Community and industry: an agenda for good governance


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THE act of ruling or controlling with authority is called governance. The word ‘agenda’, apart from its usual meaning carries two other connotations: a list of things to be done and underlying motivation. ‘An agenda for good governance’ is a value loaded title.

For us and perhaps the readers of this article the word ‘good’ refers to a democratic method of ruling which results in ‘just’ (just in the eyes of the downtrodden) distribution of natural and human resources and their products. The word democratic must be underlined as in contrast to benevolent. We will see examples of benevolence even in the following case study from which we have drawn important lessons. The lessons refer to the list of things to do to reach the goal of good governance in the process of industrialization.

‘We are not directly responsible for the fish-kill or the damage to crops,’ said a government official in Maharashtra. He said this in reference to a query about the damage caused by effluents from chemical industries in Lote industrial area in Ratnagiri district of Maharashtra state in India.

Note the play of words: ‘not directly responsible.’ Elbowroom is created with the word ‘directly’. Such play with words or use of language is considered an intrinsic part of the act of governing. The loss of livelihoods of the fisherfolk or of the farmer does not move officialdom in the normal course.

Government bodies work with their own agendas. Should any damage be caused while implementing a developmental project the response is: ‘we are not directly responsible,’ or ‘these are costs the communities must bear if development is to take place.’ The government defines development and proposes projects of industrial development. Most elected representatives too equate development with industrialization.

‘We expected there would be more schools, more medical facilities and more regular jobs,’ said a villager. He was expressing his expectation about development, which industrialization is supposed to bring about. As the impact of industrialization unfolded, this expectation did not materialize. What the villagers had to face was a degradation of the environment, loss of livelihoods and a few low paid hazardous jobs and sundry ancillary employment thrown in.

This has been the consequence of the process of industrialization. Around the Lote area the people responded in a novel way. They proposed their own plan of development. We will see the background to this development.

In Maharashtra and in other states it is seen that the people have a complex response to industrialization. There is hope that the process will improve the quality of life, that there won’t be any need to migrate to urban areas. There are apprehensions about the repercussions of industrialization. The first response to acquisition of land is: ‘No acquisition, we cannot bear loss of land – our mother, our sole source of livelihood. The industry will destroy our life pattern, we do not want pollution as in the cities.’

This is mixed with a demand for an increase in compensation. ‘If at all we are going to lose land, we should not be insulted by being offered a pittance in return. A market price must be paid to us. We should also get jobs in the industry. There should be hospitals and schools for our children.’ This is a response full of contradictions – adamancy and compromise, militancy and acceptance of sops. All these go hand in hand.

These are not necessarily different sections of people speaking in different tongues. Most often it is the same set of people echoing their expectations and apprehensions. Even after the industry commences production, complex responses continue. Few local people get employment and those that do usually get only low-end jobs.

The reasons for this are the same everywhere. The rationale of industry is: local people are not qualified, they do not have experience of industrial work, industry is not being run as a charity, and so on.



Not surprisingly, this leads to agitation: no good jobs, no good schools and, in addition, pollution becomes a fact of life. There are agitations and angry exchanges. The industry usually denies responsibility for water or air pollution. It is beyond the means of villagers and often beyond available technological means to pinpoint the exact source of say well-water pollution, especially when similar industries are in a close cluster. This only fuels local frustration.

The industry too realizes this and offers jobs to some people from the villages who are at the forefront of the agitations. Donations are made to temples, money given for the office of the village panchayat, sport kits are donated to youth groups; occasionally companies adopt some hamlets. All these are ‘acts’ of charity (maybe with associated tax benefits). These are not actions of responsible members of the community. Sometimes compensation is paid, but not for damage to crops. The causal relation of degradation of environment and industry is vociferously denied.



Industry does create some ancillary and sundry jobs. These are in the form of small and big shops and hotels. The suppliers of products to the industries are mostly from outside the local area. For example, milk produced by local people is not pasteurized. The local population tries to find ways and means to survive and reduce pollution. The community coexists with industry, but this coexistence is rarely of mutual benefit.

A similar course was charted around Lote industrial area. However, the local people and a group of activists from Parivartan (a voluntary organization working in this area for many years) after long deliberations, decided to develop a peoples’ plan and invite both industry and the government to become responsible ‘citizens’. The coexistence and survival with industries was forced on the people. Now the people wanted this ‘compromise’ or ‘co-existence’ to have a stamp of the will of the community.

For industry, the pillars of governance are the shareholders, the corporate body and consumers. In a conventional sense the accountability of industry is towards those who put in their capital and of course the government departments who regulate them through various legislations. In modern corporate governance the relationship with the neighborhood community is part of corporate social responsibility. But a majority of industry in India continues to feel that their responsibility ends with paying development tax to the industrial development body. It is not their business to interfere in the delivery of benefits to the community by such government controlled boards.

Traditionally, local charity was important for industries in India. In the case study discussed below an attempt is made to provide a platform for industry to interact with the local community well beyond set legal structures. It is a truism that development of the local community makes good business sense. To adopt such a view industry must accept its two dimensional role: one as private capital and the other as an integral part of social capital that looks after long term interests of capital.



The Maharashtra Industrial Development Corporation (MIDC) is the primary industrial infrastructure development agency of the Maharashtra government. Constituted under the Maharashtra Industrial Development Act, 1961, MIDC was established on 1 August 1962. Its basic objective was the setting up industrial areas with a provision of industrial infrastructure all over the state for planned and systematic industrial development. MIDC has as its motto ‘Udyamat Sakal Samruddhi’ (prosperity to all through industrialization).

The Lote-Parshuram industrial area (LIA) is located 12 km away from Chiplun, in Ratnagiri district of Kon-kan region of Maharashtra. In 1978, the MIDC appropriated 51, 273 hectare of land in Lote, Awashi, Songaon, Dhamandevi and some other villages for setting up a chemical industry zone. The development of an industrial belt was part of a larger plan to develop the Konkan region and provide better survival opportunities for the people.

The Lote-Parshuram area is surrounded by the Sahyadri mountain range in the east and the Arabian Sea in the west. This area is bestowed with abundant natural resources. The unique feature of this area is the confluence of two rivers, Jagbudi and Vashisht, joining at the Dabhol creek and further flowing into the sea. The area receives more than 340 cms of annual rainfall and is endowed with fertile soil suitable for horticulture and rice cultivation. The major produce of this area is the high quality alphonso mango. There is a strong fishing community settled around the creek.

The setting up of an industrial zone in this area has resulted in about drastic changes in the lives of the people. The major rationale behind MIDC locating here was the creek for letting out treated effluent water. The consequences of setting up this industrial belt were multidimensional.

LIA was developed in two phases, the first of which was completed around 1970. The next phase involved new acquisition of land for expansion of the industrial area. Around 200 chemical (agro chemicals, dyes and pharmaceutical) and a few engineering units began operations in the 1980s. By the year 2002 there were only 70 units in business, the rest having closed down. The land occupied by them now lies unused. Under the present legal framework, no one else can make use of these lands. This deindustrialization is exacerbating the problems faced by the communities. We will return to this issue later.



A study conducted in 1997 revealed the following problems. The Lote industrial area was built on the land of local people and they should have got preference in employment in the factories as a matter of right. However, this did not happen. Out of 773 seeking employment in the four villages, only 92 people (11.9%) got jobs. Only 25 among these were permanent employees, the remaining 67 working as contract labourers. 80% of work in factories is done through contractors. The lives of most workers are unsafe in the chemical industry. Apart from economic exploitation, they face the risk of contracting disease.



Workers in Lote industrial area operate in hazardous conditions, handling chemical substances and coming in close contact with various hazardous liquids and fumes. As contract or casual labourers, they are provided little protection at their workplace. Consequently they are prone to many health related problems. The people living around the Lote industrial area are also affected by air and water pollution caused by the chemical industries.

The four villages surveyed revealed different trends. Lote being closest to the industrial belt had more cases of pollution related diseases, whereas in Satwin, which is the farthest, the incidence of disease is lower.

The occurrence of general health related problems are higher in Lote village. 63% of the respondents in the 18-45 year age group suffered from general health related problems, while the figures for the same age group in Asgani, Satwin and Kotwali villages were 58, 25 and 27% respectively. 45% of the respondents in Lote suffered from respiratory diseases. In Asgani, Satwin and Kotwali villages, the figures were 18, 10 and 18% respectively.

A lung function test in the affected villages was conducted with the help of PRIA (Society for Participatory Research in Asia), New Delhi, a national level support NGO, during December 1997 to check the extent of air pollution. The tests showed that in the Chaklewadi and Dhangarwadi settlements, which are in the vicinity of industrial units, people suffered more from lung infections. In Chaklewadi, of the 99 people tested, 20 (30.3%) suffered from lung problems. In Dhangarwadi, of the 52 people tested, 16 (30.7%) suffered from lung infections.

In Deolwadi and Baitwadi clusters (which are in Satwin and Asgani villages), the number of people suffering from lung diseases was comparatively low and the difference was found to be statistically significant. (In Deolwadi, 6 out of 54 people (19%) and in Baitwadi, 7 out of 45 people (15%) suffered from lung problems.)

The reason for these two clusters being less affected is that both are distant from the location of industry and do not liein the wind direction. Deolwadi is farthest, more than 7 km away. Moreover, Deolwadi does not have any industrial workers in the sample studies, whereas in Baitwadi, though many workers were included the study, they were relatively younger. More people suffered from skin diseases in Kotwali and Lote villages; the least number in Satwin village.



The farm area in these villages had declined mainly due to industrial development. The agricultural production has come down in Lote, Asgani and Kotwali. Pollution is cited as an important reason for the decrease in crop production. It is only in Satwin that agriculture production has registered an increase in recent years. In Lote, Asgani and Kotwali villages, the decline in agriculture production is substantial. Lote village is worst hit by industrial pollution, the soil here is no more fertile and it carries chemicals.

Earlier, many villages kept cows, buffaloes and bulls in large numbers for agricultural activity. They did not face any problems of fodder. Moreover, there were vast expanses of pasture lands. However, the chemi cal contamination of pasturelands in recent times and the death of many cattle due to polluted water, has affected cattle breeding considerably in these villages. It has also adversely hit their livelihood.

This area was famous for production of alphonso mangoes, cashew nut and other varieties of fruit. Our study shows that in Lote and Asgani, the production of fruit has decreased.



A study of the fishing settlement near Dabhol bay also suggests a gradual decrease in fish production in the past five years. Until 1992, the monthly production of fish in the bay was worth Rs 1,20,000. In 1993, the production fell to Rs 1,08,000. It continued to decline until 1997, when the fish catch was negligible. This has deprived the already poor fishing community of their means of livelihood. Consequently, many traditional fishermen are compelled to work in factories as contract labourers and undertake other unskilled jobs.

Due to the creation of an industrial belt, about a quarter of the farmers in Lote village became landless. People were forced to sell their agricultural land for non-agricultural purposes. And though one of the main objectives of industrialization was employment generation, it has not been achieved. Only a very small percentage of the local population could get employment in the factories and then as contract labourers. They have no job security, nor do they get proper wages and other facilities.

When the MIDC decided to acquire land for extension of the industrial estate, it was resisted by people through agitations and court cases. The experience of the first phase motivated people to challenge the new acquisitions with a different method. Though the promises made by the MIDC in the High Court – pollution monitoring systems, development of greenbelt and so on – were not implemented, the MIDC obtained permission from the court for acquisitions.

The realization that one has to accept the existence of industry, and respond so as to bring to the forefront needs of the people, led to the concept of public hearings on the basis of a shared future.

Meanwhile, the problem of closed industries has also surfaced. These industries left behind degradation, loss of land and jobs, and large pieces of unused land. This problem will have to be tackled in the near future.



Is the relationship between all the important stakeholders unequal? Is conflict inherent in industrialization? Is a department of the government the only channel to interact with industry? Are not concessions to industry given at the cost of the local community? Is it possible to develop a mutually beneficial relationship?

These were some of the questions in the minds of people. Even though all the partners of change were ready to search for answers there was the absence of a platform and process of engagement. The local community, along with Parivartan and PRIA, agreed on one point: informed participation would be the key to engagement; that the community should itself understand and articulate its experiences, aspirations and concrete actions rather than an external facilitator. In reality, it is industry, along with the government, which controls information and knowledge at the local and state levels. Second, there should be a proper reality analysis of the community’s views before the other two stakeholders are engaged. There are numerous examples in human history where the views of the marginalized are ignored for lack of concrete evidence. On this occasion the community wanted to be well prepared before engaging with industry and government.

It is after such discussions that initiatives for capacity building of community groups began in the industrial belt. The community itself undertook an impact analysis on issues like environment, health, resources, land and livelihood. In these efforts, doctors and social scientists from Mumbai and Delhi joined the local groups. Various educational events like training programmes, group discussions and diagnostic camps were organized. On the basis of these processes, a peoples’ plan was developed.

Today, the World Commission on Economic Development (WCED), the World Bank and other agencies have started promoting concepts such as participation, people’s needs as central, stakeholders control over development and so on. But the process of achieving any semblance of control by stakeholders is a difficult one. Equality among unequals is not achieved by mere declarations or wishful thinking.



In Lote, a people’s plan was developed on the basis of a long process of participatory study training and a series of intensive meetings spread over two months. There were 40 meetings involving the gram sabhas. Women’s groups were organized in small savings groups and mahila mandals (women’s committees) who discussed various elements of the plan. The youth groups, activists, and village leadership participated in the consultations. This process involved 23 villages, their hamlets and eight clusters of fisher-community. The participants came from varied occupational backgrounds – farming, horticulture, fishing, industrial work, and housework. Artisans as well as the Association of Industries in Lote were also consulted.

Experts in chemistry, botany and sociology from nearby colleges and persons with influence in Chiplun city were brought into the consultations. Sensitive researchers could possibly have prepared such a plan, without going through the long process of meetings. However, that plan would not have become a part of the life of the people. The people would not have worked to implement it with enthusiasm.

Leave out the process and the plan does not remain the same. The major elements of the plan were as follows:

* Strengthening the public health delivery system by upgrading health centres, developing a well-equipped hospital capable of handling industrial emergencies; generation of employment in industry and in activities supplying industrial needs; contracts to be given to cooperatives of local persons; recognizing rights of the unrecorded tenants, recording and compensating loss of trees on acquired lands, relinquishing lands for common use and those unnecessarily acquired by the MIDC; compensation for the landless who lost their livelihood due to industry – the fisherfolk and shepherds.

* A survey to be conducted by the government in association with the gram sabhas to find solutions to the problems of water for drinking and other uses like agriculture; pollution of air and water; and effects of pollution on livelihoods.

* A committee, including representatives of the affected, to be formed to participate in the management of the industrial estate. This committee, the Pollution Control Board and managements of industry will have to work together to check pollution.



Communities need to develop their capacities and work collectively and coherently to properly document their problems and expectations. From this endeavour must emerge a peoples’ plan of development. Organizations such as Parivartan can play an important role if they are conscious of the limits of their role. It is attractive to play un-elected representative of people and speak on their behalf. The process of consultations should not be sacrificed for reasons of time frames of projects, or other pressures.

Industry exists to generate profits for its owners/shareholders. It pays heed to the legally mandatory demands only when it is absolutely necessary. Most often, dealing with the community is considered a necessary evil. Both in the long and short term, it will be beneficial if industry takes seriously its dual role as private capital rooted to short term profits and as social capital rooted in the long term interests of capital. It would be better if industry were to look at itself as a member of the community. It is the need of the hour that the concept of industry citizenship becomes an inherent part of governance within industry.

The government and its officials need to realize their role and become part of the process of self-confident communities charting a course of coexistence, beneficial both to the community and industry. This agenda does not cease with the development of a plan, but must be a continuous process.



The outcome

THE development plan prepared by the community was presented at a public hearing in Asgani village near Lote. Parivartan, Dakshata Samiti Asgani and PRIA organized this public hearing.

At the hearing, MIDC officials accepted that ‘the damage to crops and the leakage in effluent pipeline are obviously related and we have failed in providing a good pipeline. In the near future, a new pipeline will be laid. The acquisition procedure had problems and unnecessarily acquired lands, those needed by the villages, will be reverted back to the common land of the village. The loss of produce from trees on the acquired lands was not estimated and it will be done.’

This particular promise was fulfilled within months after continuous follow up.

The MIDC had agreed in the High Court to develop a green belt. This promise was not fulfilled. To approach the High Court again is a tedious and expensive process. During the hearing, MIDC officials agreed to hand over the earmarked land to the village cooperatives on a nominal rent to develop a green belt with a right to acquire the produce of the green belt.

A follow-up of this promise is ongoing and it is now officially accepted as policy for the Lote industrial area.

Instead of a long-drawn court case, the above idea emerged in the process of the developing a people’s plan. Though the implementation is taking time (more than three years now), the steps taken by the government are on the right track and the Dakshata Samitis are actively interacting with the government.

The issue of unrecorded tenants being denied compensation, as only the landlord was to be paid, was solved and 11 tenants have earned orders in their favour from the revenue department.

Multi-stakeholders’ dialogue based on vigorous activity and planning by the community has proved to be a useful tool of governance.