Mihir Srivastava: How Big Business Gets Its Way in India
Ratan Tata, weeks before relinquishing control of the Tata Group, has warned India of crony capitalism. In a recent interview with PTI, asked if the problem was getting worse, he replied, “Yes. It’s just an observation, I have no facts or figures to prove it.” Asked about a statement he made on the erosion of values and ethics in India, especially within the business community, he said, “I hold that view.”
» Indian Parliament has come to a standstill again as reports surface that the US-based retailer Walmart has spent Rs 125 crore since 2008 on ‘lobbying’ in India for market access among other things.
LANJIGARH, ODISHA ~ Since late 2010, when transcripts of the Radia Tapes were published in Open, questions of corporate governance and the influence of business houses over government policy have dominated public discussions in India. But as Ratan Tata’s statement reveals, the problem only seems to be getting worse.
In this report, we focus on the case of Vedanta, and specifically, on its Lanjigarh refinery in Odisha, where despite reports of problems on the ground and consistent local opposition, the government is going out of its way to ensure that the bauxite refinery’s closure is only a temporary setback to the company.
Vedanta Resources, a conglomerate owned by the Patna-born and London-based billionaire Anil Agarwal, has always been controversial. Currently, it is engaged in two cases at the Supreme Court. One is a case involving its purchase of Cairn Energy’s stake in Cairn India, which shares oilwells in Rajasthan with the Government-owned Oil and Natural Gas Corp Ltd. On this, The Herald of Scotland has reported: ‘Westminster secretly lobbied the Indian government to give the go-ahead to a controversial multi-billion pound deal with a leading Scottish oil company, internal emails passed to the Sunday Heraldreveal… UK government officials, briefed ‘over dinner’ by Edinburgh-based Cairn Energy, offered to ‘polish’ and send a letter drafted by the company. At a lunch, they also urged a key Indian government minister to back the deal. The Indian government subsequently gave permission for Cairn’s £5.5 billion agreement to sell off the bulk of its Indian oil business to Vedanta…’
The other is a case filed by the state-owned Odisha Mining Corporation (OMC) challenging a decision of the Union Ministry of Environment and Forest (MoEF) to withdraw its clearance for bauxite mining in Niyamgiri, a tribal belt in Kalahandi district of Odisha. From the very beginning, mining operations here—by OMC to supply Vedanta—have been controversial, with opposition parties in Odisha and at the national level demanding a CBI probe of all mining agreements, alleging that they violate forest laws and the state’s mineral policy—a sellout of the state’s interests.
The MoEF had cancelled its Niyamgiri forest clearance to the OMC-Vedanta project in 2011, after protests by tribals that got wide media coverage. The Ministry had also admonished Vedanta for its violation of ecological norms and expanding its refinery—a facility to turn bauxite into alumina, used as raw material to yield aluminium via electrolysis—without a mandatory environmental clearance. But no explanation has yet been offered for the ease with which the MoEF let the project go ahead in the first place.
When Vedanta shut its refinery in Lanjigarh on 5 December, it was a move widely seen as aimed at exerting pressure on the state government... read more
