Broken promises: The bitter story of sugar production in Iran

Shima Silavi
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For the past two weeks, workers of the ‘Haft Tapeh’ sugar cane factory have been on strike. In 2015, it was announced that the factory was bankrupt and in 2016, two private contracting companies, namely Zeus and Ariak, bought all of the company shares.

Ever since, there have been dozens of similar protests and strikes against privatization, mismanagement and unpaid wages.

Approximately 4,000 employees, partly with official and partly with unofficial contracts, work in various parts of this large factory. Another 1,500 members of the staff are day labourers, mostly from the indigenous Arab population.


In this regard, Khuzestan Vice President of Agricultural Associations and Guild System, Hakim Khenefari, emphasized that the only way to save the factory is to sell it to the private sector. However, two years into privatization, the factory and its workers have been witnessing a downward spiral.

Factory history and the indigenous question

‘Haft Tapeh’ factory was established in 1960’s in the North of Khuzestan province in the ancient Elamite city of Susiana, present-day Shush. The company has 24,000 hectares of fertile land.

Already in the factory’s early stages it caused tensions and discontent among Arab indigenous farmers.

Ahwazi Arab political and human rights activists consider the Iranian government's alleged sugar cane development projects as a medium for land expropriation of indigenous Arab farmers.

The lands that today belong to the sugar cane factory were confiscated by the Iranian government whereby farmers were deprived of their proprietary rights in return for only small payments and the promise of employment for the farmers’ children once the factory was built. However, once production began, Arabs were either excluded from employment or became day labourers, whereas workers from other cities were brought in as workforce. As a result, the project not only failed in combating poverty, but also contributed to creating ethnic tensions, further worsening discrimination against Iran’s Arab population.

A further aspect of this controversy concerns ater pollution. The poisonous and salty water waste from the factory, similar to oil industry waste, was disposed into marshland and nearby lakes and rivers, and consequently disrupted the lives of palm farmers and local fishermen and villagers.

What do workers’ syndicates want?

The company's syndicate was created in 1974, but upon establishment of the Islamic Republic it ceased to be actively involved in public for many years, until in 2007, some workers thought of reviving it.

According to Ismail Bakhshi, one of the representatives of the ‘Haft Tapeh’ Workers, who is currently under arrest, the restructuring of the company to becoming part of the private sector is ambiguous. The new owners exploited the name of the company to receive “financial facilities” from the government.

What has raised suspicions about the new private owners is their motivation to buy a factory that at the time when it was sold had 67 million dollars of debt.

Omid Asadbeigi and Rostami, who are known as the owners of the factory, are on the black list of currency offenders. Furthermore, according to reports, they currently are detained in Tehran.

From the workers’ point of view, there are two solutions: either ‘Haft Tapeh’ should be run by a self-governing labor movement, or it should be returned to government management, and all decisions must be taken by the workers' council.

Sultan of sugar and ‘Haft Tapeh’ bankruptcy

Importing sugar impedes sales of domestic sugar as the price of the imported sugar is considerably lower than the sugar produced within the country. Since the first years of the Islamic Republic the influential cleric, Naser Makarem Shirazi, has been responsible for Iran’s sugar imports which earned him the name “Sultan of Sugar”.

Other industries are also suffering as the same scenario prevails in other sectors. Privatising industries has been the answer of the Iranian government to workers who lack job security and suffer because of unpaid wages. Heavy Equipment Production Company (HEPCO), producer of road construction and equipment, and Khuzestan Steel industry workers - in a similar predicament like at ‘Haft Tapeh’ - organized several strikes during the past months against privatisation.

What is evident is that the economic problems that are catching up with Islamic Republic of Iran are not the result of sanctions, as Iranian government claims. Sanction relief during Obama could have revived different industries and saved the factories from bankruptcy and consequently privatisation. And this in fact was the average Iranians’ expectation.

However Iran’s adventures and expansionism in neighboring countries left no place for much needed domestic economic growth.

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