Vedanta, Posco and Sindhudurg. The issue is the same — the need for a well-thought-out policy relating to extractive and resource-based industry. The government’s withdrawal of mining permission to Vedanta on the Niyamgiri hills in Orissa’s backward Kalahandi district; the divided verdict by the Gupta Committee on the Posco iron ore project; and the environment ministry’s concern on 49 mining licences issued by the Maharashtra government for bauxite and iron ore in the eco-sensitive Western Ghats raise the issue of a fundamental conflict between the real cost of sustainable development and the national imperative to raise living standards of all Indians.
Rahul Gandhi’s dramatic championing of the Dongria Kondh tribe raised the status and expectations of the country’s politically neglected tribal population. More importantly, it raised the issue of charting the future development of affected populations beyond existing constitutional provisions in order to nurture their culture and way of life without detracting from the equal need to bring them acceptable advantages of enhanced living standards.
Without a policy frame, somewhat like a directive principle, which addresses this core issue, national legislation relating to environment protection, coastal zone regulation and forest rights will not by itself achieve the desired result. The appointment of ad hoc expert committees to pronounce on this issue neither provides a consistent policy nor detracts from the presumption of political partisanship.
International experience in countries with indigenous populations like Australia, the US, New Zealand, Brazil, Peru, Chile, Indonesia and others is not the best guide. The conflict between preserving indigenous cultures and sharing the benefits of growth and modernity has been starkly posed everywhere with only a modest degree of success. Policy in this regard has nevertheless moved from paternalistic underpinning towards seeking genuine and informed consent of the affected peoples.
The issue assumes urgency since most of the country’s mineral-rich districts are co-terminus with tribal lands notified in Schedule V of our Constitution. The existence of over 30,000 illegal mines around the country brings out the relatively lax application of the Panchayat Extension to Scheduled Areas (Pesa) Act which requires consultation with tribal panchayats or gram sabhas. It is necessary to take a view not only with regard to Vedanta and Posco that have in-principle approvals, but also the existing illegal mines in the operation where tribal rights, sanctuaries and cultures would have been affected or destroyed.
Indian industry needs assured supply of minerals and metals as also oil, gas and other intermediates to fuel growth. The extractive industry too needs an adequate rate of return on investment. The likely scaling down of projected investment in this sector because of stop-go policies could have a deleterious effect on the targeted FDI inflow for infrastructure growth in communications, industry, agriculture and services.
India needs a national policy on mining covering new mines and all existing mines — legal, conditionally approved, and illegal. The reports of the N C Saksena and Meena Gupta committees were the culmination of the work of a number of earlier committees set up by government. The dissonance in the latter’s findings raises questions of both propriety and transparency.
The government’s new-found resolve to deal with the issue across-the-board, given strong political will at the top, should enable the development of an environmentally sustainable, rights-based and cost-effective policy for value-realisation of our natural resources. A considerable body of case-studies has built up internationally where major multinational entities in extractive and hydrocarbon sectors have shown the way.
The Organisation for Economic Cooperation and Development’s (OECD’s) non-binding guidelines on corporate governance and sustainability for the European corporate sector provide an excellent basis for considering a set of national guidelines which could eventually become law. These guidelines are being effectively observed in specific cases of violation of the rights of people dispossessed or deprived by new and existing mining, exploration, infrastructure and industrial projects.
A number of “best practice” examples can be cited, e.g. Canadian mining company Goldcorp agreeing to commission an independent human rights impact assessment study and submit a detailed action plan to ameliorate violation of communal property rights in its Guatemala operations; BHP Billiton setting up a global ethics panel for quarterly review of non-compliance with the company’s code of business conduct, and their sustainability committee which focuses on HSEC (health, safety, environment and community) risks; and Anglo-American’s Social Way guidelines methodology which uses a 24-criteria scorecard that includes issues like rights of indigenous peoples and complaint and grievance procedures for stakeholders.
India’s resource-based industries need a “road map” for future development that addresses issues relating to environmental sustainability and also provides a code of business conduct that can address the issue of making affected populations stakeholders in the enterprise. The exercise could be started by getting existing permission-holders, like Vedanta and Posco, to submit a plan of action in regard to their proposed or ongoing operations which takes into account the issues listed above. It will provide the framework for a cohesive and national policy.
The author was India’s ambassador to the European Union, also a member of the Vedanta Advisory Board
