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Indian villagers in Jharkhand are warning of further actions against state-run power generator NTPC Ltd, which plans to open a new coal mine in the area, after police opened fire during clashes with locals on the weekend, killing four of them.
Landowners allege the company not only infringed forestry rights, but also did not did not offer them jobs or adequate compensation when buying the property to host the project in Jharkhand’s Hazaribagh district.
Incident highlights operational and reputational risks faced by companies operating in the extractive sector in underdeveloped parts of central and eastern India, says expert.
While the details around the incident remain murky, Verisk Maplecroft’s senior analyst Jan Zalewski says it shines a spotlight on the high operational and reputational risks faced by companies operating in the extractives sector in underdeveloped parts of central and eastern India.
On Thursday, in fact, Maoist guerrillas set on fire a train carrying coal through the same state, First Post reports.
The Hazaribagh episode Zalewski notes, follows other deadly incidents involving police firings in the same state this year and it further complicates Jharkhand’s recent efforts to promote itself as an attractive investment destination, including in the mining sector.
“Land rights are a highly controversial issue across India, particularly in the forested districts of central and eastern India that harbour significant shares of India’s mineral reserves,” the expert says.
He adds that locals usually tend to resist violently companies’ meet attempts to acquire land in such areas.
As a result, firms are increasingly deciding to employ state security forces to protect their assets and supply chains, which in turn increases the risks of being linked to police abuses.
“Participating in and adhering to the Voluntary Principles, which set out human rights guidelines for companies in the extractives sector, is one way to limit the exposure to reputational risks when benefiting from the protection of security forces,” Zalewski concludes.
The coal blocks that triggered the latest protest were awarded to NTPC in 2004, IANS reports. Still, another 8,000 acres need to be acquired for the controversial project, out of which 4,000 acres belong to contract tillers, 2,900 acres are forestland and 1,200 acres belong to the government.
