Cos open to accusations of complicity with govt

Cos open to accusations of complicity with govt

There was a senior representative from Tata Sons Ltd at the conference this past summer, as well as his corporate social responsibility (CSR) colleagues from ArcelorMittal, JSW Steel Ltd, Royal Dutch Shell and Lafarge SA. Except Shell, others are between them currently engaged in either contentious or tricky projects in central, north or north-east India. Alongside executives were arrayed human rights activists, lawyers, tribal representatives, self-declared liberals from Delhi’s seminar circuit, and corporate practitioners and consultants from Europe and the Americas.

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The purpose was to take inputs about the Indian situation to evolve corporate best practice guidelines across the world as to the experience of relocation and rehabilitation—frequently the curse of projects—and work in conflict areas. The meeting was well timed, too, seeing several popular protests against large projects and special economic zones; and the outright concern of locating projects in areas of Maoist influence.

A broad thought came through, surprisingly, from several executives. The bean counters and boardroom “suits" that operate in India don’t care about the socio-economic impact at ground zero. The project blueprint is absolute in terms of cost in time, finance, man-hours and return on investment. As activists joined the discussion, it became ever more evident that CSR ends up being a tool to buy out “opposition" with money, a primary school or health centre, some tube wells. Responsibility ends there. The governments of the states where the projects are to be located—with their political leadership, bureaucracy and police—become an extension of corporate will.

Such an approach led to Singur for Tata Motors Ltd; the relocation of the project to Gujarat worked through similar, though non-violent, channels as the government there had already pre-empted protest by releasing vast stocks of pre-acquired land. Tata Steel’s loud clarifications that it had been “allocated" land in Chhattisgarh; and its denial that a public hearing on the project in mid-October was attended by hand-picked villagers in a room heavily guarded by state police and local toughs, suggests a worrying trend: this conglomerate has learnt little from its recent collective experience.

In Chhattisgarh, it is likely to face protests that could easily escalate to violence as the administration lends a hand to shoehorn the project. There is little doubt too that Maoist-front organizations and militias will leverage toeholds offered by such an approach, the same as they have done to a project by Essar Steel in the state’s Dantewada district.

What drives a corporation to pursue a project in a clear zone of conflict? Why do businesses feel strengthened, even invulnerable, if they are in direct or moral partnership with government? Why do project planners ignore the fact that the principle of eminent domain, which permits the government to expropriate land for public good, is abused in spirit and execution? Why don’t consultants, whom corporations pay millions of dollars to scope a project, clarify political and security risks?

The fig leaf of government having appropriated land—and so, business being absolved of all responsibility—is mandated by India’s mai-baap culture, a benevolent dictatorship deeply prevalent in the relationship between business and politics. While this proved to be the bedrock of much of India’s economic growth, businesses will, in today’s charged rights and legal environment, be open to accusations of complicity with government. Globalized Indian businesses are additionally vulnerable, under international laws, to legal action even in other countries if accusations of negative complicity with government are proven. Moreover, there would be a public relations fallout.

In plain words: it will be difficult to explain away aggressive presence in a conflict zone where a project clearly stands to gain by government forces killing off rebels. And it will be difficult to deny moral responsibility for the death and displacement of innocents in such a conflict. If businesses find it difficult to comprehend morality, they could at least work to understand liability.

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

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