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Business News/ Opinion / Niyamgiri in focus, again

Villagers around Odisha’s Niyamgiri Hills have planned an expedition on 21 February. They will climb the bauxite-rich hills, which Vedanta Resources Plc wants but cannot yet have to feed its alumina refinery in adjacent Lanjigarh, and camp there. Next day, they will worship Niyam Raja, spiritual resident of these hills and the protector-deity beloved of the area’s Dongria Kondh tribals. After the ritual is over, residents will return to their villages and continue worship for the remainder of that day.

The event is significant for Niyamgiri Surakhya Samiti, the watchdog that has for several years kept a sharp eye on Vedanta’s plans in the area. The samiti, comprised almost entirely of local residents, also tracks the government of Odisha, an agency of which partners a Vedanta subsidiary for the mining project. “The coming days are not good for them (the tribals)," a communication on behalf of the samiti insists. “This Modi government may change Forest Rights Act, 2006, where there is the provision of seeking consent of gram sabhas (village councils) for any big projects in the adivasi areas." The group claims that the Narendra Modi government is “hell-bent on development of corporates in name of achhe din (good days) and Make in India plan".

If the samiti appears to have gone from peeved to paranoid, there’s a reason. Modi’s often-quoted good-days-are-here claim and his government’s plans to ramp up India’s manufacturing prowess have brought disquiet in some circles alongside delight in others. Human rights analysts and defenders fear India’s tribals and other marginalized people will continue to be collateral damage of such growth. A proposed land ordinance that seeks to dilute the rights of project-targeted communities as mandated by the land acquisition law of 2013—the entry point being a wide range of public-private partnerships—has only added to the concern that the doctrine of eminent domain may override democratic principles.

The samiti’s stand is a pre-emptive safeguard against any government action to reverse the denial to Vedanta and its partner Odisha Mining Corp. Ltd for rights to mine the Niyamgiri Hills for bauxite. In a process monitored by Odisha’s government, residents of 12 villages had in July and August 2013 voted against the project. It is quite another matter that the refinery to process such bauxite is up and running, presuming that government permission to mine would override community consent. The plant now uses bauxite sourced from elsewhere.

For their part, Vedanta and the government of Odisha have prudently reworked their public—and public relations—exposure. From displaying ill-advised belligerence over acquiring mining rights in Niyamgiri Hills as recently as its 2012-13 annual report, the conglomerate is now more lamb than wolf. The 2013-14 annual report repeatedly states the conglomerate’s intention to take the community on board. “From our perspective, we have made it clear that Vedanta will not source bauxite from Niyamgiri bauxite deposit without the consent of the local community," chairman Anil Agarwal is quoted in the report as saying.

In a general corporate presentation in September last year, the word Niyamgiri is mentioned just once: “Niyamgiri—Not pursuing bauxite without local consent." A February 2014 presentation at a JPMorgan conference—an arm of the financial services firm was joint global coordinator and bookrunner for Vedanta’s $883 million convertible bonds offer in 2010—doesn’t mention Niyamgiri at all. Neither does Vedanta’s interim results document for the six months ended 30 September.

The Odisha government, too, is lying low. Odisha Mining Corp. has 26% equity in South West Bauxite Mining Co. (Pvt.) Ltd, where it partners a Vedanta subsidiary, which holds 74%. After the village council decision led to the environment ministry nixing approval for mining in Lanjigarh, it has maintained a quiet profile with regard to the judicial appeal process, in which it had unsurprisingly taken the lead in this public-private partnership.

According to the arrangement, the state government is still liable to provide Vedanta bauxite from elsewhere in Odisha for its alumina refinery in Lanjigarh. As a Vedanta document hopefully declared to investors in 2009, there are 900 million tonnes of bauxite ore within a 60km radius of Lanjigarh.

It will be interesting to see how such a provision is made; just how amenable the central government is to ensure a policy windfall for Vedanta, as for other businesses engaged in the extractive industries and infrastructure. If the central government persists with a strategy of domination over dialogue, I fully expect Niyamgiri to resume its place as a human rights hotspot, along with several ongoing and future projects across India.

Sudeep Chakravarti’s latest book is Clear.Hold.Build: Hard Lessons of Business and Human Rights in India. His previous books include Red Sun: Travels in Naxalite Country and Highway 39: Journeys through a Fractured Land.

This column, which focuses on conflict situations in South Asia that directly affect business, runs on Fridays.

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Updated: 30 Jan 2015, 12:34 AM IST
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