[Commentary] Industrialisation gone wrong in coastal Cuddalore

SIPCOT industrial estate in Cuddalore, Tamil Nadu. Photo by Ajit Menon.

SIPCOT industrial estate in Cuddalore, Tamil Nadu. Photo by Ajit Menon.

  • Cuddalore district in Tamil Nadu, adjoining Puducherry, was considered a backward district and has been the focus of industrialisation efforts by the Government of Tamil Nadu in the past few decades.
  • An oil refinery and a thermal power plant were used to form the hub for an industrial area, promoting chemical and petrochemical industries.
  • The local communities, which have suffered due to environmental pollution and have not got the fruits of development as promised, are hoping that a change in management in the refinery could result in a change in the situation.
  • The views expressed in this commentary are that of the authors.

In Puthiravali, a village in Cuddalore district of Tamil Nadu, villagers are hopeful that Haldia Petrochemical Ltd.’s takeover of Nagarjuna Oil Corporation Ltd.’s (NOCL) dysfunctional oil refinery will result in employment for them. This optimism exists despite people knowing that the IL&FS Tamil Nadu Power Company Ltd.’s (ITPCL) thermal power plant, a few kilometers south, has hardly generated any employment for locals and rather resulted mostly in health hazards due to fly ash and air and water pollution in the neighbouring villages of Pudhukuppam (a fishing village), Karikuppam and Panchankuppam.

Industrialisation in coastal Cuddalore over the last three to four decades has been sold as a story of hope and development but ultimately has turned into one of broken promises and worsening socio-economic, environmental and health conditions for local people. In 1980, the State Industries Promotion Corporation of Tamil Nadu (SIPCOT) decided to set up an industrial park in Cuddalore. Cuddalore had been identified by the state government as a ‘backward’ district and industrialisation was to be the panacea. SIPCOT’s modus operandi was to provide basic and comprehensive infrastructure, including land, for industries to set up units.

SIPCOT Phase-I was established in 1984 covering an area of 519 acres and comprising mostly chemical and petrochemical industries. It was followed a few years later by SIPCOT Phase-II, another chemical hub of 193 acres. An even larger Phase-III intended to be a textile park, was planned over an area of 1,266 acres but is still to materialise.

Both NOCL and ITPCL were established in the early 2000s further south along the coast. They were envisaged as part of a much larger petroleum chemical and petroleum investment region (PCPIR) in Cuddalore and Nagapattinam districts.  NOCL was identified as the anchor unit of this PCPIR.

From the outset, industrialisation in coastal Cuddalore has been plagued with controversy. Controversy over land acquisition, adverse environmental impacts and the lack of developmental benefits to local communities. Many rightfully questioned why the government would set up a chemical and petrochemical industrial hub so close to human habitations and on the coast. And why were adequate environmental safeguards not put in place?

SIPCOT officials insist that there are no major environmental problems and that a few environmental activists are making much ado about nothing. The Tamil Nadu Pollution Control Board, meanwhile, which has an office within the SIPCOT Phase-I area, is for the most part silent about pollution.

The NOCL plant. Photo by Arunkumar A.S.
The NOCL plant. Photo by Arunkumar A.S.

People’s action on Cuddalore pollution

To understand the real life impacts of industrialisation in coastal Cuddalore, one has to go beyond these unsubstantiated government assertions. Thousands of acres have been acquired from farmers and fishers for industry.

Senthil Babu, a researcher based at the French Institute of Pondicherry, in 2011, published an article in Economic and Political Weekly where he highlighted how the state exercised its power of eminent domain and how brokers, employed by companies, played an active role hoodwinking farmers of their land often with false promises of fair compensation and employment. Those who refused to comply were threatened and told that the government would eventually acquire their land at any cost and that resistance would only result in lengthy court delays. Those who still refused to sell were enticed by higher compensation amounts.

Any hope of due process and fair compensation to all has diminished with the recent Supreme Court decision this July allowing the Tamil Nadu government to bypass the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (LARR) Act of 2013 in favour of prior land acquisition laws when acquiring private land for industrialisation purposes.

The environmental picture is equally gloomy. SIPCOT Area Community Environmental Monitors (SACEM) has for the last two decades regularly documented leakages of industrial effluents that have polluted land, water and air, and mishaps with equipment that have caused grievous injury to workers.

In 2003, an Indian People’s Tribunal comprising a retired judge, academics and a medical doctor conducted public hearings in villages near SIPCOT. Villagers claimed that they had suffered both direct economic losses because of lost livelihoods and indirect losses as a result of added expenditure for health ailments due to pollution and poor drinking water. While more detailed epidemiological studies are no doubt needed to corroborate causal linkages between industrialisation and ill-health, the fact that industries are transporting water from the western side of the East Coast Road to villages near SIPCOT on the eastern side is a tacit acknowledgement of severe groundwater pollution.

Villagers’ concerns are not confined to SIPCOT nor to the past. Besides for fly ash problems around ITPCL, fishers in villages neighbouring the power plant complain about sea water temperatures increasing and declining fish catch due to industrial discharge. They have also voiced their concern that the shoreline is eroding because of the company’s jetty.

The National Green Tribunal (NGT), in 2012, recommended that ITPCL undertake a cumulative environmental impact assessment keeping in mind the multiple projects planned within the PCPIR. Two years later, the NGT quashed the rapid EIA undertaken by ITPCL and reprimanded the Expert Appraisal Committee of the Ministry of Environment and Forests (MoEF), Government of India, for not applying its mind in granting environmental clearance for the power plant.

As recently as 2018, the Chennai-based Citizen Consumer and Civic Action Group (CAG) raised further questions about the EIA process for the ITPCL thermal power project, highlighting once again concerns of fly ash, the lack of a thick shelter belt around the coal storage area and discharge from the plant into the canal created by ITPCL so that fishers would berth their boats there and not on the seashore near the jetty. Unfortunately, both EIA and coastal zone regulation (CRZ) notifications rather than ensuring a precautionary approach to development have been watered down to encourage development.

Fruits of development for the local people?

Politicians and bureaucrats, in addition to resorting to denial, have defended industrialisation by talking about the fruits of development. But what are these fruits? In 2018, a small survey undertaken by two researchers from the Madras Institute of Development Studies, Chennai, in Kudikadu Panchayat Ward 1 and 2, situated next to Shashun Pharmaceuticals Ltd.’s factory, highlighted that about 40% of the 284 households interviewed had received some employment in SIPCOT in the recent past. However, most of this employment, namely construction work, loading, fitting and welding, was contractual, seasonal, and job-based with low salaries.

In villages near NOCL and ITPCL jobs are even fewer, with only a handful of people working mostly on short-term job contracts or as security guards. More ‘skilled’ jobs, those of engineers for example, are generally given to non-locals.

The bigger question is of neoliberal development. Be it PCPIRs, special economic zones or ultra-mega power projects, the state has provided enormous subsidies in terms of land and infrastructure to private capital. In addition, public sector banks have advanced large loans to private companies. While thousands of crores have been spent on large industrial projects along the Cuddalore coast alone, many of these projects remain incomplete and non-operational or are functioning below planned capacity (ITPCL).

A Parliamentary Standing Committee on Energy, in 2018, had acknowledged that there were 34 stressed power plants in India, resulting in the piling up of non-performing assets. The Centre for Financial Accountability, a Delhi-based think tank, has rightly questioned banks not only for sanctioning loans too liberally but also for bailing out private players when projects become unviable. Even the takeover of NOCL by Haldia, one of India’s largest petrochemical companies, raises questions as according to the Ministry of Corporate Affairs it too has a debt of over Rs. 25,000 crores.

At different points of time, over the last four decades, there have been rumblings of discontent as industrialisation marches ahead in Cuddalore – strikes on shopfloors, protests in fishing and agrarian villages and cases filed by civil society groups. These acts of resistance have had measures of success. SIPCOT Phase III has stalled because of local protests. ITPCL is only functioning at a capacity of 1,200 MW not the planned 3,180 MW because of legal challenges to the EIA process. Perhaps most heartening, the NGT in March this year has constituted an expert committee to prepare a comprehensive report on the environmental and health impacts of groundwater contamination due to SIPCOT with an aim to ensure a precautionary and polluter pays approach.

Read also: Tamil Nadu villages mourn as fight against pollution takes a deadly turn

Hobson’s choice?

Coastal Cuddalore’s future hangs in the balance. Haldia’s takeover of NOCL suggests that there are no plans to reign in private capital nor slow down industrialisation. It is equally unlikely that the government becomes more judicious in ensuring proper EIAs are undertaken and that CRZ is implemented, given its past record.

Fishing boat parked in a canal dredged by ILFS. Photo by Arunkumar A.S.

Whether local communities, with the support of civil society, have an appetite for continued protest is also unclear. Opposing development is a double edge sword. When projects are abandoned after land acquisition, acquired land remains with the government. Villagers are thus often stuck in limbo, facing constraints to pursue their traditional livelihoods as they once did and not having new opportunities available to them.  It is perhaps not surprising, therefore, that villagers look to Haldia for some respite despite industry’s past record.

Ajit Menon is a Professor at the Madras Institute of Development Studies and Arunkumar A.S. a post-doctoral researcher at the French Institute Pondicherry. They are both part of a Equip EU-ICSSR funded research project titled ‘Coastal Transformations and Fisher Wellbeing: Synthesized Perspectives from India and Europe.’


Banner image: SIPCOT industrial estate in Cuddalore, Tamil Nadu. Photo by Ajit Menon.

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