Facing local protests: where Vedanta’s erring

Vedanta would do well to pay attention to protests. It bought Mitsui and Co.’s majority stake in Sesa Goa Ltd, a major iron ore extractor and exporter, in 2007

http://www.livemint.com/2009/08/12211913/Facing-local-protests-where-V.html?h=B

Root Cause Sudeep Chakravarti

There was a flap in the last week of July when human rights battleaxes, among them writer Arundhati Roy and former rock-star spouse Bianca Jagger, cut into Vedanta Plc in London. Timed around the UK-based metals and mining conglomerate’s annual general meeting, protesters included a representative of the Dongria Kondh tribe from Orissa. They were criticizing a bauxite mining project in the region of Niyamgiri by a joint venture in which a subsidiary of Vedanta has “controlling” interest.

The grouse of Roy, Jagger and partners is pressing: If you mine in that area, the tribe will lose a home. For the tribe, the issue has taken on added poignancy: The Niyamgiri Hills are sacred to the Dongria Kondh.

In the contentious, increasingly relevant universe where business, human rights, tradition and emotion intersect with urgency, this is a big deal. It’s not unlike a move from some years ago when Sting, the megastar musician, made common cause with a Caiapó tribal chief from the Brazilian rainforests. If nothing else, it helped reduce the speed at which these forests—worthwhile beyond measure—are being lost.

The activists in London were hoping to hit Vedanta where it hurts, taking their message to influential investors such as the Church of England. (Those who still sneer at what activism can do in a networked world could recall the flak Nike took in the 1990s over its East Asian sweatshops. The same as finance, industry and business, activism and public opinion, too, benefit from shrinking time and space.)

For its part, Vedanta has not made a counter move, except to claim what businesses usually do at these times: display go-ahead paperwork; in this case, from the Supreme Court of India.

This signals the weight of the paper the order is written on, and potential millions of bauxite ore Vedanta will extract to feed its alumina factories. But, in terms of true resolution of conflict at the local level, it will have meant little.

If the corporation had cared, protests would not have happened. Convergence these days goes beyond the meeting ground of business and politics, or the point where the advice of consultancy “suits” merges with the ethical fig leaf of that much abused phrase—corporate social responsibility, or CSR—their clients look for. All too often, CSR is merged with another acronym—R&R, or resettlement and rehabilitation—without understanding the dynamics that operate in areas where a project, whether extractive or manufacturing, inevitably displaces people. This happens in a physical and economic sense; and emotional displacement that chief executive officers, business planners, accountants and engineers may not care to understand. (Perhaps the flaw in the concept of human resource has always been that, it is practised with those under a corporate umbrella, rarely with those adversely affected on account of a company’s activities.)

Businesses also feel strengthened, even invulnerable, if they are in partnership with a government entity—as is the case with Vedanta’s mining project in Niyamgiri. In these situations, the idea of eminent domain—that permits government to expropriate land for the greater good—is more often than not abused in spirit and execution, where resettlement always takes precedence over rehabilitation. It is no secret that state governments typically look to MoUs (memoranda of understanding) as a cocaine addict looks for the next energy high, signing billions of dollars worth, optioning a range of arrangements from tax breaks to clearing the intended patch of land, to what the Chinese so eloquently call “fragrant grease”. Orissa, Jharkhand, Chhattisgarh, Karnataka, Maharashtra, Haryana and West Bengal have proved particularly susceptible to MoUs and messing with eminent domain.

In these places, deliberate, lamentable misunderstandings lead to negative energy—the sort that local activists and their more aggressive cousins, Maoist rebels, are increasingly adept at leveraging. All these states are in the footprint of churn or violent resistance to business and administration. In Niyamgiri, protesters could join issue with any weapon at hand. Past a point of no return, they will not seek either judicial or administrative approval—or for that matter, celebrity endorsement.

Vedanta would do well to pay attention to protests. It bought Mitsui and Co.’s majority stake in Sesa Goa Ltd, a major iron ore extractor and exporter, in 2007. Sesa Goa is now engaged, along with other local operators such as the riotously controversial Sociedade de Fomento Industrial Pvt. Ltd, in staving off allegations of callousness in and around their Goa mines. This time next year, Vedanta could see Goan protesters in London.

Sudeep Chakravarti writes on issues related to conflict in South Asia. He is the author of Red Sun: Travels in Naxalite Country. He will write a fortnightly column on conflicts that directly affect business.

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