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Deep dent

Saturday 19 May 2007, by SETHI*Aman

Threat to land from the mining industry creates tension in coastal Orissa, where people have fields, boats and a decent income.

JALHONI is a name few in Joda town of Orissa’s Keonjhar district remember. It has been over 30 years since a village by that name ceased to exist. All its inhabitants seem to have left suddenly around the time Essel Mining Corporation came to establish its iron ore mine; no one knows where they went. The new settlement that came up to serve the mine is called "Cr?che-hutting" and its residents are drawn from all over the State.

Chaitanya and his wife Priya have lived all their lives in Cr?che-hutting and have been working with the "company" for almost 20 years now. Every morning they tell their 10-year-old daughter to look after her three-year-old brother and to put out all the vessels in case the tanker brings water. They then put on their bright yellow plastic hard hats issued by the company and go off to the mines to break stones.

The ore arrives in trucks and is sorted manually and broken to a size that the machine can process. Each person is allotted a fixed amount of stones and paid accordingly. Every week Chaitanya breaks 18 tonnes of ore and is paid Rs.300 for it, that is, about Rs.16 a tonne. Priya breaks a similar amount but takes longer and is paid every 10 days or so. Contract workers are not entitled to leave their small children at the cr?che that gives the settlement its name. The cr?che is reserved only for children of women who are permanent workers - a category that does not exist now in most mines.

Using contract workers frees the company from a host of entanglements such as worker safety, over-time payment, health insurance, pension, maternity leave and regular working hours. Tasks that do not require "technical skills" are, therefore, farmed out to contractors, who bring their own labourers and pay them as they please. Often a contractor does not have to find his own labour - the existing labour is simply transferred to him and he employs a foreman to supervise them. Workers at Creche-hutting told Frontline that it had been almost 10 years since the company hired permanent workers.

Supporters of mega projects have argued that the living conditions of contract workers like Chaitanya and Priya constitute precisely the reason why accelerated industrialisation is important. Industry, they say, brings money in the form of taxes, which the state can use to provide technical skills to the local people and ensure that they are competent enough to handle skilled tasks. The idea behind training youth for industry is not new. The current situation is portrayed as a temporary period of pain that must be endured to secure the economic and strategic future of the country. However, this formulation has serious flaws.

The first set of Industrial Training Institutes (ITIs) were set up by the Directorate General for Training and Employment in the early 1980s. They were designed to equip youth with industry-oriented skills. However, statistics show that the results of this programme have been far from satisfactory.

As of 2002-03, Orissa had 24 ITIs with a total of 6,400 seats and another 131 privately owned Industrial Training Centres (ITCs) with 11,950 seats. Over the past few years, the Orissa government has signed memoranda of understanding (MoUs) with a number of mining companies and consultancies, such as Tata Consultancy Services Ltd., for the setting up of ITIs across the State to train "unskilled" workers to take up "skilled categories" of work, which pay higher.

ILO study

A study published by the International Labour Organisation (ILO) in 2003, titled "Industrial Training Institutes of India: An efficiency study", stated that Orissa’s industrial training programme had been affected severely by successive austerity drives and was now underfunded. The study noted: "In 2001-02, out of 467 sanctioned posts, there were around 156 so-called vacant positions for which funding was not secured... Due to the budget shortfall, the capability of the public training system to enrol students has been effectively reduced. As a result, admissions were not made in 96 units with 1,288 seats. This means that the public training system’s capacity was underutilised by some 30 per cent." It also stated: "In Orissa, the ITI principals interviewed acknowledged that the current occupations offered by their institutes provided very little, if any, job opportunity."

Another flaw with the ITI system is that enrolment into the publicly funded system is on the basis of entrance examinations. This works to the advantage of those who have had access to some form of education. Chaitanya and Priya never went to school and are thus ineligible for admission to the ITIs. Their children, too, have no access to education.

The ILO report reveals that in Orissa’s steel processing sector only 2.8 per cent of the total workforce (both permanent and contractual) is ITI-trained. In the ferro plant sector the figure is 10.3 per cent and in the general manufacturing sector it is 3.5 per cent. These statistics suggest that ITI courses do not offer any assurance of employment and that the mining-employment link is tenuous at best.

Revenue questions

Another point of contention is the "revenue" argument put forward by the Orissa government. Every MoU that is signed with the mining companies is usually described as a landmark in the history of foreign direct investment (FDI). But how much does the government really earn from such plans? Does mining really benefit the government in terms of taxes and investment in public infrastructure or does it just boost the earnings of a few already wealthy individuals?

According to the latest figures of the Directorate of Mines, Orissa produced 46.07 million tonnes of iron ore in 2004-05 and earned Rs.72.85 crore as royalty. To put things in perspective, in the same year (up to December 2005) the State earned Rs.223.63 crore as excise duty on alcohol.

The reason for this imbalance is not hard to find. Unlike most minerals, where royalty is calculated as a percentage of the market price, for iron ore it is calculated on a per-tonne basis at rates prescribed in the Mines and Minerals (Development and Regulations) Act, 1957. Under the second schedule of the MMDR Act, royalty for a tonne for premium-grade haematite - of more than 65 per cent iron content - is Rs.27.

Recent estimates peg Orissa’s total iron ore reserves at 5,428 million tonnes. While the market price of iron ore varies on the basis of grade, size and type, the notional losses are so glaring that recently the Chief Ministers of Jharkhand, Orissa and Chhattisgarh, the ore-producing States, issued a statement that royalty collected on iron ore worked out to between 1 and 2 per cent of its sale price. So, apart from providing limited employment to people displaced by mines, iron ore mining contributes less to Orissa’s economy than the Excise Department - even in terms of just the excise duty on liquor bottles sold.

Social cost

What it does provide are stories such as those of Cr?che-hutting and Deojhar village (Frontline, May 18). Yet, this has not made mining companies or governments more responsive to the people affected directly by such projects. But the well-documented effects of mega projects on small villages have alerted other communities to the threat of displacement and provided them with the information necessary to help unravel the language of state and capital alike.

In 2004, Joda block had 18,540.86 hectares (1 hectare = 2.47 acres) classified as "wasteland", up from 8,294.82 hectares in 1989. However, the figure for the number of people displaced was conspicuous by its absence. "There are no government reports for the number of people displaced by mega projects in Orissa," says Dr. Walter Fernandes of the North-Eastern Social Research Centre.

He and his team compiled a report on displacement in the eastern States way back in 1995, and prepared what are perhaps the only reliable figures on displacement. They visited each affected district and looked at the land records in the District Collector’s office. "Our study covered between 60 and 70 per cent of all projects in Orissa between 1951 and 1995 and suggested that mines, dams and other projects had displaced an estimated 1.5 million people. Since then no more data have emerged, but we would peg the current figure at about three million people," says Fernandes.

No government data are available on rehabilitation either, but Fernandes says only those affected by dam construction and international donor-funded projects have been rehabilitated. Those affected by mining have received nothing, he says. In 2006, the Orissa government finally declared a resettlement and rehabilitation (R&R) policy in an attempt to quell the growing resistance to mining projects, but it may have come too late.

POSCO controversy

An eight-hour bus ride from the dusty interior of Keonjhar lie the gram panchayats of Dhinkia, Nuagaon and Gadakujang, perched on the edge of the Bay of Bengal. They have 11 small villages in all and about 4,000 families of farmers and fisherfolk. These panchayats are at the centre of a Rs.51,000-crore ($12 billion) controversy. They rejected what has been hailed as the largest-ever FDI project in India - the integrated steel plant to be set up by POSCO, the Korean steel giant, under an MoU signed with the Orissa government in June 2005. The panchayats cordoned off the villages and refused to let any representative of the company, the State government or the local administration into the area.

Sitting with his support group in Dhinkia panchayat, Abhay Sahu, leader of the POSCO Pratirodh Sangram Samiti, explains the opposition to the plant: "The government says a major portion of the land to be acquired is government land, but the people depend on the coastal belt for their livelihood." According to the MoU, made available to Frontline, the company requires approximately 4,000 acres for the project and 2,000 acres for township development, recreational facilities and so on. Since the signing of the MoU, the project has changed shape many times. Under the present scheme of things about 475 families will be displaced, and residents of the villages stand to lose about 800 acres of private land and 3,200 acres of government land that is under betel cultivation.

It is said that life in coastal Orissa is run by paan, dhaan and meen (betel nut, rice and fish) and the POSCO area is no different. The deltaic plains of major and minor rivers are ideally suited for growing rice and the high groundwater table and sandy soil are ideal to grow betel nut. An average family with a small rice farm and a betel vine patch along the beach is estimated to earn between Rs.10,000 and Rs.12,000 a month. "The project will destroy our livelihoods," says Shantilata Behera, a resident of Gadakujang. "They say they bring jobs, but we already have jobs, we have fields and we have boats."

Shantilata points out that POSCO will provide one job per family, but farming and fishing keep the entire community employed. "They say the compensation package is generous, but what will we do once the money runs out? None of us has ever run a business,,and I don’t think we can run one."


While details of the compensation package are yet to be released, informed sources suggest that people will only be compensated for private land. The land under betel nut cultivation is registered as government land and, in all probability, residents of the area will not get compensation for it. However, the ownership of the land is far from clear.

Judged as revenue collectors and petty zamindars by history (and historians), the scions of the Bardhaman Raj were, nonetheless, one of the largest landowners in the east in post-Mughal India, in the period from 1657 to 1955. While their territories waxed and waned over the 300-year period, there are few places in present-day West Bengal, Jharkhand and Orissa that do not have a link to the famous estates. The Orissa coastline is no exception.

If local accounts are to be believed, the coastal stretch in the POSCO-identified area was originally owned by descendents of the Bardhaman zamindari, and for about 150 years people cultivated the land and paid taxes. The situation changed in the mid-1970s with the abolition of the privy purse and the takeover of the land by the state. No move was made to transfer the land in the names of those who had tilled it for more than a century. Instead, people continued to farm the area and pay "encroachment" tax. They also continue to buy and sell the land.

At present, the POSCO project seems to be in limbo with a lot of speculation about it: that POSCO is losing interest in the project; that the government has assured it that the issues will be sorted out in three months; and that Arcelor-Mittal might assume control of POSCO through a hostile takeover.

Meanwhile, several gram panchayats across the State have begun to question the government’s land acquisition process. On March 9, 2006, residents of nine villages situated just outside Keonjhar town were surprised to find the local Revenue Inspector and Tehsil Supervisor surveying the land outside their villages. An agitation and an application under the Right to Information Act later, they were informed that their land was to be acquired by the Sterlite Iron and Steel Company for a steel plant. The proximity of the land to the mining areas was cited as a major advantage for the industry. "We gheraoed the officials and refused to let the survey continue," says Purushottam Mehra, "and the officials left in a hurry."

A year later, the schoolmaster of the local school awoke one morning to find a pile of schoolbags covered with prominent "Sterlite" stickers outside the school. Since then they have not heard from either the company or the local administration, but rumours suggest that land acquisition could begin soon. Anti-Sterlite meetings have begun at Kadagarh, and the people are preparing for a long battle ahead.

Village after village, panchayat after panchayat, community after community, the story of eviction, displacement, shattered livelihoods and exploitation repeat themselves with mind-numbing continuity. Every settlement exists in a state of almost permanent insecurity, suspicious of every move of the government, the companies and even their own fellow settlers. Iron belt or agricultural land, beach settlement or reserve forest, everything is up for grabs in Orissa.

See online : Frontline


Volume 24 - Issue 10 :: May. 19-Jun. 01, 2007

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