Are Indian firms playing predator?

Are Indian firms playing predator.?

08 October, 2011 | Debarshi Dasgupta
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Land For cheap...

Karuturi: 1,00,000 ha in first phase and 2,00,000 in the
second to grow palm, cereal and pulses at an annual rate of
20 birr/ha for 50 years
Ruchi Soya: 25,000 ha to grow soya bean at an annual rate
of 111 birr/ha for 25 years
Sannati Agro Farm Enterprises: 10,000 ha to grow rice,
pulses, cereals at a yearly 158 birr/ha for 25 years
S&P Energy Solutions: 50,000 ha to grow biofuels, edible oil
crops at an annual 143.4 birr/ha for 50 years
Verdanta Harvests: 3,012 ha to grow tea and allied crops at
an annual rate of 111 birr/ha for 50 years
Whitefield Cotton Farm: 10,000 ha to grow cotton at an
annual rate of 158 birr/ha for 25 years
BHO Bio: 27,000 ha to grow cereals, pulses, edible oils at
an annual rate of 111 birr/ha for 25 years
CLC Industries: 25,000 ha to grow cotton at 665.85 birr/ha
for 50 years (One birr= Rs 2.80)

Reports of Indian firms farming large tracts of land acquired in
faraway countries like Uruguay and Madagascar have so far been
convincingly sold as success stories showcasing an emerging India
flexing its economic muscle. But there has been little introspection, if
any, on the harm these Indian firms might be causing to the land and
to the indigenous peoples living there. With foreign firms like Posco
being criticised for taking land away from locals in Orissa, and with
the Maoist problem being seen partly as the result of corporate
greed for resources, can India turn away from problems caused by
Indian firms leasing land abroad?

Ethiopia—where more than a million hectares are being handed
over to Indian firms at bargain prices, supressing local dissent and
causing displacement of people—is an important case in point.
Many are describing India as a “neo-coloniser”. The phenomenon
has in fact received wide local coverage, with damning headlines
like ‘Indian agribusiness devastates W. Ethiopia’.

One such instance, involving a little-known Indian firm, came to light
earlier this year when the US-based Solidarity Movement for a
New Ethiopia (SMNE) revealed letters, copies of which Outlook
has, to show how Verdanta Harvests was granted the lease of
3,012 hectares in the Gambela region despite opposition from
affected locals, who were supported by none other than Ethiopian
president Girma Wolde-Giorgis and the country’s Environment
Protection Agency (EPA).

According to these letters, affected locals from the Godere district
went to meet the president in early 2010, when they learnt that their
means of livelihood—including the forests where they hunted and
gathered food—were threatened by an Indian firm that was going to
clear the land to grow tea and other crops. Upholding their
complaint, the president wrote to the EPA to ask the ministry of
agricultural and rural development not to go ahead with this project.
The EPA, too, argued in favour of the locals and said the short-term
benefits of leasing the land do not offset the long-term environmental
damage. The ministry, however, overlooked the objections, drawing
a strong rebuke from the president, who wrote to the minister of
agriculture on December 10, 2010, and told him to stop this project
immediately. Yet, the firm got the go-ahead. Wolde-Giorgis has
been described as a “figurehead” president, while real power rests
with the dictatorial Prime Minister Meles Zenawi.

Speaking to Outlook, the Addis Ababa-based CEO of Verdanta,
Manojeet Barkataky, argued that his project was not one that
would cause ‘concretisation’. “We will in fact be replacing two trees
with 10,” he says, adding that the opposition to his project was
incited by “vested interests”. He says subsequent dialogue with the
locals had resolved the problem. “Those who had opposed us are
now working with us,” he says. However, Barkataky steers clear of
making any comments on the concerns expressed by the Ethiopian
president and the EPA. The SMNE, on the other hand, hardly buys
the peace that Barkataky talks of. Tamiru Ambelo, chairman of one
of the affected villages, has been sacked for opposing the Verdanta
project, they point out.

Obang Metho of SMNE asks, “What would you do if an Ethiopian
company came to India and evicted citizens from millions of
hectares of their own land in order to grow food for export,
affecting food security for generations? Would you stand for it?” In
2010, Ethiopia reportedly received more than 7,00,000 tonnes of
food and over $2 billion in aid, but this hasn’t stopped it from
leasing fertile land to foreign firms.

Certain terms and conditions in contracts signed between the state
and investors have also aggravated fears about land-grabbing.
These include the state’s obligation to “deliver and hand over the
vacant possession of leased land free of impediments” and to
provide free security “against any riot, disturbance or any turbulent
time”. Moreover, there is no clause that specifies how much of the
produce must be sold in Ethiopia and how much shipped abroad.
Ajay Vir Jakhar, editor of Farmers’ Forum, an agriculture magazine,
who visited Ethiopia last year, argues against any “illusion” of these
private companies going abroad to bolster India’s food security.
“They are under no obligation to bring back the produce to India,”
he says.

Nowhere has criticism been more fierce than in the case of Karuturi,
a Bangalore-based firm that has been granted access to about
3,00,000 hectares in Gambela at just $1.25 per year per hectare for
50 years. Allowed to grow palm, cereals and pulses, the company
has a renewable contract. A report on the impact of land deals in
Ethiopia, published in June by the Oakland Institute, California, has
highlighted some concerns around Karuturi’s lease. These range
from the forced relocation of locals to resettlement of villages and
transfer of land coming under the Gambela National Park to
Karuturi. Felix Horne, the report’s author, who has visited the
region twice, tells Outlook of a habitation right at the entrance to the
Karuturi project. “They are supposed to be moved out next year
and there are already many soldiers in the vicinity. Karuturi may not
be directly involved in it, but the way the land is being procured is
certainly not in the best interests,” he says. Karuturi, in an e-mailed
statement, has argued that the presence of soldiers has nothing to do
with it but with neighbouring South Sudan and cross-border cattle
conflicts.

Locals have very little idea about the deals between the firms and
the government, Horne points out. In most cases, especially in the
case of Karuturi, people have no clue their land has been taken over
and then leased out to a private developer until the firm’s bulldozers
show up. This, says Horne, led to an incident in the village of Ilea, in
Gambela, where Karuturi’s bulldozers, manned by Indians,
destroyed all but one grave at a sacred burial site even before the
locals had a chance to explain. “The fact they did not talk with the
locals beforehand underlines the attitude that locals need not be
engaged with,” he adds.

Karuturi has denied any such incident and says it stresses on
maintaining harmony with locals. Horne, however, stood by his
statement. “I suppose it is easy to deny these things happening when
you work in a remote area, in a country where there is no
independent media, where there is little ability for local people to
express their concerns, and where journalists investigating these
things are subject to harassment, intimidation, and increasingly,
imprisonment.”

The other controversial Indian involvement in Ethiopia relates to the
presence of another little-known Indian firm—Whitefield Cotton—
in a region called South Omo, where it has been given 10,000
hectares for cultivating cotton. This is in a region where people are
being forcibly evicted by the government. Horne, who visited South
Omo last year, tells Outlook of around 2,50,000 hectares being
cleared there by the government using the military. “Those who
opposed handing over their land were being assaulted and
arrested,” says Horne, who was present in South Omo when these
abuses took place.

Given the lack of transparency, there are little means of knowing if
people haven’t been forcibly moved out to clear out land for
Whitefield. On the other hand, India’s Export Import Bank has also
faced questions, given its $640 million line of credit to the Ethiopian
government, officially to “develop its sugar industry”, especially
when indigenous pastoralists are being forcibly moved out. Gurjit
Singh, a former Indian ambassador to Ethiopia and presently the
additional secretary (East and Southern Africa) at the MEA,
counters that the Indian investment is only for building sugar
factories in Tendaho, Wonji and Finchaa, locations away from
South Omo. An Exim statement to Outlook also argued that its
funding had no connection with what was going on in South Omo.
But Horne maintains he still has his concerns, given the “murky
nature of a transaction involving almost a billion dollars to a
government with a horrendous human rights record”.

Singh points out that this criticism of Indian firms grabbing land has
come from a “segment of people (read the West) with a particular
agenda” because it threatens their interests. So long as Indian firms
were cultivating flowers and vegetables, there was no problem,
because most of it was going to the West. The trouble started when
Indian firms started getting into foodgrains,” he says. According to
him, neither the Indian embassy nor the India Business Forum has
received any complaint about any wrongdoings by Indian firms in
Ethiopia. “In fact, the Ethiopian government has mentioned that
Indian firms are more preferable because they create the maximum
local employment, transfer of technology and creation of both inter-
and intra-Africa trade,” he adds.

Indian firms have also been accused of violating labour laws in
Ethiopia by opposing the creation of workers’ unions. Tessema
Heramo Bajigo, of the Confederation of Ethiopian Trade Unions,
points out that as many as 45 per cent of Indian compaies operating
in his country haven’t allowed their workers to form unions. “They
do not want to give their workforce employment benefits like leave,
including maternity leave, salary increments and safety and health
benefits. This is a violation of Ethiopian law,” he says.

Given the scenario, many, including Indians, are now asking for
greater transparency. Anuradha Mittal, the New Delhi-educated
founder of the Oakland Institute, says, “Our investment policies
must focus on development for all. We need to set new standards.
Instead, Indian firms are using the Ethiopian government to get the
dirty work done so that they can operate easily. It is appalling that
India, which was once colonised, has turned into a coloniser. Ethnic
indigenous communities are being hunted down like animals to clear
land for Indian firms and businesses.” The SMNE is planning to
bring a delegation to India later this year to raise awareness about
the impact of Indian firms in Ethiopia. Mittal argues that if people in
India knew how these firms are operating, they would surely stand
up. “It’s not unlike Posco and Vedanta in taking land that belongs to
indigenous people,” she adds.

Courtesy