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Beyond Corruption in Mining: A Derailed Democracy

Beyond Corruption in Mining: A Derailed Democracy

The revelations of the Karnataka Lokayukta report are symptomatic of a larger story that goes beyond corruption in high places. There has been a neglect of state institutions and decisions by the executive are taken not under consultation with the assembly but as decreed by a new religious math-temple-resort complex that has come to wield power and influence. Democratic processes have been sidelined and people's movements have been corrupted. The uneven growth of the state economy that has accompanied these processes holds out the danger of Karnataka becoming a land of deep inhumanity.

COMMENTARY

Beyond Corruption in Mining: A Derailed Democracy

A R Vasavi

(1) A Network of ‘Illegalities and Irregularities’: “Search and Seizure” procedures yielded information on a vast network of forged permits, fake transactions, false accounts, and unaccounted funds. There have been rampant irregularities in the leasing of land – including forest and reve-

The revelations of the Karnataka Lokayukta report are symptomatic of a larger story that goes beyond corruption in high places. There has been a neglect of state institutions and decisions by the executive are taken not under consultation with the assembly but as decreed by a new religious math-temple-resort complex that has come to wield power and influence. Democratic processes have been sidelined and people’s movements have been corrupted. The uneven growth of the state economy that has accompanied these processes holds out the danger of Karnataka becoming a land of deep inhumanity.

Thanks are due to Shivasundar for a copy of the report and H D Prashant for clarifications.

A R Vasavi (arvasavi@gmail.com) is a social anthropologist based in Bangalore.

A
fter years of speculation, rumours, varied reports and accusations, come details about the depth and forms of spoilage linked to the iron-ore mining industry in Karnataka. The full report released on 29 July by justice Santosh Hegde, the Karnataka Lokayukta/(ombudsman), as his swansong at his retirement on 2 August, runs into 20,000-odd pages but its summary version of 217 pages contains enough damning evidence.

The report, which has drawn extensively from detailed reviews submitted by U V Singh, a senior official of the state forest department, highlights the amounts, “the trail of transactions” and varied “irregularities and illegalities” of the mining industry, thereby implicating the government machinery and hundreds of current and retired administrative personnel, several mining operators and owners, the state chief minister, minister for health, and the minister for tourism who was also minister in charge of Bellary district (the mining lord G Janardhana Reddy). Some highlights include:

  • * Illegal mining and transportation of ironore from three districts have resulted in a loss of Rs 16,085 crore for the period 2006-10 to the state exchequer.
  • * The (then) chief minister, B S Yeddyurappa and his family are directly implicated in the receipt of funds from one of the mining companies for their family education trust.
  • * The chief minister also failed to take action on the earlier (12 December 2008) report submitted by the Lokayukta, and of the representations and reports during his tenure against such illegalities.
  • Three Processes

    The details of the report can be summarised as indicating the working of three interlinked processes in the state, each feeding into the other to make possible the erosion of democratic and accountable structures and the loot of the state’s natural and financial resources.

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    nue lands – for mining; in issuing permits for transportation of iron-ore; and in granting permits and entering into memoranda of understanding (MOUs) with various bodies, including public sector entities. There has been theft/misuse of 15,700 holograms from the office of the deputy director of mines and geology which, in turn, has facilitated the illegal transportation and export of iron-ore and avoidance of payment of taxes. Royalties levied were a pittance and the mining companies were not liable for damages to the land and forests.

    (2) The Working of a ‘Zero Risk System’: Over the years the iron-ore mining industry in Karnataka has developed a “zero risk system” which the report describes as

    a unique illegal method of transportation adopted in the BHS (Bellary, Hospet, Sandur) region wherein the transportation of ‘zero material’ (illegally mined iron ore) has been guaranteed to reach safely to the destination. Some traders/companies/middlemen have taken this ‘job’ of transportation of ‘zero material’ to various destination by charging ‘commission’ for rendering services taking ‘risk’. In this phenomenon, the guarantor or ‘risker’ takes the guarantee for safe delivery of the iron ore without any valid transmit permits or …by using fake permits….Hence the term ‘transportation on risk’ and the person who takes guarantee ‘the risker’ is being frequently used in the sphere of illegal mining in the BHS region (p 192).

    Assessment of documents, transactions and bank accounts provide details of several companies resorting to such a “zero risk system”. Assessments indicate that some companies and “riskers” or individuals such as Karapudi Mahesh (a smalltime local transporter until 2005) have received sums up to Rs 40 crore.

    (3) Governance by Intimidation and Co-option: The coinciding of economic power with political clout has led to the onset of a system of governance by intimidation. The report details how attempts by a

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    few officers to question or straighten the system led to their transfer out of the region, to the intimidation of review committee members, and to the posting of “favoured officials at strategic posts of police, mines, forest, revenue and other departments” (p 194). Payment of large bribes at crucial sites, disregard for norms set by various departments, and the strengthening of the “zero risk system” became the dominant forms of iron-ore mining and transportation. Indicting Janardhana Reddy, the report describes how,

    the minister has also used his muscle power and has organised trespassing into the mines owned by individuals/companies and compelled such companies to execute agreements on the basis of raising contract, which itself was held…in the first report as a system unknown (to) law (p 203).

    The immediate fallout of the release of the report has been the ouster, at last, of Yeddyurappa, an arrogant and brazen Rashtriya Swayamsevak Sangh (RSS) cadre man, from the post of the chief minister whose fall has been as quick as his rise. While the fall of the Bharatiya Janata Party (BJP’s) first southern chief minister and the volume and spread of corruption are predominant themes of public talk and media reports, there is need to review the more significant implications of what the Lokayukta’s and several other reports highlight about the state of Karnataka.

    Business and Politics

    Although the opposition parties cry foul about the deep losses to the State and to the public, in truth the origin and source of such depredations must also be traced to earlier regimes, where the partnering of business and politics, legitimised by the new market fundamentalism, has meant that issues of accountability, due process, legislative norms, and overall governance were given the go-by.

    That the loot of the mining belt, most visible in all its intensity in the Bellary belt, had begun in the late 1990s and had led to the rise of the Bellary Reddy brothers, and to the Lads and other “mining lords/mafia” is evident in the fact that it was this group, which was blessed and supported by their adopted “sister”, Sushma Swaraj, who failed in 1999 to win a Lok Sabha seat (against Sonia Gandhi) from Bellary but

    Economic & Political Weekly

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    August 13, 2011

    drew the miners into the folds of the BJP. The unimaginable wealth, created by the liberalisation of mining and the booming global – primarily Chinese – demand for iron-ore fed into the coffers of several political parties, including the BJP. This, combined with the loss of popularity of the Congress and the Janata Dal, largely accounted for the fact that the BJP was able to purchase legislators by flying them in the Bellary Reddy brothers’ helicopter to resorts where their allegiance was purchased for untold amounts and which enabled them to claim majority in the 2008 assembly elections. So blatant was the purchase during that election that one of the brothers, Janardhana Reddy, although only a Member of Legislative Council, was given the plum portfolios of the tourism and infrastructure ministries, while another close ally from the Bellary belt, Sriramalu, received the department of health. Since then, deploying “Operation Kamala” to purchase legislators, panchayat members, and other candidates has been the political mantra of the state BJP.

    Intense infighting, accusations of favouritism, high-handedness by the chief minister, and indifferent governance saw the regime face frequent instability. Despite this, a coterie of sycophants kept Yedd yurappa going, including by getting a United States-based non-resident Indian admirer to pressure a university in Michigan to bestow an honorary doctorate on him. That such an honour was only laughable was made clear in the fact that no one, including the media, has taken to adding the prefix of “Dr” to his name.

    What has created such a political culture is a complex constellation of factors and trends (and not just the neo-liberal or global economy) in which an entrenched caste-based sociopolitical structure has located itself in the triangulated new economy dominated by mining, land acquisition, and construction. The politically and economically dominant Vokkaligas and Lingayats have engaged in intense competitive strategies in which wooing the backward castes, the dalits and religious minorities has been meant to gain votes. In the midst of such intense engagement based on caste-capital alliances, the real victims in Karnataka have been the democratic structures and processes and

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    the partial social development gains made in the previous decades.

    Erosion of State Structures

    The failure of the larger system and its institutions to halt or challenge such depredations indicates a deep erosion. Once seen as a state providing model programmes, the state has witnessed the steady weakening of such structures, so much so that several honest and efficient administrative officers have sought to go on deputation or on leave. The model state planning department and board have been rendered moribund; they are unable to assess, monitor, or recommend economic and social policies. Even the formulation of the “Vision Plans” for the state was assigned to private players with little or no public consultations. In the larger orientation of heightened privatisation there has evolved a form of revolving doors between the State and private industry, with key personnel moving with great comfort between the two. Is it any wonder that the monitoring and regulation that the state departments should have provided were bypassed, explaining how the Hegde report indicted 617 officials for various lapses and as being part of the loot and hoard group?

    Other reports confirm the gross negligence and violation of governance and administrative structures. A report, also from the office of the Lokayukta, with a focus on the public distribution system in the state notes that at least a sum of Rs 1,737 crore has leaked from the system. Though Karnataka has 120 lakh households, there are 159.23 lakh ration cards circulating in the state. The functioning of

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    COMMENTARY

    key commissions such as the State Human Rights Commission and the Commission for Women and Children has been largely neglected. Even the Mahatma Gandhi National Rural Employment Guarantee Scheme has been underutilised although many tracts of the state, especially the dry belts, have a large proportion of people who require livelihood support. So rampant and blatant has been the negligence of welfare and development programmes that even the amount (about Rs 1,000 crore) collected through public contributions after the floods of September 2009 has not been used fully in housing and rehabilitation of the flood-affected.

    Democracy Emptied

    That the dominant political mood has vitiated the political culture at all levels is evident in the fact that the few social movements that had gained a presence in the state are now far from engaged in emancipatory politics and are, instead, focused on gaining a foothold in the spoilage system or in exclusive identity politics. The rise of varied “senas” or “armies”, each seeking to champion either Kannada, Ramahood, or a region indicates this. And even the Dalit Sangharsh Samiti is now split into more than 12 factions. Resorting to various forms of vigilantism (which include the burning of the churches of the new Christian denominations), these groups provide the shadow power to the RSS-BJP and are their foot soldiers in the street level contestation for space and visibility. Added to the making of such supporters has been the overt intensification of the math-temple-resort complex which is now the real space in which political decisions are made and machinations over power, capital, and spoilage staged.

    There are now maths (also spelt as “mutts”) representing not just the Lingayats, but for various other caste groups as well. These are near parallel government structures whose real power over the people lies in their ability to provide welfare, development and customary judicial services, in addition to representing themselves as moral-spiritual guides. In acting as both vote banks and political brokers, the maths have come to occupy an unusual position and have been wooed openly by Yeddyurappa. Seeking to co-opt them, he has dispensed with both legislative and departmental procedures in bestowing largesse on them, which according to one RTI note accounts to close to Rs 1,000 crore. Such allegiance to the maths and temples as legitimate spaces has eroded the credibility of democratic procedures and processes. This was evident in the showcase episode of the antidemocratic mentality of Karnataka’s politicians. In the contest of allegations and counter allegations over corruption between Yeddyurappa and Kumaraswamy, the two sought to establish the veracity of their respective claims in a temple and not through the procedures of the court. In all of this, the legislative assembly, housed in a grand edifice that declares, “Government Work is God’s Work” has been rendered both empty and redundant. Attendance at the assembly is thin and several key decisions have been taken without debates and discussions.

    A sharply contrastive and uneven economy has now taken root in Karnataka. One consists of the spectacular global economy, not only of the IT industry but also that of the mining barons (travelling in their helicopters and constructing 60-bedroom homes), the booming retail malls, the construction lords, and the larger media-based promotion of lifestyles of luxury and consumerism. In sharp contrast to all this new economy are the hinterlands which bear the scars of years of negligence. Liberalisation has meant not only the production of this unaccountable wealth with its displays of new lifestyles, but also the discounting of environment and labour issues and the production of a discourse in which quick wealth is possible and legitimate for all. This accounts for the fact that even small cultivators have also bought into the idea of quick wealth and have dug up their own plots, rendering tracts (up to 800 acres) in some villages into vast open cast mines. Despite the Lokayukta reports and observance of the disregard for environmental norms, the details and implications of the real environmental holocaust remain unknown. Child labour is rampant and has increased in villages where desperate families have resorted to withdrawing their children from schools. Diseases linked to polluted air and water are rampant and account for higher mortality rates. And new forms of agrestic servitude have emerged in the mining belts. Dissent against such conditions, including questioning of the siphoning of government funds into forms of private charity, has been silenced. Combining wealth, power, and intimidation it is not only Bellary that has been turned into a new fiefdom of the mining barons, but the State itself has been held hostage.

    Why and how all these have been allowed to flourish remains a key question. A fragmented civil society (including the media), political entities and persons who have lost their public legitimacy and an uneven economy combine to feed into each

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    other. Despite substantial evidence and repeated acts of violations of democratic norms, the ruling party and its coterie of looters has not been dislodged. Public pressure has been inadequate and no issue of violation has been followed to its logical consequence – prosecution of the guilty and stemming of the erosion of the existing democratic structures. What will be the full impact of the Lokayukta’s report, for all its honesty and braveness? Will this also be allowed to pass and the accused allowed to continue to be part of the “adjusted system” that has become entrenched in Karnataka? The dangers of all this is not that Karnataka may be on the verge of becoming another Bihar. But, it may, if the system of spoils, the “zero

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    -risk system”, and the indifference of civil society continue to prevail, become like the belts of Nigeria where the looting of the reserves of oil or “black gold” by unbridled international capitalist cartels in league with local thugs has rendered the region into a condition of deep violence where the erosion of state, law, and society has seen the death of any idea of humanity.

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    Economic Political Weekly

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    August 13, 2011 vol xlvI no 33

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