Why the Coal India strike should never have happened in the first place

The government underestimated the unions.
The government underestimated the unions.
Image: Reuters/Mukesh Gupta
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Late on Wednesday night, after a drawn out meeting with coal and power minister Piyush Goyal, the unions representing some 500,000 Coal India Limited (CIL) workers decided to call off their five-day-long strike and get back to work.

Although aborted midway, the massive industrial action’s impact had already been felt: CIL’s production and dispatches had fallen by more than half, thermal power plants risked running out of fuel and the government had been caught flatfooted.

But the strike should never have happened—if only the government and the state-run miner’s brass had done a better job of handling the crisis, which had been in the making for weeks.

IPO protest

Any move by the government to dilute its stake in CIL—the Kolkata-headquartered company that supplies about 80% of India’s coal requirement—has almost always been resisted by the miner’s workers unions.

In early 2010, for instance, workers threatened to strike after the miner announced that it would list itself at the Bombay Stock Exchange by the end of the year, a former CIL official who guided the company through the IPO process, and does not wish to be named, told Quartz.

Almost as soon as the three-day strike was proposed in March 2010, the CIL brass began negotiations with the unions and then facilitated three meetings with the central government. Union leaders first met the coal secretary, then the coal minister and finally, the finance minister, before being assured that the government wouldn’t shortchange CIL’s workers.

“Eventually, the strike didn’t happen,” the official said. “Four out of the five unions backed out, and only one union went ahead.” The impact of that single action, mainly restricted to CIL’s underground mines, wasn’t significant—and the company’s IPO became the single largest listing in an Indian bourse till date.


“Trade union leaders in the coal sector are mature (individuals) who work in the interest of workers,” former CIL chairman Partha Bhattacharyya told Quartz, “but understand what’s good for the country, the economy and the coal sector.”

“The best way (to solve any crisis) is to engage with them at the right time, to the right extent,” he added.

By all accounts, this time, that engagement didn’t happen—and five trade unions, who rarely unite for a single cause, banded together against the government, protesting against its stake dilution plans and the opening up of the coal sector to private players.

“They (unions) haven’t striked like this for decades,” the former CIL official, who requested anonymity, said, “and one successful strike raises the morale (of the protesting workers) like anything.”

“It (the strike) hasn’t been properly handled,” another former senior CIL official said. “The government underestimated the unions.”

The government was caught off guard, both former officials concurred separately, because it neither seemed to have a concrete plan to negotiate a deal with the striking unions, nor had it made any arrangements to forcefully suppress the action.

CIL’s unions have been threatening to go on strike since September last year.

Moreover, the officials felt that the government’s plans for the sector should have been properly explained to CIL workers, as eventually the focus is on strengthening the mining company and not de-nationalization.

Also, it is clear that CIL by itself cannot service the coal demand from industry. Coal imports rose 19% to 210.6 million tonnes last year and it is next to impossible for a mining company like CIL to meet this demand.

“More (private) players will have to come in since the government cannot create more PSUs (public sector undertakings),” the official added.

And since the government’s aim is to eventually ensure CIL can produce one billion tonnes of coal annually by the end of the decade, it’s not as if the company—and its workers—will be suddenly abandoned.

“It’s an easy case to convince (the workers),” one of the officials said, but clearly that didn’t happened.

Instead, one of the largest industrial actions since the 1970s held the country’s coal and power sector to ransom for two days.