Vedanta row puts environment in policy focus

Vedanta row puts environment in policy focus

New Delhi: The government’s decision to reject UK-based Vedanta’s plans to mine bauxite points to tighter enforcement of environment laws, a commitment to playing by the rules rather than a political campaign against mega-corporations.

In a landmark decision on Tuesday, the environment ministry blocked Vedanta’s mining project in Orissa because the forest-hills it would have destroyed are intertwined with the lives and livelihoods of local primitive tribes.

It was a stunning victory for a four-year-long global campaign for the Dongria Kondh tribe against a giant mining firm that has been pitchforked into India’s debate over environmental laws.

Also Read | Timeline: Vedanta Mine Imbroglio

It also infused life into the environment ministry with its maverick minister, Jairam Ramesh, whose tussle with his Cabinet colleagues on clearing forests for mining and roads underlines India’s struggle for sustainable growth.

“What Jairam Ramesh is doing is saying if you have to do business here play it by the rule, no sidetracking environment, no backdoor, which is a good thing," said R K Gupta, managing director of Taurus Mutual Fund.

“The clear signal to overseas investors is that you can not take environmental clearance for granted. Things will not be done as they used to be in the past. This is course correction."

Commentators point out that thousands of factories get built in India every year and the government has clearly encouraged industrial projects - evidence analysts say that the ruling Congress party is not anti-development.

Hero or villain?

Ramesh’s stand in a country focused on development and raring to take the global high table has meant he is also scoffed at by some as an inflexible “green fundamentalist".

For years, the environmental ministry was seen as rubber-stamping projects.

But Ramesh has scrapped or delayed clearance for some 100 mining projects, including those backed by South Korea’s Posco, drawing protests that he is hurting development in a nation short of power and raw materials.

A second airport in Mumbai is caught in the environment debate as are dozens of road and dam projects.

Ramesh has also cracked down on illegal mining, often done with help from local politicians, and brought more accountability in a sector that had minimal environmental regulations.

Underlying all this is a realisation in India that enforcing environmental rules does not have to hurt growth, can boost the idea of a rule of law and make government policies transparent.’

“This not a problem typical to India, it is a developing country phenomenon; Brazil has realised, Australia faced this," said Paranjoy Guha Thakurta, an independent political economist.

Government sources say Posco could be given permission for its $12 billion steel mill in Orissa in 2 months because its problems were not quite the same as Vedanta’s.

Political Dividend

Mining lobbies have accused Ramesh of witch-hunting multinational corporations, saying he is going after projects in states not controlled by the Congress ruling party.

Orissa is one of these non-Congress states and its chief minister, Naveen Patnaik reacted to the scrapping of the Vedanta project by saying: “I hope there was no politics (involved)."

And as if anticipating such charges, Ramesh, while rejecting the proposal on Tuesday, said: “There is no emotion, no politics, no prejudice ... I have taken the decision in a purely legal approach. That these laws are being violated."

But in India, saving the environment is a political issue.

Years of uncontrolled mining has pushed tribal people off their forest land, alienating them and fuelling insurgencies that feed off a perceived neglect of the poor.

In India, two-thirds of the population makes a living from farming and a growing Maoist rebellion has capitalised on a wider resentment over the government’s seizure of land for industry.

So, Ramesh’s tough stand on environment could also help his ruling Congress party reap political dividends by restoring the lost support of millions of tribes people.

And in pursuing his environment policies, Ramesh’s hand is probably strengthened by support from his Congress party chief Sonia Gandhi. He was close to her husband Rajiv, a former prime minister, who was instrumental in bringing Ramesh into politics.

The 56 year-old minister, a sprightly new kid on the block by the standards of India’s grandfatherly politicians, is pushing a reformist agenda against more traditional figures within the government who have often focused more on political expediency.

When Prime Minister Manmohan Singh appointed him environment minister last year, months ahead of the Copenhagen climate conference, Ramesh created a flutter by suggesting that India could be more flexible in its negotiating stance at the Copenhagen summit. He soon backed down, and even seemed contrite.

“In our country, you are not accepted if you start thinking out of the box," Ramesh, a former US-educated civil servant, said after the controversy.

“You have to be inside the box. You can go out of the box occasionally but be sure you return quickly."