Trouble in the plant started in September last year, when Intuc-affiliated JK Paper Mills Workers Union demanded 20 per cent bonus for 1997-98 fiscal. The company, however, expressed its inability to concede to the demands stating that it had suffered a huge loss during the year. It agreed to pay the minimum statutory bonus of 8.33 per cent to the workers. This led to a faceoff between the workers and the management and as a pressure tactic, the workers union declared "go slow" in the plant. A lockout for four days in November by the management failed to deter workers and resume normal duties.The plant management, however, was forced to declare lockout on December 20 for the second time as the workers turned unruly and violent in the plant premises. Theyreportedly threatened the fellow workers against working in the mill and assaulted some of the company officials on December 1.

According to tradition, the workers union used to sign an agreement with the management covering all financial and non-financial benefits of all categories of workmen for a period of three yars. But breaking this tradition early this fiscal, the union submitted a fresh charter of demands two years after the signing the agreement. However, after prolonged discussion and negotiations, an MoU was signed between the two parties at Bhubaneswar in the presence of labour minister Durga Sankar Patnaik, labour minister Ulaka Rama Chandra and Intuc state president Rama Chandra Khuntia. But after returning to the plant, the Union leaders refused to honour the MoU, sources in the management said.

The sources said due to labour unrest, the Rayagada Mills of JK Corporation has suffered a production loss of about 30,000 tonnes during the last four months. The setback in the second half of thecurrent fiscal is likely to affect the company's bottomline badly. Stating that JK Paper Mill Employees Union, an organisation of 2500 contract and casual labourers, has signed a tripartite agreement with the management, the sources said these workers are now being denied jobs due to the lockout. Moreover, several thousands of bamboo cutters in poverty stricken Koraput, Bolangir and Kalahandi districts would be rendered jobless for no fault of theirs, the sources said.

The management is also facing a piquant problem of disposing the 250 tonnes of pulp which has become useless because of the idle machines. The poisonous and stinking pulp cannot be discharged into river Nagabali nor can it be thrown in an open space. The waste has to be disposed underground. The management is facing difficulty in carrying the pulp, which is in a slurry form, to the pit.