The 'Resource Curse' of the

Scheduled Areas Case of the

Bauxite Industry in Tribal Eastern
India
Procedural Paper Presentation
Patrik Oskarsson
1 December, 2006
Supervisors:
John Cameron
Oliver Springate-Baginski

Presentation Outline

Introduction
Research Objective & Justification

Conceptual Framework
Research Questions
Methodology
Research Design
Ethics

Introduction - Nimmalapadu Village, Andhra Pradesh

Introduction - Iron Ore Mines in Keonjhar District, Orissa

Introduction - Open Cast Coal Mine

Introduction - Nimmalapadu Village, Andhra Pradesh

Introduction Distribution of Benefits and Costs in Federal India

State
Union

Sets Policies and

Royalties on Major
Minerals (bauxite, iron,
coal etc.)
Major involvement in
clearances (mainly
environmental)
Owner of biggest
aluminium company

Scheduled Area

Land rights, land records Faces main costs of

mining and industry in
Competes for investment
the form of land
with other states
alienation and
At the center of demands
environmental
for development from
degradation
voters
Responsible for health and Few income
opportunities from
education
industrialisation
because of lack of
skills

Objective and Justification

Objective
How can the strategy of the state governments of Andhra Pradesh and
Orissa in Eastern India to promote and expand the bauxite mineral industry
be understood given the conflict between this industry and not only, a) the
rights of the local tribal communities but also, b) an apparent imbalance
between the costs and benefits to and distribution within the state itself ?
Justification for topic
- Tribal People among Indias poorest communities
- The main deposits of minerals (metals and coal) are found in tribal areas of
Central-Eastern India
- Indias economic growth and integration with the world economy is causing
rapidly increased mining
- It is not very clear who actually benefits from mining and industry
- Local state research is important when the state is becoming more
independent from the national government

Conceptual Framework
Political Economy of
Industrialisation

Land Rights
Land Use
Customary
Rights

National and
Society Rights

Economic Incentives

Social
Mobilisation

Legal Verdicts and

Implementation

Power

Elite
Capture

Political Incentives

Resource Curse of the Scheduled

Areas:
Continued poverty
Increased inequality (to the rest of the
state)
Environmental concerns

Key Concept 1 Land Rights

Individual and Group Rights

Government and Society Rights

National

Constitution declares
Scheduled Tribes and Scheduled
Areas
Tribal education and job
Reservation
Right to life and livelihood

Right to acquire land for the

benefit of greater society, the
states eminent domain
Rights to all major sub-surface
minerals (bauxite, iron, coal etc.)

State

Tribal right to land (and the

non-transferability of this land)
Right to have any law adjusted
to specific conditions of
Scheduled Areas

Right to all minor sub-surface

minerals (limestone, marble etc)

Key Concept 2 Political Economy of Industrialisation

Union
The Indian constitution defined India as a socialist republic with
poverty alleviation and social empowerment as its highest goals
Industrialisation as one of the main means of reducing poverty (Kohli
2004)
Indian state as captured by various interest groups and unable to live up
to its ideals (Bardhan 1984; Rudolph & Rudolph 1987)
Change with economic reforms from 1991 implied that the structure
was not as rigid as authors had earlier indicated Jenkins (1999)

Key Concept 2 Political Economy of Industrialisation

State
Union government budget constraints has meant increasing
independence of the states
Regional parties dominating/influencing national governments
Rise of competition states but also fiscally pressured states
Reform by stealth since it would have gone against the wishes of the
general electorate (Jenkins 1999)
Studying the State:
The developmental state as it is experienced by the poor (Corbridge et.
al. 2005; Rudolph & Jacobsen 2006)
Multiple formal and informal interests within the state (different
political parties, departments within the bureaucracy, urban/ rural divide,
the legal system as formally independent)

Key Concept 3 The Resource Curse

1950-1980 Mineral Resources (metals, oil, gas, gemstones) are good!
1990 Mineral Resources are bad!
Three types of curses:
1. Poor economic performance
2. Political regimes with low levels of democracy
3. Internal conflicts and civil war
Ross (2004:28) defines the resource curse as "the distributional conflicts
that commonly arise when resource wealth is unevenly distributed
around the country".
Strong empirical evidence and acceptance in policies that there is a
resource curse. But some countries have managed to overcome the curse
(Rosser 2006)!
Resources are not per se cursed. Literature on the resource curse have
focused too much on the inherent qualities of resources and how these
produce poor political, economic or other outcomes (Ross 2004; Rosser
2006).

Key Concept 3 The Resource Curse

New Opportunities in the Scheduled Areas:
Acquiring land which may or may not be used for industrial purposes
Resources used to attract domestic and international private investment
Extracting rents which require little accountability (compared to for
example direct taxation)
Creation of high value jobs for the educated middle class

Scheduled Area Experiences of Mining:

Few new jobs but those available will mean increased income. The local skill
and educational level is not adapted to industry
Environmental problems/ Water Scarcity
Displacement/Land Alienation

Objective and Research Questions

Objective
How can the strategy of the state governments of Andhra Pradesh and Orissa in
Eastern India to promote and expand the bauxite mineral industry be
understood given the conflict between this industry and not only, a) the rights
of the local tribal communities but also, b) an apparent imbalance between the
costs and benefits to and distribution within the state itself ?

Research Questions
1. What have been the changes to tribal rights to land and livelihood in the
Scheduled Areas of eastern India in relation to economic reforms and
industrialisation since the 1990s?
2. What are the characteristics of the political economy of the mineral
industry in relation to the benefits driving demand for increased mineral
industry expansion and the mitigation and distribution of associated costs?
3. What conclusions can be made about the functioning and importance of
the local state in relation to the extraction and processing of bauxite and
the existence of endemic poverty in the tribal areas of India?

Methodology

Comparative State Analysis - India as controlled laboratory when

studying the local state (Jenkins 2004):
Same national regulations (Constitution, legal framework, major
mineral rules, environmental clearances)
The states (Andhra Pradesh and Orissa) have similar institutional
setup and similar but still different land rights
Same resource (bauxite) with same geology and technical process
Different languages, political and economic histories
Components:
Policy Analysis (Roe 1994; Hajer & Wagenaar 2003)

Key Informant Interviews

Legal Judgements and their implementation
Cost/Benefit Analysis
Policy Debates

Methods - Research Design

State

Orissa

Andhra Pradesh

Deposits

Biggest bauxite deposits in India

(also iron, coal etc.)

Bauxite as main mineral in

scheduled areas (also coal)

Current Industry

NALCO is operating but many

upcoming mines and plants in
south Orissa

Attempts to circumvent the

Samatha Judgement through a
joint venture

Economy

Mineral Industry as only hope for

economic development (mines
and related industry).

Mineral industry relatively marginal

(IT, pharmaceuticals, also
agriculture)

Regimes

Elitist and coastal domination

Violently trying to push for the
industrial development that is
seen as the only hope for the state
to prosper.

Populist and rhetorically

supporting the struggling rural
population.
Desperate to provide any sort of
development, especially now
through irrigation projects.

Tribes

8 million (22% of state total)

4.5 million (7% of state total)

Methods Data Collection

Union (Delhi)

Key Informant
Interviews
Analysis of Public
Industrial Policies
and Budget
Documents (national
scope)

State
(Andhra Pradesh
and Orissa)

Key Informant

Interviews

Analysis of Public
Industrial Policies and
Budget Documents, legal
documents and
judgements, investment
agreements (MoUs) (local
state scope)
Annual reports of
companies

Scheduled Area (about 56 large projects in

research area)

Field Survey
Analysis of mining
leases, land records,
satellite imagery

Ethics in Research

Difficult Situation in Orissa means rural fieldwork will be

minimised.

Local protest movements against industrialisation often

facing state violence
Low-level Maoist insurgency
Other means will be sought to estimate social impact and
focus on state-level mechanisms (land records, mining leases,
satellite imagery)

Timeline

Preliminary Fieldwork Carried out in October 2006

Second Phase of Fieldwork Planned for January May 2007
2005

PhD Plan
Oct
Feasibility Trip to India
Work on Procedural
PP Presentation
Fieldwork
In Delhi
In Andhra Pradesh
In Orissa
Data Analysis
Writing Up

2006

2007

Sep Oct Nov Dec Jan Feb Mar Apr May

2008
Sep Oct Nov Dec Jan

2009

Jan

Feb

Mar

The End

Thank You!

Comments appreciated [email protected]

Extra Slides

Extra Slides

Indian Bauxite Export Statistics

Bauxite is aluminium ore of different chemical compositions
Alumina, aluminium oxide (Al2O3)
95% of all bauxite is turned into aluminium
Bauxite
Year

Alumina

Value (million
USD)

Quantity
(thousands kg)

Aluminium

Value (million
USD)

Quantity
(thousands kg)

Value (million
USD)

1997-1998

0.84

86,876.07

87.32

427,182.89

259.59

1998-1999

5.74

98,942.25

38.78

216,878.74

142.53

1999-2000

6.99

596,800.99

21.07

86,062.45

247.16

2000-2001

27.38

1,248,175.41

43.26

189,309.53

337.22

2001-2002

14.10

979,570.45

45.32

263,103.58

340.17

2002-2003

32.14

1,785,350.22

191.29

1,101,614.37

375.48

2003-2004

37.20

896,137.07

173.09

808,178.53

404.91

2004-2005

29.86

1,016,141.85

294.06

957,703.69

541.27

2005-2006

68.80

2,355,277.13

400.53

1,025,022.97

606.16

Source: Export-Import Data Bank, Department of Commerce, Government

of India, http://dgft.delhi.nic.in/

Methods - Data Collection

Type of
Information

Sources

Method

Economics of
mineral industry

Costs
Cost of excavation and transport, Forest
clearance, Water usage, Carbon dioxide usage,
input materials
Benefits (state and national benefits should be
separated)
Royalty (64 rupees per ton of bauxite), CESS
Income taxes and Excise, Employment, Customs
Based on annual reports and other official data
where possible. International cases to be used
where possible

Cost/Benefit
Analysis

Politics of
distribution

Legal documents, policy statements

Document Analysis

Key informants: Politicians, Bureaucrats, Activists,

Industrialists and Academics

Semi-Structured
Interviews

Methods - Data Collection

Type of
Information

Sources

Method

Land use

Land Records and Mining Leases

Document Analysis

Satellite Imagery and GIS

Field Survey
Policy Narratives

Key informants: Politicians, Bureaucrats, Activists,

Industrialists and Academics

Semi-Structured
Interviews

Key Concept 3 The Resource Curse

Indigenous Peoples and the Resource Curse:

Local states can get caught up in resource struggles (Scholtz 2006)
Linguistic and cultural differences, remoteness of location often
makes the curse more likely to happen
Extra contributions to the local area might not even be enough to
avoid a resource curse (Ross 2004)

Key Concept 3 The Politics of Industrialisation in India

Pressures on the Local State:

National Government
(fiscal discipline)

International Agencies
(fiscal discipline,
transparency)

Pressure from above

State Government

Political Party and its

supporters, industrialists
and other important
groups

Pressure from below

Jobs for the Urban

Middle Class
(powerful group with
money)

Agricultural
Support to farmers
(vote bank)

Welfare Measures for

Landless and other
rural poor (vote
bank)

Data Analysis

Conclusions

Policy Analysis

Cost/
Benefit
Analysis

Land Use,
Land Records,
Mining
Records

Discourse
Analysis

National and State

Distribution of
Royalties/ Welfare and
Local Support Systems

Key
Informant
Interviews

Court
Judgements

Valley View of Land Usage in Tribal Areas of Orissa

Agricultural land limit

Mines

10% slope mark

Industry

Source: Interview Researcher,

Orissa, 2006-10-26

Bauxite Mining in Kashipur on Bapthimala Mountain

= Village located along the mountainside

= Land claimed by tribal people as
traditionally used

Layer of Bauxite on top of the

mountain (thickness 15-20
metres)

Source: Interview Researcher, Orissa, 2006-10-26