How to amend Controversial Land Acquisition (Amendment) Bill 2015?

How to amend Controversial Land Acquisition (Amendment) Bill 2015?

How to make Land Acquisition (Amendment) Bill 2015 investment and people friendly and provide transparent investment climate?

Few thoughts….

Background:

Let me try to answer the arguments from common man’s perspective so that it is easy to communicate with common man to build political consensus.

Concern: Government is planning to take-over and sell farmers land to private parties. This is the concern express by land-owners and Civil society.

After Talking to various stakeholders, I feel our approach should be first let us classify projects and evaluate their national significance and then decide do we need them or not in larger national agenda. 

Please note all displaced people should be engaged and offered source of income better than existing engagement.

We should pose these questions to all to seek the opinion:

A. Imagine a situation, in a state fully irrigated state where there is no barren land in the next 50 kms. Power plant needs about 300 acres of land; about 300 families will be affected. They may not feel any use of power plant but rest of the 300,000 families requires power. What we should do?

B.  In backward area where irrigation facility is poor or soil is poor, should we continue to do agriculture and nurture poverty or set-up alternate source of employment, like mineral based industry? Should we do it and improve the standard of living of we should neglect these areas?

C.  Imagine district is 100% irrigated because there is no barren land in the vicinity of 30 kms, but land is required to create school and hospitals, highway or railways track closer to the rest of the society, What should be the approach? Should we create social infrastructure or not.

D.  Ports and defense establishments have location specific needs; they have to be closer to borders and sea coast or near river. What one should do – should we not create them or do it?

E. To promote exports from India to improve earning of foreign exchange, to create employment, we have to identify locations by which we can create world class industries closer to mines or raw material sources or logistically convenient place. What should be our approach?

F.   Some of the largest projects in steel, petroleum, aluminum, copper, power, paper, plastics, needs huge capital and only private sector have financial capacity to spend and manage these projects. What should be out approach?

Are large projects always bad for the economy and development of the nation?

• It is true that Small and Medium Enterprises (SME) do create employment. Their products are also sold globally, but few activities cannot be done in SME sector like Power production, oil refinery, smelters and steel mills, solar power plants, ports, airports, hospitals, universities, railways, highways, nuclear power plants, etc. Should be create them or not for our development agenda?

• To eliminate poverty from the country we have to explore all options. We have to focus on activities which can create employment and income for as many people as possible. Think of any IT park, where large number of youths work and create jobs for many more and generate foreign exchange to buy vital inputs like fuel.

• There are many projects like hospitals, manufacturing plants, fertilizer plants, ports, airports, industries, etc. which are required by the country for her development.

List of projects which are not required in the country?

• ???? (please indicate)

Are these large projects always having negative implications for projected affected parties?

• No, provided projects are properly planned and executed. Many large projects are ideal townships to live. SMART cities concept is actually emerged from these townships.

How to evaluate what will be the impact of these big project on the society and environment in the region if there is no Social Impact Assessment SIA?

• No investor will establish any unit without detailed feasibility report. Social Impact Assessment is part of feasibility report otherwise even investor is not sure about the future of the project. I request, undertake Social Impact Assessment (SIA) for all big projects. This should be allowed because this will strengthen government’s initiative to create welfare facilities. SIA will also ensure development impact with no negative impact. This will also evaluate alternate locations for similar projects.

Major Concern expressed based on past experience:

Concerns raised by Civil society is not illogical. Some corporate houses do behave irresponsibility in the greed to acquire assets. They not only treat their employees badly but also treat the surroundings and society also very badly. 

Example: Who produces adulterated products or sub-standard products? Why? Is it possible to produce such products without the consent of top management or promoters.

There must be well laid-out guidelines to identify major concerns and classify them into two aspects. these guidleines must be based on audit-able parameters. 

• Monetary impact – Develop logical formula to compensate the affected landowners. Example: Calculate average annual farm income in the last three years and decide minimum land price for the project.

Example: If annual income per acre is Rs. 50,000, price of land should not be less than INR 833,000 (if interest rate is about 6%). Please also factor that INR 50,000 is with inbuilt risk, but return from bank saving is risk free return. There must be major campaign to educate about financial management to avoid wastage of money on cars and marriages. there must be mandatory saving of this amount with the help of Local Panchayat. 

• Non-monetary impact – Proposed establishment with local administration should address these issues. Social impact assessment should be used to address the negativity of the project.This will in the interest of investor itself.

Example: Health, education, transportation, electricity, skill development, employment, environment, vocation opportunities, growing economic activity in that area will be additional benefit from the proposed project. This will benefit the project itself.

Please note, if the project land prices goes up. This component should be revised to meet raise in land price should be considered as the benefit from the project. People those who gave land for project should get employment opportunity, to address their notional opportunity foregone.

Who all are the affected people due to the acquired land?

Besides land owners, the law does not include all people who lose their livelihoods, such as agricultural laborers, or cultivators who are in possession of land for more than five years without a formal title or tenancy rights. 

The definition of ‘persons having interest in land’ should therefore include sharecroppers, tenants and sub-tenants, encroachers, and agricultural workers. Project affected people, would also include such persons who are dependent on the common lands, forests or water bodies for their livelihoods, including forest gatherers and hunters, fisher-folk and boatmen. Also affected would be persons whose livelihood is dependent on the people facing displacement (like daily wage earners, home based workers, artisans and traders).

The law says government should not only compensate for assets acquired, but also compensate for loss of habitats, livelihoods and opportunities.Why not, as citizens any why we offer such people BPL cards, employment under MNREGA, etc.

This principle is central to secure the interests of equity and the most vulnerable segments of those adversely affected by land acquisition, and goes well beyond LAA 1894, which primarily envisaged compensating those who lost assets, not livelihoods and habitats.

Who should be exempted from rehabilitation package?

There must be criteria to compensate the affected parties otherwise, deserving candidates may suffer and undeserving may get the benefit.

The following persons are excluded from Rehabilitation benefits because they are not living in project area, Such people should only get compsesation for acquired land.

• Income tax payees and their families, old age and underage people can be provided health and education facility, but at project site only.
• Absentee landlords
• Non-resident holders of agricultural land holding more than 2 hectares
• Persons/families in urban areas awarded compensation must be based on formula to ensure the fairness, otherwise, even in this courts it will be difficult to justify.
• Persons/families partially affected but even after acquisition would be having income three times the poverty line level of income.

Right to seek justice must not be curtailed?

Natural justice process should be allowed in a time bound manner so that people in other project areas develop sense of confidence and minimize disputes. If proper SIA is done and if compensation is given in transparent manner based on agreed and notified formula, why there should be litigation. 

If ligation is due to greed or due to political motivation, let courts address those issues on priority basis in a specified time. There will be just a few such cases in every district.

Safeguards: How to minimize the misuse the law by private sector?

• Bring Transparency in land related transactions when any private parties are involved.  Land for defense and other strategic issues should be exempt from public disclosure.
• Any company having land bank and lying unused should will not be entitled to acquire more land under this law.
• Promoters and Companies having sick units or closed units and seeking new lands should be asked to use the existing land or dispose those sick units before seeking new land parcels.
• CSR track record as per provisions of Companies Law should evaluated and if they have not created any tangible assets under CSR and if they have not used their CSR funds up to 80% on welfare projects, their projects should not be considered. This will force corporate to develop good track record for seek public and government support for future projects.
• For new projects, benchmarking of land availability should be based on best practices adopted in other countries. There must be criteria like steel production per ton of steel or fertilizer etc. This will prevent excessive land acquisitions. Example: If similar world class project with similar facilities can be created in specified land, excess land should not be provided in India.
• Land should be handover only once the project SIA and other registration, environmental and other consents are obtained, and formalities are completed by the investors. This will minimize litigation because it is difficult to take back the land from fraudulent investors, once the compensation is given to farmers. This safeguard should be included.
• This will insulate government from competing political and corporate pressures. This will ensure proper transparent policy in investment. Corporates cannot blame government for not supporting the investment.

Now let us go clause by clause of the ordinance to suggest modifications:

Exemption of five categories of land use from certain provisions:

• The Bill creates five special categories of land use: (i) defence, (ii) rural infrastructure, (iii) affordable housing, (iv) industrial corridors, and (v) infrastructure projects including Public Private Partnership (PPP) projects where the central government owns the land.

Proposal: Please reword the Clause (iv) – in place of industrial corridors to ‘Projects of National Important for Social, Economic and Employment Growth’.

• The LARR Act, 2013 requires that the consent of 80% of land owners is obtained for private projects and that the consent of 70% of land owners be obtained for PPP projects. The Bill exempts the five categories mentioned above from this provision of the Act.

• Introduce Social Impact Assessment: In addition, the Bill permits the government to exempt projects in these five categories from the following provisions, through a notification:

(i) The LARR Act, 2013 requires that a Social Impact Assessment be conducted to identify affected families and calculate the social impact when land is acquired.

(ii) The LARR Act, 2013 imposes certain restrictions on the acquisition of irrigated multi-cropped land and other agricultural land. For example, irrigated multi-cropped land cannot be acquired beyond the limit specified by the appropriate government.

Proposal: This should be restored because this will help government itself in understanding the social impact and motive of investor.

• Return of un-utilized land: The LARR Act, 2013 required land acquired under it which remained un-utilized for five years, to be returned to the original owners or the land bank. The Bill states that the period after which un-utilized land will need to be returned will be: (i) five years, or (ii) any period specified at the time of setting up the project, whichever is later.

These issues should be clarified by provisions to be modified so that land grabbing should be discouraged.If investor is not capable or competent to establish project why he should sit on national asset, which can be used by someone else.

• Time period for retrospective application:

The LARR Act, 2013 states that the Land Acquisition Act, 1894 will continue to apply in certain cases, where an award has been made under the 1894 Act. However, if such an award was made five years or more before the enactment of the LARR Act, 2013, and the physical possession of land has not been taken or compensation has not been paid, the LARR Act, 2013 will apply.

The Bill states that in calculating this time period, any period during which the proceedings of acquisition were held up: (i) due to a stay order of a court, or (ii) a period specified in the award of a Tribunal for taking possession, or (iii) any period where possession has been taken but the compensation is lying deposited in a court or any account, will not be counted.

• Land for Private Institutions: The LARR Act, 2013 excluded the acquisition of land for private hospitals and private educational institutions from its purview. The Bill removes this restriction.

Proposal: How much land is required by these projects? Why government should act as middleman to buy small patches of land say 5 acres of land for private school or private hospital. Rarely, these private institutions have clean track record when it comes to social obligation to extend free service to poor people in society. Social Audit should be initiated for such projects as well and there should be preferential treatment to affected people by issuing Project Stakeholders Card. Why government can’t

• While the LARR Act, 2013 was applicable for the acquisition of land for private companies, the Bill changes this to acquisition for ‘private entities’. A private entity is an entity other than a government entity, and could include a proprietorship, partnership, company, corporation, non-profit organization, or other entity under any other law.

• Ensure Transparency in land dealings will boost confidence among masses: The LARR Act, 2013 stated that if an offense is committed by the government, the head of the department would be deemed guilty unless he could show that the offence was committed without his knowledge, or that he had exercised due diligence to prevent the commission of the offence. This proposed Bill replaces this provision and states that if an offence is committed by a government official, he cannot be prosecuted without the prior sanction of the government.

Proposal: This leaves a scope for corruption and unfair practices. Transparent system based on pre-identified parameters should be introduced and draft report should be placed for comments by affected families before accepting the report as final.

• Some people may try to derail the land acquisition due to political  reasons or under the influence of competitors of the upcoming project:

Role of the affected parties should be involved and cost benefit should be communicated effectively. Financial and non-financial gains should be communicated to the affected parties.

Some people may try to behave funny and will demand out of turn compensation. In such cases law should acquire with the consent of majority. There can be resolution by 70% of ‘Gram Sabha’ in favor of the project to facilitate the proposed project.

The way forward:

We can refine these ideas by organizing brain storming sessions. Undersigned will be happy to be party to any such initiative.

- Vijay Sardana