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Alloyed Projects, Metalled Resistance: A Case of Bauxite Mining in Orissa


The governance challenge with regards to natural resources is to balance the economic, social and environmental dimensions of development. The study attempts to address the key questions posed for the workshopthe historical and changing role of the State in the governance of natural resources and the emerging challenges to it. The vital assumptions of promised neoliberal economic growth through mining are challenged from a social justice perspective highlighting the conflicts within the concept of governance. This is done by analysing the contemporary roles of the actors and institutions in the societal spheres of State, civil society and business. The case of bauxite mining at Kashipur in Orissa, India, highlights some of the challenges in shaping the relationship between different actors of governance as to effectively manage these resources. Within a backdrop of Orissas poor performance in terms of progress and poverty eradication while being the richest state in terms of natural resources, the case unfolds a story of unequal access and exchange between the state, tribals and the market forces and the resultant conflicts. A mix of review of literature, secondary data analysis and qualitative data collection through a fieldwork forms the methodology of the study. The next section deals with the neoliberal shifts in policy and its equity implications in development. Section 4 and 5 detail the social and environmental externalities of mining and the emerging conflicts. Section 6 maps the stakeholders and the concluding section reflects on the implications of all these in the governance of natural resources.


State, Natural Resource Conflicts and Challenges to Governance

Policy Reforms and Poverty Paradox

While the state progressed from welfare to developmental mode, the reforms in policy were sine qua non. If examined till the 1980s, the emphasis on small-scale industries was maintained in the industrial policies in Orissa. But since then, the state clearly affirmed its desire of rapid industrialisation. Large number of subsidies, procedural relaxations and concessions facilitated the interest of the entrepreneurs. Industrial Policy Resolution 2001 of the State Government of Orissa was a significant departure from the past policies and confined the role of the state to facilitation of economic activity in the industrial sector. Department for Intenational Development (DFID) and United Nations Industrial Development Organisation (UNIDO) reserved the right to modify the approach and structure of the project at any time during its implementation, if it was felt that unforeseen developments may jeopardise its continuing progress and successful completion. 1 Thus, with the transcending borders and flow of capital the supranational bodies transcended onto the sphere of governance of resources within the state. The relevance of mega/large-scale industrial growth did not seem intelligible within the high degree of persistent poverty and dismal record in both social and crucial physical infrastructure. Reports indicate that there was no proper integrated framework of coordination between the industries and the state of infrastructure, technical skill availability and resource generation position within the state. It also lacked the insight that the poor growth of agricultural sector could eventually thwart the effectiveness of even the policy measures giving major thrust on industrial development through various instruments and incentives. The results of the corporate-driven, top-down vision for economic development were mixed. In the post-reform period, Orissa grew somewhat rapidly than in its pre-reform phase, 2.53 per cent per annum, but was still near the bottom of the states in growth performance (12th during 1991-1998 as opposed to the 14th during


Support to the Implementation of Orissas Industrial Policy Resolution 2001, Partial Draft28 March 2002. (Ministry of Industry-State Government of Orissa, DFIDIndia, Government of UK, United Nations Industrial Development Organization, United Nations Development Programme).

Alloyed Projects, Metalled Resistance: SMRITI DAS and N.C. NARAYAN


1980-1990).2 The state borrowed heavily even for its consumption expenditure.3 But, it could leverage upon its natural resources, and within a poor fiscal status it responded boldly to the economic reforms. The result was that in the post-liberalisation period, Orissa ranked sixth in foreign investment, and at the top in per capita terms. The State was supposed to be a catalyst and hence facilitated capital in the coercive acquisition of tribal land for development that disrupted local livelihoods. Its mining sector grew by 15.6 per cent during 1980-1990.4 Paradoxically, Orissas poverty reduction rate, which was the highest in the 1980s, dropped to virtually full stop in the 1990s.5 The declining growth rate in agriculture had negative implications for income growth and income distribution in the predominantly agricultural state. The agriculture sector in the post-liberalisation phase experienced a contraction in growth of 0.5 per cent. This discussion holds relevance because though the contribution of agriculture to GDP declined, the percentage dependence of people on agriculture as a means of livelihood was still high,6 and considerably so in Orissa. It was surprising that the state was showing relatively low growth rate in agriculture at 0.72 per cent and some even attributed the backwardness of Orissa to this reason, while according to the analyses its soils and suitability for irrigation did not stand apart from more successful states. This raises some pertinent questions on the equity dimensions or the spread effect of the perceived development trajectory in the state. The possibility of a welfare failure due to the state withdrawal from social sectors were supposed to be contained by subcontracting these functions to outside agents including the civil society organisations and private players. Thus the role of the state waned out to that of a regulator and a mediator. The civil society organisations increased their
2. Sachs, Bajpai and Ramiah ( ).

3. The States own revenue together with its share of central taxes and grants from the centre falls short of the expenditure on salary, pension, interest payment and repayment of principal by more than Rs. 150 crore and to meet this deficit and other expenses. 4. Orissa has 90 per cent of Indias chrome ore and nickel reserves; 70 per cent of bauxite; and 24 per cent of coal reserves. . 5. Mller and Patel, 2004. 6. Agricultural sector in India accounts for only 26 per cent of national GDP, but employs 60 per cent of the national workforce. See Singh, Kumar and Woodhead, 2002.


State, Natural Resource Conflicts and Challenges to Governance

responsibility towards developmental work and delivery of services. Governance in the new context depicted a transfer from a top down to an interactive regulatory process, or to a networking polity (Chandhoke, 2003). But the primary responsibility was regarding imparting justice to the legitimate rights of the democratic citizens. The consecutive sections in the case will render facts and situations to analyse whether there was an adequate redressal of these rights in the mining project.

Externalities of Development: Mineral Exploitation in Kashipur

The dominance of the supranational bodies unleashed the idea of free market and political conditionality with financial aid as with any other state. Given the socioeconomic conditions, the accordance of governance to market principle was bound to lead to the questioning of accountability of the institutions involved within the democratic set up. For governance to be inherently valuable, it should represent a political value which must be negotiated by the political community in question, and speak to the relations between citizens and the state. 7 While the case of mining in Kashipur reflects the implementation of the policies whereby the elements of liberal democracy is incorporated into the institutional design and state remains a technical facilitator to the designs of development.

The Setting
The project is to be located at Doraguda village, Kashipur tehsil, Rayagada district in Orissa, which is predominantly a tribal belt with approximately 56 per cent tribal population. The physiography gives a prefect platform for the tribals to sustain their ethno-cultural identity in the district. About 81 per cent of the main working population depends on agriculture for its subsistence.8
7. 8. Jayal, 1997: 410. The district has been the homeland of various tribal communities with their subtribes. The kondhas and its subsection constitute the major percentage of tribal population in the district. They are primarily dependent on subsistence agriculture, i.e., shifting cultivation or slash and burn cultivation or Podu. It has a total geographical area of 7,58,746 ha. The cultivable land in the area is 1,92,998 ha, forest area is 1,15,911 haand cultivable waste land is 10,649 ha, permanent pasture and other grazing land is 7175 ha, land put non-agriculture uses is 24937 ha, barren and uncultivable land is 6,10463 ha. .

Alloyed Projects, Metalled Resistance: SMRITI DAS and N.C. NARAYAN


The refinery site is approximately 20 kms to the South-South-East of Baphlimali deposit. Baphlimali is the hill which has a reserve of 197.6 MT of bauxite. The terrain around Doraguda is fairly plain and is surrounded by a number of hills. The area has number of streams emanating from three sides of the hills and converging into a river locally known as Barha Nadi. The nearest reserve forest boundaries are about nine to ten kms from the proposed alumina refinery site. The project area falls in the Eastern Ghats from geological point of view. The principal rock types are khondalites, quartets, and granite gneisses. The proposed refinery is 100 per cent export oriented and based on Baphlimali bauxite deposit. Baphlimali mining issue cannot be disaggregated from its geographical importance since the entire landscape is surrounded by hills which are rich reserves of minerals that have potential for mining.9

Land and Water Requirement for Mining

The plant (including alumina refinery and steam and power plant) would require 238 ha of land. The requirement of red mud stacking area is 249 ha, ash pond137 ha, township142 ha, railway corridor128 ha and infrastructure (office and others)87 ha. The water requirements would be met from Barha Nadi and Sana Nadi. Peak requirements from Barha Nadi would be of the order of 6000 m 3 /day which would be acquired through construction of water regulator. Normal rate of drawing from Sana Nadi would be 13,400 m3/day. This will require construction of a weir across the river. Filtered water requirement of alumina refinery would be 12,100m3/ day.


Orissa possesses 69.7 per cent of the total bauxite deposited in India. As for the bauxite reserves there are 1957.3 lakh tonne in Baphlimali and 810 lakh tonne in Sasubahu Mali of Kashipur block, Dist. Rayagada; 860 lakh ton in Siji Mali and 400 lakh ton in Kutru Mali of Rayagada-Kalahandi district; 914 lakh tonne in Kodinga Mali of Laxmipur block of Koraput district. Bauxite is also deposited in Ghusuri Mali and Sijli Mali of Dasmantpur block and also in Niyamgiri area of Lanjigarh block in Khadual Mali of Thuamal-Rampur block of Kalahandi district. Bauxite is used as raw material for production of alumina. (Samantray, http:// . The cost of production in this region is estimated to be the lowest in the world due to their mineralogy and size of reserves accessible by a single alumina plant.


State, Natural Resource Conflicts and Challenges to Governance

Impacts of Mining
Displacement and Impact on Livelihood

Given the socioeconomic background of the area 10 development led displacement in the area will only lead to aggravation of the misery of the tribals. The total number of families displaced will be 147, from three villages. But the total number of project affected persons (within legal definition) would be 2005 (ST-865, SC-574 and OC-566) and the land acquired for the project is 2155.46 acres (ST-848.89 acres, SC-703.34 acres and OC-603.23 acres).11 The total number of villages directly affected by the project would be 24. The concern arises from the fact that a significant part of the cultivable and irrigated area in the Kashipur block lies in the three valley plains: Doraguda, Kashipur and Tikiri. According to a survey done by an organisation TARU,12 the plain areas below Baphlimali plateau have the highest population density and are cultivated with water from the perennial streams. The extraction of water from the perennial streams would reduce the water availability and livelihood sources of the local communities. It is also most likely that the sediment discharge would increase in the neighbouring streams leading to significant losses in the agricultural lands in the downstream.
10. Kashipur BlockDevelopment Indicators Kashipur block has a low population density of 66 persons/sq km. It has an annual growth rate of 1.641 per cent. There are a total of 412 revenue villages in the block in 20 Gram Panchayats. The infrastructure and communication facility in the block is low including literacy (female literacy3 per cent, male literacy17 per cent). The majority of the population is poor with heavy dependence on agriculture and forest produce. More than 20 per cent of the land is agricultural and 65 per cent of the landholdings are less than 1 ha. Large holdings of over 10 ha account for just 4 per cent of the population. Per capita cropped land is very low as actual land suitable for cultivation is limited. 70 per cent of the households have farming occupation. On an average, land holdings account for 60 per cent of the total assets of the household in the area. More than 80 per cent of the area is rainfed. Annual family income varies from Rs. 7,860 to Rs. 25,345 with an average of Rs. 11,200. Average per capita income is Rs. 1,740 to Rs. 3,735 in the case of marginal and large farmers respectively. The per capita annual income is Rs. 2,440. There has been a reverse trend of poverty in Kashipur with increase in population below poverty line from 15471 in 1992 to 24582 in 1997. Thus 78.48 per cent of the population is below poverty line. A study by the Orissa Tribal Development Project estimates that the excess production required to meet the balanced diet requirement in Kashipur is 65 per cent for cereals and 93 per cent for oilseeds. 11. Data sourced from Comprehensive Note on Land Acquisition (from Agragamee). 12. For the environmental and other impacts the report from study conducted by TARU has to be depended upon as the environmental management plan and the environment impact assessment reports are not made public.

Alloyed Projects, Metalled Resistance: SMRITI DAS and N.C. NARAYAN


Environmental Impact

The bauxite would be extracted through opencast mining. It is to be mined at the top of the plateau and sent to primary crushers. Crushing operations are prone to generate dust and noise. For every 1000 kg of alumina 1157 kg of solid waste is generated. The solid waste generated consists mainly of red mud, sand and lime grit. The impact of opencast mining and the solid and liquid effluents would be large-scale and are likely to affect a large number of villages through impact on air, groundwater, agricultural land and crops, aquatic life and human settlements.13 However, the company has claimed that it will take care of the solid and the liquid effluents; take steps for water quality management, noise control, groundwater contamination management, fly ash disposal and develop a green belt across the area.
Socioeconomic Aspect

As for the socioeconomic impact, the project entails various job opportunities for the local population. Given below is the estimated employment (direct/indirect) in mines and plant area by the company.14 However, these are contested by the local population on grounds of low literacy level and lack of skills. The labour opportunities generated in the construction phase would hold no promise of gainful employment (moreover, the contractors would also get the labourers from outside). With the land lease being transferred to the company, the prices of the lands in the vicinity have already plummeted and

13. The capacity of the alumina plant is supposed to be 1 mtpa in the initial stages which would later increase to 2 mtpa. Nearly 3000 tonnes of redmud, 135 tonnes of caustic soda dissolved in about 5000 cum of water, and 1000 tonnes of ash are the wastes generated by the plant of such capacity. The ash is planned to be disposed in an ash pond while red mud is planned to be disposed by mud stacking method. The disposal method of caustic soda is unknown, but releasing it into the stream would stand the threat of raising the pH level beyond 10. Neutralisation of this with acid would increase the amount of waste by about 225 tonnes/day which threatens the aquatic life in the streams. This would raise the dissolved solid content in the stream to the extent of 4437 ppm which is high above the Pollution Control Boards norm of 1000 ppm, rendering it unfit for irrigation and drinking water purpose. Storage of this material as solid waste dump would have long term impact on groundwater systems. Dissolved aluminium is toxic for the aquatic life in the smallest concentration. 14. This estimate was done in the year 2001 by the Utkal Alumina International Limited (UAIL). However, after the conflict in the area and the firing and other incidents of violence, Utkal Rural Development Society (URDS) was closed. Thus employment estimation at this point and many others are again under question.


State, Natural Resource Conflicts and Challenges to Governance

tribals express their inability to invest in attaining lands for establishing shops/business. In lack of productive assets and investment capacity, auxiliary services are also questionable. Additionally, they are aware about the possibilities of further industrialisation and the tribals standing the threat of further marginalisation.15

Table 9.1 Job Opportunities in the Area (estimated by UAIL)

Sl. No. 1 2 3 4 Item Highly skilled 600 50 10 10 670 Skilled Unskilled Total man workforce 920 600 400 590 2510 For locals

Direct Jobs in Plants and Mines Indirect Jobs in Plant and Mines Indirect Jobs in URDS and CSR Indirect Jobs in Ancilliary Industries Total

220 200 40 30 490

100 350 350 450 1250

270 400 360 580 1610

Source : Utkal Jyoti (January-March 2001).

The penetration of capital in the area is not just based on simple replacement of traditional economy by market economy. The penetration of capital into the tribal areas changes the very nature and concept of property relations. Tribals exercise corporate rights over the land rather than strict individual ownership.16 Thus the interests of different parties and the response have to be integrated within a structural explanation. The argument of the state and the market institutions is based on the efficiency logic. The environmental impact of the project with the opencast mining project is a threat to the environmental, social and
15. In a personal interview, the tribals articulated this fear as: We are aware of the notifications about the land transfer even after the project started in case of Indravati dam and even Nalco and other developmental projects aroundThis would lead to further industrialization and development where we would be forced away from our land and livelihood. The tribal women displayed seething discontent: We are the sons and daughters of land and plough land; we somehow thrive through a mix of livelihood options based on land and forest. We cannot plough in airand we are happy with our community life. 16. Pathy, 2003.

Alloyed Projects, Metalled Resistance: SMRITI DAS and N.C. NARAYAN


cultural life in the area. The State wants to make up for its poor financial performance and slow pace of development in the area attributing these to the slow pace of industrialisation in the area. This has been facilitated by the political will of the government and presents an evidence of the networking of the state and market forces with the political parties. The political agents to communicate this intent were the representatives of the people themselves. A retrospect at the peoples reaction to the mining project in the area would help in clarifying whether the interests represented in the political arena were those of the people themselves.

The Conflict in Kashipur

Orissa has a history of conflicts over the natural resources. 17 A number of them have been against the industrialisation process in the state that threatened the livelihoods of the people. These came up as the resistance of the ecosystem people to the process of resource intensification by the capitalist forces. The resistance of the local communities to the state and the outside exploiters through a variety of protest techniques can also be seen as a new series of class struggle,18 which are waged over the gifts of nature that are coveted by all but monopolised by few. Many a times these resulted from distribution conflicts. The conflict between the industry and the tribals were rooted deep in a history of unequal exchange through the capitalist exploitation of nature. While the industrial growth in the state was driven by the economic incentives, the livelihood of the tribals was threatened by the rapid resource exploitation in the area. Therefore, a twin attack was perceived on the economy and the cultural life of the communities as well as the environment. From ignorance on the part of the tribals and the attempt of co-option by the state and the market forces, the conflict of interests has taken the shape of a movement of the people, and often confrontation, against the tendencies of globalisation by the state without due recognition of the tribal rights. The conflict further aggravated and became anti-state as well when
17. The Balco mining case on Gandhamardan hills, the Chilika Prawn Fishing Project of the Tatas, the Baliapal firing range issue and a number of instances of opposition have gone down the history of Orissa in opposition to the wrathless industrialisation. 18. Guha and Martinez-Alier, 1997.


State, Natural Resource Conflicts and Challenges to Governance

the state tried to mediate between the tribals and the market forces but not as a neutral arbitrator.

Peoples Movement in Kashipur

The tribals in Kashipur block of Orissa resisted when they realised the threat to their life and livelihood from the mining project. The resistance built up through the local leadership in Kucheipadar. Krishna Saunta, Laxman Majhi and Maharaj Majhi took the lead in protest. They have been fighting the battle against the vested interests of the company and the state amidst false police cases (registered against them and against the people and the agencies supporting them), boldly facing lathi charges and other forms of police resistance.

Box 9.1 Time Line: Important Events

1993 An 18 member team met and submitted a petition to Biju Patnaik (signed by 45 villages) demanding cancellation of the project. An inquiry was conducted by the Tehsildar into the matter who projected things as fair and the process peaceful. 1994 Protest from people aggravated. Villagers from Kucheipadar set the survey team camp on fire. 1995 The protest in Srunger area against mining by L&T also gained momentum. 1996 The Industrial Policy of Orissa sounded challenging to the cause of the movements and rewarding to the cause of the rapidly progressing industrialised society. Prakrutik Sampada Surakhya Parishad and the Baphlimali Surakhya Parishad emerged as powerful local organisations to mobilise people and voice against the projects. Resistance gained momentum. Same year, the PESA Act also supported the rights of the people, extending power to the Gram Sabha in the development of the area,19 though the state amendments had different implications. NGOs get environmental impact assessment done by experts.
19. The historic Samatha judgment in Andhra Pradesh in 1997, restricted trading of land in Schedule V areas but exempted Orissa from the regulations since Orissa already had laws in place in the form of The Orissa Scheduled Areas Transfer of Immovable Property (Scheduled Tribes) Regulation, 1956 and Orissa Zilla Parishad (Amendment Act), 1997. The PSSP stated: There is a lot of talk on the unlimited powers of Gram Sabha in Scheduled areas. We feel the slogan power to people through Gram Sabha is nothing but eyewash.

Alloyed Projects, Metalled Resistance: SMRITI DAS and N.C. NARAYAN



1998 There was a lathi charge by the police in Kucheipadar while trying to break the barricade put up by the people to stop the entry of the company. Series of conflict between the administration and the people continued. United struggle and agitation continued in Kashipur and Lakshmipur. Company started an NGO for developmental activities to win the confidence and trust of the people. 2000 All the community development activities by the company were stopped. In a horrendous move, police opened 16 rounds of fire on the mob where three tribals died at Maikanch village. This was a turning point in the conflict between the company and the people. There were series of allegations and counter allegations. After this incidence, the Tatas pulled out of the consortium. Justice P.K. Mishra committee20 constituted to probe into the matter. 21 2001 A charter of demands was placed before the government to solve the problem of starvation death wherein irrigation facility through check dams and mobile medical teams were demanded. The protest against mining continued. The survey work of Sterlite company in Sasubahu mali area was foiled. 2002 The survey work at Thuamul Rampur (Dist: Kalahandi) was opposed with the support of local tribals. Demanding cancellation of all bauxite projects in KBK 22 districts, a big rally was organised at Tikri. 2003 The findings of Justice P.K. Mishra Committee reported that there was no need for so many rounds of firing in Maikanch. But as far as the justification for the project was concerned, it stated that the states progress should not be hampered in the name of environment protection. 2004 Several rallies being organised by the tribals demanding scrapping of the UAIL project and punishment to the guilty in the Maikanch firing case. Local administration actively organises all-party meetings and attempts coercion. Tribals protest against the inauguration of roads to the project site. Police resort to blank firing and lathi charge.

20. Justice P.K. Mishra was the sitting High Court Judge. 21. Three points were laid as the basis of enquiry: (1) If the incident was avoidable and if there was any excess use of force by police; (2) The factors leading to such a situation and the role played by any groups/organisations/individuals in creating such a situation; (3) Any other matter related to the incident which the commission considers useful for the purpose. 22. Koraput-Bolangir-Kalahandi.


State, Natural Resource Conflicts and Challenges to Governance

The movement has garnered support from various organisations and there have been attempts to inform and influence the policy makers at the State and the Central government level. However, these have not resulted in positive outcome as yet. The resources for the long-drawn movement are being mobilised through self collection/ support and assistance from the organisations and the individuals. Agragamee, Adibasi Manch, Ankuran, WIDA, Laxman Nayak Society for Rural Development are the local organisations which have been supporting the movement. Involvement with the movement has negatively affected the employment and livelihood of many of the tribals. Yet the tribals have continued their struggle against the companies through public rallies and meetings, peaceful agitations, road blockades, etc. In one of the meetings with the officials of the Council for Social Development, 23 the villagers reported of two centres of Agragamee being burnt by the company hired miscreants. In retaliation, people torched the temporary workshed of the company. In other instances, cases have been filed against women and children also. The attention of the international organisations like Amnesty International and National Human Rights Commission were drawn on several issues. The incident is not an isolated one in the valley of rich mineral deposits. In the year 1995, L & T started survey work in Siji Mali and Kutru Mali of Kashipur-Thuamal-Rampur blocks of RayagadaKalahandi. Due to strong opposition the company had to stop operations. The Sasubahu Mali has been leased to Sterlite Company. Under the banner of Khadualmali Surakhsya Vahini, people of eight panchayats of Thuamul-Rampur block, in Kalahandi district, have been protesting against bauxite mining. Similar voices of protest were raised against Sterlite Company in Lanjigarh area (specifically in Botlima and Lanjigarh panchayat ). 24 However, Sterlite has been successful in starting the mining operations and the pressure seems to be building upon the district administration in Rayagada.

23. Council for Social Development, 1999. 24. Quoted from A Fact Sheet by Prakrutik Sampada Surakhya Parishad. Website:

Alloyed Projects, Metalled Resistance: SMRITI DAS and N.C. NARAYAN


Stakeholders within the Network of Governance

The case steps into a contested domain with multiple interests of the stakeholders in managing natural resource vying within the network of power and structures of decision making, given an array of institutional arrangements. If argued from the new governance perspective which promises an exit from the bureaucratic, hierarchical and overloaded structures of decision making, the efficiency and efficacy of the new network in resolution of the problems demands inquiry. At another level, there is an ambiguity concerning the appropriate node in the network of governance which can be trusted by the individual to protect his/her right. Thus the mapping of the stakeholders is done with a view to critically look at the roles and the relationships of the various actors.

In Orissa, the state government harped upon the opportunities led by the economic reforms to usher into an era of liberalisation without any safety net. The legislative provisions in Orissa endorsed this, primarily with the Industrial Policy. As discussed earlier, the industrial policy changed over time to facilitate the generation of revenue through exploitation of minerals by the private sector and multinational companies. The formulation and implementation of this policy in the state was supported by the supranational agencies like the DFID, UNIDO and UNDP apart from the Ministry of Mines and Industry and Government of Orissa.25 At the process level, policymaking was driven by the scientists, geologists, engineers, economists, financial experts. Complementing the policy makers at various levels were different layers of bureaucracy and various departments which influenced the material context. The Orissa State Pollution Control Board gave the environmental clearance. The Orissa Mining Corporation helped with the mining lease. The Industrial Infrastructure Development Corporation set the infrastructural
25. Management of mineral resources is the responsibility of the Central Government and the State Governments in terms of Entry 54 of the Union List (List I) and Entry 23 of the State List (List II) of the Seventh Schedule of the Constitution of India. The Mines and Minerals (Regulation and Development) Act, 1957 lays down the legal framework for the regulation of mines and development of all minerals other than petroleum and natural gas. The Ministry of Mines is responsible for the survey and exploration of all minerals. It is also responsible for the administration of the Mines and Minerals (Development and Regulation) Act, 1957.


State, Natural Resource Conflicts and Challenges to Governance

requirements and helped through acquisition of land. The networking within the vertical layers was comprehensive with the district administration facilitating capital through control of law and order situation, resorting to coercion wherever required. In Kashipur, the Regional Development Commissioner and the Collector claim to have gained consent from 23 out of the 24 affected villages, while the representatives of the people deny having consented. While the 73 rd amendment entrusted those powers to the Panchayati Raj Institutions which the centre could not have performed, the horizontal pluralisation of the state received legitimacy nationwide. This layer is situated between the local level and the district administration and has a two-way accountability. But the PESA Act (Panchayat Extension to Scheduled Areas Act, 1996) in Orissa succinctly abrogates the powers of the Gram Sabha. As a result the consultation with the Gram Sabha remains a mere formality in case of consent over land transfer and mining lease. The provisions of the Central Act were adopted by amending the Orissa Gram Panchayats Act, 1964; Orissa Panchayat Samiti Act, 1959 and Orissa Zilla Parishad Act, 1961. The following changes were thus incorporated: Acquisition of Land In contrast to the gram sabha and gram panchayats being accorded consultative powers in the central act, the Orissa Act assigned the power to be consulted to the Zilla Parishad. Grant of prospecting License or Mining Lease for minor mineralsThe recommendation powers are accorded to the Zilla Parishad. It appears as Zilla Parishad, without the approval of gram sabha or gram panchayat, can give land on lease for developmental projects. In this context, practically the state withholds any power to be given to the people, the gram sabha or the gram panchayat . 26 Also, the

26. Regarding the traditional rights and customs of tribal people, their cultural identity and community control over resources, etc. as mentioned under Section 4 (d) of the Central Act, Orissa provides rights to Gram Sasan , making it competent to safeguard and preserve the traditions and customs of people, their cultural identity, community resources and the customary mode of dispute resolution consistent with the relevant laws in force and in harmony with basic tenets of the constitution and human rights (originally not provided under the Central Act of 1996). This in fact implies that in case of any dispute, the hold of Criminal Procedure Code, Indian Penal Code, Orissa Forest Act etc. would prevail over the customary laws of these communities.

Alloyed Projects, Metalled Resistance: SMRITI DAS and N.C. NARAYAN


Samatha Judgment in the mining case of Andhra Pradesh, which restricted transfer of tribal lands, relieved Orissa on grounds of the already existing provisions in the interest of the tribals.27 The Orissa Scheduled Areas Transfer of Immovable Property (Scheduled Tribes) Regulation, 1956 and Orissa Zilla Parishad (Amendment Act), 1997, are said to protect the rights of the tribals over the resources. Did the pluralisation of the state liberate it from the responsibility of ensuring democratic rights to its citizens? Where and to what end were the regulatory powers of the institutions used? To explain the states changing role in the development process, the district administration terms the states role as facilitative. The industries approve the policies of the state as adequate and investment friendly, except for the bureaucratic delays in procedures and political interests. Whether these changes are driven by the forces of globalisation and new market economy can be contested as the policies sound facilitative for the investment opportunities in scheduled areas, but smoothly confine the powers within the closet of the district administration (for example, entrusting the Zilla Parishad with the powers of decisionmaking).

The resource conflict resonates within the larger ambit of ecologically unequal exchange whereby extractive economies create poverty at the local level (Guha and Martinez-Alier, 1997: 39). While the governance paradigm sees the partners within the network of trust; can inegalitarian societies and relations of unequal exchange

27. In the case of Nimalpedu in Andhra Pradesh, the Gram Sabha did not give consent to carry out the mining operations, the company had to abandon its Rs. 2500 million investment just to enable the villagers to declare it a village republic and take control of the resources in the village area. The Act is rigid on Collector and the required authority being present in the meeting of the gram sabha where people are informed about the project and consulted. The clause cannot be circumvented under any condition and even the individual interested person has the right to be heard during the proceedings. In the procedure to be followed, The Central Act vide Section 4 Clause I lays that in all Scheduled V areas, consultation with the Gram Sabha is mandatory before any land acquisition proceedings can be undertaken. It also lays that All Gram Sabhas in which even if one person is affected by a proposed project would have to be consulted before acquisition proceedings are initiated, by the procedure prescribed below. A project affected person is defined as any person whose livelihood or habitat is expected to be extinguished or adversely affected by the proposed project, notwithstanding the legal status enjoyed by them in relation to the concerned resource base for their livelihood or subsistence.


State, Natural Resource Conflicts and Challenges to Governance

exhibit this behaviour? The exchange between the local economy and the market in this case is based on unequal footing and the benefits accrued would also be unequal. While the people would have nothing to gain except for labour and housing facilities for some, the company would accrue huge profit. The UAIL revised its rehabilitation package escalating the price of land to four times its original price. The rate for homestead land is fixed at Rs. 8 lakhs for 1 acre of land. But the houses of tribals are built on plots of much less than an acre, say 0.02 acres, and would not fetch them anything beyond Rs. 16,000 to 20,000. Assessing in terms of profitability to the company, it is notable that the alumina price in international market is determined by LME (London Metal Exchange) that is related to price of metal. On a freight-on-board basis, average spot price of alumina in international market varied from US$ 146/T in 2002 to US$ 290/T in 2003 and to US$ 455/T in April 2004. 28 Thus, the profitability of the company is unlikely to decline even with delay in start of the project, while it is moving with the assumption that it will soon start production with support from the Government of Orissa. The gain to the state exchequer was laid as a sufficient reason by the state to integrate outside agents in the development, while it played the role of a mediator. In 1993, UAIL was established and the project ownership was divided between INDAL, TATA and NORSKHYDRO.29 While the Industrial and Mining Policy of Orissa itself facilitated the private investment in the state, the district
28. The cost of alumina production has wide range of variation depending upon cost of inputs like bauxite, caustic soda and energy consumption pattern, bauxite quality, technology in use and size of the plant. New plants are being designed for less than US$ 90 per tonne production cost. The production in Orissa is said to be one of the least cost production units. 29. Though the mineral reserves in the state were traced long back in the 1970s, INDAL promoted the concept of greenfield project in 1991. The agreement with the Orissa Mining Corporation was signed in 1992 and the government gave permission to INDAL to set up for 100 per cent export oriented project for manufacture of alumina for one million tonne per year based on Baphlimali Bauxite deposit. In 1993, UAIL was established, while the detailed feasibility study was completed in 1994. In 1995 the environmental clearance was obtained and gradually the transfer of land was also done by 1997. The land was first taken over by the Industrial Development Corporation and was later transferred on a lease basis to the company. In 1998, the URDS was floated to take up developmental activity in the area. A consultancy firm, called the Business Partners in Development, was also hired to negotiate with the civil society and the people.

Alloyed Projects, Metalled Resistance: SMRITI DAS and N.C. NARAYAN


administration extended full support to the setting up of the project.30 The Government of Orissa helped providing them with the lease over the land in tribal areas in order to attract foreign direct investment inspite of restrictions on transaction of land in the scheduled areas. The mining lease was transferred from Orissa Mining Corporation to the UAIL in the year 2000. The capacity of the plant was revamped in the same year to 1.5 million tonnes per year. With the production capacities of 1.5 MT and 2.0 MT in the two production phases, the reserve would be exhausted in approximately 30 years. The capital investment in the project was Rs. 40,000 million. The tax on works contract was estimated at Rs. 400 million. The earnings in forex were estimated at Rs. 9,000 million per year, while the royalty from the mines was estimated at Rs. 120 million per year. Till the year 2000, the company had spent Rs. 700 million. It claims to have paid Rs. 45.10 million to the Orissa Mining Corporation for execution and registration. The total expense on the leasing of land and mines amounted to Rs. 159 million.31 With such investments, the market economy was ready to take over the pace of economy which lagged behind. The state took all steps to convince the people of the developmental prospects of mining. Gram Sabhas and Palli Sabhas are held in the presence of the Collector, Regional Development Commissioner and the police to get the consent of the tribals. In a probe into a firing incident, the committee opined that mining cannot be stopped for the sake of environment.32 This judgement is followed in words by the Government of Orissa to further the project in the district. UAIL is said to be following the World Bank guidelines to monitor and control the quality of the environment likely to be affected by its activities. The Corporate Social Responsibility (CSR) department undertook the responsibility of informing the people about the development in the area. Communicators were appointed by

30. The Collector of Rayagada opined: The minerals would be exploited in the area as long as they are therethere is nothing as project period. With these industries, ancilliary industries and other forms of business would also prop up and promise greater development. This would even help the poor farmers who would be able to set up shops, sell their products at a higher price. The colonies that would be set up would acquire educational facilities, safe and clean drinking water, electricity and prosper with the riches. 31. Utkal Jyoti, January-March 2001. 32. As highlighted by local newspaper Dharitri on October 10, 2003.


State, Natural Resource Conflicts and Challenges to Governance

the company in each village to update the villagers with the Resettlement and Rehabilitation (R&R) package and the environmental policy. Norsk Hydro and the Tatas pulled out of the project after the firing and the slow progress of the project. Thus, capital had co-opted the state for furthering its objectives.

Civil Society
Local leadership played a crucial role in the visible manifestation of the conflict. This was supported by the locally based NGOs (like Agragamee, Ankuran, WIDA, Laxman Nayak Society) which had been working in the interest of the tribals for a considerable time. The activists at the local, state, national and international level endorsed the cause of the movement and extended support. Information and sensitisation about the rights of the people proved crucial in expression of discontent with the trajectory of development. The political competence of the tribals was evident from the self confidence and the collective progress towards opposing the market forces from taking over the economy. Agragamee provided the critical support in terms of information support, mobilisation of people, networking and legal support. Through the constitutional provision like the 73 rd Panchayat Amendment and the PESA Act, it also helped the panchayats gain constitutional validity for their resistance against the mining companies through Gram Sabha resolutions. It actively drew the attention of the bodies like National Human Rights Commission, the SC/ST Commission, Ministry of Environment and Forests (MoEF), etc. The environmental and socio-economic impact study was also commissioned and public interest litigation was filed. Few organisations also extended financial support to the movement at critical junctures. These organisations and activists have been instrumental in highlighting the issue over local and global media which built a pressure on the administration to refrain from violent repression of the tribals. The showcause notice issued for deregistration of the organisations in 1998, where instructions were issued to all the departments to have no financial or other dealings with these organisations, posed a question on the survival of the organisations. But the larger fear which would have lurked was about the democratic functioning of the

Alloyed Projects, Metalled Resistance: SMRITI DAS and N.C. NARAYAN


institutions. The ban was lifted only in the year 2000. The NGOs have taken a neutral stand after the false propaganda and cases pitched against them. The demand by the civil society demands recognition of the democratic rights of the citizen, in recognition of the right to life and livelihood ensured fundamentally to the citizens of India. This is advocated for tribals because they have been the worst affected in the process of development in Orissa. Agragamee, with other organisations in the area, has been of the opinion of a genuine dialogue between the company and the people. They have been advocating for discretion of sites for mining by the government, consultation with the people over R&R packages; have been against monetary packages and built-up ghettos, indiscriminate police atrocity, etc. The picture of any node, within the network of governance, to be painted in white would not be possible within a socioculturally diverse and politically dynamic society. To understand the contribution of the conflicting ideas within or between the nodes of the network, questioning the role of the actors becomes crucial. One needs to question the role that the civil society is playing in the movement. Has it been mere management that is fated to indefinite dependence of the people on these agencies and individuals for direction? Accepting this argument would imply overlooking the collective endeavour and demand of rights by the tribals. There are schisms and internal differences within the sphere of civil society, which may increase in magnitude. A rift seems to have emerged between the NGOs and the activists on the issue of due credit/recognition of their contribution to the movement. Activists blame NGOs for capturing all media attention. The issue gradually caught up and D. Bandopadhyaya33 highlighted the ideological conflict between the puritans and the pragmatists while he referred to the controversy between the activist and the NGO representative. He pointed out, Where there should have been solidarity among intellectuals and activists to stand by and support this genuine struggle of tribals, such polemic disputes tend to weaken the ideological support base of such efforts.
33. Bandopadhyaya, 2004.


State, Natural Resource Conflicts and Challenges to Governance

The political ambition among youth becomes threatening as they tend to be driven by personal interests at the cost of collective. This stems from the corrupt practices in the administrative machinery and holds a threat in the area. Also, there seems a political disillusionment among older leaders, which may result in loss of direction for the youth. Conspicuously, capital has successfully won over few people to their camps. But the equations do not remain only a surprise when leaders like Krishna Saunta, who spearheaded the movement at one point of time and lost his government job because of the involvement, change sides. Does it pose organisation strength vis--vis capital? The incidents may indicate a redefinition and demand of accountability even on the part of the civil society which took upon itself the responsibility of social reproduction? Larger questions that lurk over these instances arewhat are the democratic rights of the citizens, what kind of democracy should be institutionalized, is it at all possible for democratic institutions to thrive in inegalitarian societies, can civil societies remain depoliticised and refrain from being accountable?

Political Parties
While we talk of representative government and democratic citizenship, the idea of what is represented becomes important.34 The representatives are instrumental in shaping the same. Chandhoke (2003) raises important questions in this regard as: Are citizens and their needs represented at all in the political society? Or are citizens as well as their needs constructed by practices of representation? Moreover, whose interests do they represent? The only respite in such cases is election period when the electorates exercise their franchise in a democratic set up. The above formulations of problems hold significance as the political parties in the area are in favour of the mining projects. They are discontented with the peoples opposition to the project and attribute the backwardness and deaths in Kashipur area to the same. There are committees that are constituted to steer ahead the process of industrialisation. Within the political contestations, the real issue of exercise of democratic rights by the citizens, and lack of accountability and responsible representation, subside.
34. Laclau suggests that representation is a necessary moment in the self-constitution of the totality.

Alloyed Projects, Metalled Resistance: SMRITI DAS and N.C. NARAYAN


To understand the significance of the agenda in the political contestation, we find the MoU with the company was signed when Janata Dal MLA, Akhil Saunta was in power. But he was defeated on the same grounds by a tribal Congress leader Anantram Majhi in 1995. He has been reelected in 2004, but people now are disillusioned and believe that none of the political leaders can help the situation. Thus, while the government and the political parties have been placing faith in the development of the area through the exploitation of rich mineral reserves, people place faith in local movement. The Chief Minister of the state has signalled a call to repress antiindustrialisation forces,35 sparking a debate over the role of the state. An all party meeting is again scheduled at Tikiri, Kashipur, on 28 th November, 2004, in support of the project. The other instances of mining are also debatable in light of the recent furore in Orissa Vidhan Sabha over the mining project in Lanjigarh, which questioned the government on transparency and accountability.

An informed participating citizenry can only be generated by a vibrant media system and the democracy is predicated upon an informed participating citizenry. Medias role within the democratic society becomes as critical as that the medium itself becomes the message.36 How do we then project the responsibility of the media in anticipated and unanticipated consequences in the small block of Orissa? Has media been responsible enough to carry forth or be the medium itself from which change emerges. Media in the country is commercial in nature and is often politically partisan. This is reflected specially in the print media. An analytical insight into the situation in Kashipur is absent in the media. The print media in action can be classified on the basis of language as Oriya and English newspapers. The Oriya newspapers like Dharitri, Sambad, etc. which mostly have local circulation and readership, report the incident on a daily basis and at times take sides with the

35. Dharitri, November 25, 2004. 36. McLuhan, 1964.


State, Natural Resource Conflicts and Challenges to Governance

interest of the tribals. The English newspapers, mostly national newspapers like the Times of India, Asian Age, The New Indian Express, etc. fail to objectively identify the issues involved and frame a message. A content analysis reveals that the messages conveyed by the newspapers reflect personalised views or opinions and even distorted reality by painting one side of the picture. There are only few instances where the media represents itself as conveying a message by objectively assessing the situation. This can be correlated to the readership and hence the interest of the different class of readers. Take the local newspapers for example: the values to which its readers subscribe are fairly well-known and common/shared. All its writings, reporting and presentation would be shaped by the values shared by its readers. It is rarely called upon by its readers to assert its values explicitly. The political economy of media restricts its allegiance to certain player within the network of actors of governance. Market can extend into media because it provides economy to the media. State has power to influence the operations of the press and also the business called press. Civil society is unable to use the media to promote itself, nor able to exert pressure on the media to promote the issue unless the news is sensational. To certain extent, medias critical role in democratic society was upheld by the presence of alternative media in the form of video and internet campaigns. The story of Kashipur has flashed all over internet sites which represents consciousness of the national and the international organisations over the issue of tribal rights, the role of the state and the concerns arising from globalisation. But the question arises about the role of the media in constructing a social reality and supporting the democratic ideals. Where does the role of the media end?

Conflicts and Crisis in Governance

Development projects, their impacts and the counter hegemonic formations of resistance reflect a development crisis, which in turn becomes a challenge in the governance of natural resources. However, these manifested expressions of resistance are healthy from the vantage point of equity in governance. These indicate ways to a pluralistic paradigm of development and governance as theorised by

Alloyed Projects, Metalled Resistance: SMRITI DAS and N.C. NARAYAN


third world environmentalism and environmental movements.37 The crux of the Kashipur movement is hinged on issues of access and control over resources and an ecological distribution conflict whereby people organised to counter the resource management priorities of external agents as well as the co-opted State. The tribals of the region, dependent upon the resource for survival, could not let go the encroachment by capital. Since the process was mediated by the state, the struggles became anti-state agitation as well. Table 9.2 identifies the benefits and losses related to the mining project in Kashipur in terms of disaggregated actors in the governance network. The focal point of the neoliberal industrial policy is the enterprise. However, sustainable development demands attention to the sustainability of livelihoods and local resource base also. The question is whether the state has assumed that the market will take care of the welfare and redistributive role too? Kashipur is an apt case of exploitation of nature to achieve efficiency in production. The new governance paradigm involves a multiplicity of actors. It also assumes a harmonious relation between the various actors in order to optimise complementary outcomes in good governance. Thus the new governance paradigm pluralises the state to stretch to market and civil society, lending it a changed identity, from that of a regulatory to a networking state characterised by flexible relationships. There is also a delegation of state responsibilities to para-state and the non-State agencies that would jointly seek public good. However, the state also abdicates itself from the role of ensuring democratic rights to its citizens. Hence the missing link here is the realm of rights-based politics that is the core of democratic citizenship. (Chandhoke 2003) points that, the life of the citizen is regulated by a number of agencies, which may well concentrate on administration and not politics. Politics as the art of negotiating between competing interests has been overtaken by the idea that the interests need to be brought into harmony with each other through the employment of managerial techniques. (Chandhoke (2003: 2964-italics added)).
37. See Shiva, 1991; Bryant, 1992; Friendman and Rangan, 1993; Gadgil and Guha, 1995; Guha and Martinez-Alier, 1997.


State, Natural Resource Conflicts and Challenges to Governance

Table 9.2 Benefit and Losses to Different Stakeholders

State38 Benefit Royalty to government at Rs. 42/tonne amounting to 12.6 crores. Taxes Development of infrastructure like roads, railway line, additional revenue through railway, etc. Enhanced growth rate of the economy. Market Private profit to the companies involved. Boost to economy with ancilliary industries and businesses. Civil Society Employment: Direct and Indirect to the people. Enhanced credibility of the organisations working for the people. Strengthened civil society activities leading to mobilisation for peoples rights. Political mobilisation of the tribals. Political Groups Personal/ party profits through corporate support.


2700 ha of land. Loss of livelihood of people. Threat of decline in law and order situation.

Time. Monetary gain as the project period.

House, Land, Credibility Livelihood. amidst Cultural and people. social loss. Threat of deregistration of NGOs. Problems in funding for organisations in support of the peoples cause.

Loss to Environ- ment

Flattened hills, loss of vegetation. Silting of reservoirs due to effluent discharge. Scarcity of water and impact on groundwater and quality of water. Environmental problems due to opencast mines and associated problems of effluents, noise pollution, and air pollution. Loss of biodiversity and impact on aquatic life.

38. State here depicted as government.

Alloyed Projects, Metalled Resistance: SMRITI DAS and N.C. NARAYAN


If the new understanding of governance is post-political, does this harmony indicate an equitable solution to the conflicts that ensue from distributional issues over resource? However, the Kashipur case reveals the insufficiency of this argument since market is not inclusive of the tribal/local/resource base concerns and hence questions the basic tenets of the new governance paradigm from the vantage point of equity and sustainability. The tribals of Kashipur in the last decade have learnt to assert their rights. Whether the state has been able to uphold these rights is a different question but what is important is that the moment the state recognises these rights as morally binding, the legitimacy of both the rights of the citizens and of state is established. This depends on the nature of the state and the democratic space available in the society for the citizen to exercise rights. Here we are more prone to the society-centred arguments where the class and other power relations in the society partly reflect the character of the state. In a situation as in the case of Orissa, the large-scale deprivation at the material level is also a reflection of the disempowerment of large sections like tribals who are disposable in the States march to modernisation and industrialisation. Neoliberal switch gives legitimacy to such development interventions in the name of efficiency. Here, state is a facilitator to capital rather than a neutral arbitrator. However, opposition is triggered through the counter-hegemonic formations, especially from the civil society inviting conflicts and protest. The effectiveness of resistance depends on the relative power of the various spheres and extent of democratic space available in the society. In Orissa, due to the limitations of such space, the Statecapital nexus is gaining advantage, elucidated by the emerging number of project proposals for mining. The conflict is very much ongoing. The judgement on governance has to be from a vantage point. The vantage point of efficiency will argue for economic growth, importance of industrialisation for larger national interest and employment generation. The vantage point of equity will criticise this from the point of losing livelihoods and cultural spaces and threat of environmental sustainability. However, the larger question that remains is that of the rights of a democratic citizen. In a situation where the state pluralises itself into civil society and market realms, who will take care of such societal concerns? Here there is the need


State, Natural Resource Conflicts and Challenges to Governance

for a state that is responsive to the manifold voices in the differentiated social structure. We have seen that the political society (including political parties and state officials) are supporting mining since their viewpoint is developmental in the growth sense of the word. Civil society organisations have to continue their strive to empower those who lose out in the process. Such governance by mobilisation is the only possibility for governance of natural resources hinged on the multiple dimensions of developmenteconomic, social and environmental.

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