India Inc. stuck

India Inc. stuck

Suman Layak and Kushan Mitra

September 4, 2008

http://businesstoday.digitaltoday.in/index.php?option=com_content&task=view&id=7233&sectionid=22&issueid=24&Itemid=1 O big Tata You lent your fire and our iron you took The shades of Mahua trees you took (Folk poetry from areas around Jamshedpur) Ratan Tata, Chairman, Tata Group It’s not easy being Ratan Tata these days. In Singur in West Bengal, he has to contend with agitators who want him to return a part of the agricultural land allocated to his dream project, the Nano, back to the farmers. At the time of writing, threats by protestors to the workforce had resulted in a shutdown at the plant. Commercial production of the much-touted Rs 1-lakh car was to start in October, but looks virtually impossible now. As Business Today went to press, the possibility of Tata Motors moving out of West Bengal lock, stock and Nano appeared very real. Yet, Singur is just one troublespot for the highly-diversified Tata Group, which has a clutch of other companies in its stable that is hungering for growth. Just one of those companies is Tata Steel, which is seeking to put up a 6-million tonne, Rs 22,000-crore steel unit in Kalinganagar in Orissa. The company is also seeking to build a port in Dhamra on the Orissa coast. As if the Singur showdown wasn’t enough last fortnight, at the annual general meeting (AGM) of Tata Steel in Mumbai, the 70-year-old Chairman had to contend with belligerent activists who were also shareholders. The object of their ire isn’t too different from that of the Singur protestors—Tata is apparently using land that, well, it should not be using for industry. Singur protest: Mamata Banerjee is demanding 400 acres of land be returned to the original owners. Tata Motors says it needs all the land Representatives of environmental activist group Greenpeace stormed into the AGM in the guise of shareholders of Tata Steel, got on to the podium and alleged that the proposed port at Dhamra will kill the migratory Olive Ridley turtles there. Tata cajoled these Greenpeace members to agree to meet B. Muthuraman, Managing Director of the steel giant, on September 10. When one activist insisted that Tata himself should be talking to Greenpeace, the Chairman threatened to unleash the company’s lawyers on the group. By then, it was the turn of other shareholders to get into the act. A few of them were keen to know the status of the steel plant in Kalinganagar. The Tatas have been facing violent protests in that region for the past two years. That’s when Tata summed up the huge predicament staring not just the Tatas in the face, but some of India’s biggest businessmen: “The issues at Singur and Kalinganagar are different. However, whether you want to build an industrial unit or mine for ore, you have to do it on agricultural land—and that is an issue we have to deal with.” Click here to Enlarge It’s an issue that’s keeping others awake at night too—others, like Mukesh Ambani who is struggling to make headway in acquiring land for two of his special economic zones (SEZs), one in Haryana and another on the outskirts of Mumbai, in Maharashtra; like L.N. Mittal, Chairman, ArcelorMittal, who is keen to put up steel units in Orissa and Jharkhand; like South Korean giant POSCO, whose steel project and SEZ are facing the same hurdles: of land acquisition. The list is long, but as estimates by the Centre for Monitoring Indian Economy (CMIE) indicate, of the total investments of Rs 70 lakh crore planned in the country, projects worth a massive Rs 2.5 lakh crore are facing resistance in acquiring land. It’s an alarming situation—alarming enough for Mukesh Ambani, in late-August, to speak out on behalf of the Tatas. And also on behalf of all other mega-projects that are stuck (including his own). “A fear psychosis is being created to slow down certain projects of national importance. This will be counterproductive for the country’s economic growth, its global image as well as our ability to attract investments from across the world. Indian industry and the political leadership in the country need to work together to deliver on the aspirations of the millions of Indians in urban and rural areas,” said Ambani. Simmering in Singur Orissa SEZ protest Clearly the current flashpoint is Singur, where protestors, mainly members of Mamata Banerjee’s Trinamool Congress (TMC), are showing little signs of backing down, as one of Business Today’s correspondents who visited the area observed. “See that is my land, I will not let this wall be completed. Not for any sum of money,” declares Proshanto Singha, a local farmer, pointing a finger over the western wall of the Nano plant. Singha can’t do much since the project site is manned by a large police force, but warns ominously that he will support didi’s (Banerjee’s) agitation at the site. Becharam Manna, a TMC supporter, is sitting at the block headquarters in Singur town and claims that Banerjee’s agitation will go on for as long as it takes. “If need be we will celebrate Durga Puja on the highway. We will not let the factory be built here.” The nub of the problem: Banerjee is demanding that 400 acres of the 997.11 acres allocated to the project be returned to its original owners. Tata Motors, of course, says it needs all the land as one block not just for the main plant but for ancillary units, too. Cut to Orrisa. At least two big projects, of POSCO and Anil Agarwal’s Vedanta Resources, are stalled because of hurdles in land acquisition. Vedanta’s Indian arm, Sterlite Industries, wants to mine bauxite reserves in the Niyamgiri hills in the Kalahandi district of Orissa. The metals giant has already built an alumina refinery at the foothills, and has got the go-ahead from the Supreme Court to mine on the hills. The problem? K.M. Birla, Chairman, Aditya Birla Group The Niyamgiri hills are the abode of Dongria Kondh, an indigenous tribal community. Although Sterlite claims that the site where it proposes to mine has nobody residing within 15 km, the Dongrias aren’t convinced. For them, the mine will desecrate the abode of their god Niyam Raja and, more alarming, threatens to destroy their way of life by destroying the streams. The commercial benefits of the mine have cut no ice with the Dongrias; their leader, Kumuti Majhi, has even gone to London to explain to Vedanta shareholders how digging up Niyamgiri is akin to digging up the St Paul’s Cathedral there. Global activist groups like ActionAid, Survival and Amnesty International have joined him in his cause. Pramod Suri, Head of Aluminium Business at Vedanta, reiterates what Chairman Agarwal told shareholders in London in July. “Without taking the people into confidence we cannot mine the area. We have to explain how we will improve their life.” Suri says Vedanta is already working on bringing electricity to 20 villages in the region and working on a project to eradicate malaria. “The Supreme Court took three years to deliver its judgement on the issue after looking at every aspect of protecting the environment. The kind of mining that we will do has been done by Nalco for 25 years. We will not start mining at 20 spots at the same time; and as soon as we vacate an area we will reforest it.” Mukesh Ambani, Chairman, Reliance Industries The Dongrias aren’t the only people who are trying to preserve their way of life in the face of what seems to be good economics—these projects, if they do come on stream, will generate industrial growth and employment. Still, in Orissa, Korean steel major POSCO is also up against a confrontational local populace. The development of its proposed 12 million tonnes per annum steel plant near Paradeep Port will need all of 4,004 acres. As Vishal Dev, Chairman, Industrial Development Corporation of Orissa (IDCO), points out: “Only 436 acres (of that land) is privately-held; the rest is government land, and now the Supreme Court has even given the project environmental clearance.” But that hasn’t quelled the protests. The anti-POSCO movement has spread across villages. Abhay Sahu, Chairman of the POSCO Pratirodh Sangram Samiti (PPSS), says the village of Dhinkia will lose a third of its area to the proposed plant. The erudite Sahu contends that he is not against industrialisation. “But this is fertile land, and the betel-vine (paan) that are grown here provide a ready source of money and employment. While the vines grow on government land, they have been here for centuries. There are 3,000 vines in the village area, and each vine provides Rs 1 lakh of income every year.” Then, there’s Tamil Pradhan of Nuagaon, another village affected by the POSCO project. Pradhan is a leader of the United Action Committee (UAC) formed by the villagers to support the plant and to bargain for an R&R package. He explains that the villagers were against the project initially. “But now, we are already seeing some benefits. Land prices are rising, and people are making plans based on the plant. It will be a disaster if the plant does not come here, but at the same time the compensation must be good.” The current status, however, isn’t encouraging for POSCO. Construction, which was supposed to start earlier this year, is nowhere near beginning. “We haven’t been given possession of any land as yet,” says S.K. Mahapatra, General Manager, Human Resources & Public Relations, POSCO-India. “We will only start acquiring land once our R&R package is cleared by the government.” Another promoter who has a lot riding on a sound R&R package, and policy—some Rs 70,000 crore on two SEZs—is Mukesh Ambani. He is is building the twin SEZs named Navi Mumbai SEZ and Mumbai SEZ covering almost 25,000 acres of land. The Mumbai SEZ, in Raigad district on the outskirts of Mumbai, is being built by privately-owned companies and Anand Jain’s Jai Corp. To ensure contiguity in the Mumbai SEZ, the Maharashtra government notified the acquisition of 20,285 acres of land in 45 villages of Pen, Panvel and Uran Talukas in Raigad District. Of this, about 5,000 acres have already been bought by the company on a “willing-buyer willing-seller” basis, but resistance from farmers has made the going tough. “It’s a challenge,” is how Jain, Chairman, Jai Corp, which has a 10 per cent stake in the project, put it to BT recently. “We are not moving any of the 45 villages in the SEZ and these people will be the first to benefit,” he adds. Anil Agarwal, Executive Chairman, Sterlite Industries In Gurgaon, Ambani has come under fire for giving farmers inadequate compensation. Led by erstwhile Congress leader Kuldeep Bishnoi, the protests have seen regular blockades, including a crippling obstruction of the Gurgaon Expressway in June. According to observers, Reliance has been offering Rs 22 lakh per acre for the Haryana SEZ. However, negotiations are on as farmers are now asking for Rs 1 crore per acre, which may be close to the prevailing market price. But what may help Reliance in Haryana is the state government’s innovative R&R policy. A big worry for industrialists is that once a project is delayed, it can stay stuck for a decade and more. Utkal Alumina, a project that started off as a joint venture of Indian Aluminium, Canadian Alcan and Norwegian company Norsk Hydro, has made no headway in Orissa for almost 12 years. Reason: hostile land owners. Last year, the Aditya Birla Group took over total ownership of the joint venture. Says a spokesperson of the Aditya Birla group: “There were problems related to land before we took over the project. Now, there is little problem.” Brave words those, but reports suggest that Chairman Kumar Mangalam Birla met the Chief Minister of Orissa, Naveen Patnaik in July, to discuss the R&R issue.\ There are no easy answers to these high-stake stalemates. Whilst landowners would seem within their rights to preserve their way of life, industry inevitably will have to trample on agricultural land in its quest for growth. Somewhere between these two extremes there has to exist a middle path. Compensating landowners in true free market style may be one answer. Outlining a clear R&R policy is an imperative for the government. Eliminating speculative middlemen from the process of land acquisition is another. And corporations need to spend some thought on winning the confidence and support of the local populace before venturing blindly like pillaging land-grabbers. In the next few pages, Business Today attempts to analyse the lacunae in policy measures, and also delves into some of the successful cases of land acquisition by promoters. Additional reporting by N. Madhavan

Opposition to Dhamra port

Greenpeace activists blockade TATA HQ, demand that the Company
demonstrate corporate environmental responsibility

Mumbai, 20th August 2008 – In the absence of evidence that the TATAs
will honour their commitment to ensure no harm to Orissa's Olive
Ridley turtles, Greenpeace activists intensified their campaign to
stop the Dhamra Port today, by taking the issue back to Bombay House,
TATA Group headquarters. Activists dressed in turtle costumes
blockaded the building and vowed not to move until they received a
commitment from the TATA Management. Present also were Greenpeace
volunteers distributing fliers and carrying laptops, from where,
concerned members of the public signed onto an ongoing online
campaign, and join 90,000 other cyber activists, who have asked Mr.
Tata to relocate the port (1).

Greenpeace has been campaigning for several years now to demand that
the TATAs drop their plans to build a controversial port at Dhamra,
Orissa. The port is in the close proximity of the Gahirmatha Marine
Sanctuary and the Bhitarkanika National Park (India's second largest
mangrove forest and home to the saltwater crocodile). Gahirmatha is
one of the largest and last mass breeding and nesting sites for the
Olive Ridley Turtles in the world (2). Its location, for years has
been a matter of serious concern to conservationists, hundreds of
scientists and academics, including turtle experts, as well as fisher
groups such as the National Fishworkers' Forum and the Orissa
Traditional Fishworkers Union (3).

Speaking to the media, Areeba Hamid, Oceans Campaigner, Greenpeace
India said, "The TATA's track record on this issue is far from good.
In 2004-2005, when they got involved, they repeatedly voiced the
opinion that turtles are not found near the port site, and hence it
poses no threat. They had even stated that they would reconsider their
involvement if there was evidence of environmental or ecological
significance of the area. Now that the evidence of turtle movement and
ecological significance of the port site has grown (4), the company's
stance has shifted to mitigation, with earlier promises forgotten, a
convenient and not very ethical shift in goal posts".

Despite repeated requests, TATA officials refused to an on-the record,
in-camera meeting with Greenpeace, insisting that any meeting be in
the absence of the media/cameras. Greenpeace was insistent that any
meeting be recorded in full transparency, given the past history of
verbal promises and assurances made by various TATA officials that
have not been fulfilled.

Meanwhile, PR consultants hired by the TATA have been asking for a
meeting with Greenpeace. While Greenpeace has continued to maintain
its readiness to meet, Ashish Fernandes, Oceans Campaigner stressed
"TATA needs to act on its prior commitments and immediately halt
construction of the port project, and this is non negotiable. It is
only too easy for the TATA to host meaningless discussions, while
simultaneously continuing construction and creating a fait accompli."

The Environmental Impact Assessment (EIA) Study, done in 1997,
considered a port with significantly different specifications from the
project currently being built. The initial proposed capacity was 20
million tonnes per annum (mtpa) where as the proposed capacity is now
83 mtpa. The original project was to handle bulk carriers up to
120,000 deadweight tonnage (dwt); the revised plan proposes handling
ships up to 180,000 dwt. As if this isn't bad enough, the EIA has no
accurate baseline ecological data. And shockingly the 1997 EIA
considered a different port site, on the nearby Kanika Sands, whereas
the port is now being built on the mainland, north of the Dhamra river
mouth.

Despite its ecological significance, the Dhamra area was purposely
excluded from Bhitarkanika and Gahirmatha Sanctuaries to facilitate
the Dhamra Port (5). In March 2007, the Department of Forest –
Wildlife, Government of Orissa, proposed the notification of an
eco-sensitive and eco-fragile area around Bhitarkanika, which includes
the Dhamra port area. Predictably, the top brass of the State
Government has once again ignored this proposal.

In April 2008, international banking giant BNP Paribas had confirmed
to Greenpeace that it is not considering refinancing a part of the
Dhamra Port. This announcement came after the bank had commissioned an
unnamed independent expert to look into environmental and social
aspects concerning the project.

Shockingly, despite the public furore, Tata Steel's corporate
sustainability report boasts that, "…there are no national parks/wild
life sanctuaries/CRZ/other sensitive and notified areas within 10 kms
of any current or proposed sites..." This, despite the fact that the
Dhamra port is less than 15 kms away from the nesting site in the
Gahirmatha Sanctuary and less than 5 km. from Bhitarkanika National
Park (6).

"Scientists are opposed to the port, conservationists are against it,
international lending institutions clearly want to protect their
reputations, and now nearly one lakh Indians – most of them TATA
customers – are asking Mr. Tata to place the survival of this species
above increasing TATA profits. What more does Mr.Ratan Tata need? If
the TATAs want to maintain their reputation for being sensitive to
social and environmental concerns - they have no choice but to
withdraw from this ecologically disastrous project. Only this can keep
the TATA legacy intact", added Areeba.

For more information, please visit www.greenpeaceindia.org or contact:

Ashish Fernandes, Greenpeace Oceans Campaigner, +91 99801 99380,
ashish.fernandes@greenpeace.org
Sama Adil, Greenpeace Communications, +91 99009 70627,
sama.adil@in.greenpeace.org

Notes
(1)     Log onto www.greenpeace.org/turtles
(2)     Under India's Wildlife Protection Act, all species of marine
turtles, including Olive Ridleys, are accorded with a Schedule I
status of Protection, on par with the tiger.
(3)     Refer to
http://www.mangroveactionproject.org/news/action-alerts/stop-port-construction-save-ridley-sea-turtles-sept-oct-2007/
and http://salsa.democracyinaction.org/o/1541/t/4058/petition.jsp?petition_KEY=835
(4)     In 2007, a survey commissioned by Greenpeace and conducted by
Dr. S.K. Dutta of the North Orissa University established the presence
of rare species of amphibians and reptiles at the port site. The study
also revealed the presence of over 2,000 turtle carcasses on, and near
the area (http://www.greenpeace.org/india/press/reports/greenpeace-biodiversity).
Moreover, the Wildlife Institute of India conducted a study in
2001with 4 turtles fitted with satellite transmitters. Of these, one
is reported in the waters off the Dhamra Port. To date, this is the
only concluded telemetry study carried out on turtles in coastal
Orissa for which the results are publicly available (refer to
http://www.wii.gov.in/webs/satindex.html)
(5)     The Orissa State Govt. in December, 1997 issued a fresh
proclamation under Section 21 of the Wild Life (Protection) Act to
exclude the proposed port area from Bhitarkanika Sanctuary. When the
final notification for Bhitarkanika was issued in September 1998, the
area was reduced from 367 sq km to 145 sq km. Further, when the
proposal for the Gahirmatha Marine Sanctuary was being drawn up by the
Wildlife Department in 1997, the Orissa state government ordered (vide
letter 11693 dated 20/6/97) that the proposed Dhamra Port area be
excluded from the draft notification of the sanctuary.
(6)     Refer to
http://www.tatasteel.com/hindi07/corporatesustainability/sustainability05-06/page-053.htm).

Turtles invade Taj Land's End, seek new home

Turtles invade Taj Land's End, seek new home

Mumbai, June 26, 2007: Under threat of displacement by Tata's mega port at Dhamra in Orissa, four 'Olive Ridley Sea Turtles' sought refuge in the swimming pool of the Taj Land's End Hotel (a Tata concern) at Bandra. Tongue in cheek, the turtles opened a banner that read 'Tata, No Room for Turtles?' a pun on the hotel's slogan 'No Room for the Ordinary'.

"The Tatas' port at Dhamra in Orissa is going to jeopardize our mating and feeding grounds. Ratan Tata is callously ignoring our pleas to save us, and so we have now been forced to come to the Taj in search of an alternative home", said Turtle Spokesperson Jitesh Mohanan. "On June 19^th, 2007, we approached approached Tata AIG Life Insurance for insurance cover since the Tatas were destroying our homes and lives. Since the Tatas refused to grant us insurance, we have now been forced to invade the Taj, in the quest for a new habitat" he added.

Tata Steel's proposed port is less than 15 km. from the world's largest mass nesting site at Gahirmatha, where up to 500,000 turtles have been known to nest in a single year. Tata's has always maintained that turtles are not found near the port site, and if evidence of their presence was recorded, they would reconsider the port. In March 2007, a study conducted by renowned herpetologist and member of the IUCN's Amphibian Specialist Group Dr. S.K. Dutta unequivocally established the presence of turtles in the offshore waters near the port. (1) The study also recorded other rare species on the port site itself, which have been ignored in the Environment Impact Assessment (EIA) done for the project. (2)

Greenpeace has been in touch with the Tatas since May 2007, on this issue, but the points raised by the study have yet to be addressed. Tata Steel has continued to claim publicly that the port will not impact turtles, though they have not been able to provide any evidence for this statement. Further, the company has chosen to ignore specific scientific concerns raised by Greenpeace, through the Critique of the Dhamra EIA report as well as the findings of the biodiversity assessment which Greenpeace had commissioned.

"The TATAs are jeopardizing their reputation for integrity by refusing to address this issue ina direct and straightforward manner. Greenpeace is calling on Ratan Tata to walk the talk and act with the integrity that JRD Tata and the other legends of the family would be proud of. If the Tatas truly value our country's environment, they must pull out of the Dhamra port project", said Ashish Fernandes, Oceans Campaigner with Greenpeace India.

For more information contact:

Ashish Fernandes, Oceans Campaigner +91 99801 99380,

ashish.fernandes@in.greenpeace.org

Saumya Tripathy, Greenpeace Communications +91 93438 62212 saumya.tripathi@in.greenpeace.org

(1) The biodiversity assessment conducted by Dr. S.K. Dutta recorded the presence of over 2,000 turtle carcasses on the port site, probably victims on mechanized fishing in the waters off the port site. Other significant findings include a large population of horseshoe crabs and rare frog and snake species that are the the first confirmed records from mainland India. The complete report is available at www.greenpeace.org/india/press/reports

(2) The Dhamra Port EIA has been scientifically critiqued by Greenpeace scientists from the School of Biosciences, Exeter University and has been found to be fundamentally flawed. This critique is available at www.greenpeace.org/india/press/reports

Dhamra port: threat to Orissa's Olive Ridley Turtles

GREENPEACE Press Release

Evidence of turtles, rare species at Dhamra: TATA must drop port

Mumbai, June 8, 2007: A Greenpeace-commissioned study has unequivocally established that TATA Steel’s port at Dhamra in Orissa would be an ecological blunder, causing irreversible destruction. The North Orissa University team, led by Dr. S.K. Dutta (1) has found evidence of the presence of Olive Ridley turtles as well as other rare species in and around the Dhamra port site. Although the site is less than 5 km. from the Bhitarkanika Sanctuary, India’s second largest mangrove forest, and less than 15 km. from the Gahirmatha nesting beaches, the world’s largest mass nesting site for Olive Ridley sea turtles, Tata Steel have claimed that the port will have no impact on the turtles
Releasing the report on World Oceans Day, Dr. Dutta, Principal Investigator of the study, said, “This finding shatters the theory that the offshore waters near Dhamra are a no-turtle zone. Even though this is not a turtle nesting ground, over the course of the study, we have recorded over 2,000 dead turtles, victims of mechanised fishing, on the port site and in nearby areas like Kanika Sands.” (2)
“Aside from the turtle aspect,. the Dhamra area is intrinsically rich in biodiversity and deserving of special protection. The area is very important for horseshoe crabs. We have also made two exciting discoveries on the port site itself: the rare Crab-eating Frog is the first record from mainland India, and the White-bellied mangrove snake has thus far only been reported once on the mainland, from the Sundarbans”, Dr. Dutta added.
The port area is an important breeding and nesting ground for the King Crab or Horseshoe Crab, a little known species. Over 1,300 individuals were recorded in the study area, trapped in fishing gear. Further highlighting the ecological significance of the area is the presence of the Crab-eating Frog, F. cancrivora, which has only been reported from the Andaman & Nicobar Islands and Southeast Asia until now.
“This is the real test of The Tatas’ claims to be environmentally responsible, a corporate group that would never harm the environment. Ratan Tata has promised to ‘address environmental concerns (concerning Dhamra) in the best possible manner’. (3) Tata Steel have repeatedly asserted that there is no scientific evidence to suggest that the port will harm the turtles and if there was they would not build the port. It is time for them to walk the talk. These findings leave them with no option but to withdraw from the project. It is not possible to ‘mitigate’ damage later. This would also be contrary to the precautionary approach that the Tatas claim to stand by” said Ashish Fernandes, Oceans Campaigner with Greenpeace. (4)
While the project has been cleared by state and central authorities, the Environment Impact Assessment (EIA), the basis for this clearance, has recently been exposed by Greenpeace scientists, as being fundamentally flawed and completely inadequate to gauge the project’s ecological impacts (5). The Tatas have yet to respond to this scientific critique.
“We are calling upon the Tatas to withdraw from the project in the light of this new evidence. There is absolutely no way they can build the Dhamra port while simultaneously claiming to respect the environment. For a group that prides themselves on their ‘legacy’, the question they need to answer is, what kind of environmental legacy will they leave behind if the Dhamra port is built?” asked G. Ananthapadmanabhan, Executive Director of Greenpeace.
-------------------
For more information contact:
Ashish Fernandes, Oceans Campaigner +91 99801 99380,
ashish.fernandes@in.greenpeace.org

Saumya Tripathy, Greenpeace Communications +91 93438 62212 saumya.tripathi@in.greenpeace.org

G. Ananthapadmanabhan, Executive Director, Greenpeace +91 98455 35410
ananth@dialb.greenpeace.org

(1) Dr. S.K. Dutta is a member of the IUCN’s Amphibian Specialist Group and Captive Breeding Specialist Group and is also the Head of the Department of Zoology at the North Orissa University.
(2) In addition to these current findings, a satellite telemetry study, done by the Wildlife Institute of India in 2001, showed turtle movement near the port site. A Greenpeace team also recorded mating turtles in the waters north of Kanika Sands, off the port site, in February 2006.
(3) Letter to Greenpeace, December 2004.
(4) As a member of the United Nations Global Compact, Tata Steel has endorsed Principle 7, the Precautionary Approach to environmental challenges. http://www.globalcompact.org/AboutTheGC/TheTenPrinciples/principle7.html
(5) The Greenpeace critique of the 1997 Dhamra Port EIA can be found at www.greenpeace.org/india/press/reports/critique-of-the-environmental