CHAPTER V LAND ACQUISITION; RIGHTS OF DISPLACED PERSON & CORPORATE GOVERNANCE

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1 CHAPTER V LAND ACQUISITION; RIGHTS OF DISPLACED PERSON & CORPORATE GOVERNANCE 5.1 Introduction This chapter is aimed to find out the issues relating to development induced displaced and, rationale of displacement and compulsory acquisition of land. In this chapter there shall be an attempt to analyse International and National scenario of development induced displaced people. Analysis of present law The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, is the key issue in relation to displacement of land owners. 5.2 Reasons and Rationales of Displacement In regard to population displacement resulting from development there are typically two types: direct displacement, which leads to actual displacement of people from their locations and indirect displacement, which leads to a loss of livelihood. Forced to leave the home region to which they are attached and for which they have the knowledge to make a living most effectively, displaced populations often become impoverished. The displacement of people as a result of development projects, policies and processes therefore constitutes a social cost for development. With the increasing pressures on land due to urbanization, rapid economic development, increasing infrastructure requirements etc., especially in a fast growing economy like India, the acquisition of land by the Government has increased. A sacrifice of a portion of a land is negligible compared to hundreds of villages acquired by the Indian government under doctrine of Eminent Domain for Greater Good and development purposes, as a result of which, millions of people become displaced from their homes 1. More than 50 years ago less developed countries all over the world were liberating themselves from colonial bondage, and economists had started to give serious thought as to what the optimal course of development would be initiating thereby a new displace called development economics, the primary constraint was thought 1 Report on India by Internal Displacement Monitoring Centre of U.N. Office of High Commissioner on Human Rights < accessed on 10 th December, 2014.

2 Chapter V Land Acquisition; Rights of Displaced Persons and Corporate Governance 91 to be the scarcity of capital. Prof. Levis described development as a process of transferring labor from low productivity agriculture and other traditional occupations to high productivity modern industry. Economic development is directly related to the creation of infrastructure. So far as the geographical situation is concerned, irrigation projects, hydroelectric projects and mining project are made by the state 2. Independent India began with the Nehru vision that big dams and mega development projects are modern temple of development. In the post-independence period India has sought rapid economic growth through planned development. This has entailed large scale investments in dams, roads, mines, power plants, industrial estate, new cities and other projects involving land acquisition 3. Since independence, land has been acquired from people particularly from farmers for the purpose of expending towns/cities by converting agricultural land into non agricultural land. In the name of industrialization a larger portion of land was being acquired from the people for public purpose and development was later handed over to private companies. Through the history of mankind, societies have tried to balance between individual rights and state power. At international level it is viewed as violation of human Rights. 5.3 Issues of Displaced To understand why displacement is traumatic, it is important to comprehend what land means to a farmer, beyond the needs that seems to bind human beings to their lands: i. First, for one land is an asset that provides him food and a livelihood. ii. Second, it enables him to utilize the major (and sometimes the only) skill that be possess working on the land. iii. Third, land can be passed on to the next generation and hence provides security to several generations. And, iv. Fourth, it is marketable and in sometimes distress serves as collateral. Cash compensation as the only means of rehabilitating displaced people is a classic middle class response to the problem of the poor. The year of 2004 has seen the forced displacement of hundreds of tribal from the inner states of India in Chhattisgarh, due to the government. Plans to bring tourism to the area 2 Ashok Kumar Sahay & Prabira Sethy, Tribal Displacement and Resettlement: Effective Safeguards? (2008) 58 Social Action 2. 3 Goyal Sanpete, Economic Perspectives on Resettlement and Rehabilitation,? (1996) June 15 EPW 1461.

3 Chapter V Land Acquisition; Rights of Displaced Persons and Corporate Governance 92 though the development of national park. In Chhattisgarh itself almost 17 lakh acres of land have been demarcated as protected area for the sake of wild life conservation where people face the threat of eviction. According to government where tourism projects have proposed. The majority of them are Adivasis and Dalits 4. These has been a shift in the pattern of land acquisition, in the past most of the development projects were in the category of the water resources. Now most of the project are in the mining and industry sector some projects are also in the areas of tourism, transport and communication and infrastructure Development Induced Displacement Development induced displacement means forcing the communities and individuals out of their homes, often also their homelands, for purpose of economic development 6. Displacement is deemed to be a necessary price to pay for development by those to whom development means only economic growth. But others who view development not only as economic growth but primarily as improvement of standard of living of whole population. In that sense, displacement is not an economic issue alone, but is to a great extent a question of human rights. Besides, displacement rehabilitation and resettlement are to be viewed not as one time event but as process that begins as soon as the project is announced and continues for several years after persons are resettled 7. The Human Rights declaration states that everyone has the right to life, liberty and security. Under the heading of economic, social and cultural rights, all government are expected to try progressively to improve the living conditions of their citizens. But studies shows that forced displacements have created potential risks landlessness, nobleness, homelessness, marginalization, increased morbidity and mortality, food insecurity. The idea that State can take away any property for public good, that is, the doctrine of eminent domain, is itself contested 8, as it raises the classic debate of power of state versus individual rights. Not many into day s world will agree with the idea that the King owns all property and bestows rights, including 4 Supranote 3 p Joseph Marianus Kujur, Development Induced Displacement in Chhattisgarh: A Case Study from a Tribal Perspective, (2010) 60 Social Action A Dhru, Kelly, Displacement due to Land Acquisition for Development Projects in India: the Problems with Existing Legislative Policy,(Unpublished, NLSIU in Association with NTPC, New Delhi, conducting training program.15th-17th December 2010). 7 Xavier Eyras, An SEZ with a Defiance? (2008) 58 Social Action David A. Dana, Reframing Eminent Domain: Unsupported Advocacy, Ambiguous Economics, and the Case for a New Public Use Test 32 Vt. L. Rev. 129.

4 Chapter V Land Acquisition; Rights of Displaced Persons and Corporate Governance 93 rights in property, upon his citizens. Let us, however, assume the idea of Eminent Domain as a fact. The existence of Eminent Domain means that the exclusivity of the rights owned in a property is at least diluted against the government acquisition of such property. Now, why would the government need to take over an individual s property? Typically, government is thought to be representative of the collective, the voice of the public, as compared to the individual. For example, governments builds street lights on the roads, because it is a collective interest and not just one person s. The problem arises when societies have different collectivities within them, and inequality of at least political power between them. So, for example, in a society with groups A, B, C and D, only group B has most power, it is possible that the government which represents B s interests will give a priority to building streetlights for group B, rather than build a school for group C. In a world with limited resources, securing a group s interest may come at the cost of another group s interest. The question then is, to what extent can we let go of someone s interest in order to serve someone else s interest? Can someone s home be taken away for serving interests of a greater population or the future generations? If one s interests are served at the cost of another s, how should the government make good for the losses? It is such question which underlies debates concerning development-induced displacement. Development-induced displacement can be defined as the forcing of communities and individuals out of their homes, often also their homelands, for the purposes of economic development. Use of coercion or force of any nature by State is central to the idea of development-induced displacement. At the international level, it is viewed as a violation of human rights 9. In India, there are a rising number of protests against compulsory acquisition of land for construction of manufacturing units such as Tata s Nano car in Singur, in which 997 acres of agricultural land was acquired to set up a factory for one of the cheapest cars in Asia, (the project was subsequently shifted to Gujarat) or for developing Special Economic Zone such as Nandigram or construction of large dams like Sardar Sarovar Dam on the river Narmada, which famously led to a cancellation of grant by World Bank due to protests under the argument that the tribal population was getting displaced under unfair conditions among other reasons such as environmental impact 9 See< on 5 th December, 2014.

5 Chapter V Land Acquisition; Rights of Displaced Persons and Corporate Governance 94 of the project. The effects of displacement spill over to generations in many ways, such as loss of traditional means of employment, change of environment, disrupted community life and relationships, marginalization, a profound psychological trauma and more. It is not the idea of this report to paint a dark picture of land acquisition for development purposes. However, to deny these perspectives is no more an escape-route for the government, particularly given the increasing international pressure and accountability and rising internal protests in India. In India, different cases find independent solutions (mostly in the Courts of law through Public Interest Litigation), but the underlying problems remain with the existing laws regarding land acquisition and rehabilitation policy. The grave consequences of such displacements at the very least require legislations and policies that address not only the issue of compensation, but also the larger issues of resettlement, rehabilitation and participation in negotiation, which can mitigate the darker side of land acquisition for development. 5.5 International Scenario of Displaced Due to Development Projects One of the major challenges today is the growth in the number of internally displaced persons (IDPs) worldwide. While there are no official definitions of an internally displaced person, the Guiding Principles on Internal Displacement set by of Office for the United Nations High Commissioner for Refugees (UNHCR) holds internally displaced persons to be "persons or groups of persons who have been forced to flee, or leave, their homes or places of habitual residence as a result of armed conflict, internal strife, and habitual violations of human rights, as well as natural or man-made disasters involving one or more of these elements, and who have not crossed an internationally recognised state border 10 ". Displacement or the involuntary and forced relocation of people has come to be acknowledged as among the most significant negative impacts of large water resources development projects such as dams. It is estimated that nearly 60 million people have been displaced worldwide due to the reservoirs created by large dams Office for the United Nations High Commissioner for Refugees (UNHCR), < on 15th November, Displacement, Resettlement, Rehabilitation, Reparation, and Development Final Version: November 2000 < nal13main.pdf> accessed on 10 th December, 2014.

6 Chapter V Land Acquisition; Rights of Displaced Persons and Corporate Governance 95 A World Bank review of 192 projects worldwide for the period 1986 and 1993 estimated that 4 million people were displaced annually by the 300 large dams (on an average) that entered into construction every year. All these figures are at best only careful estimations and certainly do not include the hundreds of thousands and millions who may have been displaced due to several others aspects of the projects such as canals, powerhouses, associated compensatory measures such as bio-reserves, etc 12. A large number of dam projects around the world have met with stiff resistance and opposition, particularly from people who stand to be negatively affected them. "The existing legal framework on natural resources confers totalitarian powers on the State, leaving the public no option but to oppose it in totality. There is no scope in the existing legal framework for people's participation in debating the merits of the project or in creating alternatives, which is the fundamental right of people in any democracy" (SOC 049) 13. Time and again there have been violations of human rights and the use of force rather than open negotiation to quell protest. In fact for thousands of people displacement has essentially been through official coercion: through misinformation or threats and intimidation; using the police and in some cases even the military; or Simply letting the reservoir fill, forcing people to leave their homes. Various submissions from Sri Lanka, Colombia, Mexico, India, China, Panama, Brazil, Slovakia, Turkey, and Indonesia all refer to instances of the use of illegitimate means to force people to move. Over the past decade, different international legal entities and institutions have responded to the human rights impacts and risks of development-induced displacement by formulating a variety of guidelines, laws and best practices. Some of the most important international guidelines and practice on this issue are: The UN Guiding Principles on Internal Displacement The Twelfth Annual Review Of Project Performance Results, The World Bank, Washingaton D.C. at accessed on 2 nd January, Ibid. 14 Guiding Principles on Internal Displacement, United Nations, 2004 < on 6th December, 2014.

7 Chapter V Land Acquisition; Rights of Displaced Persons and Corporate Governance 96 The OECD's Guidelines for Aid Agencies on Involuntary Displacement and Resettlement in Development Projects, World Bank's Operational Directive 4.30 on Involuntary Resettlement 16 All the International attempts are aimed to protect involuntary displacement and their resettlement in proper manner, keeping in mind human rights of displaced. The global experience of displacement and resettlement offers overwhelming evidence that for resettlement to be a positive experience it has to be an integral part of a new approach to planning and implementing development projects such as dams. For resettlement to be a development experience, the process will not only have to deal with the complexities and risks of resettlement itself but also effectively engage with the whole range of political and institutional factors of those risks, i.e. the power element inherent in the experience of displacement. 5.6 National Scenario of Displaced Due to Development Projects India has invested in industrial projects, dams, roads, mines, power plants and new cities to achieve rapid economic growth. This has been made possible through massive acquisition of land and subsequent displacement of people. Development Displacement Population is the single largest category among all Internally Displaced Populations (IDPs). In India around 50 million people have been displaced due to development projects in over 50 years. Around 21.3 million development-induced IDPs include those displaced by dams (16.4 million), mines (2.55 million), industrial development (1.25 million) and wild life sanctuaries and national parks (0.6 million) 17. The major area projected for the development specially mines, dams and industries have badly affected the people and forced to displace. Forcible displacement of tribal people and marginal farmers belonging to other communities from their land and other sources of livelihood for a project that was not in the national or public interest was a violation of their fundamental rights under Article OECD, Development Assistance Committee, Guide line on Aid and Environment, Paris, 1992, < accessed on 4 th December, Operational Directive 4.30, The World bank Operational Mannual, June 1, 1990 < ent.pdf?mod=ajperes>accessed on 23 rd November, Nalin Singh Negi, and Sujata Ganguly, Development Projects vs. Internally Displaced Populations in India: a Literature Based Appraisal, Bielefeld: COMCAD, 2011

8 Chapter V Land Acquisition; Rights of Displaced Persons and Corporate Governance 97 of the Constitution read with the International Labour Organisation (ILO) Convention to which India is a signatory. According to this Convention, tribal populations shall not be removed from their habitual territories without their free consent except in accordance with national laws and regulations for reasons relating to national security or in the interest of national economic development. The Convention also provides that in cases where the removal of tribal populations is necessary as an exceptional measure, they shall be provided with lands of quality at least equal to that of the lands they previously occupied Dam Building & Displacement Dam building is one of the most important causes for development related displacement. According to a report, during the last fifty years, some 3,300 big dams have been constructed in India. Many of them have led to large-scale forced eviction of vulnerable groups. The situation of the tribal people is of special concern as they constitute 40 to 50 percent of the displaced population. The brutality of displacement due to the building of dams was dramatically highlighted during the agitation over the Sardar Sarovar Dam. It has been called India s most controversial dam project. Medha Patekar, spearhead the anti-dam movement known as the Narmada Bachao Andolon. This movement for the first time systematically revealed how building dams can result in total dislocation of tribal societies. The beneficiaries of the dam are meant to be large landowners; but the tribal people are paying the price. The official figure indicates that about 42,000 families were displaced but non-governmental organizations such as the Narmada Bachao Andolan (NBA) puts the figure to about 85,000 families or 500,000 people. The Narmada Valley Development Project affected the lives of 25 million people who were in the valley and were alter the ecology of an entire river basin 19. The Tehri project is a multi-purpose irrigation and power project in the Ganges valley, 250 km north of Delhi, located in the Tehri Garhwal district of Uttaranchal state. A working group for the Environment Appraisal of Tehri Dam established in 1979 put the figure of 18 International Labour Organisation Conventions And Recommendations Relating To Industry < on 4th February, Nalin Singh Negi, and Sujata Ganguly, Development Projects vs. Internally Displaced Populations in India: a Literature Based Appraisal, Bielefeld: COMCAD, 2011

9 Chapter V Land Acquisition; Rights of Displaced Persons and Corporate Governance 98 expected internal displacement to 85,600 persons 20. Barring a few exceptions, most pre-1980 projects did not have a clear-cut resettlement plan. Resettlement was undertaken on a case-to-case basis. To mention a few, there were projects like the Nagarjunasagar, Hirakud, Tungabhadra and Mayurakshi dams; the Rourkela, Bhilai and Bokaro steel plants, several defense establishments, coal mines, etc, which did offer resettlement in the form of house sites to the displaced. Only National Thermal Power Corporation (NTPC) and Coal India Limited (CIL), two government undertakings have formulated a Resettlement and Rehabilitation policy (R&R policy) and constituted R&R departments to administer it. So it is clear that mega-projects would require the displacement or forced uprooting of substantial populations, particularly for hydraulic projects which entail large-scale submergence for reservoirs Mining and Displacement In the global era, mining has become another very important source of investment and profit for the private sector. Mining-induced displacement and resettlement (MIDR) has become a major risk from the point of view of social sustainability. Scanty information on the MIDR indicates a very high displacement in the past and even increasing trend in the future due to rich mineral posits which are found in areas with relatively high density of politically powerless populations. In India, most of the affected people are the tribal and other indigenous people 22. The size of the mines at present is taking a gigantic leap as compared to over the years. Coal caters to a third India s energy needs. Coal mines have expanded from an average of 150 acres in the 1960s to 800 acres in the 1980s over the last three decades due to shift from underground to opencast mines for exploiting lower quality coal that resulted untaking over some 1500 acres of land as open cast mines require more land and induce displacement of more persons without even creating jobs to absorb people. Industries and mines give a job each to the families they displace but ever since the mechanization 20 Supranote Ibid. 22 Parkash Chandra Deogharia, Development, Displacement and Deprivation, (New Delhi, Shree Publishers 2012) 7.

10 Chapter V Land Acquisition; Rights of Displaced Persons and Corporate Governance 99 process starts, the scope of absorbing people subtly begins shrinking Industry and Displacement Acquisition of agricultural land for industrial purposes in India is not new. Heavy industrialization is at the core of India s planned development and hence large areas had to be acquired. The proximity to market-cum-physical infrastructure for location of industries means people settled by housing are displaced. While landowners give up land in the process of acquisition by the State, landless people are deprived twice, once by not getting the opportunity to work on land as agricultural labourers and the other by not being in the net of compensation. Obviously, the landless people are mainly dependent on Common Property Resources (CPRs) and are outside the purview of compensation of any type. The land area required, in turn, is directly proportional to the type of projects undertaken. Some examples are cited below: (i) In the power sector, the NTPC Ltd. and Uttar Pradesh Rajya Vidyut Nigam Ltd. (UPRVUNL), on the 22 November 2007 signed a Memorandum of Understanding (MoU) to set up a thermal power plant of 1,320 MW at Kohrarghat of Meha Tehsil in Allahabad District of east UP. The government of UP acquired a total land area of 2500 acres for setting up the plant that affected the livelihood of 469 settled households. This adversely affected agricultural output and food security 24. (ii) To set up a 3500 MW gas-based power plant with an estimated project cost of Rs. 25,000 crores in Dadri Region in Ghaziabad District, Hapur Tehsil, in western UP, the Government of Uttar Pradesh acquired about 1,011 hectare of land in the year Most of the land acquired was earlier used for agricultural purposes. The major assets covered in land acquisition were canals, ponds and wells. Land acquisition in Dadri was estimated to have led to displacement of over 6,000 families 25. (iii) Posco, the world s fourth largest South Korean steel company, had signed a MoU with the Government of Orissa in 2005 to set up a plant, near Paradip Port in Odissa s Jagatsinghpur District that produce 12 million tons of steel per annum. Approx. 3,000 people were displaced. The people, resisting land acquisition, opined that the project 23 Supranote 22 pp Lok Sabha Secretariat Parliament Library And Reference, Research, Documentation and Information Service (LARDDDIS) Members Reference Service Reference NoteNo.30/RN/Ref./December/2013 < on 13 th November, Ibid

11 Chapter V Land Acquisition; Rights of Displaced Persons and Corporate Governance 100 would destroy their livelihood that thrives on shrimp farming and cultivation of betel leaves, a highly profitable crop. The strugglers, against Posco's proposed plant, rejected the rehabilitation package for the displaceable, announced by the Orissa Government Displacement Due to SEZs With a view to attract larger foreign investments in India, the Special Economic Zones (SEZs) Policy was announced in April This policy intended to make SEZs an engine and accelerated force for economic growth, supported by quality infrastructure, complemented by an attractive fiscal package, both at the central and state level, with minimum possible regulations. The imminent displacement of thousands. The imminent displacement of thousands of people and livelihoods in the countryside, where these SEZs are slated to come up, shall lead to massive protests. It is worth noting that, while a fact sheet on SEZs on the Government of India website, give details of the number of approved and proposed SEZs, their land requirements as well as export and employment potential, there is no mention of the number of people to be displaced by these zones, leave alone how the government intends to attend the issues of displacement. The increasing role of the state as the promoter of corporate-led economic growth is underlined by the acquisition of land for SEZs and the transfer of ownership of this land to developers. Displacement thus gets pushed to a private arena with compensation, potentially negotiated by the market and without the state s responsibility for rehabilitation. Considering that these SEZs will acquire thousands of hectares of land with little regard to land ceiling provisions, with upto a minimum of 1000 hectares for multi-product and 100 for service sector SEZs, the displacement and disruption of livelihoods to be caused by SEZs and their grave implications are emerging, even as the country witnesses steadfast resistance by peasants; and state violence and repression in West Bengal, Orissa, Andhra Pradesh of Maharashtra. The protest in Singur in West Bengal by affected farmers, due to the Steel Plant and Port; Erasama Block, Kujang Tehsil, Jagatsinghpur District, Orissa and Displacement and destruction of livelihoods in Nellore District, Andhra Pradesh due to SEZ and expansion of Port are some burning examples of absence of R&R 26 Nihar Rajan Mishra, Displacement and Rehabilitation-Solution for the Future, (Indira Gandhi Rashtriya Manav Sangrahalay, Bhopal 2012)

12 Chapter V Land Acquisition; Rights of Displaced Persons and Corporate Governance 101 policy 27. So, dams, mining industries and other developmental like SEZs projects have displaced people from their homestead and the total number of displaced and affected people runs into millions 28. Between 60 and 65 million people are estimated to have been displaced in India since Independence, the highest number of people uprooted for development projects in the world. In India, This amounts to around one million displaced every year since Independence, says a report released in 2012 by the UN Working Group on Human Rights in India (WGHR). Of these displaced, over 40 per cent are tribals and another 40 per cent consist of dalits and other rural poor 29.The need to avoid such large scale displacement, particularly of tribals and in case of unavoidable displacement, their ultimate resettlement and rehabilitation has become central issues of the developmental process itself. The failure of rehabilitation and resettlement (R&R) of the project affected families (PAFs) of the big dams can be attributed to many factors, which are sometimes under the control of project management and sometimes beyond their control. The different factors responsible for poor state of rehabilitation includes; poor planning of the project, poor data base, insufficient allotment of fund on R&R by a technical persons who has no insight for the problem, lack of participation of Projects Affected Families (PAFs) and improper Rehabilitation and Resettlement (R&R) policy, its planning and implementation Judicial Approach to Development Induced Displacement In the case of Chameli Singh v State of U.P. 31 Court held that when the land of the land owner is acquired by the state in accordance with the procedure laid down in the relevant law of acquisition it does not adversely affect the right to livelihood of the concerned land owner. The state acquire land in exercise of its power of eminent domain for public purpose. The court held that the land owner must be paid compensation as well as solatium in lieu of the land. Here the Court expressly stated that the right of land owner must be give way to the public purpose and therefore the plea of deprivation of right to livelihood under 27 Supranote 26 pp. 321, Ibid, p Times of India, New Delhi dated Parkash Chandra Deogharia, Development, Displacement and Deprivation, (New Delhi, Shree Publishers 2012) AIR 1986 SC 180.

13 Chapter V Land Acquisition; Rights of Displaced Persons and Corporate Governance 102 Article 21 is unsustainable. In considering the petition of the people displaced by the Rourkela Steel Plant, their claims for job of adult population, and for a preferential right of employment was rejected by the Supreme Court in the case of Buta Prasad Kumbhar v SAIL 32, laid down that their land was taken under the Land Acquisition Act, They were paid compensation for it. Therefore the challenge raised on violation of Art 21 is devoid of any merit. The Constitutional mandate that a deprivation of life, i.e. livelihood and dignity, will have to be only by the procedure established by law was believed to be fulfilled by applying the Land Acquisition Act. In the leading case of Banwasi Sewa Ashram v State of U.P. &Oth 33., S.C. held importance of forest as a national asset,that the court agreed with the proposal of the Govt. to embark upon scheme to generate electricity as equally important and to be taken up on priority. In another leading case of New Ravindra Coop. Housing Society and othrs 34, the Supreme Court stated that the acquisition of land by state exercising its power of eminent domain, does not offend the right to livelihood or right to shelter or dignity of displaced persons. The Supreme Court assented that the state has right and authority in exercising its eminent domain in public interest and can acquire land without any binding obligation of offering alternative sites for the displaced person. It stated that right to shelter is undoubtly a fundamental right. A person may be rendered shelter less, but it may to serve a larger public purpose. The Supreme Court did not circumscribe the state s power of eminent domain. Even though a person whose land is being acquired compulsorily for the public purpose is rendered shelter less..since the owner is unwillingly for the acquisition of his property for public purpose, Sec 23 (2) of Land Acquisition Act,1894 provides solatarium for compulsory acquisition against his wishes under those circumstances, it can t be held that the acquisition for public purpose violates article 21 of the Constitution or the right to livelihood or right to shelter or dignity of person. In the Indian social scenario these pattern have been tried to change by the new Act (The Right to Fair Compensation and transparency in land Acquisition, rehabilitation and Resettlement Act, 2013) through the investigation for determination of social impact and 32 (1995) 2 SCC AIR 1992 SC (1996) 1 SCC 731.

14 Chapter V Land Acquisition; Rights of Displaced Persons and Corporate Governance 103 public purpose on the basis of social impact agency report and giving an opportunity to individual objector in the cases of acquisition of his property. 5.8 Current Status of Internally Displaced Persons in India The effects of the displacement spill over generations in many ways, such as loss of traditional means of employment (lively hood), change of environment disrupted community life and relationship marginalization, a profound psychological trauma. It destroys the existing modes of production, affects kinship and impoverishment, and threatens cultural identity of tribal and ethnic minorities. In addition forced resettlement tends to be associated with increased socio cultural and psychological stresses and higher morbidity and mortality rates. Population displacement, therefore disrupts economic and socio cultural structures. People who are displaced undergo tremendous stress as they lose productivity process-land otherwise in the adjustment process 35. But for the government and its agents displacement for development, cash compensation seems to be the only panacea for the problems induced by displacement and only policy of rehabilitation, whereas, in practice it is the most inadequate means for rehabilitation. The development induced displaced person are also facing the same situation as compared to the induced displaced persons. In rehabilitation process what is important is the packages. Package differs from project to project, normally cash component is invariably involved in all projects in addition to provide space for housing 36. The case of the Narmada Dam exemplifies displacement without proper rehabilitation. Thousands of people mostly tribal have been displaced due to the dams built across the river Narmada. More than 2,000 families displaced by the multipurpose Hirakund dam project in Sambalpur district of Orissa were not compensated as of February In the 2007, on the land acquisition issue is singur for setting up a automobile project, Nandigram area of west Bengal turned into a battle field between the state police officials and anti-land acquisition Bhumi Uchhed Pratirodh committee (BUPC){Land Eviction Resistance Committee} comprising 35 Ashok Kumar Sahay & Prabira Sethy, Tribal Displacement and Resettlement: effective safe guards? (2008) 58 Social Action,2. 36 Dr. C. Nagiah, Resettlement and Rehabilitation Upper Krishna Project, Special Deputy Commissioner UKP,(Unpublished, NLSIU in Association with NTPC, New Delhi conducting training program.15th-17th December 2010)

15 Chapter V Land Acquisition; Rights of Displaced Persons and Corporate Governance 104 of the poor who were unwilling to sell their lands. Numerous supporters of the BUPC were killed, women were raped and at least 1500 persons were displaced from their homes. On 16 th November 2007, the Calcutta High Court declared the police killings as unconstitutional and unjustified and awarded compensation of Rs 500,000 each to those killed, Rs 2,00,000 to each of the rape victims and 100,000 to each injured person 37. Another important, impact of displacement is the problem of scheduling and certification. The displaced people are generally not rehabilitated in the form of home and land but by money. Very few are given land in the new areas, which creates conflict with the already existing groups. They are not recognized as tribal in the areas of they do not have certificate of proof of residence in the new place and thus lose their tribal identity. Resetting the displaced poor, remote and economically disadvantaged is not always an easy task 38. Much more such consequences compelled the government to pass legislation, which addresses not only the issue of compensation but also of resettlement rehabilitation and participation in negotiation 39. To kick-start stalled development projects and remove investment bottlenecks, the government is expected to make changes to the land acquisition Act, The Right to Fair Compensation and transparency in land Acquisition, rehabilitation and Resettlement Act, 2013, an Act to ensure in consultation with institution of local self-government and Gram Sabhas established under the Constitution, a human participative development of essential infrastructural facilities and urbanization with the least disturbance to the owners of the land and other affected families whose land has been acquired or proposed to be acquired or are affected by such acquisition and make adequate provisions for such affected persons for their rehabilitation and resettlements and for ensuring that the cumulative out-come of compulsory acquisition should be that affected person become partners in development leading to an improvement in their post-acquisition social and economic states and for matters connected there with or incidental thereto Anupam Hazra, Development at the Cost of Human Life, (2010) 60 Social Action Usha Ramanathan Land Acquisition and Compensation in Involuntary Resettlement, (1996) 31 EPW. 39 Bhubanshwar Sabar, Development-Induced Displacement and Human Rights Violation of Orissa: An Anthropological Insight (2010) 60 Social Action The Right to Fair Compensation and transparency in land Acquisition, rehabilitation and Resettlement Act, 2013.

16 Chapter V Land Acquisition; Rights of Displaced Persons and Corporate Governance 105 The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act 2013, enacted by Parliament provide just and fair compensation to those whose land is taken away for constructing roads, buildings or factories, had come into force, replacing the 120-year-old legislation, after a thorough perusal of The Right to Fair Compensation and transparency in land Acquisition, rehabilitation and Resettlement Act, 2013, we find a provisions which aims to achieve justice in the case of land acquisition, although it is also not free from doubts and gender biasness. Few observations are: The Provisions of the New Law shall be fully compliant with other laws such as: i. The Panchayats (Extension to the Scheduled Areas) Act, 1996; ii. The Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006; iii. Land Transfer Regulations in Schedule V Areas. In fact, while the above legislations provide for consultation with Gram Sabhas, the new law goes one step ahead and provides for consent Scope of the New Law The Right to Fair Compensation and transparency in land Acquisition, rehabilitation and Resettlement Act, 2013 sets out the ambit of application of this law. It says that both Land Acquisition and Resettlement & Rehabilitation (R&R) Provisions will apply when: i. Government acquires land for its own use, hold and control; ii. Government acquires land with the ultimate purpose to transfer it for the use of private companies for stated public purpose; iii. Government acquires land for Public Private Partnership Projects Definition: Public Purpose In defining the term public purpose in fact, while the above legislations provide for consultation with Gram Sabhas, the new law goes one step ahead and provides for consent 41. The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 defines public purpose which shall include the following purpose 41 The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act 2013

17 Chapter V Land Acquisition; Rights of Displaced Persons and Corporate Governance 106 namely 42 : a. for strategic purposes relating to naval, military, air force, and armed forces of the union, including central paramilitary forces or any work vital to national security or defense of India or State police, safety of the people; or b. for infrastructure projects, which includes the following namely: i. items listed in circular of Government of India, Department of Economic Affairs (Infrastructure Section) number 13/6/2009-INF dated the 27th March, 2012 excluding private hospitals, private educational institutions and private hotels; ii. projects involving agro-processing, supply of inputs to agriculture, warehousing, cold storage facilities, marketing infrastructure for agriculture and allied activities such dairy, fisheries, and meat processing as set up or owned by the appropriate government; iii. project for industrial corridors or mining activities, national investment and manufacturing zones as designated in the national manufacturing Policy; iv. project for water harvesting and water conservation structures, sanitation; v. project for Government administered and government aided educational and research schemes or institutions; vi. project for sports, health care, tourism, transportation, space programme, vii. any infrastructure facility as may be notified in this regard by the Central Government and after tabling of such notification in Parliament; c. Land for the project affected people d. Land for planned development or improvement of village or urban sites or for residential purpose to weaker sections; The Urgency Clause can only be invoked in the following cases: 1. National defense and security purpose 2. Resettlement & Rehabilitation needs in the event of natural calamities such as floods or earthquakes. Thus the LARR Act provides for crucial role of Gram Sabha in R&R process. 42 Sec 2(1) The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act 2013

18 Chapter V Land Acquisition; Rights of Displaced Persons and Corporate Governance Definition: Affected Families 43 The LARR Act, 2013 in affected families includes land owners and livelihood losers. The new Act while defining the affected families wants to make R&R for more and more people. (i) Land Owners In land owners following are included: a. Family or company whose land/other immovable properties have been acquired; b. Those who are assigned land by the Governments under various schemes; c. Right holders under the Forest Rights Act, (ii) Livelihood Losers In livelihood losers following are included; i. Over the last three years, a family whose livelihood is primarily dependent on the land being acquired, including agriculture labourers, tenants or sharecroppers. 44 ii. Over the last three years, families which are dependent on forests or waterbodies for their livelihoods when these are acquired; including forest gatherers, hunters, fisher folk and boatmen 45. iii. Over the last three years, any family whose livelihood is dependent primarily on the land being acquired in the urban areas or any family who is residing on the land being acquired in the urban areas Minimum R&R Entitlements 47 The LARR Act, 2013 provides for a Comprehensive R&R Package which is following: 1. Subsistence allowance at Rs per month per family for 12 months; 2. The affected families shall been titled to: (a) Where jobs are created through the project, mandatory employment for one member per 43 Sec. 3 (c) The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act Sec. 3 (2) The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act Sec. 3(iv) The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act Sec. 3 (vi) The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act (Second Schedule)The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act 2013.

19 Chapter V Land Acquisition; Rights of Displaced Persons and Corporate Governance 108 affected family or (b) Rupees 5 lakhs per family; or (c)rupees 2000 per month per family as annuity for 20 years, with appropriate index for inflation The option of Availing (a) or (b) or (c) shall be that of the Affected Family i. If a house is lost in rural areas, a constructed house shall be provided as per the Indira Awas Yojana specifications. If a house is lost in urban areas, a constructed house shall be provided, which will be not less than 50 sqmts in plinth area. In either case the equivalent cost of the house may also be provided in lieu of the house as per the preference of the project affected family; ii. One acre of land to each family in the command area, if land is acquired for an irrigation project if possible BUT the same shall be in lieu of Compensation; iii. Rs 50,000 for transportation; iv. A one-time Resettlement Allowance of Rs 50,000; Special Provisions for SCs/STs 48 In addition to the R&R package, SC/ST families will be entitled to the following additional benefits: i. Land to be given to each family in every project even in the case of irrigation projects; ii. One time financial assistance of Rs. 50,000 per family; a) Families settled outside the district shall be entitled to an additional 25% R&R benefits; b) Payment of one third of the compensation amount at very outset; iii. Preference in relocation and resettlement in area in same compact block; iv. Free land for community and social gatherings; v. In case of displacement, a Development Plan is to be prepared. vi. Continuation of reservation and other Schedule V and Schedule VI area benefits from displaced area to resettlement area. On the analysis of this Act, we find that, The Right to Fair Compensation and 48 Sec 42, The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act 2013

20 Chapter V Land Acquisition; Rights of Displaced Persons and Corporate Governance 109 Transparency in Land Acquisition, Rehabilitation and Resettlement Act 2013 to ensure, in consultation with institutions of local self-government and Gram Sabhas established under the Constitution, a humane, participative, informed and transparent process for land acquisition for industrialisation, development of essential infrastructural facilities and urbanisation with the least disturbance to the owners of the land and other affected families whose land has been acquired or proposed to be acquired or are affected by such acquisition and make adequate provisions for such affected persons for their rehabilitation and resettlement and for ensuring that the cumulative outcome of compulsory acquisition should be that affected persons become partners in development leading to an improvement in their post acquisition social and economic status and for matters connected therewith or incidental thereto. However, the amendment of 13 different laws across half a dozen sectors over the year will be important for the successful implementation of the legislation. Some sections of industry are critical of the new law as they feel the process will take even longer and lead to a steep rise in the price of land. Clashes over land being taken away from farmers for setting up factories and other projects, especially in West Bengal, Haryana and Uttar Pradesh, threatened to bring development activity to a virtual standstill, forcing the government to come up with legislation that would ensure equitable compensation to farmers. Among the important laws that need to be amended are the Coal Bearing Area Acquisition Act of 1957, the National Highway Act of 1956 and the Land Acquisition Mines Act of The new Land acquisition Act was passed by Parliament during the monsoon session last year and was thereafter notified. However, the rules governing the Act will be finalized by February 15, having been notified in the gazette for formal public consultations. The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 lay down the framework for social impact assessments and obtaining the consent of affected families. It replaces the more-than-century-old Land Acquisition Act of 1894 by establishing new rules for compensation as well as resettlement and rehabilitation.

21 Chapter V Land Acquisition; Rights of Displaced Persons and Corporate Governance 110 The most important feature of the law is that it requires developers to get the consent of up to 80% of people whose land needs to acquired for private projects and 70% of the land owners in the case of public-private partnership projects. 5.9 Corporate Governance/ CSR & Development Induced Displaced and Their Rights The last decade has witnessed a tremendous agitation for embracing Corporate Social Responsibility (CSR), and Transparency (absence of corruption), in the development of energy and mining projects especially in emerging markets. This is seen as a way of not only encouraging sustainable development, but also mitigating social risks that have profound impact on a project s bankability (acceptance for funding) and its rate of return 49. It has also been seen on a wider scope, as a way around the age long problem of infrastructure decay, environmental degradation, Companies that are socially responsible in making profits also contribute to some, although obviously not all, aspects of social development. Every company should not be expected to be involved in every aspect of social development. That would be ludicrous and unnecessarily restrictive. But for a firm to be involved in some aspects, both within the firm and on the outside, will make its products and services (for example financial services) more attractive to consumers as a whole, therefore making the company more profitable. There will be increased costs to implement CSR, but the benefits are likely to far outweigh the costs. The World Bank defines CSR as the commitment of business to contribute to sustainable economic development, working with employees, their families, local community and society at large to improve the quality of life, in ways that are both good for business and good for development 50. The fact however is that business is not under any obligation to do this, no matter how noble such acts may appear, as these do not directly enhance profit which many argue is the primary motive of business Bede Nwete, The Equator Principles: How Far will it Affect Project Financing? (2005) 2 International Business Law Journals < on 2 nd February, H. Ward, Public Sector roles in strengthening Corporate Social Responsibility: Taking Stock, working paper prepared for the World Bank (2004) < on 4 th February, It is sometimes argued, for example, that the social responsibility of business is to increase its profits, as cited in Milton Friedman, Greed is Good, the Social Responsibility of Business is to Increase its Profits, NEW YORK TIMES, 13 September See also J. Parkinson, The Social Responsible Company, in M. Addo, (ed) Human Rights Standards And The Responsibility of Transnational Corporations, (1999).