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  • 1. Procedural Paper The Resource Curse of the Scheduled Areas: Politics in the Case of the Bauxite Mineral Industry in Tribal Central India Patrik Oskarsson, p.oskarsson@uea.ac.uk Version Date: 23 May 2007 Supervisors: John Cameron Nitya Rao Oliver Springate-Baginski School of Development Studies, University of East Anglia, Norwich, UK
  • 2. Table of Contents INTRODUCTION......................................................................................................................................4 RESEARCH CONTEXT ...............................................................................................................................5 CONCEPTUAL FRAMEWORK AND RESEARCH QUESTIONS ....................................................7 LAND AND NATURAL RESOURCES IN THE TRIBAL AREAS OF INDIA .........................................................8 Land Rights.........................................................................................................................................9 The Mineral Industry........................................................................................................................13 The State’s Eminent Domain ............................................................................................................16 THE POLITICAL ECONOMY OF INDUSTRIALISATION ...............................................................................17 Economic Reform in India................................................................................................................18 Governance over Minerals ...............................................................................................................20 Resource Abundance as a Curse for Poor Countries .......................................................................21 AIMS AND OBJECTIVES ..........................................................................................................................23 RESEARCH QUESTIONS...........................................................................................................................24 METHODOLOGY...................................................................................................................................25 EPISTEMOLOGICAL CONCERNS ..............................................................................................................27 DATA COLLECTION ................................................................................................................................28 Primary Data....................................................................................................................................28 Secondary Data ................................................................................................................................30 TIMELINE ...............................................................................................................................................34 ETHICS IN RESEARCH .............................................................................................................................35 REFERENCES.........................................................................................................................................35 APPENDIX 1 - STATE INCOME FROM ROYALTIES ....................................................................39 APPENDIX 2 - TIMELINE ....................................................................................................................41 List of Tables TABLE 1: KEY FACTORS WHEN COMPARING THE STATES OF ANDHRA PRADESH AND ORISSA ....................26 TABLE 2: KEY INDICATORS TO DETERMINE THE COSTS AND BENEFITS OF MINING. .....................................31 TABLE 3: DETERMINING THE NATIONAL AND STATE EARNING FROM MINING ...........................................32 TABLE 4: MANDATORY CLEARANCES FOR MINING PROJECTS ....................................................................32 TABLE 5: MINERAL ROYALTIES FROM METALS AND OTHER IMPORTANT MINERALS FROM SELECTED STATES (CONTINUED ON NEXT PAGE) ................................................................................................39 TABLE 6: TOTAL MINERAL ROYALTIES FROM SELECTED STATES ..............................................................40 2
  • 3. List of Figures FIGURE 1: MAP OF THE CENTRAL-EASTERN INDIAN STATES ANDHRA PRADESH AND ORISSA. ....................6 FIGURE 2: CONCEPTUAL FRAMEWORK .........................................................................................................7 FIGURE 3: COMPARISON OF ANDHRA PRADESH AND ORISSA SCHEDULED AREA LAND TRANSFER LEGISLATION IN RELATION TO MINING. .............................................................................................12 FIGURE 4: SCHEMATIC VIEW OF PROPOSED BAUXITE MINE ON BAPTHIMALA MOUNTAIN, KASHIPUR, ORISSA. .............................................................................................................................................15 FIGURE 5: INDUSTRIAL SITES OF OBSERVATION .........................................................................................29 FIGURE 6: THE IRON ORE MINES OF KEONJHAR DISTRICT, ORISSA, COVER VAST AREAS OF LAND. BLACK SOOT FROM SPONGE IRON FACTORIES HAVE FURTHER DEGRADED THE LAND SEEN AT THE BOTTOM OF THE PHOTO. .......................................................................................................................................34 * Front page photo: Manual loading of Bauxite ore from mine in Western Chhattisgarh. 3
  • 4. Introduction The hills of the Eastern Ghats of Central-Eastern India contain some of the country's richest mineral1 deposits, particularly in iron, coal and bauxite but are also the home to a majority of India's approximately 70 million tribal people2. Recent economic growth in India as well as increased world metal prices have seen strongly increased interest in mining the deposits that are located on land meant to serve as a source of empowerment economically and socially for tribal peoples. Repeated failures to provide local benefits from large-scale industrial 'development projects' mean every new project will face fierce local opposition. Tribals to a large extent share a history with other rural communities of government failure to rehabilitate those displaced which has become widespread enough for an awareness to settle in among the project affected that unless they resist they will become completely impoverished3. Those that remain in the vicinity of mines or industries that are pushed through by governments and industry claim that lowered groundwater levels, disappearing springs and environmental pollution are making agricultural sustenance even more difficult than earlier (Indian Peoples' Tribunal 2006; PUDR 2005). The generally low education levels in the mining districts additionally mean that only the lucky few will manage to secure a job at a new plant whereas most will see outsiders move in and claim the benefits. It should be quite clear that industrialisation as it is currently implemented has little to offer rural communities. Economic liberalisation in India since the early 1990s has modified the role of the local state as central government funds are no longer available to the same extent to fund projects. States now have to compete among each other for investment from private enterprises, while still bearing the main responsibility for the welfare of its poorest citizens. This dual role of the state is not necessarily new but the scale and speed with which operations are expanding, as well as the increased opportunities a liberalised economy offers the political and economic elites are. The determination of the state to promote industry is most starkly seen in the state violence perpetrated against tribal opposition in 1 Minerals are here understood as non-fuel and non-atomic minerals. Since the geographic area is defined as central India this further reduces commercially exploited minerals to metals and limestone. 2 India's indigenous peoples are usually referred to as tribals or adivasis (the original/first inhabitants). 3 There are many cases in Orissa of villages that have sealed themselves against outsiders and especially government representatives as soon as an industrial project has been declared in their area. Current examples in Orissa are the Utkal Alumina project in Koraput district, POSCO steel plant in Jagatsinghpur district and Kalinga Nagar Industrial Area in Jajpur district. 4
  • 5. the police firings in Kalinganagar in 2006 and in Maikanch in 2000, both in Orissa.4 At the same time the mineral deposits that are available offer hope for socio-economic improvement in a way that no other economic activity can at present. This study takes as its starting point that outcomes of large-scale mining and industry and its related environmental, social and economic implications will to a large extent depend on the interest and capacity of the local state to manage the demands and needs of different stakeholders. Will it intervene to make sure a greater share of the earnings from an increasingly privately run mineral industry remains within the state and if so will it share this with the mineral-producing areas to avoid future local protests? Will the short-term profits when exporting minerals be favoured over for example environmental protection or investments in processing industry that could lead to better long-term sustainability? Following the drastically increased mining in the recent past and with the intention of the Indian government to promote even further mining (see e.g. Government of India 2006b) it is important to understand the priorities, concerns and capacities of the mining states5 to carry out its multiple roles. The bauxite industry6 represents a relevant case study of the contradiction between tribal rights to land and livelihood and large-scale industrial development in Central-Eastern India. It is an industry under rapid expansion due to high international demand, altering the earlier rationale for mining based on national selfreliance through public sector development to an economic model driven by private, and usually international, investment for export growth. Research Context In order to examine the issue in more detail the study will be focussing on two states encompassing the southern stretch of the Eastern Ghats mountain range, Andhra Pradesh and Orissa (see map below). 4 Das, P. (Jan 3 2007) Tribals vow to oppose displacement. The Hindu: Chennai, http://www.hindu.com/2007/01/03/stories/2007010307121400.htm Biswas, R. (Jan 3 2006), Orissa firing fuels tribal ire on MoUs, The Telegraph: Calcutta Sharma, K. (26 Dec 2004). Un-shining India. The Hindu: Chennai 5 India's main mineral producing states are central Indian Orissa, Jharkhand and Chhattisgarh together with Andhra Pradesh for coal and metals. 6 The Bauxite industry includes Alumina refineries, usually located next to the mines, and Aluminium smelters located in areas with low energy costs, in India close to coal mines. 5
  • 6. Figure 1: Map of the Central-Eastern Indian States Andhra Pradesh and Orissa.7 Orissa is often identified as India's poorest state in terms of the proportion of people living below the poverty line. As such the state is excluded from much of the rapid economic development that is taking part elsewhere in India. But within Orissa disparities are as wide as those between the state average and more 'prosperous' states like Tamil Nadu, Karnataka or Maharashtra. Coastal areas including the capital Bhubaneshwar are relatively affluent with an incidence of poverty around 35%, compared to the inland areas that have very high levels at 68% living below the poverty level. The Scheduled Tribes and Scheduled Castes in southern interior Orissa are the poorest groups of all with 92% and 82% respectively below the poverty line (de Haan 2004). The adivasi people of inland Orissa have not only experienced very little progress in terms of human development but also been subject to a range of development projects in water, forest and mining which have expropriated their lands further (Randeria 2003). The scenario for poverty alleviation is difficult to say the least. 7 Specifically, the bauxite deposits are located in the North-East of Andhra Pradesh close to Vishakapatnam and the border of Orissa. In Orissa bauxite is mainly found in the Southern parts of the state but deposits are also found on the Western side of the state 6
  • 7. Andhra Pradesh has been considerably more successful in reducing poverty, having managed to halve poverty between 1993 and 1999 (NSS 2001). The state has received much foreign direct investment (particularly IT investment) but this has primarily benefited the urban middle class in the capital Hyderabad. Rural Andhra Pradesh has witnessed an agrarian crisis even for landed farmers (evident in the much-publicised farmer suicides) and tribal people, particularly across the northern forest belt of the state, continue to suffer from marginalisation and chronic poverty. Whilst the Scheduled Areas in the north-eastern part of the state have not seen large-scale mining since the Supreme Court Samatha judgement (1997) governments of the state have made and are making repeated attempts to overcome what is seen as an obstacle to the industry. The deficiency in human development is on par with the areas across the border in Orissa and as long as communities resist mining plans there is even less money or political incentive to provide the needed hospitals and schools. Conceptual Framework and Research Questions This section outlines the key concepts that will be used for further analysis. Further a set of overall Aims and Objectives are defined and these are refined into precise Research Questions that will guide fieldwork and data analysis. Figure 2: Conceptual Framework Political Economy of Industrialisation Land Rights Land Use Customary Rights Economic Incentives National and ‘Society’ Rights Legal Verdicts and Implementation Social Mobilisation Maoists Power NGOs & Social Movements Elite Capture Political Incentives ‘Resource Curse’ of the Scheduled Areas: • Continued poverty • Increased inequality (to the rest of the state) • Environmental concerns • Potentially increased militant activities 7
  • 8. The proposition of this research is that the issue of land and who has access to land and its resources in the tribal areas, and the greater political economy of industrialisation have interacted to create a sub-national ‘resource curse’ situation for the tribal people who live in the Scheduled Areas of Andhra Pradesh and Orissa (see Figure 2 above). The land which was meant to be home territory to the peoples classified as tribal have for complex reasons mainly come to be vested under the control of the state. When state rights and tribal private rights to land have clashed the courts have been the option for negotiating the different claims. Uneven power relations and the greater economic incentives promised by the mineral industry has generally triumphed other concerns. But outcomes are still far from certain as local groups and individuals mobilise to keep their land or at least receive just compensation for it. Social movements and political parties vie for the support of local people while at the same time aiming to please the powerful industrialists and other elites with interests in promoting industry. The ‘curse’ of mineral resources seems to indicate the continued poverty and lack of influence of tribals amidst resource wealth but constitutional rights and increased mobilisation might open up for more inclusive outcomes. Land and Natural Resources in the Tribal Areas of India India's tribal people, the adivasis, is a social category not easily captured or defined. It comprises a wide range of peoples living across a number of different states, where some have their own religion, language or other customs separating them from 'mainstream' India but others do not or have converted to use religion, language or customs similar to other social groups. As tribals are today more diverse than ever the use of the term has also become more contested (Xaxa 1999). The official ‘definition’ of the Government of India still uses a colonial language which assumes special importance as it is the state that is supposed to provide the main social support systems for tribal people: “The criterion followed for specification of a community, as scheduled tribes are indications of primitive traits, distinctive culture, geographical isolation, shyness of contact with the community at large, and backwardness.”8 Following the official negative definition of a tribal it would seem a natural response for a tribal would be to want to overcome her or his primitiveness, shyness and backwardness. 8 Website of Ministry of Tribal Affairs, Government of India, Delhi, Accessed 2006-11-22, http://tribal.nic.in/schedule1.html 8
  • 9. This would mean to become non-tribal, and assimilate with the rest of society. Roy Burman (2003) offers a more positive way of describing tribal people: "In the normative sense, a definition of adivasis can still be used to cover people who feel rooted in their surroundings, entertain a custodial sense about their territory and resources, are bound together primarily through moral bindings and entertain a sense of reciprocity and mutuality reinforced by egalitarian ethos." The Scheduled Areas of India are those listed in the fifth schedule of the constitution as having a majority of tribal people at the time of India's independence. Since then these areas have faced large-scale migration of non-tribal populations resulting in tribals in some areas no longer being the majority community. At the same time tribal villages 'left out' of the original Scheduled Areas have not been included indicating the status quo that has lasted over the past 60 years on paper (Sarma 2006). In reality major migration flows has taken place both in and out of the Scheduled Areas leading to often radically changed composition of peoples. The support extended to tribals has tended to vary between paternalism in the sense that tribal people should be guided into the light of development and modernisation versus a more idealised image of tribals as environmentally benign beings (Corbridge et. al. 2005). Most rights of tribal people depend on them actually residing in the Scheduled Areas. This includes special land rights, reservation for tribal political leaders in elections, and the possibility to amend any law to suit tribal area conditions. This has caused Baviskar (2003) to claim that tribals are being "incarcerated in nature" by the policies that were meant to support them. The multitude of groups that comprise tribals in India together with the difficulty for them to claim to be more indigenous than other people in at least South India pose major problems when tribal people as a group are trying to ensure rights to land and livelihood. But the definition has existed since the British and has as such become well established. Land Rights Land is a source of income and security for a vast majority of tribal people commonly depending on rain-fed agriculture and collection of minor forest products. In the Scheduled Areas most land has been claimed by the government however, either as forest or as revenue land. This stems from the claim of the government to all land identified as 9
  • 10. forest, as unused so called wasteland, and as hill slopes too steep for agriculture when land records were established. Tribal land title deeds make up much of the remaining private land although non-tribal encroachments have been many over the years (Kumar & Choudhary 2005). Continued intrusions by outsiders and the loss of land by tribal people through money lending, unsettled land records and displacement from industrial and agricultural projects has been a source of contention in the tribal areas for centuries. Starting with the British colonial government and further strengthened by subsequent Indian governments a response has been to introduce special rights to land for the tribal people as the historical inhabitants and cultivators. Whether these special rights were given to the tribal areas by benign rulers recognising the many ways outsiders continued to alienate tribals from land, or a result of tribals asserting their rights to traditional lands remains disputed. Parts of the Bastar area in South Chhattisgarh for example remain unsurveyed by the authorities until today since the area has been considered high in biodiversity as well as in tribals showing very 'primitive traits'. Both these qualities needed to be conserved for the future (Sundar 1998). An entirely different motivation for the creation of special tribal land rights is presented in Arnold (1982) who writes of the "rebellious hillmen" of 19th century Madras Presidency, today Vishakapatnam and East and West Godavari districts of Andhra Pradesh. Though limited in scale, the recurring uprisings against the British administration and local landlords enabled special concessions to be established. The history of violent uprisings in the hills continued when the Maoist rebel group usually referred to as the Naxalites moved to the hills of the Eastern Ghats in the 1950s. Yet another protest movement, this time in Srikakulam district in the 1960s, finally resulted in the very restrictive current legislation in the Andhra Pradesh Land Transfer Regulation Act (1970) (APLTR Act) (Laxman Rao et. al. 2006) (See Figure 3 below for more details on the APLTR Act). Pati (2001) describes several similarly violent rebellions during the 19th century by the Kandha tribe of Kalahandi district of South Orissa. Again the tribals revolted against a combination of the colonial administration and local landlords who cooperated to push the tribe away from its traditional land. According to the APTLR Act in Andhra Pradesh no land in the Scheduled Areas can be transferred to a non-tribal whether owned by a tribal or by the government. Land can not be sold to a non-tribal even if the tribal is in need of selling the land and the main (legal) 10
  • 11. ways of transfer will thus be through inheritance or between tribals. The regulation is strict enough to state that any non-tribal having land in the Scheduled Areas can be assumed to have taken this land from a tribal and is thus illegally occupying it. With an administration with a vested interest in not settling illegally occupied land and tribal people unable to move courts and authorities to follow the law only very limited areas of alienated land has been restored. The corresponding legislation in Orissa, the Orissa Scheduled Tribes (Transfer of Immovable Property) of 1956 (OSATIP), is only relevant to privately held tribal land and not to government land but has the same stringent clause banning transfer from tribal to non-tribal (Kumar and Choudhary 2005) for a comparison of state land transfer legislation). A major problem with land regulation has been the multiple interests of the state as the main upholder of rights for tribals while at the same time being the biggest landowner and a representative of a class of land owners with vested interests in not settling title deeds. Upholding land rights for tribal people may not necessarily be enough to secure poverty alleviation. Despite the problems of displacement and non-settlement of title deeds tribal landholding is often larger than those of farmers on the plains and yet they remain poorer. The low productivity of the land, relying only on rain for irrigation water and without inputs such as fertilisers, has prevented them from secure income generation. In this light mineral and forest products do offer some of the few alternative opportunities for economic improvement. 11
  • 12. Figure 3: Comparison of Andhra Pradesh and Orissa Scheduled Area Land Transfer Legislation in relation to mining. Andhra Pradesh • No land, tribal private land as well as government land, can be acquired or leased to a non-tribal for mining or industry • The government can setup a mine and sell the mineral to any company since it operates in the public interest Orissa • No tribal land can be sold or leased to a non-tribal o the government is free to do whatever it wants with government land (about 85% of all land in the Scheduled Areas) o And it can acquire tribal land in the greater interest of society and sell this land to any company (putting the actual value of the land rights legislation into question since there is no need to demonstrate public purpose to acquire the land) • It is against the law to make a tribal landless (meaning other land must be provided if state acquires it) In 1997 the Supreme Court delivered a landmark verdict, the so-called 'Samatha Judgement'9, upholding the right to land for tribals in the Scheduled Areas of Andhra Pradesh against state and private company interests in mining and industry. The judgement stated that not even the state had the right to acquire or lease land to private companies resting on the state land transfer legislation read together with the constitutional protection for tribals10. After this judgement all private mines were forced to close down in Andhra Pradesh and it seemed that this would happen across India's Scheduled Areas since the court had recommended that all states with similar legislation should settle the issue in an analogous manner. Government efforts (central as well as those of the state of Andhra Pradesh) were to side-step the judgement by trying to amend the constitution11 as well as the land transfer regulations of the state. Eventually the Supreme Court itself came to the 9 Supreme Court case of Samatha vs State of Andhra Pradesh, 11.07.1997 The case was taken to the Supreme Court as Public Interest Litigation filed by the Andhra Pradesh NGO Samatha on behalf of tribal villagers in Vishakapatnam district. 11 The note was widely published in the Indian press. See for example Manoj Mitta, "When the law displaces", Indian Express, September 21, 2000 10 12
  • 13. rescue of concerned industrial promoters through the 2001 Balco case12. This judgement restricted the ‘Samatha Judgement’ to only apply to Andhra Pradesh opening up for privatisation of Balco aluminium in the Scheduled Areas of Chhattisgarh and further private investment in India's other tribal states. The government of Orissa's special sub-committee created to overlook the interpretation of the Samatha Judgement in the state, headed by the Chief Minister Naveen Patnaik, decided in the same year as the Balco case that the Samatha Judgment did not apply in Orissa. The decision was based on the claim that there were already extensive provisions in the state’s existing laws to protect tribal interests.13 A few years later the Orissa government moved ahead to invite international mining companies to the state, implying a further opening of its Scheduled Areas. Even in Andhra Pradesh the judgement remains contested apparent in a recent Memorandum of Understanding between the government of Andhra Pradesh and a private company to cooperate in mining and refinery operations in the state (Government of Andhra Pradesh 2005).14 The cooperative tribal mining companies envisioned by the Samatha Judgement remain side-lined to minor efforts in gem quarries. The Mineral Industry A large number of studies point to the apparent contradiction between adivasi development and extractive industries-based economic development (for example Downing 2002, Fernandes 1992, Warden-Fernandez 2001). This contradiction has become more obvious over the last decades worldwide since much of the remaining unexploited ores lie under indigenous lands (Ballard and Banks 2003). Only a very small part of the wealth generated from mineral extraction appears to be distributed to tribal people (i.e. via state infrastructure development and welfare programmes), yet they face multiple associated risks of impoverishment from the loss of their traditional lands, cultural integrity, sources of income, and food security, health risks, and loss of human rights (Downing et al. 2002). Local experiences of mining and resistance to new projects are best exemplified via the reports of public enquiries such as the Indian Peoples’ Tribunal (2006) 12 Supreme Court judgement on Balco Employees Union vs. Union of India and others, 10/12 2001 The rules cited in this regard were the Orissa Scheduled Areas Transfer of Immovable Property (Scheduled Tribes) Regulation (OSATIPR), 1956, and the Orissa Zilla Parishad (Amendment) Act, 1997 (Down to Earth, Breach of law, 15 Aug. 2003). 14 According to the memorandum the government will hold the mining lease to circumvent the Samatha Judgement ban on transfer of land in the Scheduled Areas while the private Jindal corporation will perform all other functions from planning operations, applying for environmental clearances to leasing the necessary equipment to the government mining company. 13 13
  • 14. and PUDR (2005). These civil society organisations are some of the very few detailed field studies on mining and industrial projects in tribal India at the moment. India has 8% of the bauxite deposits in the world, out of which 75% are in Orissa. The major bauxite deposits are located in the Scheduled Areas in Kalahandi, Rayagada and Koraput districts with large scale mining being done by NALCO in Koraput district, South Orissa. The economic growth in India in recent decades is only part of the explanation for the increased interest in mining15. Internationally, high prices16 and especially a soaring Chinese demand for metals like bauxite, iron and chromium determine mineral extraction and to some extent processing for exports, while coal is mined for local energy needs. Inefficient public companies, especially in the coal sector, and a lack of capital and technology are all speaking in favour of increased private mining in the future. Modern mining has largely abandoned its traditional underground operations through deep shafts in favour of open pit mining. Open pits result in significantly larger amounts of overburden having to be removed to reach the ore body and also prevents agro-based activities from taking place at the surface level while minerals are extracted underground. Bauxite miners do not have the choice to operate underground like coal or iron ore miners in some cases have. Bauxite deposits in Andhra Pradesh and Orissa are shallow sediments on top of particular mountains (see Figure 4 below). The mineral is porous enough to allow it to be scooped up with no or little blasting by enormous diggers. Under such conditions a mining company can best hope to ameliorate its environmental impact by doing proper post-mine rehabilitation of lost topsoil and forest (there are other related problems such as how to contain the toxic mine waste and control groundwater depletion which will affect both underground and open pit mines). 15 The extractive industry in India is concerned with a wide range of minerals and metals but largely not oil or gas. Thus mining in this paper is confined to non-fuel minerals if not specifically stated otherwise. 16 For example prices of iron ore increased 70% during 2005 (US Geological Survey 2006) 14
  • 15. Figure 4: Schematic view of Proposed Bauxite Mine on Bapthimala Mountain, Kashipur, Orissa.17 = Village located along the mountainside = Land claimed by tribal people as traditionally used Layer of Bauxite on top of the mountain (thickness 15-20 metres) Bauxite from central India is almost exclusively refined into alumina, an aluminium oxide, and this often takes place just next to the mine. Further processing into aluminium uses vast amounts of energy which is why smelters have traditionally been located in countries with low energy costs such as Canada, Norway or the Middle East. India and China is changing the world production of aluminium into one powered mainly by coal but also by hydropower. The main bauxite producers are all found in the tropics in countries like Australia, Guinea and Jamaica. The weather conditions in these countries as well as in Eastern India are the key to the formation of bauxite as heavy rains will leach out the iron content of soils and lead to the 40% and above alumina content that is seen as commercially viable bauxite ore. Andhra Pradesh has drastically increased its collection of royalty in recent years to become one of the main royalty earners among all states. Coal royalty is fixed to Rs. 7 per ton but still amount to at least 75% of total royalty in the states of central India. Royalty continues to remain a very minor part of the budget in Andhra Pradesh at 864 crore (approximately £108 million) for 2004-2005 compared to Orissa's 663 crore (£83 million). The states are likely to continue their demands for increased royalty rates by the central government as well as other measures to increase revenue together with requirements that companies must develop industrial facilities within state borders or lose mine licenses (detailed royalty data is available in Appendix 1 on page 39). 17 Based on interview with researcher, Orissa, 2006-10-26 15
  • 16. The State’s Eminent Domain Remaining untouched natural resources like rivers, forests and minerals are in India mainly located in the scheduled areas. In 'public interest' the state can invoke the Land Acquisition Act, 1894 and acquire land for any kind of project to extract or utilise these resources, on its own or via an agent such as a private company, by claiming the eminent domain of the state. The state's eminent domain is a right to undertake a development project for the benefit of society which conflicts with individual rights to property as well as with group rights to common property resources. The use of eminent domain in India without implementing proper checks and balances has come under a lot of criticism. "Indians, like the British, have continued to use double standards with occupancy rights, and for similar ends - the exploitation of resources from the common land" (Singh 1986:21). As invoking the eminent domain builds on the public purpose of a particular project it could have been envisioned that a detailed set of regulations would be available to define what this is. Indian courts have never really gone into the basic question of what is meant by public interest however. Courts have dealt greatly with interpreting what is the purpose of a particular project but never defined who the public is that will benefit from it. If larger questions of purpose have been raised courts have generally sustained the view that a government's perception of what constitutes public purpose is above judicial review since the government after all has been democratically elected to represent the people (Pimple and Sethi 2005). By using the right to acquire tribal land for public purpose the Orissa government has been able to take land from its poorest tribal citizens and pass it on to private interests in the mining industry. The strength of the eminent domain has enabled the state government to keep protective land transfer legislation on paper which is good for political campaigns, but left them with the option to bypass the same legislation to promote industrialisation when felt appropriate. It is clear from this that the outcomes of actual implementation of rights and laws as well as deciding what lies in the public interest will depend on the influence and power of different interest groups. 16
  • 17. The Political Economy of Industrialisation One of the central poverty alleviation strategies adopted in independent India was statedirected industrialisation, although the vision of the large-scale industry of Nehru differed significantly from Gandhi's ideal of cottage industries (Kohli 2004; Evans 1996). India has recorded some successes in its industrialisation efforts since independence e.g. through the establishment of centres of excellence in education and a basic industrial base. In an international comparative perspective the results were clearly inadequate since the inwardlooking, import substitution policies adopted resulted in a so called 'licence raj' where opportunities for the bureaucracy as well as the industrialist classes lay in protectionism and control rather than competitiveness and continuous improvement. Specifically, Kohli (2001) refers to the fragmented nature of Indian politics aiming to satisfy too many constituencies, and the weakness of its institutions as reasons for India's middling industrial performance. Recent Indian economic growth may be seen as an indicator of the probusiness alignment of India's rulers since the 1980s. Industry, manufacturing as well as mining, have not benefited to the same extent as the service sector that has been the main force behind Indian economic growth (Kohli 2006).18 The Indian state as a representative of certain class interests is a well-covered area. Bardhan (1984) gives explanations for India's poor economic performance in the abuse of power by the 'dominant proprietary classes'. Rich farmers, public-sector professionals and industrial capitalists were all vying for power and largely able to corner the main benefits of the states between themselves. At the same time no one group was strong enough to dictate events resulting in a status quo when one of the dominant classes was able to block the efforts of another. Bardhan concluded that change was structurally inhibited and change almost impossible. A slightly different version on the Indian state was given by Rudolph and Rudolph (1987). Their concept of a Weak-Strong State outlines a state that has ever since its foundation alternated between "autonomous and reflexive relations with the society in which it is embedded (1)". By this the authors referred to the ability of the state to make its presence known across the country and wield considerable autonomy in economic policy matters but also at times become over-stretched and fall prey to various special interest groups. Both these and other authors focused on large-scale national models of a country 18 Kohli (2001) points to a business-government alliance with a narrow focus on industrialisation and nationbuilding as the main reason behind the economic growth of South Korea but he is also aware of the often undemocratic ways in which this government operated. 17
  • 18. with significant variation within. As discussed in the following chapter they also tended to emphasise the rigidity of the system rather than the possibilities for change thus largely failing to anticipate the significant reforms that took place in India in the 1990s. Important for the understanding of the role of the state is however the widespread lack of state representation in areas away from the main cities. Where the state has no presence social institutions has taken its place to regulate India’s ‘informal market’, the market in which an overwhelming majority of the citizens, especially tribal peoples, still live (HarrissWhite’s 2005). This informal regulation has tended to build on inherited structures of class and caste of a very different nature than the formal legal setup. Even when the allocated funds for plans made by the English-speaking elite in Delhi did reach its designated target areas local, 'vernacular' understandings of the implementing agencies was often too different to make sense of the plans resulting in serious mismatches between plans and results (Harriss 2006). In the Scheduled Areas the state has come to make its presence felt as an outside intruder ready to take control over resources like the forest which has been managed locally for generations, or as an usurper of land needed for industrial projects or dams. Rarely has it succeeded in providing the educational and health facilities it is mandated to and even institutions like minimum support price shops have when established often failed to function according to plan.19 The importance of tribal votes does however ensure that considerable funds continue to be devolved from state budgets reinforcing the dual roles of the state in the Scheduled Areas. Economic Reform in India The 'economic reform' process, which has deregulated the Indian economy since 1991, has coincided with international record prices for many minerals, mainly due to high Chinese demand, to create an unsurpassed interest in mining and the mineral industry. New income opportunities have private companies, domestic and international, as well as public sector units competing for a share in what used to be an essentially state-controlled sector.20 19 It was still found on travels in Andhra Pradesh that tribal farmers could grow cash crops such as tobacco and cotton and then rely on the minimum support price shops to buy the food items they needed. 20 There were notable exceptions to the state's control such as the Tata steel plants in Jamshedpur and Bhilai, both established before Indian independence. 18
  • 19. Reform should be understood not only as the relatively slow process of policy change by the central government, inhibited by weak coalition governments, but as the sum of changes to central legislation and the additional policy moves by increasingly powerful states. Taken together significant changes have been made to the policy environment. Characterising the way reforms were operationalized Jenkins (1999) concludes that the economic reforms program has largely been reform by stealth since it would have gone against the wishes of the general electorate.21 “The intellectual arguments of liberalisation would never have gone down with the electorate and thus this debate was avoided. The sustainability of Indian economic reform can therefore largely be explained by the government's ability to pursue 'reform by stealth' though this would not have possible in the absence of a conducive constellation of incentives, institutions and skills. (Jenkins 1999:47-48)” The stealth behaviour resulted in opposition parties voicing major disagreement with policy changes only to continue with the same once in power (Suri 2005). Andhra Pradesh was for a number of years a contradiction to the general pattern since its Chief Minister Chanrababu Naidu openly declared his support for reforms thus becoming a poster boy of international business magazines (Rudolph and Rudolph 2001). The most recent election results with a loss for Naidu may indicate a return to the political norm of populism and concealed intentions. The economic reforms has been a source for new forms of patronage to substitute for lost ones due to state's reduced regulatory role. The new economic and political incentives are important for the continuation of reforms despite protests from many different sections. "Indian politics […] induces socio-economic elites to engage in negotiation and compromise - and governing elites to engage in obfuscatory and manipulative tactics. These tactics include, in addition to outright pilfering: shifting unpleasant responsibilities and blame on to political opponents, surreptitiously compensating selected interests, concealing intentions, reassuring and then abusing the trust of long-time political allies, and obscuring policy change by emphasising essential continuity (Jenkins 1999:7)." 21 India is by no means unique in stealth reform as Jenkins also points out. The same has been witnessed in e.g. the UK and the United States in the 1980s. 19
  • 20. The rise of the 'competition states' is the increased independence of state governments to make own policy decisions but also the fiscal pressure that forces them to compete for private investment to substitute for lost central transfers (Corbridge and Harriss 2000). The intense competition between states with very different ruling parties has lead to policies becoming more similar through state learning in the adoption of successful policies (Sinha 2005). Even though reforms have generally gone in a pro-business direction it has meant dismantling many virtual monopolies held by powerful business groups and to open up for competition domestically as well as internationally. Part of the process of de-centralization has been the gain of local state business groups on behalf of the old national business houses (Rudolph and Rudolph 2001; Harriss 2006). The literature on economic reforms in India opens up for explanations to new economic and political opportunities. For the Scheduled Areas reforms has meant that land is being acquired for various projects at faster rates and with less control than earlier. It means that it has become accepted policy to acquire land for 'public purpose' and hand this over to private investors.22 The importance of the approach taken by Jenkins (1999 & 2004) is also in showing the functioning of actual democracies as opposed to the 'good governance' agenda supported by e.g. the World Bank which advocates transparency and democratic participation where there in many cases can be shown there is very little of either (See Methodology Chapter for more on this point). Governance over Minerals The control over taxation and clearances of minerals are shared within the federal structure of India between the central government and the states. Royalties for major minerals such as bauxite, iron and coal are set by the central government whereas minor minerals are the responsibility of the states. Political battles have been fought for decades over how the share from mining incomes should be distributed. Since all royalties go to the states they have had a keen interest in raising these especially in view of the rapidly increasing international mineral prices in recent years. But the centre has had an interest in keeping these low to be able to reap higher profits from public sector companies such as Nalco in the aluminium industry and SAIL in steel. The result has been royalties ranging from only a few rupees per ton in the case of coal to 64 per ton for bauxite compared to a market price 22 Public purpose could be to acquire land for private companies if it could be shown that the public would still gain from the project through e.g. increased tax revenues. In the Scheduled Areas the picture is complicated by the stringent land transfer laws that are in place. 20
  • 21. of approximately 2000 rupees per ton of bauxite. Many states introduced additional fees to add to the royalty until the Supreme Court prohibited these. Recently a move away from fixed price royalties towards international market prices has been made (Government of India 2006a).23 Another response from the states has been to try to promote downstream industry to set up in the states since this would lead to significantly higher revenues than only having the mines. Orissa has a policy not to approve mining leases unless significant investments had been made in refineries and attempts were also made to introduce inter-state excise to prevent transport of ore out of the state. State income from minerals has risen sharply in recent years but information on the amounts that go back to the actual mining districts is scarce. Even more difficult to assess is how much money the central government makes from the industry since revenue is not declared separately. The central government remains an important stakeholder through its control over the many clearances that are required, especially environmental clearance. Within the central government mine clearances operate under a complicated dual responsibility between the Ministry of Environment and Forests (MoEF) for the environmental aspect but frequently more on socio-economic aspects, and the Indian Bureau of Mines under the Ministry of Mines. Resource Abundance as a Curse for Poor Countries From a story in the 1950s to the 1980s describing natural resources as good for the economic development of poor economies, a completely opposite literature has become dominant since the 1990s claiming resource abundance is in fact a curse. The earlier claim was based on how a lack of technical know-how and infrastructure meant that natural resources could be a way for poor countries to earn significant income from export to richer countries (Rosser 2006). Empirical studies of resource-dependent states and their performance have shown clearly that most, but importantly not all, economies have underperformed compared to less resource-endowed countries. The 'resource curse' has thus lead to a poor developmental record in terms of political unrest, economic performance and ultimately in human welfare (Bulte et. al. 2005). Nevertheless there are authors who speak of the "myth of the resource curse" as a theory (Wright & Czelusta 2004). 23 The most important minerals coal, iron and limestone remain under fixed royalty. 21
  • 22. Certain types of resources have been found to be more prone to curses. Auty (2001) distinguishes between "point" resources and "diffuse" resources where the former includes minerals that are usually mined from specific locations and the latter agricultural and forest products. The point resources, among which bauxite would be classified, requires more capital-intensive modes of production and thus tends to have more concentrated ownership and in the end also a smaller number of beneficiaries than the diffuse resources. Countries depending on point resources suffer from more severe curses according to Auty. A general definition of the resource curse is provided by Ross (2004:28) as "the distributional conflicts that commonly arise when resource wealth is unevenly distributed around the country". Ross further mentions four problems that governments, firms and local communities must face when dividing the costs and benefits of a mineral development project: “Mineral-producing countries have the highest risk of violent conflict when they have low income levels; when they produce oil or other deep-shaft minerals; and when the mineral-rich region is mountainous, lies on the country’s periphery; and harbours people who are ethnically or linguistically distinct from the rest of the country’s population (2)” The Scheduled Areas has been the home since decades for Maoist rebels. The remoteness of the mountains has allowed them to find refuge and also to some extent support from the local population. The continued exploitation of the area's resources including its land by outsiders including especially governments themselves has lead to preciously little local gains. The distinctiveness of the tribal culture from that of the representatives of the Indian government has not helped to increase the understanding when implementing programs and laws. The literature on the 'resource curse' has come to depend on three separate sub-literatures on the relationship between natural resource abundance and; economic performance; political regimes; and civil war. Studies on economic performance have generally focused on macro-economic effects that are not relevant to a study of sub-national territories such as particular states in India. The writing on civil strife and warfare has mainly originated from conflicts in Africa and the Middle East around especially oil and precious stones. Despite the prevalence of Maoist groups in especially Andhra Pradesh these have largely stayed away from both local issues of tribal rights and those of resource use to focus on 22
  • 23. the 'larger' concerns of building a movement towards class-based revolution. Even when an obvious and very easy to hit 'capitalist' target have cut straight through the heartland of Maoist territory, such as the newly constructed pipeline which transports iron ore from south Chhattisgarh over the Eastern Ghats and to the port in Vishakapatnam, Andhra Pradesh, it has been left alone.24 This study aims to build on the theories of resources and their impact on political regimes, especially the accountability of regimes with major mineral resources within its territory that can be monopolised and extracted without the active involvement of local residents. There is now a large literature claiming the deterministic negative impact of certain resources. Herbst describes this literatures claims as: "The economic and political forces generated by fluctuations in export volume and revenue in natural resource-dependent states are so powerful that they overwhelm any type of political design. The resource decides the rule rather than the opposite" (2001:1). Suggestions have been made that the causation should be turned the other way around to examine how certain political, economic and social factors impact on the possibilities to benefit from a resource (Ross 2004; Rosser 2006; Lahiri-Dutt 2006). Clearly the exploiting the same resource has lead to varying results across different countries indicating the importance of studying the specific economic and political context. A study of the local political economy of a sub-national economy dependent on a few minerals and its effects on government accountability as proposed here could possibly contribute to this body of research. Aims and Objectives How can the continued failures of state governments of eastern India to secure tribal rights to land and resources be understood in relation to the conflicts between these rights and the interests of the state in securing economic and political benefits through the promotion of the bauxite mineral industry? 24 It would be easy to think that the Maoists derive some benefits from not attacking the pipeline, either politically or economically but there is no proof of this at present. 23
  • 24. Research Questions 1. What have been the changes to tribal rights to land and livelihood in the Scheduled Areas of eastern India in relation to economic reforms and industrialisation since the 1990s? a. What were the forces and mechanisms limiting the bauxite mineral industry in the Scheduled Areas before the start of economic reforms? b. What internal and external forces have changed the earlier conditions since the start of the economic reform process and opened up for increased mining and industry in the Scheduled Areas? c. Were the earlier lower levels of mineral industry operations a matter of an actual higher level of protection for local communities or is increased mining a sign of changing opportunities for governments and industry? 2. What are the characteristics of the local political economy of the bauxite mineral industry in relation to the benefits and the distribution of these benefits driving demand for an industry expansion and the mitigation and distribution of associated costs? a. What is the state income from bauxite mining and related industry and who, within and outside the state, are the main beneficiaries? What is the distribution of income between the states and the central government and what are the funds going back to the districts where the mining takes place? b. Who are made to bear the costs of mineral development and how are these costs rationalised as being less than the benefits? c. What have been the legal and political responses to the contradiction between mineral-based industry and tribal rights to land with respect to India's constitutional division of responsibilities? What have been the responses to new opportunities in the mineral industry from political and economic elites? 3. How can a theory of a sub-national resource curse guided by elite interests help understand the prospects of economic and political empowerment of the mineralrich regions of central India? a. How can a better understanding of the political and economic reasons behind the conflicting interests between tribal people and the mining industry improve theories on what appears to be a resource curse in a subnational context? 24
  • 25. b. How can this improved understanding inform approaches that will enable tribal communities to escape their poverty in resource-rich areas and the domination by outside, non-tribal interests? Methodology India has been characterised as a ‘controlled laboratory’ when studying the local state (Kohli 2001; Jenkins 2004). Jenkins (2004:3) describes why comparative intra-national case studies are relevant when examining how actual democratic states function: “India's federal system has created 29 'mini-democracies with almost identical institutional infrastructures, at least in terms of the formal systems of representation. India's States, moreover, operate under a set of common conditions, including New Delhi's foreign and economic policy framework and the legal protections enshrined in the Indian Constitution." For the purpose of research into the mineral industry the major mineral rules and the mineral royalty are uniform as declared by the national government. To promote industrial development the states are increasingly active in generating special incentive programs to differentiate themselves from other ‘competitor’ states. At the same time the states are rapidly learning from one another making policies less diverse than could be expected across India (Sinha 2005). The states Andhra Pradesh and Orissa have similar institutional setup and similar but still crucially different land rights. Crucially the states have different languages and political and economic histories. States are also to some extent constructed borders where particular tribes have found themselves living across state borders with very different majority communities. See Table 1 below for some key similarities and differences between Andhra Pradesh and Orissa. 25
  • 26. Table 1: Key factors when comparing the states of Andhra Pradesh and Orissa Topic Similarities/Common Elements Resource Differences (state specific) One mineral refined according to one process Geology, Limited Geographical Area Industry Few large companies dominate on limited number of sites Policy National Mining policy, national royalties since major mineral Industrial policy, investment policy Legal Constitution and Scheduled Areas Land Rights (very similar on paper but not in practice) Politics Different Regimes relying on different constituencies Tribes and other communities local (but spread across state borders) and in the states Researching power and politics in India's economic development requires discursive approaches to uncover the often significant differences between the written policy and the actual implementation. This is not the result of a mere gap between intentions and ability to implement policies but based on a clash between different economic and political interests. Jenkins (1999) was the first to attempt to uncover some of the hidden reasons behind India’s economic policy reforms in the 1990s beyond the official need for change due to a foreign exchange crisis. The results indicate reforms as an opportunity for new economic gains and new ways to secure political power for those of India's politicians who could navigate the difficult terrain. Policy debates and interview responses will be analysed in a ‘narrative policy analysis’ (Roe 1994; Hajer & Wagenaar 2003) sensitive to the importance of class and power as outlined by Harriss (2006). In recent years there has been a wealth of books on the developmental state as it is experienced by the poor (Corbridge et. al. 2005; Rudolph & Jacobsen 2006; Fuller and Harriss 2000). These volumes focus on the multiple meanings of the state with its many formal and informal interests manifested through different political parties, departments within the bureaucracy, its urban/rural divide, and a legal system that is formally independent but frequently has shown a class bias in favour of the upper classes in its judgements. Historically sensitive institutional analyses on the role and responsibility of the Indian state in promoting industrialisation have been made by Kohli (2001) and Evans (1995). The research will attempt to contextualise current mining industry expansion with a historical account of this industry’s background and growth and contrast this with a 26
  • 27. different type of history related to that of tribal rights to land and livelihood in the same geographical area. Epistemological Concerns The nature of industrialisation in tribal areas in terms of its effect on the health and livelihoods of the people who live there as well as the environmental outcomes remains blurred among stakeholders. Available information is not disseminated and what exists will not be trusted by local people or by authorities and industry. Although some aspects of mining’s detrimental effects on the environment are relatively obvious, such as the destruction of forest cover at actual mine sites and the need to place overburden and other waste in secure ponds, much of the worst impact remains hidden as long-term leakage of acidity or heavy metals or a drop in groundwater levels. The present is too contested for us to know whether there will be a shared view among stakeholders of future use of land and resources in the research area. Other authors have commented on persistent differences in worldviews: "Competing land uses and conflicting resource management systems are not simply reflections of competing vested interests, not competing views of the utility of 'country' for society. In many cases these conflicts reflect much deeper ontological schisms between worldviews - between ways of seeing the world and ways of thinking about peoples' places within the world" (Howitt 2001:59). The nature of the ontological controversies stem from historically incompatible experiences of resources and development. Ultimately decision makers and other key stakeholders live in urban centres and have little or no knowledge of the ground situation in the industrial areas and the people who live there. It is the assumption that this lack of knowledge is more than ignorance and should be better described as a sustained effort to not have to get involved in matters concerning the rural poor and their environment. To uncover the real intentions of industrial developers in the government and the industry, the use and incomes of land, water and minerals by different groups and the policies that guide this usage can be uncovered with a careful analysis of available statistics, policies and other data. Thus, a 'reality' will be constructed in order to evaluate the narratives of key power holders. This is not to say that different groups will come to share the same ontology despite shared information and analysis. At best the possibilities for negotiation and 27
  • 28. compromise should increase after an exercise such as the one proposed in this research. When the present is not agreed on future scenarios of the final outcomes of industrialisation will differ widely. It is not assumed here that tribal people would freely choose something that could be referred to as equitable mineral industrialisation but it is also not assumed that they would not be interested in some of ‘modern’ life’s conveniences in terms of better housing, roads and schools. Power is of vital importance for outcomes and the question is then to understand who holds power and how this power is used. The power to access the government apparatus including the policy makers, the police and the courts will be of vital importance. Data Collection The data should be used to examine the gap between the rhetorical claims of industrial development and modernisation (as evident from written sources and interviews) with not only the ground evidence of neglect of tribal areas (as covered in a vast literature as well as statistical sources) but also a neglect of public purpose in the sense that the state and a very large section of its citizens actually stand to lose out given how mining is actually practised in India today (with little ability to enforce environmental norms, widespread land alienation for little employment generation, low royalties and widespread tax concessions). Primary Data Key Informant Interviews A number of semi-structured interviews will be conducted for approximately 1 hour per session. These will revolve loosely around a number of topics but will have no predetermined agenda to enable flexibility for the individual respondents. Interviews will be mainly sought from people within the administration; politicians of various parties holding elected office and the administrators. Especially important will be to gather the statements within the ministries/departments of mines and commerce, tribal affairs and finance. Attempts will also be made to systematically collect information from the local administrators in and around the bauxite projects (especially from District Collectors but also from Tribal Welfare Officers where possible). It will also be important to try to estimate what industrialist viewpoints on industrialisation are. Local tribal leaders, researchers, journalists and activists may be able to contextualise and provide different opinions on interview responses. 28
  • 29. Personal contacts are believed to be the best way to gain access to informants and decision-makers in the administration and industry. Snowballing through interview responses will be an additional way of identifying further interviewees. Interviews will mainly be sought in the state capitals of Andhra Pradesh and Orissa, Hyderabad and Bhubaneshwar respectively to understand state government positions. Since much of the legislation is shared between the central government and the states interviews will also be sought with concerned ministries in Delhi together with institutions like the Planning Commission and the main industry associations. Observation From the corridors of bureaucrats and the industry offices in state and national capitals to tribal farmers trying to make a living next to mining operations, observational techniques are expected to provide some very useful information on the different worlds that power holders and mining-affected people live in. At the same time it will not be possible to capture more than a fraction of the multitude of cultural and social practices that are present in the different tribes and castes who live next to the industrial areas. Figure 5: Industrial Sites of Observation Andhra Pradesh • Proposed project sites in Vishakapatnam, Vizianagaram Districts and East Godavari districts for Jindal/APMDC* joint venture • Proposed project sites in Vishakapatnam and Khammam districts for Ras al Khaima/APMDC joint venture Orissa • Nalco Mine and Alumina Complex, Damanjodi, Koraput • Nalco Aluminium Smelter, Angul • Vedanta Alumina Refinery, Lanjigarh, Kalahandi • UAIL (Utkal Alumina) Alumina Refinery (under construction), Baphlimali, Kashipur • Vedanta (under construction) and Hindalco Aluminium Smelters, Jharsugoda • L&T Mine and Alumina Refinery proposed site, Kutrumali, Rayagada district 29
  • 30. * APMDC is the Andhra Pradesh Mineral Development Corporation, a government of Andhra Pradesh public undertaking. Secondary Data Secondary data will be continuously collected while on fieldwork but can also increasingly often be downloaded from various websites. The volume of secondary data available means that it will be important to identify the key publications and data that needs to be further analysed. Policy Documents Government policy statements including Planning Commission documents provide a rich and varied source of information as different ministries at the central and state levels continue to produce documents for different purposes. These are nowadays often available online for easy access. Judgements in Supreme and High Courts and other legal and Constitutional texts can often situate contentious issues and be very useful sources for situating debates. Memorandums of Understandings are especially important when trying to evaluate government-business relations and the potential benefits and costs associated with business deals. Some of these documents are available but many will remain secret. The Economics of mining can be evaluated quite clearly by using the public sector company Nalco as a case study. This company has been operating in two locations in Orissa since the 1980s and provides publicly available accounts through its annual reports. The economics of the other bauxite companies with similar or planned operating procedures will be evaluated using Nalco as the norm. 30
  • 31. Table 2: Key indicators to determine the costs and benefits of mining. • Costs o Cost of excavation and transport o Forest clearance (Net Present Value given by the Supreme Court after the TN Godavarma judgement) o Water usage o Carbon dioxide usage (huge cost if converted to energy-intensive aluminium) • Benefits (state and national benefits should be separated) o Royalty (Set by the national government based on sales price) o Income taxes and Excise (if not declared as Special Economic Zone) o Other fees and charges o Employment - new factories are not likely to employ more than a few hundred people. Most of these will not be from the local area The income of various taxes and fees from the mineral industry will be shared between the national and state governments whereas the costs are almost uniformly carried by the immediate area around the industry. Of special interest is not only what the states make from mining and industry operations but also how much of this money is routed back to the areas where the minerals came from originally. State capital regions are significantly better off from the mining areas economically and do not have to face the direct negative consequences. Important issues to investigate will be to what extent there is a willingness to share income within the states and what understanding policymakers have of the local costs of mining carried by the people living in the mining areas. 31
  • 32. Table 3: Determining the National and State Earning from Mining • What is the central and state governments' income from mining? • What is the central and state governments' income from related processing industry of alumina refineries and aluminium smelters? Does this income vary if the company is public or private? • Who are the beneficiaries of low mineral royalties from mining and who would benefit from state governments insisting on only giving mine leases to companies investing in refineries within the state? • How are the states distributing the wealth from mining within their Clearances remain a vital part of industrialisation despite many having been reduced or even redundant following the economic liberalisation program. The main problem is that all clearances are one-off trials during start-up or expansion and after this there is no or little reliable information on how the facility is actually run and managed. The inspections that do take place are carried out by the Indian Bureau of Mines whose employees do visit most large mines but fail to take corrective action even when discrepancies are found for complex reasons. Gaining access to clearance-related information has recently been made easier through the Right To Information Act. Table 4: Mandatory Clearances for Mining Projects • Environmental (according to Environmental Protection Act and Forest Conservation Act) o The most important form of clearance and the one where the public can voice an opinion. Massive protests are always present at meetings, often organised by political parties in opposition o Also to a limited extent for social impact analysis • Tribes Advisory Council o Body of tribal MLAs dominated by the large parties • Local Gram Sabha o Differently empowered in different states (according to PESA) • Indian Bureau of Mines - Mine Clearance Land Records and Mining Leases should be able to reveal in whose name different industries and mines are being promoted and what the actual extent of mining is. It would 32
  • 33. e.g. be very interesting to clarify whether non-tribals have their names on leases in Andhra Pradesh since this would go against the law. It remains in doubt whether it will be possible to gain access to the records that are held by the departments who have most to gain economically from not settling tribal land titles, the Revenue and Mines departments. Even when accessed manually going through these records will be a very burdensome task likely to take significant amounts of time. Statistics on land use, land ownership and tribal land alienation may be available from various other sources like ICRISAT in Hyderabad and the World Bank. Satellite Imagery A further useful tool for exploring environmental change in the Scheduled Areas would be to use satellite imagery. High-resolution images can show details of buildings and factories including mine sites and tailings dams. If landscapes facing large-scale environmental degradation due to open cast surface mining can be captured it can then be inferred that the people living there, or in many cases who used to live there, have seen significant negative impact on their ability to make a living from the land and the forests. 33
  • 34. Figure 6: The iron ore mines of Keonjhar District, Orissa, cover vast areas of land. Black soot from sponge iron factories have further degraded the land seen at the bottom of the photo. Source: Screen capture from Google Earth 29/3 2006 When the satellite images are updated (Google Earth seems to update roughly every year) they can also be used to track environmental change over time. The problem with current satellite imagery services is that they often do not have high-resolution images available outside of the main cities limiting the image analysis to overviews rather than detailed examination. The image above is an overview and interesting as such since the environmental damage is spread over a large enough area to be clearly visible. It would not be sufficient to pinpoint particular sources of pollution or the exact locations and sources of forest degradation for example. Timeline The timeline for fieldwork and future write-up is available in the Appendix on page 39. A reconnaissance trip to India was made in October 2006. This was followed by fieldwork from January to May 2007. After initial analysis of the collected data on this fieldwork trip has been made a second trip is being planned for October to December 2007. 34
  • 35. Ethics in Research Research will involve fieldwork in some of India's poorest areas and deal with historically disadvantaged groups of tribal people. This raises a number of ethical concerns that will have to be addressed in the research design. Most important is to recognise the vulnerability of tribal groups and the various ways in which research potentially could put them at risk. Poverty, lack of education and access to various forms of resources, together with the indifference of authorities, puts tribal people at multiple risks. As recent confrontations between authorities and tribal groups show, mining is becoming an increasingly contentious issue especially in Orissa and this will also be important for the research to consider. Care must be taken so that respondents do not feel that participating in research will put them at risk of being perceived as against the government or mining development in general, something which could have negative repercussions for individuals. Participants in research will be fully informed about the content and purpose of research and will sign a form declaring willingness to participate. In the case that respondents are illiterate, the consent form will be read in local language and witnesses will be there to verify and record that the respondent understands and wishes to participate. Responses from all participants will be kept strictly confidential with the researcher and anonymous to safeguard any potentially controversial responses. Participating in the study will be on a voluntary basis and each individual will have the right not to participate. Since mining is a contentious issue where as of yet no middle-ground position exists it might be difficult to be perceived as a neutral researcher, in fact this might even be impossible. A perception of the researcher as pro-mining will mean that tribal people and social movements will not be interested in participating in research while being anti-mining might be equal to being 'anti-development' and thus contentious to government officers. Balancing these various forces in an ethical manner will be one of the main challenges during fieldwork. References Auty, R, and RM Auty. 2001. Resource Abundance and Economic Development: Oxford University Press, USA. 'Balco Judgement' (2001). Verdict of the Supreme Court case 'BALCO Employees Union Versus Union of India & Ors. Respondents', Supreme Court of India: Delhi Ballard, C. and G. Banks (2003). Resource wars: the anthropology of mining. Annual Review of Anthropology 32: 287-313. Bardhan, P. (2005). Scarcity, conflicts, and cooperation: essays in the political and institutional economics of development. Cambridge, Mass., MIT Press. 35
  • 36. Bardhan, P. (1998). The political economy of development in India. Oxford, Oxford University Press. Baviskar, A. (2003). Tribal politics and discourses of Indian environmentalism. in Nature in the global south: environmental projects in South and Southeast Asia/Greenough, P. and Lowenhaupt Tsing, A., (eds). London: Duke University Press. Bulte, E., Damania, R. and Deacon, R. (2005) Resource intensity, institutions, and development, World Development 33(7): 1029-1044. Collier, P, and A Hoeffler. 2005. "Resource Rents, Governance, and Conflict." Journal of Conflict Resolution 49:625-633. Corbridge, S., G. Williams, et al. (2005). Seeing the State: Governance and Governmentality in India, Cambridge University Press. Corbridge, Stuart, and John Harriss. 2000. Reinventing India: liberalization, Hindu nationalism and popular democracy. Cambridge: Polity Press. de Haan, A. (2004). "Disparities within India's poorest regions: why do the same institutions work differently in different places?". Background Paper for, World Development Report 2006 - Equity & Development. Washington, World Bank Group. Fuller, CJ, and J Harriss. 2000. "For an Anthropology of the Modern Indian State." The Everyday State and Society in Modern India:1–30. Godoy, R. (1985). Mining - anthropological perspectives. Annual Review of Anthropology 14: 199-217. Government of Andhra Pradesh (1 July 2005). Memorandum of understanding between Government of Andhra Pradesh and Jindal South West Holding Ltd. Government of India. (2006a). Mineral royalties, Indian Bureau of Mines: Nagpur Government of India (2006b). National Mineral Policy - Report of the High Level Committee, Planning Commission: Delhi Hajer, M.A. and H. Wagenaar, eds. (2003). Deliberative policy analysis: understanding governance in the network society, Cambridge: Cambridge University Press. Harriss, J. (2006) Power Matters - Essays on Institutions, Politics, and Society in India. Delhi: Oxford University Press Harriss, J. (1999). Comparing political regimes across Indian states - A preliminary essay. Economic and Political Weekly 34(48): 3367-3377. Harriss, J, K Stokke, and O Törnquist. (2004). Politicising Democracy: The New Local Politics and Democratisation: Palgrave Macmillan. Herbst, J. (2001). The politics of revenue sharing in resource-dependent states, United Nations University, World Institute for Development Economics Research. Howitt, R. (2001). Rethinking resource management, London: Routledge. Indian People's Tribunal (2006). Kashipur: An Enquiry into Mining and Human Rights Violations in Kashipur, Orissa, Report of the Indian People's Tribunal on Environment and Human Rights Tribunal, available on http://www.iptindia.org/ Jenkins, R. (2004). Regional Reflections: Comparing Politics Across India's States, Oxford University Press. Jenkins, R. (1999). Democratic politics and economic reform in India. Cambridge: Cambridge University Press. Knapp, A. B. and V. Pigott (1997). The archaeology and anthropology of mining: Social approaches to an industrial past. Current Anthropology 38(2): 300-304. Kohli, A. (2006). Politics of Economic Growth in India, 1980-2005: Part II-The 1990s and Beyond. Economic and Political Weekly April 2006: 1361-1370. Kohli, A. (2004). State-directed development: political power and industrialization in the global periphery. Cambridge, Cambridge University Press. Kohli, A. (2001). The Success of India's Democracy, Cambridge University Press. 36
  • 37. Kumar, K. (2005). Dispossessed and displaced: A brief paper on tribal issues in Orissa, Unpublished document, Bhubaneshwar: Vasundhara Kumar, K. and Choudhary, P., R. (2005). A socio-economic and legal study of scheduled tribes’ land in Orissa, Bhubaneshwar: Vasundhara Kumar, M. (2004) Subaltern politicization in Jenkins, R. (ed) Regional reflections: Oxford University Press. Lahiri-Dutt, K. (2006). May god give us chaos, so that we can plunder: a critique of resource curse and conflict theories. Development 49(3): 14-21. Laxman Rao, S., Deshingkar, P. & Farrington, J. (2006). Tribal Land Alienation in Andhra Pradesh - Processes, Impacts and Policy Concerns, Economic and Political Weekly Le Billon, P. 2000. "The Political Economy of Resource Wars." Angola’s war economy–the role of oil and diamonds. Mooij, J. E. (2005). The politics of economic reforms in India. New Delhi: Thousand Oaks/Sage Publications. Mooij, J. E. (2003). Smart Governance? Politics in the Policy Process in Andhra Pradesh, India. ODI Working Paper 228, Overseas Development Institute: London Moore, M. 2004. Revenues, state formation, and the quality of governance in developing countries. International Political Science Review 25:297-319. NSS. (2001). Level and pattern of consumer expenditure in India 1999-2000, Report 457, National Sample Survey Organisation, New Delhi. Pati, B. (2001). Situating Social History - Orissa 1800-1997. Hyderabad: Orient Longman Limited People's Union for Democratic Rights, PUDR (2005). Halting the Mining Juggernaut: People’s Struggles Against Alumina Projects in Orissa, available on www.pudr.org Roe, E. (1994). Narrative policy analysis: theory and practice. Durham, N.C; London, Duke University Press. Ross, M. (2004). Mineral wealth and equitable development. Background Paper for: World Development Report 2006 - Equity & Development. Washington: World Bank Group. Ross, M. 2003. "Natural Resources and Civil War: An Overview." Paper submitted to the World Bank Research Observer, August. Ross, M. (1999). The political economy of the resource curse. World Politics, 51, 297–322. Rosser, Andrew, University of Sussex. Institute of Development Studies, and Centre for the Future State. 2006. The political economy of the resource curse: a literature review. Brighton: Institute of Development Studies University of Sussex. Rudolph, L. I. and J. K. Jacobsen (2006). Experiencing the State, Oxford University Press. Rudolph, L. I. and S. H. Rudolph. (2001). "Iconisation of Chandrababu." Economic and Political Weekly: 1541. Rudolph, L. I. and S. H. Rudolph (1987). In Pursuit of Lakshmi: The Political Economy of the Indian State, University of Chicago Press. 'Samatha Judgement' (1997), Verdict on 'Samatha Vs State of Andhra Pradesh' delivered on 11.07.1997. Supreme Court of India: Delhi Saxena, N. C., J. Farrington, et al. (2003). Trends and prospects for poverty reduction in rural India: context and options. London: Overseas Development Institute. Scholtz, E. (2006). Negotiating claims: the emergence of indigenous land claim negotiation policies in Australia, Canada, New Zealand, and the United States. New York: Routledge Scott, JC. 1999. Seeing Like a State: How Certain Schemes to Improve the Human Condition Have Failed: Yale University Press. Singh, C. (1986). Common property and common poverty: India's forests, forest dwellers and the law. Delhi: Oxford University Press. Sinha, A. (2005). The Regional Roots of Developmental Politics in India: A Divided Leviathan, Indiana University Press. 37
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  • 39. Appendix 1 - State Income from Royalties Table 5: Mineral Royalties from Metals and Other Important Minerals from Selected States (continued on next page) Madhya Jharkhand Orissa Chhattisgarh Rajasthan Karnataka Pradesh Iron ore 0.0 0.0 0.0 0.0 0.0 0.0 2002-03 207.7 422.6 359.3 0.1 53.8 2003-04 182.2 593.2 429.2 0.2 462.9 2004-05 235.2 728.5 423.3 1.5 797.5 0.0 0.0 0.0 0.0 0.0 0.0 2002-03 12.5 65.9 277.4 39.8 1.5 2003-04 11.9 70.6 254.2 52.8 1.0 2004-05 12.6 105.4 290.5 81.8 2.2 0.0 0.0 0.0 0.0 2002-03 76.9 2.2 2003-04 62.7 2004-05 92.0 1.4 0.0 0.0 Bauxite Copper Chromite 2002-03 0.0 0.0 21.4 23.1 37.7 0.0 0.0 0.0 0.0 181.8 0.8 2003-04 272.5 2004-05 440.3 Lead & Zinc 0.0 0.0 0.0 3.5 2.5 0.0 0.0 2002-03 850.4 2003-04 1,032.0 2004-05 0.0 1,512.3 Lime stone 0.0 0.0 0.0 0.0 0.0 0.0 2002-03 1,139.6 31.8 81.1 586.0 936.2 444.9 2003-04 1,017.0 29.4 83.7 576.9 951.9 510.5 2004-05 1,199.5 30.8 103.5 620.6 1,165.6 542.4 Coal/Lignite 0.0 0.0 0.0 0.0 0.0 0.0 2002-03 4,502.6 7,320.7 3,107.3 4,340.8 23.9 2003-04 5,141.0 8,363.7 3,860.0 5,124.3 34.2 2004-05 5,339.5 8,357.4 4,419.0 5,555.0 28.7 Source: Adapted from Government of India (2006b) 39
  • 40. Table 6: Total Mineral Royalties from Selected States Madhya Jharkhand Orissa Chhattisgarh Rajasthan Karnataka Pradesh Major minerals 0.0 0.0 0.0 0.0 0.0 0.0 2002-03 5,837.6 7,656.5 4,173.5 5,368.2 2,255.0 510.7 2003-04 6,335.0 8,675.6 5,196.0 6,231.5 2,569.8 1,035.7 2004-05 6,825.2 8,760.2 6,191.0 6,745.6 3,407.5 1,466.7 0.0 0.0 0.0 0.0 0.0 0.0 2002-03 69.3 320.0 232.2 155.4 1,741.8 328.2 2003-04 132.4 326.0 276.4 140.2 2,009.8 400.5 2004-05 512.0 401.4 445.4 200.5 2,490.4 642.7 0.0 0.0 0.0 0.0 0.0 0.0 2002-03 5,906.9 7,976.5 4,405.7 5,523.6 3,996.8 838.9 2003-04 6,467.0 9,001.6 5,472.0 6,371.7 4,579.6 1,436.2 2004-05 7,337.2 9,161.6 6,636.0 6,946.1 5,897.9 2,109.4 Minor minerals Total royalty Source: Adapted from Government of India (2006b) 40
  • 41. Appendix 2 - Timeline 2005 PhD Plan Oct … Work on Procedural Feasibility Trip to India PP Presentation Fieldwork Trip 1 In Delhi In Andhra Pradesh In Orissa Initial Data Analysis Fieldwork Trip 2 Data Analysis Writing Up 2006 2007 Sep Oct Nov Dec Jan Feb Mar Apr May … 2008 Sep Oct Nov Dec Jan 2009 … Jan Feb Mar 41

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