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In
April 2008, the world's largest steel producer ArcelorMittal1
announced that it would spend a whopping US$500 million toward
corporate social responsibility (CSR) in the two states in India
where it was setting up multi-billion dollar projects.2
The two projects, which marked the entry of ArcelorMittal in
India, were expected to displace thousands of families belonging
to the small farmer and tribal communities from their lands.3
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The company contended that integrating plant
management with CSR would help it to earn the trust of the communities
and also quell any potential resistance against the project.
In 2006, ArcelorMittal planned to enter India by setting up two steel
plants in the iron-rich eastern Indian states of Orissa and Jharkhand at
a total investment of US$20 billion.
The company planned to acquire
12,000 acres of land in each state for the steel plant, a power plant,
and township, with sufficient scope for future expansion.4
Once the plants became operational, the company expected to produce 12
million tons of steel per annum in each plant. Accordingly, the company
signed a memorandum of understanding (MoU) with the state government of
Orissa on December 2006 to set up a plant in Keonjhar district.5
In early 2008, it also finalized Khunti district as the site for its
plant at Jharkhand.6,
7
Shortly after the MoU with the government of Orissa was signed, protests
broke out in the Keonjhar district as villagers, fearing that they would
be displaced from their lands, demonstrated before the district
authorities.8 Orissa, as well as
other parts of the country had witnessed similar protests, some even
uglier, against the projects of companies that included POSCO9 and the Tata
Group10.
Land acquisition had become a contentious issue as local farmers resisted such moves, at times violently, fearing the loss of their livelihoods. With some local politicians and social activists too putting their weight behind the protesters, the situation had turned somewhat irksome for the companies promoting the projects.
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1] ArcelorMittal, headquartered in Luxembourg
City, Luxembourg, is the world's largest producer of steel with a global market
share of 10 percent. Its revenues and net profit in 2007 were US$105.2 billion
and US$10.36 billion respectively. It employed some 310,000 employees in 60
countries.
2] "ArcelorMittal Plans to Spend $500 mn on CSR
Initiatives," www.economictimes.indiatimes.com, April 18, 2008.
3] Rajesh Chhabara, "Asia-Pacific: ArcelorMittal -
India Steels itself for Land Battles," www.ethicalcorp.com, April 8, 2008.
4] Rajesh Chhabara, "Asia-Pacific: ArcelorMittal -
India Steels itself for Land Battles," www.ethicalcorp.com, April 8, 2008.
5] Sunita Dubey, "Will Mittal Steel be a Raw Deal for
Orissa?" www.indiatogether.org, August 8, 2007.
6] Rajesh Chhabara, "Asia-Pacific: ArcelorMittal -
India Steels itself for Land Battles," www.ethicalcorp.com, April 8, 2008.
7] A MoU was signed with the state government of
Jharkhand on October 8, 2004. However, the initiative was stalled for a long
time mainly because the state government was yet to notify its resettlement and
rehabilitation (R&R) policy.
8] "Indian Villagers Protest Site of Arcelor Mittal
Plant," www.singur-singur.blogspot.com, January 27, 2007.
9] POSCO, headquartered in Pohang, South Korea, is
one of the world's largest steel producers. Its plans to set up a 12 million
tons capacity plant in Orissa had evoked a huge protest.
10] The Tata Group, headquartered in Mumbai, India,
is one of the leading Indian multinational conglomerates with interests in
steel, automobile, tea, power, telecom, IT, hotels, etc. Tata Steel Ltd. (Tata
Steel) is one of the leading steel producers of the world. Multiple projects of
the Tata Group were facing protests in different parts of the country. |
