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Wärtsilä under fire over Indian operations

A fresh report from a Finnish NGO accuses Finnish engineering firm Wärtsilä of suspect labour practices. Workers at the firm’s factory in Khopoli don’t have independent union representation—and conditions at one of the firm’s suppliers are even worse.

Wärtsilän alihankkijan Echjay Forgingsin tehdas Honandin kylässä, Maharasthrassa.
Wärtsilä has been using controversial sub-contractor Echjay Forgings since 2013. Image: Päivi Koskinen/Yle

The Finnish NGO Finnwatch has published a new report uncovering what it says are questionable practices at Wärtsilä, a large Finnish engineering firm. According to Finnwatch, workers at the company’s factory in Khopoli, near Mumbai, receive subsistence, minimum wage salaries which are barely enough to live on.

Wärtsilä also uses large numbers of temporary and agency employees, with fewer rights than permanent staff.

The report also revealed what it claims are serious labour abuses at Wärtsilä contractor Echjay Forgings in the industrial hinterland of Mumbai. The firm is accused of not providing adequate safety equipment, underpaying workers and violating their right to organise.

“It’s the worst company of all, completely inhumane,” Babu Thomas, general secretary of the Kamgar Congress trade union, told Yle. “Over the last 24 years people have worked liked slaves for that firm.”

Labour disputes

Finnwatch says the firm, which has been supplying Wärtsilä since 2013, has fired permanent employees and replaced them with cheaper, agency labour, and has been the scene of fierce labour disputes. The agency labour works 12-hour days, six days a week, and many of them rent housing from the firm that lacks adequate sanitation.

They are also paid below minimum wage, according to several ex-workers Yle met in the town. They described wages of just 5,000 rupees, or around 75 euros per month, until they were fired in 2010 after demanding a pay rise.

“On that salary you can’t get anything but the bare necessities,” said former Echjay Forgings worker Chandrukant Raut. “When we complained, we got the sack.”

The local trade union raised objections to alleged abuses at Echjay Forgings in 2010. The union’s general secretary Babu Thomas says that the firm has hidden workers without safety equipment during inspections.

“We have complained to the police and to other authorities, but they are in cahoots with the factory,” said Thomas.

Echjay Forgings has denied the charges in the Finnwatch report, and threatened Finnwatch with legal action.

Finnwatch: Wärtsilä wages not enough to live on

Wärtsilä's own factories are, according to Finnwatch, clean and compliant with health and safety regulations. The firm’s provisions for healthcare are also lauded in the report, but the salaries paid by Wärtsilä are—according to Finnwatch—not enough to live on.

Finnwatch interviewed workers who reported salaries ranging from 105 to 395 euros per month, whereas the company itself reported paying between 167 and 536 euros. According to Finnwatch, the minimum subsistence-level salary for a small family is 200 euros.

The factory’s director claimed that there were no problems around salaries at the plant, and that in any case, money isn’t everything.

“I have not noticed any dissatisfaction at all,” said Milind Jhoshi. “There are very poor but happy people and very rich people that are unhappy.”

Workers in the Mumbai region are in any case having to spend more on living costs as inflation rises along with India’s economic growth.

Finnwatch also claims that Wärtsilä workers are unhappy about the trade union operating at their factory. Workers claim that the factory’s internal union was created to keep genuine trades unions out of the facility.

Factory boss Jhoshi and union representatives denied that the organisation was created to advance the employer’s interests. They said that conditions of work were discussed and agreed jointly.

However workers have told Finnwatch that the union does not intervene when things go wrong, and that especially those on temporary contracts are in a weaker position—and that the official union does not safeguard their rights.

Wärtsilä's head of sustainable development Marko Vainikka told Yle that the company will look at the report and work to correct the problems identified in it.

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