Sustainable Development: Do Things Right – The First Time, Every Time

Sep 2, 2010

The verdict from the Indian Ministry of Environment & Forests (MoEF) on Vedanta Resources’ mining operations is a welcome gesture for environmentalists and Dongria Kondh tribe of Orissa – a reprieve for a community distraught at the hands of a conniving corporate giant showing scant regard for its social and environmental concerns.

Over the past decades, mining companies across the world have had a chequered history when it came to fulfilling their commitments to safeguard fragile eco-systems in their mining areas and localities. Be it mountaintop mining in West Virginia undertaken by Big Coal or similar mining practices followed by Vedanta Resources in Niyamgiri Hills, the same story runs with almost same levels of impunity – removal of mountain-tops for mining purposes, drastically shifting weather patterns, completely disfiguring the landscape, displacing indigenous tribes and failing to effectively resettle and rehabilitate affected people.

What is conspicuous in the Vedanta story is the lack of coordination between various agencies – both State and Central Government – responsible in the first place for providing necessary clearances and approvals for carrying out the mining operations.

In the humdrum of championing development through the FDI (Foreign Direct Investment) route, fast-track approvals have been accorded to many multinational companies. It now appears that very little attention had been paid to environmental and social ‘due diligence’ which has now strongly come to the fore. This half-baked approach has now led to a crisis-like situation for other projects as well which are in advanced stages of development across the country.

While the stakes for the government are high and it runs the risk of ‘shunning’ interested global investors from venturing on Indian soil, the institutional mechanisms for initially sanctioning such projects need to be strengthened to avoid situations like this at some later date.

There are many examples of environmental degradation caused by corporate giants from across the world – from Indonesian forests, Brazil’s rain forests, to those in African nations, etc. There is a lot to learn from such experiences to avoid ignoring local priorities. States need to understand that a U-turn on their policies to usher development would backfire if they are not in sync with their earlier stand-points. Change can be introduced properly by involving the interest groups. A lot of legwork needs to be done to prepare the State to accept and appreciate the development agenda. Involving stakeholders at every stage is becoming a required norm – primarily because of the growing rights’ activism.

While governments would love to showcase their territories (read constituencies) as a model state within a short span of time, local priorities should not be overrun. The promise of livelihood is not backed by a proper understanding of ground realities. Majority of the displaced population comes from agrarian or tribal class and is uneducated, untrained and unaware of its rights. They are unprepared to adopt a lifestyle that they had never known before. Companies offer jobs – which they cannot take as they do not have requisite training or education; companies offer compensations – which they do not know how to use or where to invest; companies offer rehabilitation homes – which they are traditionally not meant to live in. Governments and Companies need to understand that throwing compensation, jobs, houses, etc., is not the appropriate strategy to get the buy-in from the local stakeholders and that there can not be a short-cut to success

The Environment Ministry’s verdict has brought some semblance of justice – to the Dongria Kondh tribe, the NGOs fighting for the conservation of environment and other tribals – but what we need to address is the fact that a lot of resources – financial, natural, environmental, etc. – have already been put to stake. Why is monitoring of such projects not done in time?

Recently, the Indian Environment Ministry scrapped a hydro-project at Loharinagpala, Uttar Kashi and the area has been declared as an “eco-sensitive” zone. The state-owned power utility – NTPC Limited – has already invested more than INR 600 Crores in this project. Moreover, the infrastructure created till date would have to be dismantled, which would be at an additional cost. Undue stress has already been created for the local populace and damage to the ecology already done. Who will bear these losses? Are we going to learn only from such costly ventures?

Though the decision is a good one that protects the endangered tribes and preserves the ecology, much needs to be done to undertake a comprehensive assessment of environment and social risks at an earlier stage to prevent such later day losses. Such measures also send strong signals to companies about the high ethical standards and corporate governance needed to conduct business in India. It might slow down industrial activity for a while but would be sustainable in the long run and would contribute to society and economy in a meaningful way.

A proactive approach from regulators, government and policy-makers is what is needed to do things right the first time, every time.