The Naxal Approach To Multinational Corporations: A Critique – Analysis


By Souvik Chatterji

The Naxal opposition to the multinational corporations (MNCs) entering the Indian economy is a wrong approach. The Naxals in different parts of the country feel that the entering of the MNCs in different sectors can lead to unemployment among the unskilled labourers and the rural persons.

MNCs in India have contributed positively in different sectors of the economy in the last 10 years, including road construction, electricity generation, telecom connection, and other utility sectors. For instance, in Bastar, Chattisgarh the Bodhghat dam was built. During the process of raising the infrastructure, thousands of adivasis were displaced from water-forest land. The Vedanta group had acquired huge amount of land in Niyamgiri, Orissa, thereby displacing thousands of the Dongria tribe, who previously used to inhabit the place.


The trouble is that the Naxals in states like Andhra Pradesh, Chattisgarh, West Bengal, Orissa, Bihar and Jharkhand feel that through the use of force they can prevent the MNC projects in different parts of the country and can extend their control over the land. But the fact is development in the country can come with the intervention of the MNCs in most of the cases. In India, the Land Acquisition Act, 1894, had allowed the state to acquire the private lands for building of bridges, dams, railway tracks and infrastructure projects. The private party can only get compensation, but cannot prevent the state from acquiring the land. The Land Acquisition and Rehabilitation Resettlement Bill, 2011, has not been passed. So for the time being, for any infrastructure related project, indigenous groups have to rely on Supreme Court cases which had gone in favour of the tribals and other local inhabitants, who were displaced on account of projects undertaken by the MNCs.

The Vedanta Group- which was based in London – created mining infrastructure in Niyamgiri, Orissa, for the mining of bauxite. Survival International, a social organisation took up the cause of the Dongria tribes, who got displaced from the region due to the acquisition of land and the mining operation. India’s Environment Ministry, then under the leadership of Mr. Jairam Ramesh, rejected the Vedanta Resources Plan to expand the refinery six-fold, and demanded immediate improvements in the existing plant, which is based at the foot of Niyamgiri hills.

In Bastar, the Tatas, Jindals, Essar and Mittals entered MOUs for projects around the Bodhghat dam and for the refining of minerals, despite the protests of Bastar Sambhag Kisan Sangharsh Samiti (BSKSS). Thousands of rural people were displaced for these projects. The Essar Pipeline was built to transport fragmented iron ore from Dantewara to Vishakhapatnam.

The Supreme Court of India on 19 March, 2011, ordered a fresh environment impact assessment for Nirma Limited’s Bhavnagar Cement plant. It was built in Azone in Gujarat, which was the source of a sweet water body.

These case studies in Orissa, Chattisgarh and so on highlight the fact that the state is sympathetic towards the displaced tribes in India. The state wants both environmental impact and social impact assessments with respect to infrastructure projects.

But Naxals feel that the agreements regarding special economic zones (SEZs) and MNCs are always one-sided where the displaced tribes do not get their dues. However, there are a number of ways through which the displaced tribes can get justice.

First, the displaced tribes or local unskilled groups can get jobs in the MNC projects. The social organisations which fight for the rights of the indigenous groups should raise this issue before the MNCs. Even if the locals are unskilled, they can get jobs in accordance with their capabilities.

Second, infrastructure projects can lead to the creation of residential complexes which can in turn help the local people by giving them access to cheap accommodation. The MNCs are required to ensure that.

At the same time due to creation of infrastructure projects, a number of other amenities can be created – schools new roads marketplaces and there is purification of water. All these things require capital, which is available with the MNCs.

If the Naxals, instead of encouraging the participation of more number of displaced tribes in their groups and waging wars against the MNCs, extend their cooperation, the displaced tribes may have access to better food, shelter and clothing. In India, with more than 100 SEZs operating in different parts of the country, MNCs cannot be prevented from entering the interior and rural parts of the country. Infrastructure projects will continue and land acquisition will also take place. The Naxals are required to ensure that the local inhabitants are not exploited, and that they are rehabilitated, proper compensation is given to them and peace is brought in the entire area. If the marginalised groups are poor, joining the Naxals and waging war against the MNCs will not improve their condition. Cooperation with the state governments and MNCs, and settling the issues through dialogue is the best option available, which if used can lead to proper development of the entire area in the future.

Souvik Chatterji
Assistant Professor, National Law University, Jodhpur e-mail: [email protected]


IPCS (Institute for Peace and Conflict Studies) conducts independent research on conventional and non-conventional security issues in the region and shares its findings with policy makers and the public. It provides a forum for discussion with the strategic community on strategic issues and strives to explore alternatives. Moreover, it works towards building capacity among young scholars for greater refinement of their analyses of South Asian security.

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