grasim industries ltd ( gil ), an Aditya Birla group company, sought the permission of the Kerala government to close down its viscose plant located on the banks of the river Chaliyar at Mavoor, Kozhikode district. The company also posted copies of the notice to the trade unions on August 23, 1999. The closure threatens to render about 3,000 people jobless. The reason given by the company for the notice is the state government's unwillingness to supply the required quantity and quality of raw materials. The last contract for supply of raw materials at subsidised rates ended on August 31. Unofficial figures estimate that in the last 10 years, the losses sustained by the state exchequer on account of the subsidies on raw material prices allowed to gil is at least Rs 2,500 crore.
The story of gil 's Mavoor plant is very complicated. The pulp plant has been at the centre of a 30-year-long struggle carried out by the people of the adjoining areas against pollution caused by the factory. And whenever the company has been pressurised into cleaning up its act, it has responded by threatening to close down the factory. In a state where unemployment is a major problem, the government just cannot afford the adverse publicity that a closure will attract. On the other hand, the Chaliyar Action Council ( cac ) of Vazhakkad village near Mavoor, which has been involved in the protest against the pollution caused by gil , had moved the Central Election Commission in the second week of August 1999. The council sought to stall the state government's reported move to enter into a new raw material supply contract with gil , saying that this would be a violation of the electoral code of conduct.
"The management of gil has been using trade unions to pressurise the state government to provide cheap bamboo and hardwood. In 1998, it almost got 30,000 hectares of forest land for captive plantation from the Kerala government. It was only after some non-governmental organisations petitioned the Central government about this move, which was a violation of the national forest policy, that the Kerala government scrapped the move,' says Chandra Bhushan, coordinator of the Green Rating Project ( grp ) of the New Delhi-based Centre for Science and Environment ( cse ). The project has recently completed the first-ever rating of the Indian pulp and paper sector in which gil was placed at the bottom of the pile in the rating with a ranking of 25 among 28 pulp and paper units. The rating had revealed that the company's efficiency in the use of fibre