Home >News >India >Employees, local economy get caught in the crossfire in Sterlite Copper fiasco

Bengaluru: Irudhaya Rajamani Lenin, 57, a materials and spare parts supplier for Sterlite Copper in Thoothukudi, about 610km from Chennai, is worried about making the next payment for the 4 crore overdraft he has on account of machine and equipment purchases in the last few years.

A plate-rolling machine he bought seven years ago for 50 lakh remains unused since May 2018, when the Tamil Nadu government ordered the closure of Sterlite Copper’s smelting plant, a unit of billionaire Anil Agarwal’s Vedanta group.

“Business from the plant was my main source of income and now I barely have anything," he said in Tamil. Lenin had started off as a small-time contractor in the late 1980s and had entwined his business with Sterlite in 1993 when there were few other opportunities available for micro enterprises to grow in the port town of Thoothukudi.

On Tuesday, a Madras High Court order upheld the importance of environmental concerns over economic considerations to keep shutters down at the plant. But caught in the crossfire are the livelihoods of thousands like Lenin who are part of an ecosystem that includes truckers, contractors, labourers, real estate market and even tea shops that came up around the plant.

A top executive of Sterlite Copper said that it spent around 600 crore per year on logistics, material purchases and other requirements that are now non-existent.

Lenin’s fortunes grew and crashed with Sterlite as he clocked in just under 5 crore turnover this year from 26 crore two years back.

The plant has been shut since police opened fire at the protestors, killing 13 people in May 2018. Having moulded his business and investments around this company, Lenin couldn’t just move on as he has higher stakes unlike other employees and contract labourers.

The fortune and fate of many in the community are also linked to the company that indicates the impact of a corporation on smaller players and the local economy in a town where most services revolve around the few industries that operate there.

“The livelihood of roughly 50,000 people is at stake," Pankaj Kumar, CEO, Sterlite said in an interview. The company has retained at least 60% of its employees hoping that it would get reprieve from higher legal authorities and resume operations.

Economists say that new investments impact the local economy from the beginning as they displace villages and residents and also bring with it jobs and prosperity.

“It is normally the workers, small businesses that depend on the activity generated by the larger players," professor Amit Basole of Azim Premji University said. He added that the local economy loses because it is not a very powerful force in negotiations and does not have a seat at the table, a euphemism to point at the non-consultative process followed by governments.

With no silver bullets to satisfy either the green warriors, protecting local interests or the corporations, the path to finding a balance between pro-environment or pro-development is likely to claim more casualties.

“Sterlite had hired more people from even other states and they have since moved on after the plant shut," said Arjunan, a local trade union activist.

Raman Mahadevan, a business historian, said that cases like Sterlite bolsters the non-government organization movements that have started to look at retrospective impact of companies operating since the 1990’s when compliance was held to different standards.

Political parties steer clear of the controversy to avoid antagonizing any one side irrespective of what formal party lines may dictate.

But it’s almost the end of the month now and Lenin is beginning to worry about the next installment on his overdraft.

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