Vedanta chief's Emperor Ashoka inspiration?

Rajni Bakshi argues that if people don't struggle for fair and equitable prosperity right now, they might lose the chance of doing so in the future.

Sometime last year a non-governmental organisation in western India found itself in conversation with Vedanta Resources Group executives who were seeking a partnership for some of their CSR (corporate social responsibility) initiatives.

Inevitably, the NGO folks asked questions regarding the increasingly negative reports about Vedanta's operations in Orissa.

In reply they got a list of welfare activities which Vedanta is running in Orissa. The large 'Mining Happiness' hoardings plastered all over Bhubaneswar are reportedly based on some actual schools supported by the company.

That's okay, said the NGO worker, but what about the destruction of eco-systems and habitats which is depriving tens of thousands of people of their natural resource base.

Well, said the Vedanta officials, our executive chairman, Anil Agarwal, takes inspiration from the life of Emperor Ashoka.

After all Ashoka was first a great conqueror amassing wealth, partly by destruction. But then he went on to become Ashoka the Great, a monarch whose good governance and good deeds are still celebrated more than 2,000 years later.

Like a Chinese whisper this story may well have been altered somewhat in transition. But the essential point, minus the historical allusions, is commonly repeated by many people. Namely, let rapid industrialisation, growth and wealth creation proceed at full throttle. Let's repair the damage later and compensate by doing good deeds with the wealth thus generated.

The ministry of environment's decision against Vedanta last week is bound to add fuel to the fires already raging around these disputes. We can anticipate extreme pressure being brought on the Union Environment Minister Jairam Ramesh. Since Orissa is a non-Congress state there will also be accusations of biased treatment.

One camp will argue that this sends a wrong signal to international investors who, in any case, feel harassed by procedural delays and corruption in India.

Another camp will congratulate the ministry for upholding our laws and punishing violations. The trick, as an editorial in one business paper said, is to show that the rules are evenly applied rather than being subject to political favoritism.

The future hopefully will be shaped by the latter camp who not only support a market economy based on sound application of fair rules but profits measured in a triple bottom line -- that is, social responsibility, ecological restoration and financial benefits.

Last week brought multiple good news for advocates of this view. For example, the New Delhi-based NGO Centre for Science and Environment (CSE) welcomed the proposed Mines and Minerals Development and Regulation (MMDR) Act, 2010 because it has a provision for companies to share benefits with poor communities living on mineral-rich lands.

The CSE declared this to be the first step towards repairing and repaying the damages done to such communities for decades.

The draft MMDR Amendment Bill provides for 26 per cent of equity or profits of mining companies to be given as annuity to project-affected people. In the present context this is a radical proposal.

Predictably, some of India's industry bodies have raised objections. FICCI, in a letter to the prime minister, argued that sharing the profits of mining companies with affected people 'would be like money earned without any effort'.

The letter also stated that the move will lead to greater inequalities and cause socio-economic problems besides making the mining industry operations unviable.

But as CSE's deputy director, Chandra Bhushan, pointed out: "In many mineral-rich countries, wealth from mining is being channelised into local development and shared with local communities. The provision of benefit sharing and local area development in the proposed MMDR Act, 2010 is, therefore, not new and in line with the global best practices. A number of mineral-rich countries have been following it for years without impacting the genuine profitability of their mining companies."

CSE's press release went on to give the example of the Papua New Guinea Mining Act which dictates that owners of private land will receive 20 per cent of the total royalty paid for mining leases on the land.

Likewise, South Africa's Mineral and Petroleum Resources Development Act includes provisions that give local communities powers to benefit substantially from mining projects.

Peru has a system of royalty tax, payable to the central government, which is then distributed among local administrations and communities.

The need for some form of benefit sharing cannot be over-emphasized. A report published by CSE in 2008 estimated that between 1950 and 1991, mining displaced about 2.6 million people in India and less than 25 per cent of those displaced were fully rehabilitated.

The same report, titled Rich Lands, Poor People -- Is Sustainable Mining Possible?, also stated that for every 1 per cent that mining contributes to India's GDP, it displaces 3-4 times more people than all other development projects put together.

Sharp escalation of Maoist insurgency may now galvanize popular support to rectifying these historical injustices.

For example, consider the reaction of some students to whom I narrated that conversation between the NGO activists and Vedanta officials. The class of MA students at a university in Bhopal first responded with silence -- as they quietly reflected on that allusion to Emperor Ashoka.

Then two camps emerged -- a minority argued that it is more important to first generate wealth and worry about its how and why later. But most students seemed disturbed by the proposition that a promise of good actions in the future, or crumbs offered in compensation, can justify inflicting avoidable suffering on people in the present.

Perhaps the sharpest insight came from a shy, female student who demurely asked : "What if Mr Agarwal does not have time for the latter part of the Ashoka story?"

Those of us who are never asked to pay the 'price' for development can also ask ourselves this question. If we don't struggle for a just and equitable prosperity, here and now, what are the chances that we will be given the chance to do so at some point in the future?

Rajni Bakshi is the author of the book Bazaars, Conversations and Freedom: For a Market Culture Beyond Greed and Fear, which last week won the Vodafone Crossword jury award in Non-fiction category and the Vodafone-Crossword Popular book award.