INDIA: Indian Activists' Rising Clout

Publisher Name: 
Wall Street Journal

India's Supreme Court is poised to decide whether a British


company has the right to mine in a sacred tribal forest, a case that


underlines the complexity of undertaking large-scale industrial projects


here.




The case's hearing by the court reflects the growing clout of activist


groups in India and the bigger role the judiciary is taking in enforcing


the country's environmental rules. Experts say legal challenges could


become a greater hurdle for foreign and local investors as India's


environmental lobbyists work together and gather influence.




Vedanta Alumina Ltd., majority-owned by London-listed metals-and-mining


company Vedanta Resources PLC, wants the right to mine bauxite in the


Niyamgiri hills, in the mineral-rich eastern Indian state of Orissa.


Bauxite is refined to produce alumina, which is then smelted to produce


aluminum. Vedanta already operates an alumina refinery it built adjacent


to the area it wants to mine, part of an $800 million project that also


includes a power plant. The company opened the refinery in March, using


bauxite from elsewhere.




The environmental and social activists who brought the dispute to the high


court allege Vedanta didn't disclose that forest land was needed for the


project and therefore didn't get prior clearance from the Ministry of


Environment and Forests -- a violation of Indian law. A spokesman for


Vedanta Resources denies this but declined to comment further on the case


because it is before the court.




The activists also argue the project will do serious harm to the flora and


fauna of the area, which includes rare orchids, elephants, barking deer


and sloth bears. Vedanta declined to comment.




At a hearing in May, Vedanta argued that bringing mining to the area would


create jobs, said a person who attended. The company also promised to


forest other areas in compensation for the trees lost.




The court is scheduled to hear the Vedanta case tomorrow. Its ruling could


stop the mine project, require Vedanta to find another area to mine or


allow the project to proceed, legal observers say.




The legal battle comes against a backdrop of growing social discontent as


India's economic growth of more than 9% leaves many behind. "India's


much-fêted economic miracle is not only bypassing many of the most


vulnerable communities such as dalits [low-caste Hindus], urban poor and


indigenous groups, but is pushing them off their land, out of their homes


and destroying their livelihoods," says Bratindi Jena, of the


international nongovernmental organization ActionAid, which opposes the


mine.




As a result, foreign companies flocking here to tap into the booming


economy, as well as India's own fast-growing corporate giants, face


increasing grass-roots resistance: Across the country, conflicts have


erupted over projects ranging from mines to supermarkets.




In May, villagers opposed to South Korean company Posco's construction of


a huge steel complex in Orissa seized three employees, assaulted two and


held them briefly. Canada's Alcan Inc. said in April it would withdraw


from a mining-and-refinery venture that had faced years of protests,


though a spokeswoman denies that is the reason it pulled out. Reliance


Retail Ltd., a subsidiary of India's biggest company, Reliance Industries


Ltd., which is investing more than $5 billion in a national supermarket


chain, has had stores attacked, as small traders fear for their


livelihoods in the face of major retail competition.




Amid such opposition, "investors need to be aware of the potential for


litigators to file public-interest litigation in the courts," says Seema


Desai, a London-based India analyst with consultancy Eurasia Group.


[Mine Project]




Projects have seen opposition from a range of sources, from farmers to


social activists to larger nongovernmental organizations. Ms. Desai


predicts that "over time, some of the protesters or litigators will join


hands in more organized ways, in which case it could become a big hurdle


for investors."




Public-interest litigation, similar to class-action lawsuits in the U.S.,


is filed directly to India's Supreme Court because it is considered to be


in the general public interest.




In court, environmentalists are already getting a sympathetic ear, says


Gurdip Singh, a professor specializing in international and environmental


law at the University of Delhi. Judicial activism has led to India


adopting stringent environmental regulations, he says. The judiciary tends


to see the environment as the property of future generations to be


protected, and it treats the right to a healthy environment as a


fundamental human right, Mr. Singh says.




The Supreme Court is "taking a big interest in things like urban planning,


land issues, environmental issues," says Ms. Desai.




In taking on such cases, the Supreme Court is filling a gap left by the


central government, which has been reluctant to strictly enforce


environmental laws, says Anand Prasad, a New Delhi-based partner with


Indian law firm Trilegal.




The Vedanta case centers on a report produced by an expert panel assembled


by the Ministry of Environment and Forests on the direction of the Supreme


Court. The report said use of forest land in an ecologically sensitive


area like the Niyamgiri hills shouldn't be permitted. It suggested


environmental clearance for the refinery should be revoked until an


alternative mine site has been identified, and said that if the plans had


been properly reviewed at the outset, the project would have likely been


abandoned.




The refinery was completed and began operating after the report was


issued. Vedanta Resources declined to comment on the report.

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