Last week, the country’s mainstream media was flashing a couple of good news hinting at economic progress for the country in the near future. The claims were backed by the approval of a $500 million loan from World Bank for the MSME Growth Innovation and Inclusive Finance Project, which aims to improve financial access for micro, small and medium enterprises (MSMEs) working in the manufacturing and services sector, from early to growth stage. Considering MSMEs contribute over 45 per cent to manufacturing output and employs about six crore people—majorly from the rural, the loan is expected to play a role in poverty reduction.

Another World Bank initiative in the news was its $43 million grant and guarantee agreement with the Government of India towards the Partial Risk Sharing Facility for Energy Efficiency (PRSF) project. The objective of this project is to mobilize investments to energy service companies (ESCOs).

Some compromise?

The other side of these developments that has not got media mileage is the Government of India’s stance on the tribal population who may be displaced for projects funded by World Bank. While the bank’s proposed policy mandates that ‘free, informed and prior consent’ be taken before proceeding with a project affecting indigenous peoples, the Indian government says that this policy will prohibit forced evictions; hence they are not comfortable with this provision.

World Bank was informed about India’s stance during consultations on the bank’s safeguard policies and proposed environmental and social framework. Once this framework is completed, it will become the policy the bank follows while lending to countries for specific projects. India does not want such policies and environmental guidelines to come in the way while borrowing from the bank.

The government has justified its stance on the grounds that the country’s laws of acquisition and protection of concerned communities provides for adequate safeguards, including consent before acquisition in certain cases.

It should be noted here that the NDA government is on the verge of passing executive orders that will do away with the veto powers of tribal communities which protect their forestlands in most cases. Moreover, the much-debated amendments in the land acquisition bill are already being termed as a major threat to tribal prosperity by a section of politicians. They believe it will give the government arbitrary powers to acquire forestland, which has been their source of livelihood for many generations.  

A grim situation

Statistics reveal that the majority of the global reserves are spread over indigenous peoples’ lands. For instance, about 50 per cent for oil and gas production and 80 per cent of mining will happen on such lands in future. At present, 25 per cent districts in India are already seeing the tribal-versus-extractive-industry conflict. With an estimated 11 million hectares already in demand for development purposes, the conflict will only increase in the next decade.


Across the globe, especially in the West, extractive industries including the mining majors and oil and gas companies are looking at economic development through environmental sustainability. The world seems to have understood the significance of coexistence with communities and sharing benefits with them.

The idea of free prior and informed consent (FPIC), which the Modi-led government is uncomfortable about, is being appreciated and adopted across the world. It is not merely a matter of social obligation towards tribal communities but also a ‘best practice’ standard that each business as well as government must adopt.

FPIC is not just about consent of the communities and is much different from India’s domestic legislations on tribal rights. FPIC gives indigenous communities the right to say ‘no’ to a project or even refrain from engaging on the issue. The World Bank Group that brings together over 80 financial institutions from 35 countries already embraces FPIC.

The Indian government must also respect the UN special rapporteur’s clarification on indigenous peoples’ rights. It says that companies must respect the rights of indigenous peoples even ‘in cases where states/countries are opposed to the application of making FPIC a reality.’

Jharkhand tribals react

Tribal communities are already protesting against the amendments to the land acquisition bill. Recently about 50 tribal men defecated in public on copies of the bill near the Barwadih block office of Latehar district in Jharkhand. The protest was organized by a platform called National Campaign on Adivasi Rights (NCAR), which has, among other things, been studying adivasi-related expenses of the government. The organizers say they have received invitations from six other sites in Jharkhand to conduct such protests.    

WCCCA: A solution to look at

Mining company Comalco (now Rio Tinto Alcan) had been in conflict with the indigenous communities of Australia for decades until it signed the Western Cape Communities Co-existence Agreement (WCCCA) – the parties to it were the company, the communities of the region and local councils. The company apologized to the communities for what they described as ‘a late realization’ and expressed their belief that they could coexist and prosper together.

The WCCCA, unlike India’s legislations on jobs and rehabilitation of tribal communities, is more of a benefit/profit-sharing programme where the company contributes a minimum of $2.5 million a year or more, depending on bauxite production and the market price of aluminium, towards community development. It also includes cultural heritage and environment protection and land relinquishment plans.

Apart from this, WCCCA reserves $500,000 annually for capacity building of communities, education, skills training and entrepreneurship development. The Queensland government contributes another $1.5 million towards the same. The spending rights of these funds remain with the communities; the committed money is deposited in the Communities Trust, ensuring that the investments are being utilized by and for the people they are meant for.