One-way-road-to-civilization-globalization or Frankenstein's monster.
Governance, CSR & Affected Tribal Communities
(Part of this article was published in ICFAI Reader in July 2006)
Background:
In the mid-1950s background in ‘Tintin an America’,[i] Herge in his unique style portrayed Red Indians losing their homes amidst the mad oil-rush and the post-world-war-II rebuilding of consumerism driven US economy that lead to the formation of global cash-rich oil giants of today. The red-Indians of erstwhile Texas were mistaken in realizing the good, the bad and the evil. They mistook Tintin to be evil, the villain ‘Al Capone’, the only real life villain[ii] in the whole series to be good and before they realized who the oil magnates were and what they wanted, they were displaced (or booted out?) from their inherited century old land within matter of days.
A similar real life story is unfolding in emerging India today. India - one of the laggards of global economic development of last century is not only at the eye of global economic development, but a global economic growth driver today. And one of the region towards manufacturing growth is centered is Chotanagpur Plateau – one of the richest belts in mines and minerals in India spanning primarily over Orissa, Chattisgarh and Jharkhand states.
Orissa – a tribal populated non-performer state within a non-performer country did hit the headlines for all wrong reasons during 1990s and early 2000s. Orissa, titled ‘one of the poorest states’[iii] in India with ‘Kalahandi’[iv] story of century-old repeated drought had media-attention for extreme-human sufferings. What were surprising in those pictures and stories was those pictures and stories were not coming from a country in war or internal decadence as found in many African nations, those pictures and stories came from India, and India was having prosperity elsewhere.
Highlighting the state of the issues, World Bank on 24th October, 2005 in same Project Information Document on State Roads Project in Orissa, stated
“Orissa, although endowed with rich mineral resources and a coastal location, is among the poorest of India’s major states. Nearly half of its 37 million people live under the official poverty line and its per capita income (US$250, versus all-India average US$620) has changed little in the last 20 years, while many other Indian states have doubled theirs during the same period. In recent years, however, Orissa’s economic and fiscal fortunes have changed for the better.”
Background:
In the mid-1950s background in ‘Tintin an America’,[i] Herge in his unique style portrayed Red Indians losing their homes amidst the mad oil-rush and the post-world-war-II rebuilding of consumerism driven US economy that lead to the formation of global cash-rich oil giants of today. The red-Indians of erstwhile Texas were mistaken in realizing the good, the bad and the evil. They mistook Tintin to be evil, the villain ‘Al Capone’, the only real life villain[ii] in the whole series to be good and before they realized who the oil magnates were and what they wanted, they were displaced (or booted out?) from their inherited century old land within matter of days.
A similar real life story is unfolding in emerging India today. India - one of the laggards of global economic development of last century is not only at the eye of global economic development, but a global economic growth driver today. And one of the region towards manufacturing growth is centered is Chotanagpur Plateau – one of the richest belts in mines and minerals in India spanning primarily over Orissa, Chattisgarh and Jharkhand states.
Orissa – a tribal populated non-performer state within a non-performer country did hit the headlines for all wrong reasons during 1990s and early 2000s. Orissa, titled ‘one of the poorest states’[iii] in India with ‘Kalahandi’[iv] story of century-old repeated drought had media-attention for extreme-human sufferings. What were surprising in those pictures and stories was those pictures and stories were not coming from a country in war or internal decadence as found in many African nations, those pictures and stories came from India, and India was having prosperity elsewhere.
Highlighting the state of the issues, World Bank on 24th October, 2005 in same Project Information Document on State Roads Project in Orissa, stated
“Orissa, although endowed with rich mineral resources and a coastal location, is among the poorest of India’s major states. Nearly half of its 37 million people live under the official poverty line and its per capita income (US$250, versus all-India average US$620) has changed little in the last 20 years, while many other Indian states have doubled theirs during the same period. In recent years, however, Orissa’s economic and fiscal fortunes have changed for the better.”
Impact of recent developments on tribal communities:
All that changed with global commodities boom as one driver, other being scorching pace of growth of Indian economy, where infrastructure is a major bottleneck. As metals boomed globally touching new highs in LME, benchmarked primarily for non-ferrous metals and in global steel markets, companies in India and global giants looked at mineral-rich Indian states. Globally natural resources (mines and minerals) were getting increasingly scarce commanding higher premiums compared to production and conversion facilities. Be it bauxite, iron ores, coal, chromite, manganese ores, or be it the quantity and the quality of such ores, Orissa, Chattisgarh and Jharkhand lead the pack[v]. Till 2005, almost $15 billion of FDI in Orissa alone was proposed, largest one of them of $12 billion by Posco[vi]. And that is equally matched, if not more by rush of funds and new projects of all Indian metal giants – be it Tata Steel, Jindals, Hindalco or others. And then there were Indian multinationals like the Sterlite with global non-ferrous and mining giants like Alcan, BHP Billiton, etc. The boom was so much that 38% of Indian manufacturing projects announced in the period of October’04-September’05 was in Orissa[vii] – and India again was having a boom in its manufacturing investment[viii] with buoyed global economic growth, emerging-India story and its capital market performance after the last short-lived one in 1990s.
And this time again Orissa did hit the headlines for the wrong reasons – tribal protests, Police lathicharge and even firing and loss of tribal lives. And majority of land acquisition projects lead to such controversies. Even Tata Steel, globally appreciated for its Corporate Social Responsibility practices, and the owner of forthcoming Kalinga Nagar steel project was not spared where thirteen tribals[ix] were killed in Police firing when tribals protested against its land acquisition. All these raise the question on whether ‘the economic and fiscal fortunes’ that Orissa saw in recent times transformed uniformly to the so called owners of the mineral-rich land - the tribal communities.
Barring mining and metals projects, regular cases of tribal unrest and violence over rehabilitation issues surfaced at frequent interval all across India. Be it large Narmada and Tehri Dam Project[x], or the stray incidence of a death of a fisherman in Gangavaram Village in Visakhpatnam over building of Gangavaram port[xi] in their land. And these incidents clearly bring out lack of standard practices in managing developmental projects with clear responsibility and monitoring mechanism. And if India needs to maintain its targeted 8% or more GDP growth rate with stable democracy over next 10-20 years, as Indian manufacturing companies scale up to their global counterparts - a policy document containing practices and processes with responsibilities and accountability towards this objective is a must.
Indian Government had been running a policy towards upliftment of the tribal communities through various reservations and concessions since almost independence, but its effectiveness can be questioned looking at the socio-economic status-quo of majority of tribal communities in Chotanagpur Plateau over decades. Lately this has also led to insurgency of various forms as well[xii].
All that changed with global commodities boom as one driver, other being scorching pace of growth of Indian economy, where infrastructure is a major bottleneck. As metals boomed globally touching new highs in LME, benchmarked primarily for non-ferrous metals and in global steel markets, companies in India and global giants looked at mineral-rich Indian states. Globally natural resources (mines and minerals) were getting increasingly scarce commanding higher premiums compared to production and conversion facilities. Be it bauxite, iron ores, coal, chromite, manganese ores, or be it the quantity and the quality of such ores, Orissa, Chattisgarh and Jharkhand lead the pack[v]. Till 2005, almost $15 billion of FDI in Orissa alone was proposed, largest one of them of $12 billion by Posco[vi]. And that is equally matched, if not more by rush of funds and new projects of all Indian metal giants – be it Tata Steel, Jindals, Hindalco or others. And then there were Indian multinationals like the Sterlite with global non-ferrous and mining giants like Alcan, BHP Billiton, etc. The boom was so much that 38% of Indian manufacturing projects announced in the period of October’04-September’05 was in Orissa[vii] – and India again was having a boom in its manufacturing investment[viii] with buoyed global economic growth, emerging-India story and its capital market performance after the last short-lived one in 1990s.
And this time again Orissa did hit the headlines for the wrong reasons – tribal protests, Police lathicharge and even firing and loss of tribal lives. And majority of land acquisition projects lead to such controversies. Even Tata Steel, globally appreciated for its Corporate Social Responsibility practices, and the owner of forthcoming Kalinga Nagar steel project was not spared where thirteen tribals[ix] were killed in Police firing when tribals protested against its land acquisition. All these raise the question on whether ‘the economic and fiscal fortunes’ that Orissa saw in recent times transformed uniformly to the so called owners of the mineral-rich land - the tribal communities.
Barring mining and metals projects, regular cases of tribal unrest and violence over rehabilitation issues surfaced at frequent interval all across India. Be it large Narmada and Tehri Dam Project[x], or the stray incidence of a death of a fisherman in Gangavaram Village in Visakhpatnam over building of Gangavaram port[xi] in their land. And these incidents clearly bring out lack of standard practices in managing developmental projects with clear responsibility and monitoring mechanism. And if India needs to maintain its targeted 8% or more GDP growth rate with stable democracy over next 10-20 years, as Indian manufacturing companies scale up to their global counterparts - a policy document containing practices and processes with responsibilities and accountability towards this objective is a must.
Indian Government had been running a policy towards upliftment of the tribal communities through various reservations and concessions since almost independence, but its effectiveness can be questioned looking at the socio-economic status-quo of majority of tribal communities in Chotanagpur Plateau over decades. Lately this has also led to insurgency of various forms as well[xii].
Management role and focus:
This article focuses on these complex real-life issues of development in sensitive backward tribal areas. Majority of tribal communities may not have seen the benefit of civilization till date. Fueled by a sudden commodity rush and growth, Indian Government or corporate world now find itself in the wrong foot as it ask these tribal communities to vacate their age-old land.
All developmental activities may not necessarily be evil as generalized by a majority of NGO activists operating with tribal communities in affected belts. We believe the primary lacunae to be with the communication process. Gullible simple tribal communities are as such localized and isolated from mainstream for years. Rapid fast change in their lives and lifestyle would expectedly be resisted. And therefore violence over land acquisition is a natural outcome where certain good corporate citizens also suffer as it happened with Tintin in ‘Tintin in America’. Therefore there exists a genuine case to take a critical re-look at the overall process as managed by Government and leading Indian and global firms for mining activities in backward tribal belts. Possibilities on the contrary however can not be ruled out firms taking tribal communities for a ride as was proclaimed by famous Supreme Court judgment[xiii] over Samata filing on ‘Threat to fifth schedule of the Indian Constitution’ over mining projects in Andhra Pradesh in 2001 and again in another case in 2004 over pollution issues[xiv]. Indian tribal communities’ access towards judiciary system is anyway limited, and while dealing with sensitive issues on tribal land acquisition, firms and Government bodies therefore need to doubly ensure that tribal sentiments are not being adequately taken care of. And due to that reason again, protests take violent turn and bridges – if not built from the beginning by effective communication and deliverable mechanism may get more difficult even in future.
Following a process-break-down structure, any policy towards that objective should focus on following five critical processes with distinct ownership, communication strategy and monitoring mechanism:
Processes before Government hands over mining lease to any private or Government bodies. Here we focus on role of Government primarily in communicating (to the age-old tribal owners of the land for which seldom there exists any land records with Government) forthcoming changes to the affected tribal communities and what actions the Government and/or prospective acquirer would take to ensure that the tribal communities get a fair deal in lieu of their land, and Government and private bodies get critical natural resources for development.
Processes after Government signs mining lease with firms, but before the acquisition starts – where both sides can play a proactive dual role.
And finally delivering on the promises made to the affected tribal communities by prospective lessee and/or Government and monitoring mechanism set-up by Government through separate cell in case Government is a party to promises made to tribal communities to ensure that there are no deviations in the negatives.
As the overall process finally boils down to managing the change management in the lives of the tribal communities, an optimistic project schedule in terms of completion time may be unjustified. Particularly in cases when Government takes months to grant lease to interested parties for mine acquisition, and on top of that, firms in cases sit on top of them at times of global commodities downturn and wake up at commodities up-cycle again to speed-up the project. And the cost is paid by tribal communities as shortening the acquisition and rehabilitation cycle time forces them through rapid changes. Tribal communities have nothing to do with global commodity cycle, and therefore they need not necessarily pay a heavy price at commodities up-move.
And from firms’ point of view, how they get a fair idea on overall cost impact before acquisition and time estimate for project completion so that they don’t face any un-surmountable hurdles like indefinitely delayed project even when they meet all their due responsibilities as good corporate citizens.
Further research scope exists to qualitatively and/or quantitatively measure the costs and benefits that each stakeholder pays for mining, metals and developmental projects that require backward tribal community rehabilitation. A study on the trade-off in terms of actual costs of communication, tribal community rehabilitation, and other welfare spend directed towards tribal community development vis-à-vis delayed project costs due to tribal unrests can be undertaken as part of that studies.
This article focuses on these complex real-life issues of development in sensitive backward tribal areas. Majority of tribal communities may not have seen the benefit of civilization till date. Fueled by a sudden commodity rush and growth, Indian Government or corporate world now find itself in the wrong foot as it ask these tribal communities to vacate their age-old land.
All developmental activities may not necessarily be evil as generalized by a majority of NGO activists operating with tribal communities in affected belts. We believe the primary lacunae to be with the communication process. Gullible simple tribal communities are as such localized and isolated from mainstream for years. Rapid fast change in their lives and lifestyle would expectedly be resisted. And therefore violence over land acquisition is a natural outcome where certain good corporate citizens also suffer as it happened with Tintin in ‘Tintin in America’. Therefore there exists a genuine case to take a critical re-look at the overall process as managed by Government and leading Indian and global firms for mining activities in backward tribal belts. Possibilities on the contrary however can not be ruled out firms taking tribal communities for a ride as was proclaimed by famous Supreme Court judgment[xiii] over Samata filing on ‘Threat to fifth schedule of the Indian Constitution’ over mining projects in Andhra Pradesh in 2001 and again in another case in 2004 over pollution issues[xiv]. Indian tribal communities’ access towards judiciary system is anyway limited, and while dealing with sensitive issues on tribal land acquisition, firms and Government bodies therefore need to doubly ensure that tribal sentiments are not being adequately taken care of. And due to that reason again, protests take violent turn and bridges – if not built from the beginning by effective communication and deliverable mechanism may get more difficult even in future.
Following a process-break-down structure, any policy towards that objective should focus on following five critical processes with distinct ownership, communication strategy and monitoring mechanism:
Processes before Government hands over mining lease to any private or Government bodies. Here we focus on role of Government primarily in communicating (to the age-old tribal owners of the land for which seldom there exists any land records with Government) forthcoming changes to the affected tribal communities and what actions the Government and/or prospective acquirer would take to ensure that the tribal communities get a fair deal in lieu of their land, and Government and private bodies get critical natural resources for development.
Processes after Government signs mining lease with firms, but before the acquisition starts – where both sides can play a proactive dual role.
And finally delivering on the promises made to the affected tribal communities by prospective lessee and/or Government and monitoring mechanism set-up by Government through separate cell in case Government is a party to promises made to tribal communities to ensure that there are no deviations in the negatives.
As the overall process finally boils down to managing the change management in the lives of the tribal communities, an optimistic project schedule in terms of completion time may be unjustified. Particularly in cases when Government takes months to grant lease to interested parties for mine acquisition, and on top of that, firms in cases sit on top of them at times of global commodities downturn and wake up at commodities up-cycle again to speed-up the project. And the cost is paid by tribal communities as shortening the acquisition and rehabilitation cycle time forces them through rapid changes. Tribal communities have nothing to do with global commodity cycle, and therefore they need not necessarily pay a heavy price at commodities up-move.
And from firms’ point of view, how they get a fair idea on overall cost impact before acquisition and time estimate for project completion so that they don’t face any un-surmountable hurdles like indefinitely delayed project even when they meet all their due responsibilities as good corporate citizens.
Further research scope exists to qualitatively and/or quantitatively measure the costs and benefits that each stakeholder pays for mining, metals and developmental projects that require backward tribal community rehabilitation. A study on the trade-off in terms of actual costs of communication, tribal community rehabilitation, and other welfare spend directed towards tribal community development vis-à-vis delayed project costs due to tribal unrests can be undertaken as part of that studies.
© Ranjit Goswami. Ranjit is a Research Scholar with Indian Institute of Technology, Kharagpur, India; and is the author of the book ‘Wondering Man & The Internet’. He can be reached at ranjit.goswami@gmail.com
References:
[i] Herge, ‘Tintin in America’
[ii] http://paul.durdin.net/tintin/baddies.html
[iii] World Bank ‘Project Information Document (PID)’ Report No AB1887 dated 24th October 2005
[iv] Mishra, M Kumar ‘Drought in the Folklore of Kalahandi’ http://www.geocities.com/bororissa/dro.html
[v] Das, Prafulla ‘Mines of Conflict’ Frontline Volume 22-Issue 24, Nov 05-18, 2005
[vi] http://www.wadhwani-foundation.org/download/Orissa.pdf
[vii] World Bank ‘Project Information Document (PID)’ Report No AB1887 dated 24th October 2005
[viii] Speigel, Rob ‘India Preps for Manufacturing Boom’ http://www.reed-electronics.com/electronicnews/article/CA402278?pubdate=03%2F07%2F2004 3rd September 2004
[ix] India Update, Mines and Communities, http://www.minesandcommunities.org/Action/press945.htm
[x] Patil, Shivraj, Home Minister, Government of India ‘Law for rehabilitation necessary for diaplaced tribals’ http://www.newkerala.com/news2.php?action=fullnews&id=30048 dated 23rd March 2006
[xi] NDTV ‘Vizag Violence: one killed, 23 injured’ dated 27th March 2006 http://www.ndtv.com/topstories/showtopstory.asp?slug=One+killed+in+Vizag+village+clashes&id=19057&category=National
[xii] Padel, Felix ‘Letter from London…..by Felix Padel’ http://www.cgnet.in/36garh/FT/t4 11th October 2005
[xiii] ‘Threat to fifth schedule of Indian Constitution’ http://www.minesandcommunities.org/Action/action5.htm 25th June
[xiv] ‘Two demonstrations against Vedanta in one week’ http://www.minesandcommunities.org/Action/press827.htm 9th December 2005
Labels: Corporate Social Responsibility, fundamental rights, Governance, Indian tribals, land acquisition
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