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Mines, not only theirs

For a resource-rich country like India, the tussle between development and exploitation of natural reserves will always be controversial.

india Updated: Nov 26, 2007 21:45 IST

For a resource-rich country like India, the tussle between development and exploitation of natural reserves will always be controversial. A case in point is Friday’s Supreme Court judgment on bauxite mining in Kalahandi’s Niyamgiri hills. While petitioners wanted a complete ban on mining the bio-diversity-rich area, no matter which company was involved, the SC only banned Vedanta Resources Plc. But this does not serve much purpose because the SC has provided an escape clause by saying that Sterlite Industries, Vedanta’s Indian arm, can go ahead with the mineral extraction provided they set up a special purpose vehicle along with the Orissa government and Orissa Mining Corporation to ensure that environmental regulations are complied with.

This ruling took into account reports that the Norwegian government’s pension fund will not invest further in Vedanta because the firm seems to “lack interest to do something about the damage its operations inflict on the environment and people”. While Norway took into account an earlier report by an SC-mandated panel that said there should be no mining in Niyamgiri, the apex court on Friday failed to pay heed to its own committee’s recommendations. The court was expected to give a clear judgment; instead it tried to balance the issues.This case also brings into focus the State’s responsibility in protecting marginalised communities and natural resources. But what should be probed right away is how the Ministry of Environment and Forests and Orissa cleared rights for the mining in first place. In fact, the SC-mandated panel criticised both, saying that their casual attitude, lackadaisical approach, undue favour and haste did not inspire confidence in either parties. While a blanket ban on mining is not feasible, the government needs to judiciously open the areas keeping in mind the livelihood of the people and bio-diversity.

It also makes it worthwhile for companies interested in our resources to comply with the law and not sneak in through the backdoor. In a globalised world, a company’s public equity is as good or bad as its compliance record. Norway’s decision proved it. Sterlite — and if you lift the corporate veil, Vedanta — does not have a clean record either. On the day of the judgment, a Sterlite official said the Norwegian report was motivated and did not affect the company. The comment is more like that of a fly-by-night operator than a responsible company. The government should be wary of such enterprises.