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CMI hired by Utkal?

In the summer of 1997, Christian Michelsen Institute (CMI) was asked by Norsk Hydro to examine the possibilities to evaluate the rehabilitation process in the Utkal case. Since then, CMI has been in the project area, writing their own report on the case and giving talks to the board of the company. Below we bring some main points from the report, and comments from CMI.
Artikkelen er mer enn to år gammel. Ting kan ha endret seg.
In the summer of 1997, Christian Michelsen Institute (CMI) was asked by Norsk Hydro to examine the possibilities to evaluate the rehabilitation process in the Utkal case. Since then, CMI has been in the project area, writing their own report on the case and giving talks to the board of the company. Below we bring some main points from the report, and comments from CMI.


By Tarjei Leer-Salvesen
Norwatch

Alf Morten Jerve, representing Christian Michelsen Institute (CMI), gave a talk on social responsibility, guidelines, and international standards regarding forced displacement and rehabilitation to Utkal's board in Oslo on the 24 June. He particularly stressed the World Bank standards.

In January 1998, CMI sent Kai Grieg to Orissa to look into the situation, and to assess whether, and on what terms, CMI will possibly get involved. An assessment of the situation was made, and excerpts from the report are referred to below.

- Both during the discussion yesterday and earlier, we at CMI have underlined the need for a dialogue with the project affected people, says Jerve. He adds:

- The question is how the company can adjust to re-establish this option.

Jerve indicates that the partners in the consortium seem to have somewhat different views on how the principles of a rehabilitation plan should be formulated.

Regarding the possibility that CMI may now take on a larger assignment for Utkal, after the "preliminary studies" they did for Norsk Hydro, he says:

- We have said that we are willing to assist the companies in the further process. However, a genuine will in the companies to change their policy is presupposed. They must want a new process, and be willing to change their strategy.

- If we do this, it will be in co-operation with Indian partners who also work with these questions. However, we do not want to be the companies' "fire men". Pretty soon there must be a clarification of the further propulsion of the project, and also of the timing of the start of the construction work, Jerve ends.

"Issues of concern"
CMI's report concerns different guidelines for the mining industry. The intention is that Utkal should evaluate itself according to these. However, the report lacks CMI's mandate, and there is no chapter with CMI's conclusions. Still, Grieg and Jerve have some comments which resemble the criticism which has been levelled against the project earlier on.

After going through the company's rehabilitation plans, they write, among other things:

"We note that in the official project documents, the only ones mentioned as affected by the project, are those who lose land and houses. Losses of common crops or rented land are not mentioned. Neither is loss of working opportunities as a consequence of expropriation."
The report also says that Utkal's rehabilitation plan amounts to one tenth percent of the invested capital.

Under "Issues of concern", which is the last part of the report, CMI asks:
"- Have all social impacts been identified, especially those related to non-landowners?
- Does the standard of compensation of the Land Acquisition Act reflect replacement costs of assets lost?

- What knowledge do people have about the project, and in what way have they received information in the company?

- Have affected people in any way participated in the planning process?

- How is the R&R plan other development initiatives of UAIL co-ordinated with the state and district development plans? How will operational cost of services put in place (schools, health centres, etc.) be financed in the future? What is the role envisaged of the Utkal Rural Development Society? Whom to include in and who to exclude from the benefits of the Society?

- Why did UAIL decide to employ one or two persons in each village to work as R&R workers/agents, and not work through established social organisations at village level? What has been the effect in terms of creating internal conflicts at village level?

- There are reports that compensation money already paid out to PAPs has been used for unproductive ends. How will this be remedied in the rehabilitation process to come? How can the villagers be protected from outside people who want to take their money?

- There are complaints of some well-connected individual started buying land from local people before acquisition was initiated, and now get a profit from the compensation being paid by the government. How can the project contribute to limit speculation in land?

- How is the Company looking at proposals to ensure that affected people and the local communities should benefit from the economic profits from the project?

- With the expropriation almost completed, how can Utkal get "back on track" in the implementation of rehabilitation standards meant to be co-ordinated with the expropriation and the start of preparatory work?

- At one time UAIL promised one job for each family. This principle seems to have been withdrawn. What type of employment scheme will be acceptable to the affected people?
- We have observed a profound lack of trust between the Company and especially villagers of Kucheipadar, leading also to acts of violence and use of armed police. How can this situation be improved?

- There are plans to construct a boundary wall at the plant sitestarting in February 1998. We are concerned that if several of the topics above are not addressed before this work starts, there is a great risk that the level of conflict will escalate. How is UAIL and Hydro responding to this problem?

Norwatch Newsletter 14/98

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