By Zanny Begg
In the Bihar region of India, the village of Mangardaha teeters 60 metres from the edge of an open pit coal mine. The houses groan and shake from the blasting of the mine, which operates 24 hours a day. Malaria, dysentery and diarrhoea are rife in the village. The mine has cut off the fresh water supply and the road to the local school. The people in the village are scared and angry about what the future holds for them.
Nothing has been done to improve the conditions for these people. Mangardaha village will be moved, along with four other villages (which have already moved or are in the process of moving) in the Karampura coal fields to make way for the coal mine's expansion. In the meantime, the villagers wait and live in misery.
This is how Judy Hudson, a Community Aid Abroad activist, described her visit to the Piparwar coal mine in March 1992. Her description could be of any of the massive commercial industrial developments displacing people in developing countries around the world.
Unfortunately, she is describing the Australian government's largest overseas aid project, the Piparwar coal mine.
The mine began operations in 1991 as a joint project between the Australian and Indian governments. The Indian government's instrumentality, Central Coalfields Ltd (CCL), and the Australian-owned White Industries are the two companies running the project.
White Industries won the $206 million contract to extract and process the top quality black coal from the Karampura coal fields with the help of $61 million from the Australian government's aid program. Since that time, White Industries has imported some of the best coal mine technology in the world into India's poorest state, Bihar.
The project is very ambitious. Piparwar is the first to open of 23 possible new mining sites in the region. The huge injection of overseas money and world class technology has made Piparwar one of the biggest and most productive coal mines in India. The mine has an annual target of 6.5 million tonnes of raw coal and 5.5 million tonnes of power grade coal.
In all, the project is a big plus for the Indian government. But if the Indian government is pleased to see the mine, the angry graffiti along the road to Piparwar shows the people are not. "The people of Bihar", claims Hudson, "have got nothing out of the project at all".
In 1987 the land surrounding the mine was assessed, and compensation rates were worked out for the villagers who would need to be moved for the project to go ahead. The compensation, however, has proved to be pitifully inadequate. For a start, the people are compensated only if they can prove legal title to their land. As 90% of the female population and 70% of the male population in Bihar are illiterate, proving legal ownership is a complex and frustrating process for the villagers. "Many villagers have been there for generations farming the land", Hudson continues, "yet many don't have any legal title, so therefore they won't be compensated. In some villages, over half the population don't have any legal rights to their land. Some government officials have been charging half the compensation to supply legal title to the land. The villagers are missing out all along the way."
To make matters worse, the villagers are compensated only for the non-movable parts of their house. Communal village property like wells and commons will not be compensated. Even the thatch roofs on the village houses are not being compensated because they are considered movable by the government.
Prasad Bhuiya's case illustrates the plight of many of the villagers displaced by the mine. Bhuiya and his family owned one and a half acres of land and sharecropped an additional five acres of land. In Bhuiya's family there were three brothers, all of whom were married with children. They could prove title to only half of their land. Their compensation came to the sum of 5000 rupees, or about $25. This had to be divided among the whole family.
In some ways, Bhuiya has been lucky. Carol Sherman, the director of Aid/Watch, in her report on the Piparwar mine, The People's Story, states that 40% of the population who have been sustaining themselves on small parcels of common land will not be able to prove title and will receive no compensation at all.
Sherman told Green Left Weekly that even the villagers who have received compensation are not much better off. In some cases, the compensation was paid in 1987 or 1988 and the villagers are only being moved now. The compensation money has been long spent, and the villagers are being moved with no money and no means of supporting themselves.
To sweeten the prospect of moving, CCL has promised a job in the mine for each family which owns more than three acres and is displaced by the mine. This disadvantages the poorer families but is also of little assistance to those who do own more than three acres of land. One job per family doesn't really help an extended family with three to four adults, all with children. According to Sherman, "The poorest in the community are suffering the most ... even the people who do have more than three acres only get one job. This is a terrible situation because people now have no cash. They are being moved into small resettlement housing with no land for agriculture — they have no real jobs, no livelihood and no chance of a job in the future."
The situation for these people contrasts starkly with the living conditions of the Australian technical experts who have been flown into the region to run the mine. "One minute you go into these poor villages who have got nothing and are being thrown out", Hudson explains, "and the next minute you look at where the Australians are living and it's all brand new homes, people to cook and clean for them, a new school and a big barbed wire fence around it".
White Industries has also claimed that its new technology is clean and environmentally friendly, but Sherman has reservations. "The streams have been diverted because of the mine, the mahua trees, which people rely on for food, have been bulldozed, and the forests have disappeared. On a lot of levels the local people have suffered and will continue to suffer while the Australian government and White Industries claim they are using a system of mining that is taking regard of the environment." The environmental impact statement on the mine has been classified by the government as top secret.
In response to the failings of the Piparwar project, the villagers have been organising protests and demonstrations. As these protests escalate, the Indian and Australian governments, CCL and White Industries have been nervously trying to shift the blame for any problems associated with the mine.
"The Australian government is involved, as this is their biggest aid project", says Hudson. "White Industries is being funded $61 million, CCL is the Indian government instrumentality ... The deal is the Australians implement the technology and the Indians acquire the land and compensate the villagers. This is where things start to get complicated ... When you talk to White Industries, they put the blame for what has gone wrong in the Indian hands. Everybody is passing the buck to somebody else. Nobody will take responsibility for what is happening."
While the buck keeps getting passed, the living conditions of the villagers continue to deteriorate. "Many of these people who used to be poor agriculturalists", Sherman points out, "have now become the landless poor and will migrate to the urban areas and end up slum dwellers ... an overseas aid project has created a landless poor". The people in the Mangardaha village could be excused for wondering what the Piparwar mine has to do with aid.
Unfortunately, the Piparwar mine has a lot to do with the aid priorities of the Australian government. According to Jeff Atkinson, a researcher with Community Aid Abroad, there are three official motivations behind the Australian government's aid budget. "One is humanitarian, one is Australia's commercial interests and a third is Australia's political interests. We are told they have equal weight and that they are quite compatible with each other ... If you look at the actual program, however, it's clear that the commercial motivation is the one that has taken over."
Over the last few years, most parts of the aid budget have been held constant or have been cut back. But one particular section of the aid project, the Development Import Finance Facility (DIFF), has been growing rapidly. The money given to White Industries for the Piparwar mine project falls under the DIFF part of the aid budget.
DIFF projects enable Australian companies which are seeking contracts in developing countries to obtain assistance from the aid budget. White Industries has been a major beneficiary from the DIFF program, winning more than one-fifth of total DIFF grants by the end of financial year 1990. By the last federal budget, the DIFF program had risen to around $120 million — over 9% of the aid budget.
Jill Hickson, overseas project coordinator for the Committees in Solidarity with Central and Latin America and the Caribbean (CISLAC), describes DIFF as "a direct subsidy to business masquerading as aid".
"A lot of pressure has come on the government from big business to slash the aid budget", she explains, "so instead they have given the money officially designated for overseas aid, through the back door, into the hands of business".
What worries Atkinson is the way in which these project distort aid priorities. He argues that aid money which was motivated by humanitarian concern would end up in the poorest countries of Africa, whereas much of Australia's government aid ends up in the more commercially interesting regions like South-East Asia: 84% of all DIFF grants in the last three years have gone to Indonesia, China, India and Thailand.
"What is outrageous" he says "is that this would be all fine and good if we were talking about an export promotion program, but forgotten within this equation is the question of aid, of assisting the poor and the needy".
The Piparwar project is a reflection of the growing Australian commercial interest in Indian markets. Over the 1980s, India's GDP surged. The manufacturing sector had a growth rate of 7.1% during this time. Australian government aid to India grew from 0.3% of the total aid budget in the mid-'80s to 3% in 1990, with the Piparwar mine now being Australia's largest overseas aid project.
Not only does Australian government aid focus on the stronger developing economies; it also focuses on projects that assist the rich within these countries. "The basic assumption behind the DIFF projects", says Hickson, "is that if you help the bureaucrats and government officials in poor countries, the benefits will trickle down to the really needy. But the money never reaches the bottom. The only people who benefit out of these projects are the Australian companies and the already well-off in the countries where the projects are established."
In Bihar, where the Piparwar mine is situated, Sherman argues that the standard of living has "declined because of the mine". The coal is not even intended for Bihar: it is shipped out of the state to fire power stations in New Delhi. "The urban industries and the local elites of New Delhi" are the only ones in India who benefit out of the project, according to Sherman.
A further barrier to the money reaching the poor in developing countries is the money spent on government aid projects which never leaves Australia. According to Atkinson, 80% to 90% of government aid stays in Australia. Hudson confirms this notion when she describes the experience at Piparwar:
"Part of the contract of White Industries is that 73% of the total cost of the project and equipment must be Australian content. This means they were importing trucks from Australia when there was an almost identical Indian model available. The kinds of goods that are imported then get charged 90% import duty. So, besides there being a local truck they could have used, they are also being landed with an import tax. This is ridiculous. $151 million worth of mining equipment and technical services is being imported from Australia. This money, as with most AIDAB aid that is supposed to go to poor people in poor countries, is being spent on Australian goods and services."
The winners from this situation are business interests in Australia. Sherman is very critical of the whole thrust of the government aid project. "Too much emphasis has been placed on the business and commercial aspects of Australian aid, which benefits Australia rather then the developing countries. We are seeing very inappropriate types of projects which don't incorporate the wishes of the local people. We are seeing a very heavy-handed approach to development.
"In PNG, for example, most of the aid budget has gone into strengthening the police force, which has made community groups very critical of AIDAB."
In Bihar the people are suffering because of what the Australian government calls "overseas aid". They have lost their homes, their source of livelihood and their land. Many will end up beggars. Most would have been better off if the Piparwar coal mine had never been opened.
Jill Hickson argues, "Australian government aid only reflects the interests of the Australian government, and not the interests of the poor. Aid which really reflects the interests of the poor is aimed at community empowerment and genuine development. It is also aimed at helping people in poorer countries fight against the unequal economic system which makes them poor while others are rich." The people displaced by the Piparwar mine don't think Australian "aid" has done much to alter that system.