wistron.

In a letter,dated 14 December, addressed to the state government,Wistron said it was distressed by the recent incident.

"We bring the best of practices worldwide to our plant and operations and want to protect workers’ interests. We will work together with the State Government to ensure plant operations are resumed at the earliest,"Sudipto Gupta, Managing Director, Innovation Business Group at Wistron Smart Devices said in a letter to the government.

The company said it remains optimistic about its future in the state.

"We are committed to make Electronic Manufacturing succeed in India, which is key to our global plans, and look to expand our presence in this very important market as we go forward," Gupta said in letter.

A report released by the Department of Factories, Boilers, Industrial Safety & Health lists several violations of the company including discrepancies in wages, faulty attendance capturing, prior approval for additional construction at the facility and not seeking permissions to increase staff strength.

"The practices in place with regard to payment of wages and overtime work, are not in line with the provisions of law," according to the preliminary findings after investigations were carried out on 13 December.

Interviews with workers and contract workers also revealed that housekeeping staff had not been paid till date. It added that necessary exemptions under the Factories Act 1948 has not been taken to carry out overtime

work from the workers and hence the working hours of the factory from 6am to 6pm and from 6pm to 6am is in violation of the provisions of Section 51 and 54 of the Factories Act, 1948.

A comprehensive report on the incident as sought by the state government is yet to be released.

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