The shining image of the Tatas is being increasingly questioned. The latest report of the International Campaign for Justice for Bhopal provides frightening details of the corporate crimes committed by one of India’s biggest business houses.

That Tata Steel have done terrible things in the past, and that their good image is quite undeserved is further underlined in Orissa, which has been used as their plundering house to build up their steel prowess in Jamshedpur, and globally. They have not just mined the state for steel to the point of destruction,  but also built up refractories, and excavated huge pits for coal and chromite. They have left village communities unsettled, and landless, and not bothered to compensate for the ills caused by employing labourers in their rephractories, and underground mines.

But to my mind, the much more crucial question is what will Tata Steel be upto next. In the CORUS acquisition Tata Steel  have bought a hugely overpriced unit, whose efficiency is less than half of their much smaller unit. Tata Steel set up in 1907 is one of the lowest cost producers of steel. On the other hand, Corus which ranks 9^th globally in terms of steel production, in its earnings from steel it is at the 17^th position. While TATA had an operating income of $280per tonne of steel produced in 2005, the Corus figure was $104. The operating income of the merged entity would be only $146. Corus steel facilities are old, with costs of production quite high, and their return to profits has been mainly due to higher steel prices, and Europe’s oligopolistic market, where the steel makers have together cut production to save prices, and are active today in initiating or threatening trade cases against other countries. Frontline quotes a senior official in the Steel Ministry as saying that Corus probably saw the Tata acquisition as the "best opportunity to make an exit". He said: "Corus does produce high-quality first-class products, they are nevertheless high cost. It does not have access to iron and coal mines, which is a handicap. It has mastered certain technologies and, in fact, sells them. But there will be a time, not very far into the future, when Corus facilities will have to be replaced."

In addition to income inefficiency, Tata Steel  face a challenge in financing the deal, and meeting just the physical needs involved. Corus has something like 19million tonnes of steel capacity, much of which is not backed by crude steel capacity. Different estimates indicate Corus’ crude steel requirement from Tata is more than 13 million tonnes per annum. But as of now, Tata capacity stands at just 5 million tonnes. How would Tata Steel meet the deficit of 8mtpa?

Tata’s Managing Director B. Muthuraman is upbeat, and says that there are tremendous synergies between the two companies. The significant synergies expected to be achieved over the next five years include improvement in the areas of manufacturing and production, benchmarking and best practices sharing, procurement, shared services, transfer of technology from Europe to India to develop new products, and ‘capture’ growth in India and Asia, utilisation of combined enlarged distribution network and improve competitiveness of European operations. The much firmer basis of the deal, however appears to be the continued low cost production of steel which Tata Steel seem to be banking on. Their plans include commissioning of first phase of the 3mtpa Kalinganagar Steel plant by 2009, to be followed by a second phase of 3mtpa building up the Dhamra port facilities, continue the progress of the projects in Chattisagarh, and Jahrkahnd, expansion of the total crude steel capacity in Jamshedpur to 10 mtpa.

It is common knowledge that Orissa has been the chief and cheap raw material source of Tata Steel ever since the establishment of India's first integrated steel plant at Jamshepur in 1907. The most important factor which decided the location of this plant was the discovery of an ‘exceedingly rich and extensive deposit of iron ore’ in the Gorumahisani, Badampahar and Sulaipath region of Mayurbhanj in Orissa where the ores were ‘incomparably richer than those of the Barakar area’ (which is in West Bengal). The existing Princely Rules did not pose much of an obstacle, and Tata got the mining lease at quite liberal terms. Mining was done in Orissa with low value addition and through low paid manual jobs but processing of these ores and manufacturing took place in Jamshedpur. (Jaya Prakash Pradhan, Working Paper, ISID, Februrary, 2007). Thus, Tata Steel was able to exploit the states mineral wealth, as well as the cheap labour to their best advantage. This extraction has continued post independence upto the present times.

Calling their happy exploitation of Orissa “Courtship & Marriage” Tata Steel describes how they have ‘carefully nurtured’ Orissa’s economic growth, and ‘optimally utilized’ her natural resources. They have helped Orissa establish an ‘intimate bond’ with the steel plant at Jamshedpur through railway lines that have served to siphon out her valuable resources with ease. After depleting the Mayurbhanj deposits, they began mining the iron ore reserves at the Joda East Iron Mine in the Keonjhar district in 1925. Here, mining is done by the conventional open pit benching system whereby the one body is drilled, blasted and then the fragmented ore is loaded by shovels into dumpers, which haul the material to the crushers. Subsequently, the mining was expanded to Noamundi and Khondbond, and Keonjhar emerged as a source of high quality iron ore. Jhakhand has also been a steady source of cheap iron ore to the for Tata Steel. These mines have affected tribal agriculture, water resources, and livelihoods. Their lands have been ravaged, and abused, with little inputs for developing human livelihoods, or reversing the ecological disaster.  However, tucked away as these regions are in the hinterlands, there is little visibility of the devastation, Tata Steel has continued from strength to strength, expanding into other countries as well, while Orissa, and specially the tribal communities are in a downward spiral of decline.

It is not just the recent Corus deal, the Tatas have been on a major expansion drive since 2003. Taking advantage of its low cost mining operations, the company has expanded to serve iron ore markets in India, China, Korea and Japan. The captive units in Keonjhar and Jahrkahnd would be the prime sources for this expansions drive. Quite apart from the Corus acquisition, the steel major has been eyeing units in South East Asia, and had in February 2005 through NSA taken over NatSteel, a group of companies operating as different legal entities in countries like Singapore, Malaysia, Thailand, Vietnam, the Phillipines, Australia and China, with as many as five joint venture partners.

Thus the courtship and marriage has indeed helped Tata Steel reap significant returns, and plan for global expansions with minimum costs. Tata Steel obviously expect this romance to continue, with the pliant bride, still eager to bend over backwards to accommodate more investments.

India is one of the cheapest exporters of iron ore. The private sector companies do not require permission of the government to export iron ore with iron content less than 64 per cent. However, such companies who own mines are allowed to export iron ore fines having iron content of 64 per cent and above after meeting requirements of domestic consumers and the MMTC Ltd.

Even though iron ore price has increased steeply in recent times, government's revenue by way of royalty has not increased commensurately. This is so because royalty is charged on the basis of tonnage, irrespective of prevailing price in the market. Thus, while iron ore exporters are reaping windfall gains, benefit to the exchequer is negligible. According to one report, states like Orissa and Jharkhand, which are among the poorest have a lot of iron ore. However, as recent articles have pointed out, it only takes Rs 250-Rs 325 per tonne to extract the ore from captive mines, while the market price is around Rs 2000 per tonne. But the central government has set the lease rate (on an average) at around Rs 27 per tonne. (The gold that keeps Orissa poor - Friday November 17 2006 08:23 IST:Chitta Baral, Newindpress). The Keonjhar mines produce some of the highest quality ores in the country, with 66.5%iron content ranked ‘very rich’ in the Tata Steel website.

This continued supply at not just dirt cheap but throw away prices is perhaps, what Tata Steel are banking on. By May 2006, quite soon after the Kalinganagar event, Tata Steel announced that its Rs.67400 crore Greenfield steel manufacturing projects in Orissa, Chattisgarh and Jhanrkhand are progressing as per the schedule. These three projects are expected to add 23mt to its existing 5mt capacity. Quite unfazed by the events in Kalinganagar, the company announced the plans to commission the first phase of the 3mt plant in Orissa by 2009. Events like the Kalinganagar firing appear to be but a small ripple for Tata Steel in their scheme of things to come. Even as the world was watching quite aghast the events that unfolded in Singur, in West Bengal in the beginning of this year, Chairman, Ratan Tata was busy showing off his skills in flying combat aircrafts. While Budhadev and other communist leaders were busy defending what happened in Singur, Tatas shrugged their shoulders and turned the other way! By mid-march, they had announced that the small car project was on track, and would be ready by the middle of next year.

Corporates in India have been able to use state government as a convenient and pliant front to get land, and coerce local communities into submission for setting up their projects, while they take on the stance of being innocent of all involvement. Thus, time and again, the police have been used in the interests of private business in this country. However, the anxiety of the Tatas to push projects for steel is becoming increasingly exposed, in the increased violence, and pressure tactics being used. In Chattisgarh, terror, and the state sponsored violence through the Salwa Judum is being used in the very Block where Tata Steel is planning its next Greenfield expansion to feed the Corus deal. According to one report, it is in reality a police sponsored terror  militia forcing the evacuation of one tribal village after another in Lohandiguda Block. In the Kalinganagar industrial complex, the Tata subsidiary, Nilachal Ispat has already rode rough shod over the local community in setting up its steel plant. It was the displacement and suffering caused by plants that have already come up including Nilachal Ispat, Jindal and Bhusan Steel that has lead the tribals in Kalinganagar to dig in their heels and firm up their resolve, to not allow any more industrialisation. Considering the size of the Corus deal, considering the ambition and the competition between the corporates, and our Indian MNCs, it is understandable that Tata Steel would try to push ahead. It is understandable, but not acceptable.

The Tatas have an impressive public image. They are seen as benign, philanthropic, and as one of those private corporations who have done much more good than harm in general. But increasingly, the other side of Tatas growth is becoming visible. The report of the ICJB (International Campaign for Justice in Bhopal) has highlighted that Kalinganagar is only one of a series of violent repressions of local communities which have resisted Tata Projects. It has also pointed out that Tatas have a bad record of labour unrest. Striking workers have been arrested to break strikes in Tata factories, workers have been laidoff, and trade unions leaders have been gunned down during labour unrests. In the Tata mines, and refractories in Orissa, Tatas also have a bad record of compensation. Victims of diseases including silicosis, burns, etc, have not been compensated, nor have the families of those who died of such hazardous occupations been provided any form of relief.

Nobody grudges Tatas their success or their growth. But, it is time, Tatas took stock of the costs of this growth and success, and became responsible enough to bear it. Even as I write this, there are reports that 8 people in Kalinganagar have been injured as the Tatas try to push ahead with a rehabilitation colony in Maniapatna. The Visthapan Virodhi Jan Manch are upset as the District Collector had given an undertaking that there would be no further progress on the work for the Tata Steel plant till all the demands and issues raised by them have been properly addressed through dialogue. We cannot wish away corporations like that Tatas. But, it is time, we decided not to put up with their misdeeds, and forced them to reform. Business houses in India have grown with the help of government supports, and government law keeping forces have been used to enforce the law of business houses rather than the laws of the country. This has allowed these business houses to build their empires and getaway with much lower production costs than other countries, and thus much higher profit margins. But at some point of time, this irresponsible looting of the land and the people has to stop.

It is not just Tata, there have been huge protests against Poscos misguided efforts, the Mittal steel plant is also facing resistance in Keonjhar. These are recipes not just for human disasters, but for environmental destruction. In a country like India where the laws and their enforcement are so much more slack, the scale of destruction will be much more.  Corporations should not turn into Godzillas guzzling up humans and their lands and resources. If they have expertise, it is high time they began to use it to improve human living conditions. If Tata has such expertise with township planning as in Jamshedpur, why don’t they take up a city like Cuttack for example, and make it more livable. It is high time a corporate house like Tata thought of giving something back to Orissa, and other states, which they have mined to destitution rather than grabbing more and more for export oriented profits. It is time they worked to develop a genuinely humane image rather than manufacturing one, and trying to greenwash their pollution and other crimes.

Vidhya Das is with Agragamee in Orissa -  e-mail:awsdc@sify.com