SEZs are the first stage of an assault on agriculture that may entail the demolition of Indian democracy. With over 600 SEZs on the anvil, some 250 million Indians may be displaced in the coming decades.
By Papri Sri Raman
At the 55th meeting of the National Development Council (NDC) in New Delhi last week, MK Stalin, de facto chief minister of Tamil Nadu, told the gathering of chief ministers and the Planning Commission: “The proposal to discontinue tax incentive to SEZs in the revised DTC is causing concern among developers and prospective investors.” Batting on behalf of ‘investors’, the DMK leader urged that the concessions already formulated under the Special Economic Zone (SEZ) policy “should be continued and amendments proposed in the revised Direct Tax Code need to be modified.”
Stalin also disclosed that in Tamil Nadu 70 SEZs were formally approved, of which 57 SEZs have already been notified. This means, more than 70,000 acres are going to be outside agriculture and residential activity in India’s most urbanised state. This is in addition to SEZs already functioning and land acquired since the 1970s by government SEZ promoters like ELCOT (Electronic Corporation of Tamil Nadu), SIPCOT (State Industries Promotion Corporation of Tamil Nadu) and TIDCO (Tamil Nadu Industrial Development Corporation). SIPCOT’s declared aim is to develop a ‘land bank’ of about 20,000 acres in the next five years.
In a representation to Chief Minister M Karunanidhi, companies who want to and are functioning in SEZs in Tamil Nadu have written: “…the proposed DTC is set to derail and undo all the good work of the SEZs….the new, revised DTC virtually amounts to closing down of the SEZ scheme.” Infrastructure major GMR, in its letter to the Tamil Nadu Chief Minister, says that the DTC, in its present form, would not only affect the investment climate of the state and the country, but also its Krishnagiri SEZ project.
Working conditions within SEZs are suspect. SOMO, an Amsterdam based organisation supported by the Dutch government, that studies international labour conditions, in a detailed two-year joint survey with Indian NGOs like CIVIDEP and Penn Thozhilalargal Sangam have reported how young rural women are employed at very low salaries by organisations like Nokia, Samsung, Flexitron, Salcomp, Foxconn and Perlos. Says activist Sujata Modi, “These companies prefer women workers as they are docile, and do not know their rights and cannot demand much. Then they claim that they support women’s empowerment.”
An eminent panel of social scientists, economists, retired bureaucrats and other experts, all part of an initiative called the Sirapu Porulaathara Mandala Edirappu Iyyakkam (a platform of SEZ struggles from across Tamil Nadu) and its member organisations carried out the ‘Tamil Nadu People’s Audit of SEZs/industrial estates in this south Indian state in October 25-26, 2009. The exercise was supported by the National Alliance of People’s Movements (NAPM), Unorganised Workers’ Federation, Dalit Land Rights Federation (Mannurimai Koottamaippu); Tamil Nadu Women’s Forum and many other Tamil Nadu peoples’ movement and organisations.
Social activist Aruna Roy presented the audit findings in a report to which Prashant Bhushan and Sanjay Parikh, senior advocates, Supreme Court of India, Prof Shanmuga Velayudham and Prof Gladston Xavier of Loyola College, Prof Vijay Baskar of the Madras Institute of Development Studies, Prof Fatima Babu of St Mary’s College, Tuticorin, retired IAS officer Louis Menezes, Sukumar Muralidharan, a senior journalist and trade unionist V Srinivasan contributed.
Their findings in villages across the state where huge proportions of productive land is being acquired by labelling them unproductive, grazing commons and water bodies usurped, are testimonies to how agricultural land is being snatched for SEZ at the same time when a policy note of the state agriculture department says that 56% of population in the state is still dependent on agriculture and rice and other crop production is shrinking due to loss of cultivable land.
Leader of a peasant association, SSR Krishna told the audit panel that 500,000 acres in Tamil Nadu is dry-irrigated land, where drought resistant cotton, cowpea, okra, cluster beans, black gram, corn, green gram can grow. Yet this is classified as barren land in Thirumangalam for the 1,500 acre SEZ, rendering 10 villages of 20,000 people and 3-crop farming landless.
As much as 2,600 acres are being acquired by TIDCO for the Nanguneri SEZ. A local religious organisation has claimed ownership of the land, and sold it to the government, though landless and tenant farmers have been cultivating here for centuries and have now lost their livelihood.
The Hosur SEZ is 2,600 acres and the Perambalur SEZ is 3,000 acres. The Rakindo SEZ in the foothills of the ecologically fragile Western Ghats is 869 acres while the ‘Singapore’ SEZ is of 1,200 hectares. In Gumidipoondi, north of Chennai, 1,127 acres of panchayat forest land has been acquired by SIPCOT for the Michelin tyre plant.
In Sriperumbudur, 2,500 acres has been taken by SIPCOT, including from 10 Dalit villages; as much as 73 plots were taken from 300 Dalit families, to make one km of a six-lane road, leaving 1,050 people destitute. Seeman (80 years) told the audit team here, Vinobha Bhave gave him the ‘dhan patra’ 50 years ago. He farmed the land with paddy and groundnut. The land has been taken for an SEZ for Nissan. His whole family has no income now. Manickam (70) too told the story of Vinoba’s land grant under bhoodan and how an MLA had tried to take their land, then came the Nissan SEZ. Now he does not even receive old-age pension.
In Oragadam, 2,174 acres, including bhoodan land of 13 Dalit families has been acquired. In Chappakkam bhoodan land was forcibly acquired and 61 FIRs against protesting villagers were filed. As much as 300 acres of panchami land where three crops were grown by Dalit families has been acquired for SEZ at Agavalaiyam-Nedumpally. In Thervoy Kandigai-Palaykkam, grazing land for 20,000 livestock has been acquired.
A thousand acres of salt pan land has been taken in Ponneri by TIDCO for a NTPC project. The Ennore SEZ for the port and power plant is another 385 acres of salt pan land, taken in
villages like Athipattu, Koranjur, Reddypalayam, under protest.
In Cheyyar, nearly 3,000 acres is being acquired for the auto industry despite protest from eight villages. The auto industry is also being given a foothold in Erode’s Perundurai.
In Ranipet (Vellore) 3,500 acres of new land is being acquired by SIPCOT. Ranipet is India’s most polluted town due to the leather industry. Here industrialisation has become so unviable that units shut shop, once subsidies expire. The footwear industry is being given space also in Irunga-thukottai, the Indian home of auto giant Ford. In Panappakkam (Vellore) SIPCOT is acquiring another 1,200 acres.
According to a Finance Ministry study, industries in the Nokia SEZ have enjoyed a tax holiday which has resulted in a revenue loss of over Rs 1.7 lakh crore to Tamil Nadu over five years. This does not cover local levies.
The SEZ audit notes that state agencies “….acquired land for private industries using the Tamil Nadu Acquisition of Land for Industrial Purposes Act 1999 and Rules 2001. Legally the Tamil Nadu Act is untenable as it overrides the Central Land Acquisition Act, 1894. Besides being more regressive than the Central Act — as it leaves no room for dissent — it does not define ‘public purpose’. In the name of public purpose, the state can acquire and hand over productive land and common lands to private companies. Even the word ‘compensation’ is not mentioned in the Act. People who lose their lands are only ‘entitled’ to an ‘amount’, which is determined by the District Collector.” The audit panel has recommended that approvals for SEZs in Tamil Nadu by the Board of Approvals be immediately halted and land acquisition for SEZ projects stopped. But the DMK government is not inclined to listen.
Bandit democracy
The Parliamentary Standing Committee for Commerce in its 83rd report has recommended that the government “pause on further approvals” citing various concerns including the fast pace of approvals, review and amend the Act to “put a region-wise cap on the SEZs,” linking fiscal incentives to exports. There are more than 600 SEZs in various stages of approvals and as much as two lakh hectares can be transferred to corporates by this process, say activists, calling it the “biggest land scam of the century” where SEZs are defined as processes of a “Bandit Democracy.” These SEZs, despite violent protests from Nandigram to Nanguneri, are taking place by an Act passed in June 2005.
Many state policies for SEZs invoke exemption clauses in the labour laws including exemptions from the Minimum Wages Act, from the Contract Labour (Regulation and Abolition) Act, Employees State Insurance Scheme etc and only provide 10% local employment.
Even judicial and policing functions are altered under the 2005 law. “No investigation, search or seizure shall be carried out in a SEZ by any agency or officer except with the permission of the Development Commissioner,” Sec 22 of the SEZ Act 2005, says. It provides for “special courts” to be set up in SEZs for both civil and criminal matters, and that these are to be the “only ones” that can hear any civil dispute within an SEZ or any trial of a “notified offence” (Sec 23, SEZ Act 2005).
The state SEZ policies even dilute the power of gram panchayats and municipal elected bodies. The SEZ policies of Andhra Pradesh, Gujarat, Jharkhand, Karnataka, Kerala, Madhya Pradesh, Orissa, Rajasthan, Tamil Nadu, Uttar Pradesh and West Bengal, as well as the Union government’s model policy, all declare that SEZ’s will be notified as “industrial townships” under Article 243Q of the Constitution.
Big brand sweat shops
NOKIA: Nokia is the world’s biggest mobile phone maker and has about 8,000 staff at the Sriperumbudur facility, which produces more than six million handsets a month. This July, it is for the third time in a year, that employees here struck work, demanding wage revision and the government had to intervene, to get them salary in the range of Rs. 6,100 and Rs.10,000. Non-core benefits like uniforms and footwear were also agreed upon.
So, an average local Nokia worker does not even get routine gear like uniform without a protest and gets only Rs 6,000-Rs 10, 000 when the company’s declared net profit on July 22, 2010 was of 104 million Euros ($133 million), and it sold 111.1 million units during the second quarter this year. The average selling price of Nokia handsets in the quarter was 61 Euros, Nokia E72 costs some Rs 23,000.
HYUNDAI: In June this year, the police arrested more than 200 striking workers of Hyundai Motors, another high-profile company in Sriperumbudur, employing 10,000 people and with a production capacity of around 50,000 units per month. The plant is constantly plagued by strikes for wage revision.
VEDANTA: The kind of operations that companies indulge in is highlighted by the recent arrest of the vice-president of Sterlite Industries, SV Varadharajan, for tax evasion to the tune of Rs 750 crore. Sterlite Industries is the largest non ferrous and mining company in the country, and runs a copper smelter plant in Tuticorin. Sterlite belongs to Anil Agarwal’s controversial British company, the Vedanta group, and has reported net profit at Rs 1,008 crore for quarter ended June 2010. Its consolidated net sales increased 29.4% to Rs 5,924 cr from Rs 4,578 cr.
Activists point out that action is now being taken by the DMK government against Sterlite as it had the patronage of the AIADMK.
Vedanta owns another mining subsidiary, the Madras Aluminium Company Limited (MALCO) — that has been strip mining for bauxite in the Shervaroyan hills in Yarcaud, in west Tamil Nadu. MALCO’s operations in Tamil Nadu span more than 60 km — from the mist-clad Yercaud and Kolli hills to the impressive earthen dam and drinking water reservoir on the Kaveri River in Mettur.
RELIANCE: On July 20, The Madras High Court pulled up Reliance Industries Ltd for implementing a natural gas development project in Yanam (part of the Union territory – a settlement at the junction of Godavari and Koringa river flowing to the sea north of Chennai, in AP) without obtaining prior approval from the Puducherry government.