MAC/20: Mines and Communities

Vedanta Damned

Published by MAC on 2009-07-20

In June 2009, the Expert Appraisal Committee (EAC) of India's Ministry of Environment and Forests (MoEF) met to finally consider an application, first made in 2007 by UK-listed Vedanta Resources plc, for a major expansion of the company's bauxite mines at Bodai-Daldali, in Chhattisgarh state.

At issue was the plight and status of 261 Adivasi (tribal) families who had already suffered at the company's hands. Some of these Baigas had been removed from their homes to make way for mining, while the remainder were being threatened with eviction as Vedanta's operations spread through their hill-top villages.

The EAC's decision last month was unequivocal: Vedanta - through its subsidiary Balco - must not be allowed to proceed with its expansion. The committee found that not only had the British company violated basic rules on resettlement and rehabilitation; it was - put bluntly - a company that could not be trusted.

Background

The Bodai-Daldali bauxite prospect is remote by any yardstick. Access is through a long, steep and winding road, to a plateau which commands majestic views over rich forests and is home to several Indigenous communities who have farmed the land for generations.

In 2006, photographic evidence was presented at Vedanta's London annual general meeting (AGM), graphically demonstrating that the company had already destroyed some of the bauxite-rich hilltop and was ruthlessly exploiting a mainly tribal workforce, sub-contracted for day labour on a pitiful wage and deprived of virtually any safety equipment or social and medical benefits.

Vedanta's executive chairman, Anil Agarwal, promised on that occasion to "investigate" these allegations and report back. He didn't so, and the situation did not improve. The issue was raised once more at the mid-summer 2007 AGM. Once again, Agarwal failed to provide an adequate response.

Meanwhile, Vedanta/Balco had applied to the MoEF to extend its operations at Bodai-Daldali five fold. (This was a forerunner of Vedanta's intentions, expressed shortly afterwards, to increase by six times the capacity of its Lanjigarh alumina refinery in Orissa).

The proposed expansion was unequivocally rejected by the EAC in October 2007, due to what it described as Vedanta's "poor performances in the conservation of the rich bio-diversity of the area and the wildlife and rehabilitation and resettlements of the affected and to be affected population of [the] families."

For a third time, the issue was raised by a London shareholder at Vedanta's August 2008 AGM, when the company claimed it had already presented a revised expansion plan to the EAC, implying that this was likely to be accepted.

In fact, what the company had done was to make a somewhat obtuse argument to the EAC, based on the comparative market value of bauxite at the site and the economic necessity to mine it. Vedanta also claimed to have improved its processes for relocating and compensating, both the removed and to-be-removed, families.

The Indian government instructed the EAC to review the company's application. This the committee did in November 2008, when it acknowledged that Vedanta/Balco had "taken some initiatives in the conservation of forest and wildlife by depositing some money with the State Forest Department." The company had also "detail[ed] its proposed activities on socio-economic development".

However, "considering past records of the company," the EAC didn't reverse its earlier decision; instead it appointed a sub-group to assess the prevailing situation around the Bodai-Daldali operations.

The sub-group's visit took place on February 21 2009, although the EAC did not issue a report until June 3rd when it observed that:

• Vedanta/Balco is under a binding obligation to ensure proper relocation and resettlement of 261 affected families who have lived "for generations" in four villages at Bodai-Daldali

• Until February 21 2009 (wrongly given as September 21 2009 in the EAC report) 48 families had been "shifted" to four relocation sites. By April 24th 2009, the figure had reached 72. As of that date, there were still 189 families "yet to be resettled besides the rehabilitation of the 261 families to be completed." (1)

• In any event, the families' "land holdings, admissible compensation amount and amount actually paid" have not been submitted to the EAC. Thus, as of June 2009: "[T]he actual status in this respect is not known to the EAC. This is a critical input in coming to a conclusion if the progress in the resettlement process is in the right direction." Nonetheless, the EAC did feel able to conclude that "[P]rogress so far in the resettlement of the families to be displaced is far from satisfactory...even if only the disbursement of compensation money for land oustees is taken into account."

• Although Vedanta/Balco claims to have provided well above the normal market rate in compensation, the EAC declares there are "quite a good number of project proponents who have reported...a more liberal compensation as a conscious decision to ensure the good will of the local people."

Moreover, since "the lands in the area are productive, though not very productive..." though are "much more valuable [to the company] for the purpose of mining", the conventional concept of market price "without any relation to the importance of the lands to M/s BALCO is not relevant." Additionally, says the EAC: "[T]he annual return on a fixed deposit in the Bank is not attractive, specially for small land holding families."

• Many families do not have verifiable title to the land; as a consequence of which Vedanta/Balco has refused to compensate them for such losses. The number of these families is "anybody's guess" - since the company has not yet provided records of their status. They "would have been living [at Bodai-Daldali] for generations and even the State has not thought it prudent to deprive them of their continuing to enjoy the benefits of the lands under possession."

• The EAC considered whether, ex post facto, Vedanta/Balco might receive environmental clearance for the mine so long as it provided adequate compensation.

While the EAC recognises this to be fairly common practice in other situations, it says that the "present case is a different one." It points outt that "[t]his is a working mine... since 2003", and the company knew that "261 families would have to the shifted during the course of its mining operation."

• Thus, regardless of any deliberations over future expansion, "the company is under the obligation of compensating and rehabilitating such families."

It is "sheer coincidence", comments the EAC," that the issue has become relevant and known to the EAC while considering the proposal for expansion."

Significantly, the committee also judges that, "if the request of the company to grant environmental clearance is accepted [even] with the condition as suggested by M/s Balco, the EAC will not only [be ignoring] the lapses on the part of the company but also will acquiesce in the same."

In other words, the EAC brooked no acceptance of Vedanta's past violations at Bodai-Daldali, nor would it subscribe to allowing the company to commit any future violations.

Having considered " the past records of the company and very slow progress in implementing the R&R plans, even for the existing operation", and in light of Vedanta's failure to provide basic data (on the number of impacted families, the type and amounts of compensation, and on proposed rehabilitation measures) the EAC therefore concluded that:

"[E]nvironmental clearance for the expansion proposal is not possible."


Note

(1) In what appears a manifest contradiction, the EAC report also notes that "only 24 families" had been shifted to the resettlement sites by April 24th this year. Presumably a distinction is being made between the effective "dumping" of people as distinct from a concerted effort made to provide them with sustainable livelihoods and housing.]


Nostromo Research comments: Despite the ambiguity of some statements in the EAC Report, its overall conclusions are abundantly clear: Vedanta has, once again, inexorably blotted its copy book. While they may occupy a relatively small corner of a very large wood, the residents of Bodai-Daldali have suffered egregious harm over six years, with precious little external recognition of their plight.

The Baiga's experiences are by no means unique - though that may afford them little practical comfort. Vedanta's wilful and unapologetic exploitation of vulnerable rural communities, workers, and the surrounding environment, is replicated in neighbouring Orissa, and as far afield as Goa, Tamil Nadu, and northern Zambia.

Once the company gets its claws into a specific project, and its feet on a certain ground, costs are ruthlessly cut , whether environmental or for labour. The dizzying rate of its planned or proposed expansions (at Tuticorin in Tamil Nadu, at Lanjigarh in Orissa; at Korba and Mainpat in Chhattisgarh, at Bidhanbagh in West Bengal, across Goa's iron ore excavations, along Zambia's poisoned copper belt, and in the Kolli Hills) is matched only by its studied defiance of the rules of law.

Many small and several major detailed investigations since 2004 into Vedanta's modus operandi - both legally-based and more generic, such as that of the Norway's Council on Ethics - have exposed a systemic pattern of multiple abuses and violations.

The time is ripe to broadcast this salient fact much further abroad and raise the campaign game.

MINUTES OF THE 34th MEETING OF THE EXPERT APPRAISAL COMMITTEE (MINING) HELD DURING JUNE 2-3, 2009

The 34th Meeting of the Expert Appraisal Committee (EAC) for Environmental Impact Assessment of Mining Projects was held during June 2-3, 2009 at Fazal Hall, Scope Convention Centre, Scope Complex, Lodhi Road, New Delhi. The list of members present is given below.

1. Shri M.L.Majumdar - Chairman
2. Shri B.S. Roy - Vice Chairman
3. Dr. T.K. Joshi - Member
4. Dr. B. Padmanabhmurthy - Member
5. Prof. Binayak Rath - Member
6. Dr. K. Suresh - Member
7. Dr. S. Subramaniyan - Member
8. Dr. A. Mohan Kumar - Member
9. Dr. S.R. Wate - Member
10. Dr. Gurdeep Singh - Member
11. Dr.P.L Ahujarai, (MoEF) - Member Secretary

Dr. B. K. Mishra, Member could not attend the meeting due to his prior commitments.

In attendance: Sh. W. Bharat Singh, Dy. Director, MoEF. The deliberations held and the decisions taken are given as under:

DATE: 03.06.2009.

34.2.12. Expansion of Bodai Daldali Bauxite Mine (ML area 592.551 ha) from 0.3 MTPA to 1.25 MTPA of M/s Bharat Aluminium Company (BALCO) Ltd., at villages Mundadadar, Rabda, Semseta and Kesmardha in Bodla Tehsil District Kabirdham, Chhattisgarh - reg. environmental clearance .

The proposal of M/s Bharat Aluminium Company Ltd (M/s Balco) for expansion of Bauxite mining from its present capacity of 0.3 MTPA to 1.50 MPTA was earlier considered by the Expert Appraisal Committee (EAC) in its meetings held during 18-20 April, 2007 and 11-12 Oct, 2007. The EAC has rejected the proposal in its 14th Meeting held during October 11-12, 2007 on the grounds, inter alia, of M/s Balco?s poor performances in the conservation of the rich bio-diversity of the area and the wildlife and rehabilitation and resettlements of the affected and to be affected population of 261 families. The company approached the MoEF in October 2008 requesting for re-consideration of the matter in view of actions taken in relocation and rehabilitation of project affected population. Accordingly, the proposal was re-considered by the EAC in its 27th meeting held during November 4-5, 2008. It was noted that M/s Balco had by that time taken some initiatives in the conservation of forest and wildlife by depositing some money with the State Forest Department.

Though M/s Balco made a presentation before the EAC detailing its proposed activities on socio-economic development, the EAC decided that considering past records of the company a sub-group of the EAC should make a site visit to appraise the progress in the rehabilitation and settlements of the affected and to be affected people keeping in mind the observations of EAC in the various meetings and submit a report to the EAC for its consideration. The sub-group consists of Dr. S.R. Wate as convenor, Dr. B. Rath, Dr. S. Subramaniyan and Dr. K. Suresh as members. The sub-group had made site visit on 21.02.2009 and submitted its report. The sub-group also made a video presentation on its findings before the EAC in its meeting on June 03, 2009.

The EAC deliberated on the report of the sub-group and its elaboration during video presentation and observed as follows:

M/s Balco has been operating the mine since 2003. Hence it is under obligation to implement a proper rehabilitation and resettlement scheme, as admittedly 261 tribal families, living for generations in the 4 villages, namely, Mundadadar, Rabda, Kesmardha and Semseta of Bodla Taluk, have necessarily to be shifted elsewhere during mining operation.

The sub-group has reported that till the date of visit (21.09.2009) 35 families had shifted to the resettlement sites at Singhari, 6 families to Baijalpur, 6 families to Mandibata and 1 family to Pachrahi, making a total of 48 families having shifted till 21.09.2009. This figure broadly tallies with the submission made by M/s Balco before the EAC in its meeting held during 11-12 October, 2007 that there were still 210 families yet to [be] shifted. Subsequent to the visit the sub-group received the report that by 24th April, 2009 the above figures of 35 shifted families had reached 59. This means till April 24, 2009 the total number of families shifted reached a figure of 72.
Thus during the last about 2 years since the first meeting of EAC to consider the proposal held during 18-20 April, 2007, M/s Balco had been able to shift only 24 families to the resettlement sites. No comment is called for on the rate of progress of resettlement. There are still (261-72) 189 families yet to be resettled besides the rehabilitation of the 261 families to be completed.

The EAC has noted the findings of the sub-group that some of the displaced families who have been paid compensation are better off compared to their previous standard of living. However, the sub-group has also noted that all the families could not yet be paid compensation.

As noted earlier, altogether 261 families are necessarily to be shifted elsewhere. M/s Balco has not submitted to the EAC in any of their presentations the status of the 261 families, i.e, their land holdings, admissible compensation amount and amount actually paid. The company has not submitted the same to the sub-group also. Thus as on date the actual status in this respect is not known to the EAC. This is a critical input in coming to a conclusion if the progress in the resettlement process is in the right direction.

M/s Balco has projected two components of the R&R scheme- the amount of compensation actually paid to a family has been deposited in Banks as FDR and that rate of compensation per acre of land itself is much higher than the prevailing market rate. While the EAC would not comment on the adequacy about the rate of compensation, there is quite a good number of project proponents who have reported to the EAC a more liberal compensation as a conscious decision to ensure the good will of the local people. The lands in the area are productive, though not very productive, as admitted by the district authorities. For the company the lands are much more valuable for the purpose of mining, hence conventional concept of market price without any relation to the importance of the lands to M/s BALCO is not relevant. Further, in the prevailing interest regime, the annual return on a fixed deposit in the Bank is not attractive specially for small land holding families. Moreover, while land as an asset appreciates in a routine way besides the annual produce of the land, the amount of compensation in lieu of the land remain fixed and static unless the rate of interest is higher than the rate of return from the land by way of the produce. The land owner by his hard work can increase the produce including multi crops on the same land but he has no control over the rate of interest.

The essential eligibility criteria being followed by M/s Balco for the payment of compensation is that the affected person must have a clear land deed/ land records to justify his claim. The sub-group have come across 3 to 4 cases where the families could not be paid compensation for want of valid land records in their favour. The number of such families is anybody's guess in the absence of details of all the 261 families. It is relevant to mention here that of the 4 affected villages, in Keshmardha village alone, which is predominantly inhabited by Baiga Tribe, 75% of the families do not possess valid land records in their favour and they are treated as Beja Kabja land holders (encroachers unauthorisedly) and hence they are not entitled to the payment of compensation. The sub group has concluded that resettlement in this village is incomplete.

Since village-wise list of Beja Kabja land holders have not been provided by M/s Balco, the EAC is not aware of the number of such families. The EAC is not convinced of the argument advanced by M/s Balco in not giving any compensation to such families. But for M/s Balco's mining operation such Beja Kabja families would have been living there for generations and even the State has not thought it prudent to deprive them of their continuing to enjoy the benefits of the lands under possession.

Obviously such lands belong to the State and these tribal families are having usufructuary rights over the lands. If the above criterion adopted by M/s Balco is accepted such families, who are also necessarily to be shifted, cannot be paid any compensation. Such a person after displacement has recourse neither to lands they enjoyed for so long nor to financial compensation in lieu thereof. It is beyond the comprehension of the EAC that M/s Balco has not been able to find a solution to such an inevitable human tragedy. Nobody is going to question the right of M/s Balco if it decides to pay financial compensation to such families as are not having valid land records, and there is no law also to prevent M/s Balco from paying compensation to such persons.

In the meeting held during 4-5 November, 2008 M/s Balco has suggested that environmental clearance can be accorded with a condition regarding rehabilitation and resettlement of the 210 (now 189) families. The EAC in many cases stipulates such condition along with other conditions. The present case is a different one. This is a working mine and M/s Balco has been mining there since 2003. The company was in the know of it that 261 families would have to the shifted during the course of its mining operation. The company is under the obligation of compensating and rehabilitating such families irrespective of the present proposal for expansion. It is sheer coincidence that the issue has become relevant and known to the EAC while considering the proposal for expansion. Thus if the request of the company to grant environmental clearance is accepted with the condition as suggested by M/s Balco, the EAC will not only ignore the lapses on the part of the company but also will acquiesce in the same.

The progress so far in the resettlement of the families to be displaced is far from satisfactory and even if only the disbursement of compensation money for land oustees is taken into account. So far an amount of Rs. 8,11,10,883/- has been paid as compensation of which 5 families alone have received Rs. 1,12,00000/-.

The EAC in the past has noted that M/s Balco had expanded its smelting capacity from 1.0 LTPA to 3.45 LTPA for which the company does not have full captive source of bauxite. The company had indicated that it has been using externally sourced alumina to meet the full requirement of the expanded smelter. Thus even if the present proposal for expansion of the mining capacity is refused M/s Balco's smelting operation remains what it is at present.

In the absence of the following critical information the EAC is not in a position to reconsider the proposal:

i) A list of the 261 families, their land holdings, amount payable as compensation, amount actually paid as compensation besides Rs 30,000/- per family as assistance for relocation.
ii) Number of families already shifted to the new sites of resettlement with reasons for the remaining families not yet shifted even after receipt of the compensation amount.
iii) Number of families not yet paid compensation and other amounts with reasons thereof and the time by which such families would get all the benefits
iv) Numbers of families as are not having any valid land records in their favour and the mode of compensating such families and their resettlements and the time frame.
v) Details of the rehabilitation package envisaging gainful economic activities for the affected families including development of community facilities like grazing lands etc.

M/s Balco's Principal is a multi-state company with enough financial resources. M/s Balco itself has been earning net profit @ about Rs 1000/- crores per annum (as submitted by the company in one of its presentations before the EAC) and hence even a very small percentage of the net profit can take care of the 261 families if the company adopt an imaginative CSR policy with human touch in deserving cases like the instant ones.

Considering the past records of the company and very slow progress in implementing the R&R plans even for the existing operation, the EAC regrets that in the absence of the information referred to in sub-paras (i), (ii), (iii), (iv) and (v) above reconsideration of M/s Balco's proposal for environmental clearance for the expansion proposal is not possible.

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