Executive summary

The Aditya Birla Group is a global corporation with a market value of US$50 billion. Headquartered in Mumbai, India, it is one of India’s largest conglomerates and owns over 40 subsidiaries operating in a wide range of industrial sectors, including aluminium, cement, power generation, telecommunications, financial services and textiles.

The group is the world’s leading producer of viscose, with factories located across Asia. Birla also owns factories in Europe, notably Sweden’s Domsjö, a speciality pulp and bio-refinery company that it acquired in April 2011. The group’s Pulp and Fibre business is spread over eight countries and covers the entire viscose value chain, including plantations and the production of dissolving grade wood pulp, chemicals such as carbon disulphide and caustic soda, power generation, viscose fibre production and final consumer products. It owns 12 mills in total: 7 viscose mills and 5 dissolving pulp mills. Its Indian manufacturing arm, Grasim Industries Ltd., which commenced operations in 1947, is described as the ‘flagship company of the Aditya Birla Group’. In January 2018, Grasim received government clearance for the expansion of its viscose staple fibre (VSF) plant in Gujarat. The project will require an investment of around US$400 million, and the company plans to double its VSF production capacity. In addition to being a market leader, the Aditya Birla Group aims to become ‘the leading Indian conglomerate for sustainable business practices across its global operations’. In November 2017, it was ranked number one globally by the NGO Canopy for its work on the conservation of ancient and endangered forests in the sourcing of wood pulp, placing it ahead of ten other producers representing roughly three-quarters of global viscose production. However, in June 2017, our Dirty Fashion report shone a light on the environmental damage caused by irresponsible production practices at Aditya Birla Group viscose plants in India and Indonesia, and described how pollution there was blighting people’s lives and destroying livelihoods. The report also highlighted links between the polluting factories and global markets by identifying some of Birla’s customers, including major fashion brands and retailers such as H&M, Zara (Inditex), ASOS, M&S and Tesco.

This report presents findings from two follow-up investigations conducted at Aditya Birla Group’s plants in Nagda (Madhya Pradesh, India) and Purwakarta (West Java, Indonesia) in November and December 2017. It shows that, while the company is keen to broadcast its sustainability credentials, when it comes to viscose production it is failing to implement even basic legal requirements. In addition to multiple first-hand witness accounts of the company’s wrongdoing, independent laboratory testing found that air and water emissions of some contaminants exceed regulatory limits, indicating a serious potential threat to the local environment and the health and wellbeing of its workers and the communities living in the shadow of its factories.

The report finds the following in particular:

At Aditya Birla Group’s site in Madhya Pradesh, India:

• Conditions on the ground were markedly worse than during our previous investigation in spring 2017; more sites were characterised by visible and highly odorous pollution, which had turned the water dark red.
• There was a major health incident in October 2017, resulting in the death of two residents of Parmarkhedi, a village 8km downstream of Grasim Industries on the opposite bank of the Chambal River. Sixty villagers fell seriously ill and lost the ability to walk. Locals claim the incident was caused by contaminated water originating from the Birlagram industrial estate, where the Grasim viscose plant is located (although Birla has denied these claims).
• An independent laboratory tested an air sample taken outside the Grasim plant and found that the level of carbon disulphide was 125 times the World Health Organization (WHO) guideline value.6 Carbon disulphide is a dangerous chemical; it impacts the nervous system and is suspected of damaging fertility and the unborn child, even at low concentrations.
• Contamination has left the villages surrounding Grasim Industries without access to drinking water. In several villages, well water has made people and animals sick, forcing local residents to look for safe and clean water sources outside their villages.
• People in communities surrounding the factory are suffering from serious health conditions, including cancer, tuberculosis, reproductive problems, birth defects and stomach disorders.
• Contaminated water has wiped out most forms of agriculture in the area surrounding the Birlagram industrial estate. Farmers are unable to obtain a fair price for their produce at local markets because of fears it is contaminated.
• Various sources report alarmingly poor worker safety within the Grasim plant, with repeated accidents and deaths in the workplace.

At the Group’s Indo Bharat Rayon (IBR) plant in Purwakarta, West Java:

• Locals report regularly witnessing evidence of illegal discharges by IBR, usually at night-time or after rainfall.
• Our investigators observed discharge coming from IBR, which was steaming hot and accompanied by thick foam.
• An independent laboratory’s testing of water samples showed that the river water around IBR’s discharge pipe is extremely polluted and does not even comply with ‘worstin-class’ Indonesian water quality standards, meaning it should not even be used for irrigation, let alone drinking or bathing.
• Children were seen bathing in the contaminated water close to the discharge pipe, and farmers were found to be using the river water for irrigation and fish farming.
• The villagers’ complaints seem to be falling on deaf ears, and Aditya Birla Group lacks a credible grievance procedure to properly acknowledge and address local concerns and complaints.