Niyamgiri Hills: SC judgement and its ripple effect

livemint, April 25, 2013
Businesses will find it increasingly difficult to generate escape velocity
Sudeep Chakravarti 

The extractive industry may see in the Supreme Court’s 18 April judgement on Vedanta Resources Plc sourcing bauxite from Orissa’s Niyamgiri Hills a window of opportunity. All it will take is a gram sabha, or village council, decision to open mining to feed the corporation’s alumina refinery in next-door Lanjigarh. There could also be some rejoicing because Orissa Mining Corp. Ltd, joint venture partner with a Vedanta subsidiary in this bauxite mining venture, is rooted in an eastern state where violation of human rights often appears to be a part of industrial policy.

And so it might be tempting to ask: what’s a gram sabha decision or two in the face of a state’s might? This, surely, is now a nearly done deal; perhaps a decade late, but inevitable nonetheless. The compact of overbearing government and aggressive business can’t be denied.

To those who think that way, the fact that the mining project hasn’t got off the ground for all these years on points of procedure, popular protest and law should underscore the sober truth that both public opinion and judicial writ increasingly count in the way India does business. A presumptuous set of pylons exist in Lanjigarh to carry ore on a conveyer system from Niyamgiri Hills to the plant, not yet the permission to do so. Moreover, even if acquiescence for the project by gram sabhas were to come about, one cannot discount the ripple effect this judgement will have in Orissa and across India for free, prior and informed consent.

A tiny example. In Goa, where I live, the government has for the past two months gone on overdrive to diminish the power of the gram sabha in order to promote the primacy of the state’s Town and Country Planning department, for long a wide-open window for the construction industry. Villagers and activists are already studying the Supreme Court judgement as precedence to rock the government and its pet projects back on their feet. In areas where iron ore mining, both legal and illegal, was conducted until it was banned in the wake of enquiries by the Justice M.B. Shah commission, in most cases forested areas and in several inhabited by indigenous tribes, the judgement will likely boost the institution of the gram sabha to the detriment of mining lobbies.

The boost this judgement can bring will go beyond aiding the project-affected, and strengthening the Forest Rights Act and tribal empowerment across the country—not to speak of the likely furor as the Land Acquisition, Resettlement and Rehabilitation Bill, 2011, winds its way to becoming an Act. I expect the judgement will help spark investor awareness and investor activism, among the weakest and most callous links in the chain of corporate accountability in India.

It may be too much to expect the Securities and Exchange Board of India (Sebi) to adopt the combative mode of the US Securities and Exchange Commission. The SEC is at present embroiled in litigation with the A-team of business interests in the US, the National Association of Manufacturers, Business Roundtable, and United States Chamber of Commerce. This tag team is seeking to negate SEC’s 2012 ruling that mandated declaration of the use of conflict minerals by businesses. Were Sebi to be even permitted such powers by government, it is likely that vast areas of business in India would come to a standstill on account of what is clearly “conflict” land acquisition and “conflict” mining, besides other violations.

Elsewhere, there is the example of the Thun Group, an agglomerate of four banks—Barclays, Credit Suisse, UBS and UniCredit—that formed in Thun, Switzerland, in 2011. This group declared: “In support of the UN Protect, Respect and Remedy Framework we, the undersigned banks, have been collaborating in reviewing how the Principles [of human rights] may apply within our sector. We are considering the particular challenges we face as universal banks when addressing human rights issues, notably the scope and depth of our human rights-related responsibilities and the due diligence requirements commensurate to these.”

In other words: are we funding human rights violations? The sub-text: we could be liable for these. The Thun Group expects to publish a best-practice guideline for banks this year.

All this may seem a bit distant in India, and there certainly is cause for cynicism as India ranks high among the worst perpetrators of human rights violations across the board. But the “Niyamgiri judgement” and its ilk judiciously open the window for strengthening the laws of the land and their application. Businesses will find it increasingly difficult to generate escape velocity.

Sudeep Chakravarti is the author of Red Sun: Travels in Naxalite Country and Highway 39: Journeys through a Fractured Land. This column focuses on conflict situations in South Asia that directly affect business.