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By Nityanand Jayaraman, Independent

The beauty spot, 6,500ft up in the Palni Hills, at the southern end of the Western Ghats, is famed for its pine and eucalyptus forests. Conservationists prize it as a "biodiversity treasure trove", home to many plant species found nowhere else. Yesterday, 400 activists from Greenpeace and a broad coalition of environmental and citizens' groups marched on the Hindustan Lever factory and demanded a halt to the use of mercury there. They say the waste is being dumped around the town without regard for consequences, strewn across a hillside behind the factory, polluting sensitive watershed areas of the sholas, the region's biodiversity hotspots, and clogging a scrapyard in town where 15 tons of discarded thermometers were discovered.

A former worker at the plant, Mahindra Babu, says 30 per cent wastage of thermometers during manufacture is considered acceptable. The Indian factory was set up in 1977 by Cheeseborough Ponds, an American company, after its thermometer plant in the US closed. The factory, then bought by Hindustan Lever, the Indian subsidiary of the Anglo-Dutch multinational Unilever, was built in the area of outstanding natural beauty after the Tamil Nadu state government gave special exemption on the basis that the factory would not cause pollution.

But mercury is highly toxic, and yesterday's activists expressed their anger at what they claim is a breach of trust. In addition to illegal dumping, workers at the plant complain of unsound work practices.

"Mercury spilt on the floor is routine," said a Mr Sagayaraj, who worked at the factory from 1984 to 1995. "In the oven sections ... there is a lot of breakage and mercury spillage. Every time we open the oven door, a gust of vapour comes out." A doctor in the town, who did not wish to be named, said: "Most of the workers who come to me from [the factory] have kidney problems. Mercury is a slow killer ... I tell them their only cure is to quit their jobs."

A local conservation activist cited the Bhopal disaster of 1984, when 1,600 people died from toxic fumes spewed from the Union Carbide factory. "What have we learnt?" he said. "What have the corporations learnt? Sixteen years later, the Indian regulatory agencies remain as incompetent and clueless as ever, the multinationals have not gone beyond posturing, and continue to poison the workers and environment with impunity." A senior manager at Hindustan Lever has denied any wrongdoing by the company.