Upgrad LLM

SEZ - Vviolation of Human Rights

SPECIAL ECONOMIC ZONES : VIOLATION OF HUMAN RIGHTS IN INDIA
by
BURRA BALA RAJU. B.E., M.B.A., LL.B., (LL.M).,
 
[1][What is a SEZ ?
Special economic zone (SEZ) refers to a totally commercial area specially established for the promotion of foreign trade. A Special Economic Zone (SEZ) is a geographical region that has economic laws more liberal than a country's typical economic laws. Usually the goal is flourishment in foreign investment. In other words SEZs are specifically delineated enclaves treated as foreign territory for the purpose of industrial, service and trade operations, with relaxation in customs duties and a more liberal regime in respect of other levies, foreign investments and other transactions.
The SEZs in India are the outcome of the present Government’s industrial policy which emphasizes deregulation of Indian industry and to allow the industries to flexibly respond to the market forces. All undertakings other than the small scale industrial undertakings engaged in the manufacture of items reserved for manufacture in the small scale sector are required to obtain an industrial license and undertake an export obligation of 50% of the annual production. This condition of licensing is, however, not applicable to those undertakings operating under 100% Export Oriented Undertakings Scheme, the Export Processing Zone (EPZ) or the Special Economic Zone Schemes (SEZs).
Basic Difference between EPZs and SEZs
The SEZs are the new nomenclature of modified earlier Export Promotion Zones (EPZs). The first EPZ in India was set up in 1965 Kandala. They were created as privileged zones with the facilities of liberal tax and labor laws. They were to attract the foreign investors to import materials for use and export the manufactured commodities. In this way jobs would be created and export got enhanced. The main difference between an EPZ and a SEZ is that the former is just an industrial enclave but the latter is an Integrated township with fully developed infrastructure.
Background of SEZ India.
During late 1990s the then Union Commerce Minister Murasoli Maran visited the high tech SEZs in China and got impressed by their contribution to the rapid growth of GDP of the country. He then thought about taking measures to do the same in India. In New Delhi the International Convention on Special Economic Zone was arranged on March 21, 2002. The main guest was undoubtedly Mr. Maran, the Honorable Minister for Commerce and Industry on that time. In his speech he pointed out that for a long period of time foreign trade in India has been viewed as suspicion rather an optimum potential to charge a high growth rate of the economy. The time has come when the country is moving towards export fatalism to export apathy. This change of notion would definitely lead to an incentive to the economic progress of the country and for this the need of SEZ is inevitable. The SEZs would act as vehicles of production and the FDI increase swiftly. As a result India will attain a considerable place in its contribution to the world economy.
Dream becomes Policy and Policy becomes Law.
The Government of India announced SEZ policy in March 2000 under the export-import (EXIM) policy for the augmentation of export production. We all know that a policy may not be enforced but a law can be. The new government came out with Special Economic Zones Act in the year 2005 which attained the assent of the president on 23rd June. This Act provided for the establishment, development and management of the Special Economic Zones for the promotion of exports and for the matters connected therewith.
Some Important Provisions of the Act
1.  SEZs can be established mainly for manufacturing of the goods, for providing specified circumstances and as a free trade and warehousing zone.
2.  SEZs will include three types mainly. They are multi-product SEZ, sector specific SEZ, port or airport based SEZ and free trade and warehousing zone.
3.  They will have their own adjudicating, enforcing and administering agencies. Therefore absolute non interference by the state.
4. There will be 100% tax exemption and relaxation from strict labor laws.
5. They will not have any burden to comply with any sort of minimum obligation to export.
6. Except for certain kind of offences the no investigation or inspection can be carried out in any of the SEZs without prior approval from the development commissioner.
7. The Development Commissioner will be entrusted to the overall administration and supervision of the SEZ and exercise all necessary controls and co operations to foster speedy and effective development of the SEZ concerned. The development commissioner shall be appointed by the central government.
How will be the Special Economic Zones?
The main underlying purpose behind the creation of SEZs is to create a hassle-free environment for the promotion of exports. These zones are regarded as duty free enclaves and for the purpose of trade operations they are deemed to be foreign territories. The basic presumption behind SEZs is that they will bring large scale investment of global funds into the manufacturing and service sectors and pump the economy to its top. The setting up of the SEZs will allure investment from within India and abroad. This will also lead to the development of the concerned area, ensuring better quality of goods and services, large scale employment and many other elements highly expected to boom the already growing market economy of India. According to the government if all these are totaled then it will lead a total forwarding of Indian economy.
To develop SEZs there has to be someone who needs to improve the basic infrastructure. Upon that infrastructure the superstructure of SEZs will function. The infrastructure will play one of the key roles behind the success of each and every SEZ. For example if production is huge and ready to reach the port but due to bad transportation goods cannot be reached there n time then order is cancelled. Therefore by our common sense we can understand the importance of infrastructure. The Government is also in the same footing of common sense with that of an ordinary prudent person and after a cautious observation of the main objectives of the SEZ policy it has came to this opinion that there shall be no lack of efforts in the infrastructural development of the SEZs. As a result the role of developer has been conceived with due care and attention.
Land Acquisition:
Industry cannot be framed in air. It needs land and by virtue of being seventh in the world as far as territory is concerned India still has ample quantity of land. However the quantity of land is neither adequate to support the growing need for shelters to bulk of the people nor it is of very high productivity to meet the growing demand for additional food grains. Land is required for agriculture, land is required for shelter and land is required for the economic development of the country.
1.            It is the right of the farmer to grow crops in his land,
2.            It is the right of all human beings to seek lands for shelter and
3.            It is the right of the government to foster economic growth of the country in order to sustain the same in the international competition and to make a good image of it in the family of nations.
But if a question comes as to which amongst the three rights is most competent then “all” will be the unanimous answer. But as state is vested with a huge amount of resources it has got the power to decide which right is given foremost importance in the given circumstances.
Therefore the present conflict is between right to livelihood and right to economic development. The government has employed total of its force and justification to sustain the latter. The ministry of commerce and industry has discussed that the SEZs will be coming only on barren lands and single crop lands. But in practice it has not been so. The policy of SEZ has already acquired the stigma of “land grabbing policy” or a “new model of real estate’s business by giant developers” and the like. People have already expressed their negative views over SEZs saying destroying valuable agricultural plots seems especially ill-conceived, as farmers are not likely to make an easy transition to the jobs on offer at these SEZs. For getting industrial development sacrifice of agricultural land is non-permissible. The history shows that most of the land acquired by the Government at minimum rates have been commercialized and sold at market rate by manipulations. It is a scandal and will end up in a mess. Already more than 10 farmers are committing suicides every day.
The growing issue of SEZ also leads to the growth of resistance from the rural people. Govt. and the developers are claiming that the resistance is unreasonable. Since the meaning of ‘reasonableness’ has not been defined anywhere therefore a live example may workout. In some area in the outskirts of city the farmers have been handed over land acquisition notices by the authority and the developers. The local officials’ claim that the land earmarked is unproductive but by a drive through the villages one can really eyewitness as to how “unproductive” is the lands. Further there is a difference of opinion amongst the officials also. According to the officials the policy clearly talks about non acquisition of irrigated and double-cropping land. But this is also true that some organization named Posco-India has acquired multiple cropping lands in Orissa. The officials from the Karnataka Industrial Areas Development Board have said that under the given guidelines 10% of the required can be double-cropped. The Baikampady SEZ has been disputed as a result of the statement made by the Union Minister for Commerce and Industry saying that 10% of the lands can be double cropped.
On the question of land grabbing, the petition says the principle of ``Eminent Domain,'' which is the basis of the Land Acquisition Act (1894), is being misused and even given priority over the principles in the 73rd and 74th Amendments of the Constitution that give primacy to gram sabhas as autonomous decision-making entities. The status of ``deemed foreign territory'' being granted to the SEZs will further undermine the sovereignty of local governance systems.
India is already going through a crisis in terms of water scarcity as well as loss of forests and biodiversity. The point is that in the current framework of economic development the costs of loss of forest and other common lands, large scale exploitation of water resources, coastal land, and environmental pollution are not even being computed.
Environmental Issue:
Whenever we talk about industries, Environment comes very usually as one of the important concerns. Industry uses natural resources at a huge scale. Proper utilization of natural resources is expected at all levels but simultaneously over utilization, reckless operation etc. adversely affects the ecological balance. Therefore to protect the environment from the whims and fancies of the selfish industrialists it has become necessary to frame and implement rigid laws in order to prevent any kind of harm to environment and also to undertake a subsequent survey to find out the necessary implications left out on the environment by the industry. SEZs also therefore should not be exempted from the environment regulations. In other words environment cannot be sacrificed on the excuse of economic development of the country.
However the SEZ units are exempted from Environmental Impact Analysis under the provision of the Environment (Protection) Act. Further, the development commissioner will be empowered to issue consent and no objection letters in consultation with the officers of the state pollution control board. The units are permitted to submit a compliance report for maintaining prescribed pollution standards. Although the development commissioner has powers for a random check, the units within the SEZ are free to follow their own methods to maintain environmental standards. It has also been expected that the conflict between development and environment needs to be resolved properly and the environmental regulations must be proactive in nature and not to be barrier on the path of country’s economic development.
Issue of Labor Welfare:
Apart from the issues deliberated above, there are other aspects also which are required to be taken into consideration. The issue of labor is very important. The Parliament since the time of independence has enacted a number of legislations concerning welfare of the labors. The main object behind this was to promote the interests of the labor class and to protect them from the exploitation of the industrialists. But a reading of the SEZ Act leaves us under the apprehension that it hardly gives any space for the welfare of the labors. A member of the Rajya Sabha raised a very pertinent doubt regarding this. He said “there is an ILO recommendation about the Grievance Redressal Authority and the Development Commissioner. The ILO recommendation is that these two persons should be different persons, but here, the Development Commissioner has been given the authority to look after the task of grievance redressal. This should not be done.” It is further apprehended that all the rights concerned the labor class have been tactfully withdrawn by both the central as well as the state govt. The rights of the labor class have been attacked in this Act under Section 49(1) which categorically says as: “Provided that nothing contained in this section shall apply to any modifications of any Central Act or any rules or regulations made there under or any notification or order issued or direction given or scheme made there under so far as such modification, rule, regulation, notification, order or direction or scheme relates to the matters relating to trade unions, industrial and labor disputes, welfare of labor including conditions of work, provident funds, employers’ liability, workmen’s compensation, invalidity and old age pension and maternity benefits applicable in any Special Economic Zones.” Similarly, the right of the State Government for granting exemption from the labor rights has also been deleted. The original draft was “The State Governments may, for the purpose of giving effect to the provisions of this Act, notify policies for Developers and Units and take suitable steps for enactment of any law:- …….. (b) directing that any of the provisions of any State Act relating to Trade Unions, industrial and labor disputes, welfare of labor including conditions of work, provident funds, employers’ liability, workmen’s compensation, invalidity and old age pensions and maternity benefits or any other activity relating to the Special Economic Zones-(i) shall not apply to a Special Economic Zone or a class of Special Economic Zones or all Special Economic Zones; or (ii) shall apply to a Special Economic Zone or a class of Special Economic Zones or all Special Economic Zones only with such exception, modifications and adaptations, as may be specified in the notification;”. Existence of bold portion would also invite competition among the states in withdrawing the rights and facilities of the workers. So the entire bold portion has been withdrawn from the Bill before its adoption. Section 3 (4) of the draft gave right to set up and notify a Special Economic Zone without referring the proposal to the State Government. That also has been amended. It is also alleged that SEZs are centers of immense exploitation. The zones are declared to be “public utility services” and that in effect bans trade unionism and application of labor laws. Minimum wages are not implemented; employees are forced to work overtime without any extra payment; safety equipments are not provided adequately; crèches are not provided; instances of sexual harassment are very common.
Legal Recourse to Oppose SEZ.
To counter the mechanism of SEZ people have not only started protesting vehemently but have also knocked the doors of the Judiciary to strike down the policy as well as the Act. Several Writ petitions and Public Interest Litigations have been filed in various High Courts as well as the in the Supreme Court of India.
An advocate Manohar Lal Sharma filed a PIL in the Supreme Court seeking a CBI probe into the alleged land scandal. He contended that vast track of fertile lands have been acquired illegally in Delhi, Kolkata and Mumbai. He has also submitted graphic details and alleged that there is an unholy nexus between the industrialists and the politicians. He prayed before the Court to grant interim stay and to direct the lands to be given back to the real owners.
In another instance the petitioner contended that in some places the lands were acquired without the consent of the farmers. The Acts under challenge are Centre's Special Economic Zones Act 2005, National Capital Region Planning Board Act 1985 and Haryana's SEZ, 2005. The petitioner has particularly prayed for nullifying the colourable exercise of power which is both malafide in law and malafide in fact in respect of Reliance which has been given about 1700 acres of land for Garhi Harsaru SEZ site in Haryana. In response to that petition the Supreme Court issued notice to the Centre, States concerned and the developer to examine the conflict arisen.
In another Writ petition the petitioner sought to quash the MOU signed between Govt. of Punjab and Reliance Industries limited for setting up of SEZ on the alleged ground of blatant violation of land allotment policy.
In another writ petition the adequacy of the compensation given to the farmers was challenged before the Court. The Court granted liberty to the farmers to challenge the adequacy of the compensation provided.
In Allahabad High Court a writ petition was filed to restrain the government from finalizing the setting up of a SEZ in Noida on the alleged ground that the lands were acquired at the pittance of the farmers and it is in violation of Article 14 and 300(a) of the Constitution.
In another petition the entire SEZ policy of the Govt. was challenged on the ground that it will create a huge financial loss and the economy may collapse. But the Court refused to entertain the petition on the ground that it was purely a policy matter but left a remark that the Court can interfere in the policy matter in the individual cases when the party concerned is personally affected.
Social Justice:
The Constitution of India, 1950 embraces social justice in its preamble. The directive principles of state policy are embodied in the constitution to fulfill the noble objective of social justice. It is thus expected that whatever policy or measure being taken by the state must ensure advancement of the cause of social justice. Dr. Bhim Rao Ambedkar, one of the main visionaries of the Constitution of India, advocated democracy in every field: social, economic and political. For him social Justice means maximum happiness to the maximum number of people, upliftment of the poor, backward and downtrodden. The present trend to set up SEZs shows lands (sometimes even agricultural) are being taken up for establishing industry. As a result of this present motion of SEZs there comes a web of complex land laws restricting the freedom of enterprises to acquire land and the freedom of individuals to sell land in the name of a dubious cause called Social Justice. There is no Social Justice in the State playing facilitator to get around a web of laws that owed their existence in the first place to the State. The current approach to SEZ Land Acquisition with the State at its heart fails the tests of Social Justice. There is no Social Justice in the State playing an active role in Land Acquisition for private enterprises.
The development process in India presently exposed to two fold challenges. On the one hand, how do we make our agriculture more productive so that we maintain our food security? On the other hand, how do we increase the manufacturing base to absorb a large army of unemployed and underemployed labour in industry? India is an aspiring Nation of young people, and unless these challenges are addressed with appropriate policies, the country is at serious risk of social and economic balkanization. The protests being organized in the various parts of the country, the views being expressed continuously through the media clearly shows that there is something genuinely wrong. In such a circumstance it would be unfair to blindfold the eyes and drive the dream by bulldozing the expectation of millions of people. When a country comes up to be economically developed then one should not be under the impression that it is the industry which only contributes. If economy is conceived to be a hanging bridge then agriculture and industry are the two pillars of it. If one is sacrificed at the benefit of the other then it does not remain bridge at all. We should try to give equal importance to both of them rather than getting mad over any of them. The train of right to development travels over the two tracks made simultaneously by agriculture and industry. If one track is absent then it is impossible to drive the train.]
Human Rights Framework
Land Acquisition Act with a colonial legacy must go, either by amendment or by abolition. One can argue on the positive side that the cross-sectoral aspect of land issues sometimes allows for piecemeal selection of how to frame interventions in the most strategic way in a given context. Choosing the best way to frame interventions requires understanding of a country’s land issues, and how they connect to larger conflicts. In this regard, international human rights standards are also valuable tools. Conventions of the ILO (especially concerning Indigenous and Tribal Peoples) underscore the importance of several key principles related to land. These are: free, prior informed consent (FPIC), relocation, rehabilitation, compensation, return, and procedures to deal with grievances. It lays the basis of informed consent, and offers protection for the community, recognizing its rights, even if there may not be a formal legal title of ownership. It recognizes the idea of collective ownership, establishes legal procedures, sets out principles for use of resources, institutes relocation principles and principles for compensation, and calls for penalties for unauthorized intrusion.
In 2007, the U.N. General Assembly adopted the Declaration on the Rights of Indigenous Peoples, with India speaking in favor of it. It states that ‘indigenous peoples have the right to the lands, territories and resources which they have traditionally owned, occupied or otherwise used or acquired.’ The Declaration, while not binding, states that indigenous people have a right to own and develop resources on their land, a right to legal recognition of indigenous lands by states, and a ‘right to redress… for the lands, territories and resources which they have traditionally owned or otherwise occupied or used, and which have been confiscated, taken, occupied, used or damaged.’ Both the Convention and the Declaration emphasize participatory dialogue and the need for free, prior, and informed consent with respect to decision-making about land occupied by indigenous people, especially where the relocation of people from the land is under consideration.
The human rights crisis facing rural India today largely centers on the issue of land rights. Our slums, resettlement colonies and tribal areas are home to numerous campaigns to save their lands and habitat, to secure land reform, and press for land claims. If we only take into account the known eighteen disputed projects in 2009, some 300,000 Indians are known to live at risk of being forcibly evicted in the wake of land disputes, land grabbing, and agro-industrial and urban redevelopment projects. Thousands have already been forcibly evicted in recent years, many left homeless, others relocated to inadequate resettlement sites with poor infrastructure, lacking basic amenities, including sanitation, and with limited access to work opportunities. We have failed to protect, in law and in practice, the population against forced evictions. By contrast, those with political or economic power are allowed to act with impunity in arbitrarily expropriating land. This is the burning context amidst which we are dealing with the land acquisition and rehabilitation bills. Today a ‘menu’ of approaches might help facilitate broader access to land to multiple stakeholders like the industries, developers and colonizers, but it endangers equality in economic opportunities. Alternatively, the government could go for improving employment prospects by introducing an agrarian reform programme for landless groups, and by promoting alternative employment opportunities, emphasizing that access to land and agrarian reform form a key part in the forthcoming right to food initiative.
Although land policy development is taking place, it generally lacks a Human Rights framework. Land is not simply a resource for one human right. While some rights have been recently established in the legal framework (like life, health, work, education, food etc), they all can be adversely affected by access to land, and the legal implications of it for a broad range of human rights is obvious.
[2]Scrap SEZ Act
It violates right to life, liberty and security and other Human Rights
 
µ    Deemed foreign territory status will challenge local governance
µ    Act promotes large-scale privatization and monopoly of resources
 
NEW DELHI: Even as local protests against "forcible acquisition" of agricultural land for creation of SEZs in Punjab, West Bengal and Maharashtra continue, civil society groups are demanding the repeal of the "anti-democratic and unconstitutional" Special Economic Zones Act, 2005.
The Act violates the right to life and livelihood of people, who are being forcibly displaced for implementation of projects, says a petition addressed by over 100 civil society groups and individuals to Pranab Mukherjee, chairman of the Empowered Group of Ministers on SEZs.
They have sought cancellation of the approved and notified SEZs and return of land. Talks should be held with people's groups, communities and panchayat representatives to seek their opinion on strengthening local economies.
A critique enclosed with the petition raises issues of land-based livelihood displaced by the SEZs, environmental concerns and labor exploitation.
Sustainable Development:
The coming up of SEZs must be put under the scanner of sustainable development as it is being emphasized worldwide that development be it social, economic or political must bear substantial value. While putting in the context of Indian SEZs three aspects of sustainable development must be taken into consideration. These three aspects are economy, environment and society. A summation of the three aspects tell us that SEZs must be so formulated that they can ensure production of goods and services in a continuous basis, avoidance of sectoral imbalances, restraint from over exploitation of natural resources, maintenance of biodiversity, atmospheric stability, achievement of distributional equity, adequate provision of social services and the like. If these aspects are taken care of with comprehensive and proper deliberation then SEZs can generate sustainable value. SEZs should be envisaged as a self-sustaining value creation proposition. In other words they should benefit the society in tremendous quantum.
SEZ  : Violation of Human Rights
It is easy for our Industrialists to claim that the SEZs moving out will be detrimental to the Investment in India but let us look at the moral ethics of the land acquisition by the Governments for the Industrial units of SEZs.  
 
I have a few questions to both the Central & State Governments and SEZ units.
1.    How do you justify the fact that a landowning farmer has now become a landless farmer? 
2.    What is the compensation that you are paying the farmer who has lost his livelihood as a result?
3.    Who gave you the right to offer the compensation below the market price?
4.    Are they doing a charity by establishing SEZs or units within?
5.    If this is a commercial venture then why shouldn’t the Company buy the land from the individual at commercial prices?
6.    The SEZ prides itself on its ethics. Then where are the ethics of taking away the land from the poor and marginalized farmers? Isn’t this the legal equivalent of daylight robbery or Dacoity?
7.    If you want to put up your project in SEZ aren’t there any acres of barren land where you can put up your project. Why do you need fertile land that is being cultivated at present?
An open Question to all Indians: If you have 100 sq ft of land, doesn’t it belong to you? If yes, what do you call someone who is forcibly taking away your possessions without your consent?  
........ What will you call the Governments and / or Industrialists?


[1]   Quoted upon this topic, in http://www.legalserviceindia.com visited on 20th Mar, 2010.
[2] Quoted upon this topic, in http://en.wikipedia.org visited on 20th Mar, 2010.

 

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B.B.R.Goud. 
on 10 April 2010
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