SEZs

Land conquests

Print edition : March 21, 2014

Reliance Industries' refinery at Jamnagar, a file photograph. Photo: AFP

A farm in Pen, Raigad. The Maharashtra government and Reliance's plan to set up a mega SEZ on these lush farmlands was thwarted by farmers. Photo: SHASHI ASHIWAL

Farmers from Raigad district at an anti-SEZ rally in Mumbai on July 20, 2010. Photo: Vivek Bendre

Land acquired for an SEZ at Gurgaon and left unused. Adjacent to it, on the right, is land that remains with farmers. Photo: T.K. Rajalakshmi

With a compliant government in Gujarat, Reliance faced little hurdle in acquiring agricultural land for its Jamnagar SEZ, but its plan for a massive SEZ in Raigad, Maharashtra, was aborted by a farmers’ movement.

IT IS NOT OFTEN THAT Reliance Industries Limited (RIL) does not have its way. Used to having the red carpet laid out for it in Gujarat, the company may have been rattled by the resistance it faced in Maharashtra.

RIL completed its massive Jamnagar refinery in Gujarat’s Saurashtra region in 1999. Company statistics reveal that the entire facility can cover a third of Mumbai city. Built over 3,000 hectares, the largest refinery in the world has a township and manufacturing and port facilities. In 2006, the oil major wanted to expand and sought the State government’s help to acquire 4,000 hectares from five villages in Jamnagar district close to the main refinery.

The plan was to develop a special economic zone (SEZ) that would house a 27-million-tonne mega-refinery for Reliance Petroleum Limited (RPL). The farming community in Jamnagar was against the acquisition and filed a special leave petition (SLP) in the Supreme Court after the Gujarat High Court ruled against it. According to the farmers, the land the company sought was agricultural and not wasteland or grazing land. They said 3,600 hectares of it was highly cultivable. They also claimed that the compensation and rehabilitation package did not meet the regulations.

The movement never gained an aggressive momentum as several farmers were convinced by Reliance that giving up the land was a better call. Unfortunately for the farmers who held out, the Supreme Court dismissed their petition and cleared the decks for RIL to go ahead with its SEZ plan. In what has become the typical style of operation of Gujarat Chief Minister Narendra Modi, the land acquisition process took place in a matter of months, giving the farmers little option but to take the compensation and whatever other benefits that were thrown their way.

On December 25, 2008, RPL announced the commissioning of its refinery in the SEZ. According to the company, “The completion of the RPL refinery has enabled Jamnagar to emerge as a ‘Refinery Hub’, housing the world’s largest refining complex with an aggregate refining capacity of 1.24 million barrels (197,000 cu m) of oil per day, more than any other single location in the world.”

In 2011-12, exports from the SEZ accounted for 83 per cent of Gujarat’s SEZ exports and 55 per cent of the total SEZ exports from the country.

An SEZ is a duty-free zone and is considered a foreign territory for trade and financial purposes. Under India’s SEZ Act, 2005, companies in the zone are granted huge concessions on customs duties and sales and income tax.

In the name of farmers

In a paper on the SEZ, Parimal Nathwani, RIL group president of corporate affairs, says that “prices [for the land] arrived at through negotiations was always more than market price. Then consent agreements took place between the land owners and the company. Only then the government land acquisition officer declared the ‘consent award’ under the Land Acquisition Act, 1894.”

Nathwani says that the Jamnagar SEZ example is a case study to understand the “acumen and skills of farmers who willingly offer their lands for industrial development, make money and still remain farmers by buying farm lands in the vicinity”.

“The farmers had no option and now many are suffering,” says Bharat Jhala, a Right to Information (RTI) activist who works closely with the farmers in the area and has been keeping a record of the number of suicide cases among farmers in the Saurashtra region.

In the 2012-13 crop year, close to 35 lakh hectares of cotton crop was damaged in the Saurashtra belt. Almost 80 per cent of the region’s population is dependent on agriculture and almost every marginal or small farmer has been affected, says Jhala. “This is just outside the SEZ. Reliance has not helped even one farmer in distress. In fact, they will probably take away more land, saying it is not cultivable.”

Frontline visited the districts of Rajkot, Jamnagar and Amreli in Saurashtra in 2013 where the harvest, which takes place from November to March/April, was miserable and distress was beginning to take its toll. Official data, released following RTI applications, revealed that there were 112 deaths from 2008 to 2012. Around 40 more farmers died in 2012 between August and December, according to other sources verified by police reports.

“Reliance has not done anything for us other than take away our livelihood. Those farmers had no choice and they thought they were getting a good rate for the land. They give employment to those who are well educated. It’s not accurate to say we have benefited,” says Laluba Jadeja, a farmer in Jamkhampalia, a village very close to the refinery. “Unless you are part of the refinery you cannot use the health care or other facilities they put up.”

In a study on the Jamnagar SEZ, Professor Amita Shah from the Gujarat Institute of Development Research says: “Overall, communities in the region, including farmers, have gained substantial economic benefits and have also made investments in land and other assets. But it has also brought with it several negative implications. After not being adequately informed and not being prepared to shift their economic base and physical location, a large part of the village communities are at a loss about shaping their lives in a rapidly changing socio-economic milieu. Voicelessness is a major impediment in a transient situation such as this.”

A source in the corporate sector says RIL probably owns plenty of agricultural land across the State but under different entities and that information will not be in the public domain. Ironically, RIL has begun to produce and export mangoes by cultivating some of the land within the refinery/SEZ. “This land was supposed to be wasteland,” points out Jadhav.

Failure in Maharashtra

While Gujarat may bend over backwards to accommodate the oil and gas giant, the same cannot be said of Maharashtra.

In an attempt to replicate RIL’s Jamnagar model in Maharashtra, the State government came up with an ambitious plan in 2006 to set up the world’s largest SEZ on 10,000 hectares in Raigad district, which shares a border with Mumbai. RIL was to be the main promoter and developer of the project, called Maha Mumbai SEZ. Reliance was even made the Special Planning Authority for it.

The SEZ would have been the company’s first foray in Maharashtra into acquiring agricultural land towards building a massive economic and industrial zone. RIL has two major plants in Nagothane and Nagpur and several other units located in the designated industrial zones in Maharashtra.

A massive people’s movement, however, blocked the project and eventually ensured that it was scrapped. Farmers whose lands were to be acquired battled it out for four years. Finally, the Supreme Court effectively ruled in the farmers’ favour by refusing to extend the land acquisition process.

“Reliance has not entirely given up the idea,” says Ulka Mahajan, who led the agitation under the Maha Mumbai Shetkari Sangharsh Samiti. She told Frontline that the project has come back under a different name and that RIL was still trying to complete the project. Named the Khopta SEZ, the company is hoping to make use of the land it had initially acquired from the farmers, she says. However, because the lands are scattered, the company is unable to finalise the location. “The relationship with land in this area is very strong and the farmers will not give up their property.”

Activists also say that the proximity to Mumbai shows that this could just be a land grab for real estate development. “They manage to convert agriculture land into commercial and residential land and then start selling it for very high rates,” says Ganesh Kharpatil, a local farmer.

The Maha Mumbai SEZ project was first conceived as a massive attraction for foreign direct investment (FDI), with total investments estimated at Rs.4,00,000 crore. According to the government, the SEZ was planned as a 10,000-hectare multi-product trade zone, which would eventually be a major hub in South Asia. Its location was crucial as the Sewri-Nhava Sheva sea link bridge and the Rawas port are close by.

To get the project off the ground, the promoters needed to acquire land, much of it believed to be productive land, that belonged to farmers. Obviously, the promoters were not able to buy the 10,000 hectares and so they found an ally in the government, which used the outdated Land Acquisition Act, 1894, to start the process of acquisition. Under Section 4 of the Act, the State can purchase land from farmers for SEZs provided the process is completed within a year or in special cases up to two years, after which the process lapses.

The SEZ would have affected 45 villages in Raigad district. An additional 25 villages in the Hetawane dam command area would have also been affected. The latter would have been illegal as SEZs cannot disturb command or irrigated land. A bit of tweaking by the Irrigation Department altered the flow of water and managed to remove those villages from the command area. For farmers who had given up their land for irrigation, this was a hard blow.

According to activists who ran the movement at the time, the promoters had promised farmers Rs.25 lakh a hectare for cultivable land and Rs.12.5 lakh a hectare for “wasteland”. The offer came attached with the typical cliched promises of employment, better education and health care facilities.

Banded under the banner Vishesh Arthik Shetra Hatao Sangharsh Samitis (action committees against SEZ), the villagers, along with the Maha Mumbai Shetkari Sangharsh Samiti, led an agitation. Almost 70 per cent of those affected refused to part with their land and took the case up to the Supreme Court. Since neither the government nor Reliance could buy the land within the stipulated two-year period, the Supreme Court in 2009 ruled that the project would have to be disbanded.

Raigad is known for its fertile land and for its fruits and vegetables. Most landholdings are small or medium, with rice being the main crop. Coconuts and pulses provide an additional income or are mainly grown for home consumption. According to State government figures, the per hectare yield of rice is between 2,500 and 2,800 kilograms a year. It is largely rain-fed agriculture. An attempt was made to irrigate the land via the Hetawane dam, but the canals were never completed and so irrigation water remaines elusive.

Reliance is not a company that is intimidated by people’s movements and Supreme Court orders. In 2013, the promoters went to the SEZ Board of Approvals, appealing that they had already spent Rs.600 crore on land acquisition and asked that the stay on the extension be lifted. Even this met with a negative. It has, however, come back with the Khopta SEZ. The farmers may have ousted Maha Mumbai SEZ, but it is only a matter of time before another project comes up and the process starts again.

Acres of conflict


IN Dee Brown’s legendary book Bury My Heart at Wounded Knee: An Indian History of the American West on the depredations faced by American Indians, an anonymous American Indian is quoted as saying of the white men: “They made us many promises, more than I can remember, but they never kept but one; they promised to take our land and they took it.” The residents of five villages in Gurgaon, whose land was acquired by the Haryana government and given to RIL for an SEZ, feel somewhat like he did.

Their lands were taken without them having much of a choice in the matter. Section 4 of the Land Acquisition Act, 1894, gave powers to the government to issue notifications declaring its intent to acquire land. The villagers protested as the price offered was below their expectations but to no avail. The government in its wisdom was determined to acquire their land—not for a public sector undertaking or unit that was to be involved in the setting up of the SEZ, but for one particular private company.

On June 19, 2006, the Haryana State Industrial and Investment Development Corporation (HSIIDC) acquired 1,383.68 acres (one acre equals 0.4 hectare) in the five villages in Gurgaon. The HSIIDC entered into a joint venture agreement with Reliance Ventures Limited (RVL), a 100 per cent-owned subsidiary of RIL, and created a joint purpose vehicle called Reliance Haryana SEZ Limited (RHSL) to set up the SEZ over 10,000 hectares in Gurgaon and Jhajjar districts.

As per the agreement, the HSIIDC transferred the land it acquired to RHSL at a consideration of Rs.399.85 crore. Later, the terms of the agreement were altered and 12,500 acres was earmarked for developing an SEZ in Gurgaon and the remaining 12,500 acres for a model township at Jhajjar. Reliance then directly purchased 7,100 acres in Jhajjar from farmers at a cost of around Rs.22 lakh an acre and also purchased an additional 1,200 acres in Gurgaon district.

RHSL has so far not put up even a wall in either Gurgaon or Jhajjar. In the first week of February, the Haryana State Cabinet, led by Chief Minister Bhupinder Singh Hooda, announced that the HSIIDC would buy back the 1,383.68 acres of land from RHSL as Reliance had failed to develop the SEZ. That this realisation dawned only on the eve of the Lok Sabha elections was not missed by many.

In January 2012 itself RHSL had declared its intentions to abandon the SEZ project and offered to return the land to the HSIIDC. It also wanted as refund the amount it had paid for the land and the expenditure incurred on the sites and the interest that had accrued on the amount. RHSL’s claim totalled Rs.1,172 crore, which the government did not agree to. It has now agreed to refund Rs.343.51 crore as against Rs.399.85 crore paid by RHSL at the time of the transfer of the land.

According to an official release, the SEZ project had been “rendered economically unviable due to the mid-term corrections in the SEZ policy, viz., imposition of Minimum Alternate Tax, withdrawal of the tax holiday, slowdown in the global economy, prohibitively high prices of land and other problems associated with the aggregation of land through private negotiations”. The Chief Minister announced that land would now be used under the Delhi-Mumbai corridor project for developing a Global City. The government has also envisaged an integrated model township in Gurgaon to house an exhibition and convention centre, high-value innovation and knowledge industries, township facilities and a central business district.

“We want our land back”

Poor sanitation, half-built drainage systems, overflowing sewage, non-metalled roads and haphazard construction work characterise Mohammadpur village in Gurgaon adjacent to the Delhi-Jaipur highway. It was one of the five villages where land was acquired for a pittance—Rs.12.5 lakh an acre. The majority of the farmers owned between two and five acres. Five hundred acres was acquired in Mohammadpur.

Today the land lies desolate and fallow, visited by dogs and wild animals, in contrast to the verdant lands adjacent to it that were not acquired. The farmers themselves are a desolate lot as their claims for enhanced compensation were not agreed to by the reference court. The farmers want their land back. Under the newly enacted Land Acquisition Rehabilitation and Resettlement (LARR) Act, any land that has not been utilised for more than five years must be returned to the owners. “For the last three years, we have not been getting our royalty as well. The Chief Minister says he is a farmer’s son and that he understands [our plight] but it is like breaking our heads against a wall,” said Phool Singh, a Mohammadpur resident. Several farmers went to court to get the compensation enhanced. A clutch of petitions are also pending with the Supreme Court.

Jhajjar acquisition runs into trouble

Farmers whose lands were acquired in Jhajjar are also unhappy. Some of them have filed an application in the court of the District Collector seeking that RHSL’s landholding in Jhajjar and Bahadurgarh subdivisions be declared surplus land since the company held more than the prescribed limit under the Haryana Ceiling Land Holdings Act, 1972. The applicants have submitted that RHSL had purchased 7,702 acres from farmers of 22 villages between 2006 and 2010. Section 3(m) of the Act defines a company as a person and so it can only hold a maximum of 18 acres of agricultural land in its name.

Section 9(1) of the Act says that a person holding land in excess of the prescribed limit is required to furnish a declaration of the surplus land.

The application moved by the farmers states that RHSL was bound by law to furnish the details of the land purchased from them from October 2006 onwards and that RHSL failed to file the declaration as mandated. It also says that the land held did not fall in any of the provisions of Section 5 of the Act and even the provisions subsequently added to the Act in 2011 (but deemed to have come into force with effect from 1975) did not exempt the land held by RHSL as it was declared an urban area only on February 14, 2011. Hence, the land purchased before February 14, 2011, was in no way exempted from the Land Ceiling Act. The farmers want the land held in excess of the prescribed limit by RHSL to be declared surplus and the same to be vested with the government or returned to the original owners.

RHSL plans to develop a model economic township at Jhajjar. The project, which has received environmental clearance from the State government environmental committee, involves an industrial colony project comprising industrial and residential buildings, commercial, transport and communication infrastructure, open spaces, and other public/semi-public utilities. But what additionally happened is that RHSL leased out a part of the land to two companies—18 acres to Denso Haryana Private Limited in February 2012 and 72 acres to Panasonic India Private Limited in March 2011.

The Haryana government amended the Land Ceiling Act in October 2011 in order to facilitate the change of land use where such land would fall within the definition of “urban area” as defined under the Haryana Development and Regulation of Urban Areas Act, 1975. It was speculated that the amendments were effected in order to benefit real estate and builder lobbies. The land that was acquired by the government for Reliance in 2005-06 is now valued around Rs.6 crore an acre. “When we tell people that we are from Gurgaon, they think we are a rich ‘party’. Little do they know of our condition. We have nowhere to go,” said Chattar Singh, who had to give up his land. “Where was the question of choice? It was the government’s decision. If the builders had brought the land directly from us, we would have got more. I gave up all my three acres of land as it was coming in one contiguous path. All the money has gone,” said Phool Singh.

Others like Laik Ram, Dharam Singh and Ram Charan Singh too have similar stories to tell. “You would hardly find any person who was happy with the rates given. People got houses built and then bought vehicles. After that they gave their homes on rent. Yet, they hoped there would be some work. Now we sit idle and the youth also sit idle. The government does not exist for us,” said one of them.

Said Phool Singh: “I am 67 years old. I could have worked on my land for five or six more years and stayed healthy. Either the government give us back our land or pay us prices at the prevailing rates.”

The business of SEZ

The purpose of industrialisation, as Satyaki Roy, Assistant Professor at the Institute for Studies in Industrial Development, points out, even if led by private capital, assumes a social face only if the profit of private capital is linked to greater earnings of people through employment generation. He also says the experience of the export processing zones (EPZs), the precursors of SEZs, in either employment generation or exports, was not encouraging. The six EPZs set up in the country between 1973 and 1984 accounted for only 5 per cent of the exports and 1 per cent of jobs in 2004-05.

In fact, a 2007 report by the Citizens’ Research Centre estimated that all the approved SEZs would result in loss of livelihoods for 1,96,000 agricultural families, including land owners and agricultural workers.

With T.K. Rajalakshmi in New Delhi

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