We need Environment and Social Safeguard Policy for Indian Financial Institutions

On April 26th 2022, women of Janardanpur, Chhattisgarh hugged trees of the Hasdeo Aranya forest to prevent them from being felled by the forest department and did so successfully. But the forest department came back in the early hours next day and felled over 300 trees. This is following the clearance given to the second phase of mining at the Parsa East Kete Basan coal mines despite the protests. The projects are owned by Rajasthan Rajya Vidyut Utpadan Nigam and operated by the Adani Group. This was not just a one off protest, the people from the area had been protesting against the mines for years! The clearance was given despite the villagers petitioning the Chief Minister and the Governor on the false consent papers and the ecological, social and human cost of the project. The entire affected community sat on a 75 day sits in protest and marched over 300 kms to petition the chief minister. The mining project spreads over 1,200 hectares, and expansion into the second phase will lead to a displacement of around over 700 people and felling of over 200,000 tress in the forest.

Meanwhile the last couple of months saw huge protests in Kerala against the K –Rail project. The Thiruvananthapuram-Kasaragod Semi High-Speed Rail project, popularly known as the Silver Line, is a proposed 529.45-kilometre rail line, built at a cost of Rs 63,941 crore, running through 11 districts to connect Thiruvananthapuram in the south to Kasaragod in the north. The project, which is expected to be completed by 2025, is being pushed despite strong protests from the people of the state. While experts say that the cost will over run to Rs 1,26,000 crore, the concerns of the people are that this project would according to reports displace 20,000 people and the rapid Environment Impact Assessment had reported permanent damage to fertile soil and reduction of agricultural produce. There have been mounting protests against the project that continues till today.

These are only two examples from numerous protests that are currently ongoing across the country. At present, there are at least 20 other mega projects including, the bullet train, hyper loop project, metro rails in at least 25 cities; Kalpasar Dam Project; Bharatmala project for goods and freight corridor (26,000 km of economic corridors estimated at Rs. 6,92,324 crore) that will cut across 550 districts; at least seven ultra-mega power projects (est. Rs. 15,000 crore each); the target of 25 solar parks (ultra-mega solar projects) that was increased to 50 in 2017 (many of which are completed or under construction); the Sagarmala project (Cost: Rs. 6.01 Lakh Crore) that has more than 574 projects  (of which 121 are completed and 201 are under implementation) and so on! The number of such projects are only on the rise. Those in power are able to sell them in the name of “development”, chasing a “$5 trillion economy” or becoming a ‘Super Power’. Never are the social, economic, ecological & human devastations caused by these projects considered by the government, companies and institutions behind the funding of such projects.

This is not a new story, for decades now, people have been fighting to protect their land, forest, ocean, ecology, lives and livelihood from the so-called development projects. The idea of development has been reversed since the 1990s and today what we see is a communal authoritarian government that has comfortably blended into the neo-liberal framework to decimate any pro people, democratic, inclusive and sustainable model of development. The result of this blend is for us to see and suffer everywhere! Today we no more hear about roads but only corridors – industrial corridors, freight corridors; no transport for the interest of connectivity but bullet trains, high-speed trains; no more housing for poor but smart cities. There is hardly any protection for the people or ecology in conceiving projects like Bharatmala, Sagarmala, or Parvatmala!

The very idea of this kind of development is based on loot of natural resources, driving people out of their lands, excluding the most marginal communities and historically oppressed communities. And anyone or any community who dares to challenge is brutally repressed, arrested, jailed or worse – killed!

The resistances of the people continue across the country and have taken different shapes and dimensions. For the most part, the people have and continue to resist the government and the companies despite the police brutalities and threat of false arrests. But many a times, the financiers of these projects continue to be in the dark. There have only been a handful of projects in India, where people have raised questions directly to the financiers on the violations and impacts of the projects they are investing on. In some, they have been successful in stopping the finance and in some the project itself has been stalled or cancelled.

One such example where the demand to the financier played a crucial role in stopping the project (among others) was the Amaravati Capital city project. This was possible because many of the international Multilateral Development Banks have been forced to adopt Environment and Social Safeguard Policy and Independent Accountability Mechanisms to address any grievances on violations of those policies. Today, it is not just World Bank, Asian Development Bank or Asian Infrastructure Investment Bank that are funding these projects but truth be told, many of these are funded by us!

Yes! We, the people who stand in solidarity with the struggling people of this country who are fighting to protect their land, livelihood and ecology, we have funded their destruction. As people who have and are fighting against Adani Group or Ambani or Jindal or TATA, we continue to fund their ports, airports, and mining projects! Not directly, maybe but through our banks, our mutual funds, LIC policies – through our savings and deposits!

Since early 2000s commercial banks have been engaged in lending to big businesses and industries. The global recession of 2008, cases of frauds against the banks and evergreening of corporate loans etc. – all resulted in the NPA crisis that threatened the very survival of banks. Since 2014, Rs. 8 Lakh crore (as of 2021) has been written off and yet the NPA stood at Rs. 10 Lakh crore (as of 2021). Not only that the banks have lent to destructive projects with the people’s deposits without any accountability, but has done so without any due diligence, increasing the risks to our savings. Worse is when these losses were once again tried to be forced on the public again through service charges and reduced rate of interests on savings etc.

While we rightfully demand that the public banks should focus on small scale and retail loans or on the priority sectors, we cannot deny the reality that the public sector banks are being pushed to the path of a development bank that focuses on project finance. It is in this context that we demand that the banks and all Indian financial institutions should have an Environment and Social Safeguard Policy.

What is needed is safeguard policies that are set in the Indian context, taking into account the realities of the social, economic & environment into the policy itself! It has to be a policy that is put through consultations with the communities that have been and are likely to be affected by such projects. The demand for safeguard policy does not in any way mean that it is an acceptance of the developmental model that is being pushed, but it is only yet another tool in the hands of the people to fight against the financial institutions & companies that destroys lives, livelihood & ecology, to hold them accountable.

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