Management Development Institute, Murshidabad
Quiz-1
Business Ethics and Corporate Social Responsibility
Note: Please read the case and answer the questions given the end.
DEAD RIVER’S REVENGE: Barren fields, closed factories, lakhs without a livelihood. A poisoned
Noyyal has spelt disaster for Tirupur, a booming town caught in a people versus pollution war.
Six months ago, Tirupur was throbbing with activity. Today, the Tamil Nadu town — a major
knitwear export hub — is steeped in gloom. And a river runs through it. The river, Noyyal, has turned
poisonous. For years, the town’s dyeing units had been pumping effluents into it. The toxic water
eventually reached the agricultural fields of western Tamil Nadu, rendering them barren. A high
court order in January led to the closure of almost all the city’s 654 units. Now, over three lakh
workers are paying for the sins of their employers.
“The closure of the dyeing units has crippled the entire economy of the city. Right from the roadside
tea-stall to the departmental and textile stores, there is a drastic dip in customers,” says R
Annadurai, convener, Tirupur Industrial Protection Committee.
The tragedy of Tirupur, though, began years ago — and it was first felt by the 1.5 lakh farmers of
over 100 villages of Tirupur, Erode and Karur districts. A P Kandasamy, a farmer from Athipalayam
village, used to be proud of his lush, green 24 acres of paddy, sugarcane and coconut trees. That was
before the dyeing units began to flourish in neighbouring Tirupur and started pumping effluents into
the river. Today, the vast barren fields leading up to his house bear only a few patches of shrubs,
grass and hollow tree stumps — skeletal remains of an ecological disaster that has struck the region.
The past decade has been a desperate struggle for farmers as agriculture suddenly became unviable.
“Not even cattle can drink the river’s water. How did they allow such an atrocious act to be
committed? Nothing will grow on this soil,” laments AM Thangamuthu, a farmer from the area.
Thousands like him in this belt were forced to migrate to the cities to seek employment as unskilled
labour.
The misery of the farmers coincided with the rapid rise of Tirupur as a knitwear hub. As orders
poured in from Europe and the US, garment manufacturers started working overtime to maximize
profits. Pollution norms were sidelined as rapid economic growth took centre stage. Sources in the
Pollution Control Board (PCB) now admit the units used to regularly pump toxic water into the
Noyyal at night.
It was in Kandasamy’s house that the farmers finally decided to stand up to the might of the garment
barons. In 2003, a writ petition was filed before the Madras High Court on behalf of their
organization, the Noyyal River Ayyacutdar Protection Association (NRAPA). Eight years and
numerous appeals later, the court on January 28 ruled in their favour and instructed the state
government to ensure the closure of polluting dyeing units with immediate effect. The farmers have
hailed it as a landmark ruling. “It will strengthen other cases where farmers are taking on industry
over sensitive issues like pollution,” says Kandasamy. The court also came down heavily on the then
DMK state government and issued contempt notices to PCB officials for their failure to act. The total
dissolved solids (TDS) in the river were found to be alarmingly high — between 5,500 ppm and 7,000
ppm. The permissible level fit for human consumption is 2,100 ppm. TDS levels as per the records
maintained by the PCB always peaked during the period between October and May, the peak season
for the garment sector. Out of the 752 dyeing units registered in Tirupur, 654 were still functioning
at the time of the court ruling. Action was initiated against them in February. Their power supply was
disconnected and they were served with closure notices. Only nine units — with their own individual
effluent treatment plants (IETPs) — were allowed to keep functioning.
The tragedy of Noyyal has since shifted from the agrarian hinterland to the epicentre of Tirupur city.
Most of the workers in these units are unskilled labourers who migrated from the state’s southern
districts (Madurai, Virudhunagar,Theni and Dindigul) and from Bihar, Orissa, West Bengal and
Jharkhand. Ironically, many of them had given up agriculture and come here to make a living. Now
they have nowhere to go. “I don’t know any other job and I don’t have anyone back in my native
town (Rajapalayam in Virudhunagar district). I know some people here and will try to borrow money
from them to complete my children’s education,” says P Marimuthu, one of the jobless workers.
Fortunately for Tirupur, the assembly elections in April ensured the issue got top billing. The run-up
to the polls witnessed several protests by local associations and citizens’ forums. There was also a
move to field more than 1,000 independent candidates from Tirupur North constituency, all of
whom were affected by the closure. “Our main aim is to revive the dyeing and bleaching units in the
city. The economy of Tirupur has come to a grinding halt,” said Chitra, a 36-year-old tailor and
mother of two after filing her poll nomination.
What next? The new government and the Union textile ministry have swung into joint action. A 12-
member, high-level committee was formed on July 25 to resolve the issue. The panel is meeting in
New Delhi to discuss possible bailout plans. “The steps being taken by the chief minister and Union
government officials are commendable and we are hoping that soon we will be able to revive the
garment sector,” says A Sakthivel, president, Tirupur Exporters Association. The CM has also
announced an interest-free loan package of Rs 200 crore for the 20 common effluent treatment
plants (CETPs) in Tirupur for upgrading their effluent treatment facilities. The authorities are
currently monitoring a 90-day trial run to ensure zero liquid discharge at the Arulpuram CETP. The
PCB has allowed 15 dyeing units to function at 30% capacity during the trial period. The state
government has also promised immediate disbursal of a compensation package of Rs 18.38 crore to
farmers affected by the pollution.
The farmers, meanwhile, are watching the developments closely. “The state government has
announced some plans but because of the court ruling we believe that garment exporters will not be
able to exploit Noyyal the way they did earlier,” says Kandasamy.
Questions:
Q.1 Use the “actions, character, outcomes and relationship” framework of business ethics to analyse
the problems of garment manufacturers in Tirupur with regard to the issues raised in the case.
Marks: 05
Q.2 Consider Tirupur Exporters’ Association as your client and offer solutions to their problems.
Marks: 05
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A.1- Framework of business ethics to analyse the problems of garment manufacturers in
Tirupur are-
Action
Irregular and uncontrolled disposal of waste from the garment manufacturers led to
obliteration and devastation of the village’s ecological balance which in turn led to a loss of
land quality, opportunities, growth as well as closure of the factory itself.
Character
The attitude of the garment manufacturers as well as even government authorities in the
direction of negligence led to catastrophe in Tirupur village and its surroundings.
Outcomes
The river, Noyyal, has turned poisonous.
The toxic water eventually reached the agricultural fields of western Tamil Nadu, rendering
them barren.
Agriculture suddenly became unviable.
Relationship
The new government and the Union textile ministry have swung into joint action. A 12-
member, high-level committee was formed on July 25 to resolve the issue.
The CM has also announced an interest-free loan package of Rs 200 crore for the 20 common
effluent treatment plants (CETPs) in Tirupur for upgrading their effluent treatment facilities.
The authorities are currently monitoring a 90-day trial run to ensure zero liquid discharge at
the Arulpuram CETP. The PCB has allowed 15 dyeing units to function at 30% capacity
during the trial period. The state government has also promised immediate disbursal of a
compensation package of Rs 18.38 crore to farmers affected by the pollution.
The farmers, meanwhile, are watching the developments closely.
A.2- The main problem to be resolved at hand are two-fold-
1. Increasing production level to pre-crisis level via restarting closed units.
2. To Minimise and work towards handling the distorted brand image of the
Associations.
The best way to jump back to their normal level would be to use the incentives by the
government and as well as their profits garnered through these years of operation towards
establishing control measures for pollution which will save workers job and their misery
also.
At the same time rehabilitation and employment of workers from the village itself whose
farms got destroyed will further help them in clearing their name as well as will pump more
men for better and fast production. In addition to this helping in restoring the ecological
balance in the village back with a focus specific CSR division will be an icing on the cake to
further increase their prospects in re-branding and clearing their name off of the catastrophe.
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