Industry heads share worries with Jairam

Alarmed by the increasing number of large projects falling foul of an ‘activist’ environment ministry, the largest industry forum in the country took its gripes right to the doors of the environment minister Jairam Ramesh. However, after holding closed-door discussions with top industry heads from the Confederation of Indian Industry (CII), however, said laws are meant to be implemented and he did not understand the ‘headlines’ around many of his ministry’s actions.

“The [environmental] laws were not passed to assuage the conscience of the law makers,” he said, adding that the application of laws — whether to big companies or small — should not cause the furore that they do in India. “World over, implementation of law is seen as a humdrum activity. It is only here that the implementation makes headlines,” he said.

Ramesh has been in the headlines for blocking many gigantic projects, such as India’s largest foreign investment project by POSCO, an aluminium plant expansion by Vedanta Resources and a steel project by Congress MP and powerful industrialist, Navin Jindal. The environment ministry — which used to play the role of a spectator as big industrial houses flouted green laws with impunity — started insisting on strict compliance after Jairam took over 19 months ago. The scrutiny has set off alarm bells among the corporates — including many of CII’s prominent members. The associaton had recently written to the Prime Minister objecting to a proposal to force companies to share their profits with people affected by a big project.

Despite a session of closed-door ‘open’ discussion between industry heads and Jairam, the minister did not seem to be in a mood to compromise. “[Caring for] the environment is no longer just a middle class preoccupation, but is a serious public health issue.. The incidence of asthma when I was growing up in Bangalore was 6%. In 2009, it was 26%,” he said, adding that cases of cancer are being reported from many towns in North India where it was never prevalent. “Environment is not a luxury,” he said, urging industry not to look at their commitments towards sustainable development as a burden.

“We have not hit the pause button or rewind button [on development.] It’s still on play, but according to the rules of the game,” he told CII. He dismissed suggestion that his is a new era in which industry has to ‘mend’ its ways, but said by-passing the laws of the land — if adopted as corporate policy –made poor corporate strategy. He, however, said that he will try to ‘accomodate’ industry’s concerns without diluting the laws.

Hari Bhartia, CII president, said the industry was not against the laws per se, but the implementation of the laws left much to be desired, pointing to corrupt officials. Environmental nods, particularly at the level of local pollution control boards, is seen as a way to make money by many corrupt officials with the pollution control boards. To get around the issue, Bhartia urged Jairam to lay down very clear provisions for getting clearances, so that corruption can be minimized.

“We should try to remove the element of subjectivity [in giving clearances],” Bharti urged the minister, “We would like clear and transparent laws that we can work with,” he said.

Ramesh accepted that there was corruption in the ministry and promised action to crack down on bad apples. “When I was in the power ministry, we brought in an external audit of the power firms by Transparency International.. Why can’t we have an external auditor for the ministry,” he asked, adding that he was thinking of ways to bring in more sunshine into his organization. Two members of his ministry’s sectoral expert appraisal committees — which clear industrial projects at the central level — were found to be involved with private companies and shifted out, he said.

Ramesh also said the government is thinking of removing the discretionary power of individual ministries to allocate natural resources such as coal blocks and bring in an open-bid mechanism like in the case of oil blocks. “This is part of the five programs announced by the Congress President to crack down on corruption,” he said, without giving further details. Allocation of natural resources — primarily mineral blocks — is currently done by politicians without always going through an open tender.