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Villagers Celebrate The Historic US Supreme Court’s Verdict Which Ended The Immunity of the IFIs

For Immediate Release

Villagers Celebrate The Historic US Supreme Court’s Verdict Which Ended The Immunity of the IFIs

March 31, 2019, Mundra: The air in Mundra filled with the slogans like Kaun Banata Hai Hindustan, Machuawara, Majdoor, Kisan! (Who makes India? Fishermen, Labourer and Farmers); Ladenge Jeetenge! (We shall fight, we shall win); Aadiwaasi Machhuawara Kisaan Ekta Zindabad! (Long live the unity of tribals, fishermen and farmers), and Poonjipatiyon Ki Dalaai Band karo! Hundreds of people from Navinal and Tagri villages of Kutch and representatives from various social movements and civil society members have gathered to celebrate the historic verdict of the US Supreme Court that ended the absolute immunity enjoyed for long by the International Financial Institutions.
“Is Development only for Tata, Ambani, and Adani? What about the fishermen from Mundra, who live in the open with huts made up of bamboo and gunny bags but feed thousands of people in and outside Gujarat,” asked Medha Patkar, senior activist, Narmada Bachao Andolan and National Alliance for the Peoples’ Movements. “Every citizen has the constitutional right to question anti-people policies,” she asserted. She further said, “We do not have any problem in discharging Sardar Sarovar (Narmada) Dam waters for the benefit of the farmers of Kutch. However, we will fight if it is given to the industries,” referring to the allocation of water for a large number of industries.
She was speaking at the public meeting, organised by the Machimar Adhikar Sangharsh Sangathan (MAAS), Mundra, which witnessed the participation of the hundreds of the villagers affected by the World Bank Group’s International Finance Corporation-funded Tata Mundra Ultra Mega Power Plant. The meeting was organised to celebrate the historic verdict of the US Supreme Court that ended the absolute immunity enjoyed for long by the International Financial Institutions.
During the occasion, representatives from various social movements and civil society members like  Medha Patkar, senior activist of the Narmada Bachao Andolan; Soumya Dutta, Convenor of the Beyond Copenhagen Collective; Nitaben Mahadev, Gujarat Lok Samiti, Sanjeev Danda, Dalit Adivasi Shakti Adhikaar Manch; and Maju Varghese and Anuradha Munshi from the Working Group on International Financial Institutions (WGonIFIs) were also present to extend their solidarity and felicitate the fishermen and villagers who have been at the forefront of this historic struggle.
The petitioners of the case were garlanded and facilitated at the public meeting. Speakers after speakers alluded their courage, encountering hostilities and the broader impact of this victory to the people around the globe, making institutions like World Bank more accountable.
Speaking at the occasion, Soumya Dutta, emphasised that the recent US Supreme Court’s decision to end immunity of the International Financial Institutions is a significant victory of the people fighting to save their dignity, land and livelihood across the world. He stressed that a broader alliance of different sections of the people affected by the project be formed to fight getting justice.
Sanjeev Danda said the US Supreme Court’s verdict is a firm reminder that fishers and poor are not insects that can’t be eliminated easily. He thanked the villagers for their firm resistance against the might of the IFC and Tata.
Nitaben Mahadev expressed solidarity on behalf of organisations in Gujarat and wished the people the best to take the fight to higher heights.
Buddha Ismail Jam, the main petitioner of the case against the ongoing IFC, emphasised the need to stay together. He said, “If we continue to stay strong for the remaining struggle, nobody can snatch justice away from us.”
Gajendra Sinh Jadeja, a co-petitioner of the case and Sarpanch of the Navinal Panchayat in Mundra, listed the problems currently being faced by the fishermen, farmers and pastoralists. He said, “The production of cotton, dates, chikoo has considerably reduced due to the coal-ash, which has also adversely impacted the health of the people. Similarly, the inlet and outlet channel have increased the salinity, thus impacting agriculture. Additionally, the channel has also driven away from the fishes away from the coast, due to which, the fishermen have to travel about 25 kilometres into the sea.”
Bharat Patel, thanked the villagers, civil society and social movements across the country for their solidarity, and the Earth Rights International, for their unflinching support. He asserted that the policies of the IFIs need to be amended and said that they can’t function at the cost of the lives of people. Talking about the further course of action, he said, “We will fight till the ecology is restored; the people who lost their livelihoods are adequately compensated; and the officials of IFC and Tata Power, who conspired to destroy our lives for their greed are criminally charged.”
Background
On February 27, 2019, the Supreme Court of United States, in a historic 7-1 decision, the U.S. Supreme Court decided in Jam v. IFC that international organisations like the International Finance Corporation of the World Bank Group do not enjoy absolute immunity.
The Court’s decision marks a defining moment for the IFC – the arm of the World Bank Group that lends to the private sector. For years, the IFC has operated as if it were “above the law,” at times pursuing reckless lending projects that inflicted serious human rights abuses on local communities, and then leaving the communities to fend for themselves.
In the case of the Tata Mundra, since the beginning, the IFC recognised that the Tata Mundra coal-fired power plant is a high-risk project that could have significant adverse impacts on local communities and their environment. Despite knowing the risks, the IFC provided a critical Rs 1,800 crore (USD 450 million) loan in 2008, thus enabling the project’s construction. Despite this, the IFC failed to take reasonable steps to prevent the harms it predicted and failed to ensure that the project abided by the environmental and social safeguards.
As predicted, the plant caused significant harm to the communities living in its shadow. Construction of the plant destroyed vital sources of water used for drinking and irrigation. Coal ash has contaminated crops and fish laid out to dry, air pollutants are at levels dangerous to human health, and there has already been a rise in respiratory problems. The enormous quantity of thermal pollution – hot water released from the plant – has destroyed the local marine environment and the fish populations that fishermen rely on to support their families. Although a 2015 law required all plants to install cooling towers to minimise thermal pollution by the end of 2017, the Tata plant has failed to do so.
A nine-mile-long coal conveyor belt, which transports coal from the port to the Plant, runs next to local villages and near fishing grounds. Coal dust from the conveyor and fly ash from the plant frequently contaminate drying fish, reducing their value, damage agricultural production, and cover homes and property.
The IFC’s own internal compliance mechanism, the Compliance Advisor Ombudsman (CAO), issued a scathing report in 2013 confirming that the IFC had failed to ensure the Tata Mundra project complied with the environmental and social conditions of the IFC’s loan at virtually every stage of the project. The report recommended the IFC to take remedial action. However, the IFC’s management responded to the CAO by rejecting most of its findings and ignoring others. In a follow-up report in early 2017, the CAO observed that the IFC remained out of compliance and had failed to take any meaningful steps to remedy the situation.
The harms suffered by the people are all the more regrettable because the project made no economic sense from the beginning. In 2017, in fact, Tata Power began trying to unload a majority of its shares in the project for one rupee because of the losses it has suffered and will suffer in future. At the moment, the plant is operating much-below capacity in part because India has an oversupply of electricity.
Please visit here for more background and accessing documents related to the case.
About us:
Machimar Adhikar Sangharsh Sangathan (MAAS) is a trade union of the fish workers in Mundra and a co-petitioner in the historic Budha Jam vs IFC case.
 
Contact:
Dr Bharat Patel (Mundra, Gujarat, India)
General Secretary, Machimar Adhikar Sangharsh Sangathan
+ 91 94264 69803
bharatp1977@gmail.com

भारत में जलविद्युत विकास को बड़े पैमाने पर बढ़ावा

इस सेक्टर में निजी क्षत्रे को आकर्षित करने के लिए सरकार ने 2016 में इस पर चर्चा शुरू की कि नवीकरणीय ऊर्जा के क्षत्रे को और विस्तृत किया जाए ताकि 25 मेगावाट क्षमता से अधिक के जलविद्युत स्टेशन भी उसमें शामिल किए जा सके। इससे सरकार को 2022 तक 175 मेगावाट नवीकरणीय ऊर्जा उत्पादित करने के लक्ष्य को हासिल करने में मदद मिलेगी।

The Role of IFIs in the Development Agenda

Ulka Mahajan on the Context of the Role of IFIs in the Development Agenda

Coastal Infrastructure and Fishers Struggle in India

Jesu Rathnam, Convenor, Coastal Action Network, on the coastal infrastructure and fishers struggle in India

CSOs Call for Accountability and Disclosure from AIIB on its FI Investments

By Tani Alex

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Representatives from civil society organizations from all over the world have written a letter this week to the AIIB, drawing urgent attention to rising concerns of AIIB’s investments through Financial Intermediaries (FIs). This is in context of AIIB developing its strategy to invest more in equity and funds, without formulating robust policies and systems around FI investments regarding transparency, accountability and efficient channels of communication with all stakeholders. FI investments mean a “hands-off” or third-party lending, with which comes potential risks – the clients of FIs are not held accountable for the environmental and social safeguards.

The letter urges AIIB to learn from International Finance Corporation’s (private lending arm of World Bank Group) lessons on FIs from the recent past. The Compliance Advisor Ombudsman (CAO), which is IFC’s accountability mechanism, and various CSOs had submitted their own findings regarding the high risk of lending through FIs. Accordingly, the CAO addressed the highly problematic relationship between IFC and the FIs’ clients, wherein it is not assured whether the FIs’ clients ESMS is leading to the implementation of the Performance Standards (of IFC) at the subproject level. IFC’s CEO has already announced that IFC has cut its high-risk lending from 18 to just 5 investments, and has committed such projects to climate mitigation and women-owned SMEs.

Studies carried out by CSOstracking IFC investments in FIs support these findings. The letter explains that the study examined a small segment IFC’s FI portfolio, wherein more than 130 projects and companies funded by two dozen FIs are causing/likely to cause critical environmental harms and human rights violations. The projects spread over 24 countries come from a range of high-risk sectors which includes private military contracting, mining, infrastructure, energy, industrial agriculture, transport and infrastructure. Few of the demands put forth in the letter to AIIB on policy, investment decision-making and contracts with FIs include: high scrutiny on project portfolio, track record of ESF policy, aligning with AIIB’s own ESF even for sub-projects, monitoring FIs’ clients’ ESF due diligence and ensuring project-affected communities have access to redress including the AIIB’saccountabilitymechanism. Moreover, FIs should also adhere to disclosure of its investments, which should reflect in AIIB’s website. A provision for this should also be included in AIIB’s upcoming Public Information Policy. The letter concludes reminding AIIB of its promise delivered by its VP DJ Pandian to CSOs during the AGM Meet at Jeju in 2017, that AIIB will disclose high-risk sub-projects supported by equity funds.

Among the FIs, AIIB has approved and invested in India is India Infrastructure Fund, targeting investments in infrastructure, energy and transport sectors. This project is partnered with the General Partner and its investment team, a global infrastructure investment and management platform, for a period of eleven years. AIIB has approved 150 mn USD, out of the total project cost of 750 mn USD. Another FI project in the pipeline for India is the National Investment Infrastructure Fund(NIIF), considering to invest in roads, airports, ports, power and urban infrastructure. NIIF is established by the Government of India (GoI) who owns 49% stake. Out of the target project fund of 2.1 bn USD, AIIB is considering to invest 200 mn USD, over an implementation period of 19 years, while GoI invests 1 bn USD.

IMF and World Bank: Marching to a G20 Tune?

By Nancy Alexander

This year, the G20 Finance Ministers and Central Bank Governors’ Meeting on October 12-13 overlapped with the IMF-World Bank annual meeting on October 13-15 in Washington, DC.

As of December 1, 2017, Argentina becomes G20 President with the past and future Presidents (Germany and Japan, respectively) as part of the G20 Troika.  At the October G20 meeting, Argentina announced that it’s two key G20 Finance Track priorities will be the Future of Work (shared with the Sherpa Track and possibly looking at automation, education, and womens’ entrepreneurship as well) and Infrastructure Financing, especially through financialising infrastructure as an asset class. The priorities of the Argentine Sherpa Track will be announced at the final German Sherpa Meeting on 9-10 November in Berlin.[1]

The individual G20 member countries hold the overwhelming majority of votesat the IMF and World Bank, so it is not surprising that G20 priorities are often identical to those of the institutions they dominate.  For example, infrastructure financing has been a G20 development theme since 2010 and a powerful Finance Track theme since 2014, except under Germany, when infrastructure issues were dealt with by the Sustainability Working Group and under the Compact with Africa.

Since 2010, the G20 has focused urging the Multilateral Development Banks to standardize, scale-up, and replicate mega-projects, especially public-private partnerships (PPPs) in emerging and developing countries.  Indeed, the G20 encouraged the strengthening of existing and start-up of new Project Preparation Facilities (PPFs) with the capability of accelerating mega-project preparation — especially for trade facilitation in the energy, water, transportation and ICT sectors.  In each geographical region and subregion, Master Plans for Infrastructure in these four sectors have already been designed.

Especially since 2014, the G20 has tried to solve the problem of how countries can attract private investors, particularly long-term institutional investors (pension and insurance and mutual funds and sovereign wealth funds) which hold over $100 trillion in savings. While the G20 and the MDBs have not succeeded in mobilizing much additional financing for PPPs from investors, efforts to overcome remaining obstacles are described in Boxes 1 and 2.[2]

Until the German Presidency, there was no effort to promote infrastructure that would be environmentally and socially sustainable.  Even under the German Presidency, the officials leading the powerful Finance Track said that sustainability is the job of the (less powerful) Sherpa track.  Infrastructure contributes approximately 60% of greenhouse gases (GHG) emitted to the atmosphere; therefore, it is crucial that urgent steps be taken to curtail infrastructure that locks-in carbon-intense technology and ensure that infrastructure meet criteria for mitigation of GHG and adaptation to the effects of global warming.  At present, all such criteria are voluntary whereas the rights of investors are legally protected in trade/investment agreements and the PPP contracts that include investment provisions.

  • At the 2014 Australian G20 Summit, the G20 Global Infrastructure Hub was launched to expand the project “pipeline” for preparation and financing.
  • Also, in 2014, the World Bank launched the Global Infrastructure Facility.  At the launch, Bank President Jim Kim stated “We have several trillions of dollars in assets represented today looking for long-term, sustainable and stable investments…In leveraging those resources, our partnership offers great promise for tackling the massive infrastructure deficit…”
  • In 2016, the World Bank’s private sector arm, the International Finance Corporation (IFC) launched its Managed Co-Lending Portfolio Program, a loan-syndications initiative that enables third-party investors to participate passively in IFC’s senior loan portfolio. The first partnership under the program was signed with the global insurance company Allianz. Under the agreement, Allianz intends to invest $500 million, which will be channeled into IFC debt financing for infrastructure projects in emerging markets.
  • 2016 was also the year when China launched the Asian Infrastructure Investment Bank (AIIB) and the BRICS (Brazil-Russia-India-China-South Africa) launched the New Development Bank (NDB).

Box 1: New infrastructure-related institutions

The G20 has directed each multilateral development bank to expand infrastructure financing for years, especially by “crowding in” the private sector. At the Hamburg G20 Summit in July, Leaders adopted principles to achieve this.[3]  These principles underpin the theme presented at the IMF/World Bank annual meetings — namely “Maximizing Finance for Development” (also known as the “Cascade” or “billions to trillions”). The October 14 Communique of the Development Committee emphasizes this theme, which is actually a relatively new paradigm for financing infrastructure.[4]The IMF and World Bank’s two papers[5]for the Development Committee meeting describe this paradigm and its implementation.

While the World Bank is tasked with expanding private investment in infrastructure, the IMF’s Infrastructure Policy Support Initiative provides tools to help countries assess the macroeconomic and financial implications of various investment programs and improve their institutional capacity.

The gist of the “Maximizing Finance for Development” paradigm is that nothing should be publicly financed if it can be commercially financed AND that if commercial financing is NOT forthcoming for a project, a country must promote a more investment-friendly environment and/or private sector guarantees, risk insurance and other inducements should be provided.  My blog criticizes the paradigm[6], which relies heavily on expanding the launch of PPPs, including by packaging them in portfolios for trading.

Figure 1: Maximizing Finance for Development (“the Cascade”). Creator: Jim Yong Kim, Speech at LSE 04/11/2017.

There are Cascade pilots in nine countries (Cameroon, Côte d’Ivoire, Egypt, Indonesia, Iraq, Jordan, Kenya, Nepal and Vietnam) which are intended to introduce private sector solutions in energy, transportation, and other infrastructure sectors. The pilots will gradually expand to include other sectors and countries.

The “Maximizing Finance for Development” paradigm responds to the G20 interest in attracting private investors, especially long-term institutional investors such as pension and insurance and mutual funds as well as sovereign wealth funds. As it is, OECD pension funds ($30 trillion) and insurance funds face staggering gaps and potential insolvency unless they can get higher yields on their savings.  Many long-term institutional investors, such as pension funds, will work with hedge funds and private equity funds to deploy their assets under management (AUM) in infrastructure portfolios for these higher yields.

The idea of this paradigm is for the public sector to take high risks at the early stages of project identification, design and construction and the long-term investors to take a revenue stream over 20 or 30 years. To counter this agenda, a Global Campaign Manifesto on PPPswas launched by 152 national, regional and international civil society organisations, trade unions and citizens’ organisations from 45 countries to “sound the alarm on dangerous PPPs.

Megaprojects and PPPs are not inherently dangerous, but when their design fails to produce adequate social and environmental co-benefits and heap risk on governments, they become so.  When risk is heaped onto governments, PPPs tend to increase inequality by privatizing gains and socializinglosses. The World Bank “Guidance on PPP Contractual Provisions” proves how heavily the World Bank proposes heaping risk on governments as well as introducing “stabilization” procedures that would inhibit the right to regulate/legislate in the public interest.  Motoko Aizawa summarizes key critical pointson the Guidance and links to the legal analysisof the Guidance by the firm Foley Hoag. Despite major problems with the “Guidance” – it will be launched in Cape Town, Kuala Lumpur, and possibly Abidjan — unless the process is stopped in order to radically revise it.

In Africa, the “Compact with Africa” report by the Africa Development Bank, World Bank, and IMF (March 2017, Baden Baden) describes how public utilities would be taken “off balance sheet” and user fees and domestic resources would be mobilized, along with aid, to shoulder public risks and, meanwhile, development banks would offer guarantees and liquidity facilities to offset risks to the private sector.

The heavy policy conditionalities proposed by the G7/G20 for each African country participating in the “Compact” include requirements that governments use the World Bank’s “Guidance on PPP Contractual Provisions” which would impose enormous risks on governments while hobbling their capacity to protect the public interest.  The conditions also require that governments develop Systematic Investor Response Mechanisms (SIRMs) to satisfy investor grievances before they reach international tribunals (Investor-State Dispute Settlement).  Concerns for investors are not matched by concerns for citizens who often lack even basic information about the development of projects that will affect their lives.

In light of the heavier push for financialising infrastructure, we have a recent NEPAD announcement which calls for African asset owners to raise the percentage of assets under management for infrastructure from 1.5% to 5%. This strategy is aggressively promoted by Africa’s Continental Business Network (CBN), which issued a communique in September calling for the adoption of this strategy at the AU Summit in January 2018 with a roadmap presented to the African Finance Ministers meeting in March 2018 as well as the G7 and G20 Summits later in the year.

Box 2: G20 compact with Africa

The G20 will measure the performance of each MDB by the extent to which it leverages private investment[7]and, in turn, the MDBs will measure the performance of many countries by how effectively they leverage private investment.

In conclusion, the “Maximizing Finance for Development” approach would create greater reliance on commercial financing and reduce the need for World Bank lending to governments, as would the Trump/Mnuchin push to reduce World Bank lending operations to creditworthy countries (See FT 10/13/17 “US Demands China loan rethink as condition of World Bank cash”). If these approaches are implemented, the World Bank could shrink as the Asian Infrastructure Investment Bank (and others) expand. Potentially the finance available for public goods (stable finance, sustainable development and climate goals, urban infrastructure such as sanitation…) would become even more scarce. Privatization and deregulation would give market players, even the predators, freer rein.

[1]At the final German Sherpa meeting on November 9-10 in Berlin, the Argentine Sherpa will announce the priorities for the 2018 Presidency.  The Germans have chosen 7 topics for this meeting: 1) a review of outcomes of the Hamburg Summit (Trade, Migration, Anti-Corruption, Terrorism, and Digitalization); 2) the Climate and Energy Action Plan; 3) the Global Forum on Steel Excess Capacity; 4) Main Outcomes of the Finance Trade, including the Compact with Africa; 5) G20 Governance; 6) We-Fi/Business Women Leaders’ Taskforce; and 7) Health.
[2]For descriptions of financialization, see an article by Nick Hildyard of Corner House and a blog by the World Bank Group’s Chief Financial Officer.
[4]Communique of the Development Committee, IMF and World Bank, October 14, 2017.
[6]N. Alexander, “Beware the Cascade,” JustGovernance, Boell Blog
[7]See Annex 2 of the Hamburg Principles and the report of the Global Infrastructure Hub to the G20 Finance Deputies.   These two documents established the metrics for the first Joint Report of the MDBs on mobilizing private finance. This sets up a competition among the MDBs in terms of their efficiency and modalities for mobilizing private finance, in general, and for infrastructure, in particular.
Nancy Alexander is the Program Director, Economic Governance & G20 at the Heinrich-Böll-Stiftung North America.
The analysis first appeared here.

Budget Session of Parliament: An Overview

By Maju Varghese

The Constitution of India has accorded the Parliament the supremacy among the three organs of the Union government viz legislature, executive, and judiciary. Parliament not only makes the laws but also enables the citizens to participate in controlling the government. The Parliament applies various oversight mechanisms to ensure transparency and accountability in the system. The two mechanisms available in our country are questions and debates on the floor of the house and various committees which scrutinise the public finances and policies.

The budget session of the Parliament was held between January 31 and April 12, 2017. The session had a recess between Feb 10 and March 8, 2017, during which the standing committees examined the demand for grants from various ministries. The session was convened in the context of upcoming assembly elections and also of post demonetisation distress.

This session was important for many reasons. The budget was introduced on February 1 instead of the last working day of February as per the tradition.  The government claims that advancing the presentation will result in necessary legislative approval for annual spending plans and tax proposals could be completed before the beginning of the new financial year.  According to eminent economist Arun Kumar, early presentation of Budget will help the entire exercise to get over by 31 March, and expenditure, as well as tax proposals, can come into effect right from the beginning of new fiscal, thereby ensuring better implementation.

Besides advancing the date, the government decided from this year to merge Union Budget and Railway Budget.  Earlier, Railway budget was presented first followed by the general union budget.  Another interesting development this year is doing away with the distinction of the plan and non-planned expenditure in the budget-making monitoring difficult on capital infusion in developmental planning.

The budget session held 29 sittings for 178 hours in total in which 24 bills were introduced, and 23 bills were passed.  Members raise 560 starred questions and 6440 un-starred questions during this session.

Some Major debates in the Parliament

The budget session saw the introduction of some major bills and discussions around those.  These are: The Finance Bill, 2017; The Specified Bank Notes (Cessation of Liabilities) Bill, 2017; Bills related to Goods and Service Tax; The Payment of Wages (Amendment) Bill, 2017; the Maternity Benefit (Amendment) Bill, 2017; the Mental Health Care Bill, 2017; and the Employee’s Compensation (Amendment) Bill, 2017.

Analysis of Questions in Parliament

During the budget session, about 6440 un-starred questions and 560 starred questions were admitted in the parliament.  However, the lack of interest in the functioning of the IFIs was evident as just 7 questions asked on the topic in Lok Sabha out of 5203 questions, and 7 in the Rajya Sabha from the total 5064 questions.  The break-ups of the questions are given below.

IFI Name Lok Sabha Rajya Sabha
World Bank 6 3
ADB 1 2
AIIB 0 2
NDB 0 0

Rising NPA’s and Parliament

The debate on Non-Performing Assets continued to be debated in the parliament with many parliamentarians raising the issue through questions. There were about 18 questions asked in the Rajya Sabha and 21 questions in Lok Sabha. K.V Thomas, then chairman of the standing committee on public accounts, said that the current non-performing assets stood at 6.8 lakh crore or 6.8 trillion of which 70% are those of big corporate houses. There were debates on the bad bank and how the banks could be cleared of the mounting NPAs. Interestingly, the same bankers who were asking the state to take care of their bad debts came against debts being waived off for farmers who are facing an acute crisis due to a variety of reasons leading to suicide deaths.

New trend of undermining  democratic institutions

The Parliament is witnessing a new trend of bypassing Rajya Sabha in important matters including amendment of acts where both Lok Sabha and Rajya Sabha is responsible. The introduction of the Finance Bill[1] first with 10 amendment of acts and later to change 40 different acts including Reserve Bank of India Act as well as the Representation of the People Act was according to opposition first in the history of Parliament itself.  This act has robbed the Parliament its right to refer the bill to a standing committee or to scrutinise it clause by clause as to every amendment and the power of Raja Sabha to discuss, propose and incorporate amendment.

The very fact that the finance bill is a money bill gives the option of not incorporating Rajya Sabha view in the bills. All the five amendments passed in the Rajya Sabha was not incorporated into the finance bill, and it was passed as such.  Centre has got 22 Money bills passed in Lok Sabha ignoring the Rajya Sabha, and this has kept a bad president for the functioning of the democracy as such.

Executive legislation through Ordinance rather than legislation

The ordinance is an independent legislation brought out by the Executive; it is the wisdom and authority being exercised by the Executive. An Ordinance can only be done in extraordinary situations when the houses are not in session or a critical condition.  The Ordinance encroaches the right of the parliament in law making.

The government seems to issues ordinance after ordinance despite the fact that this could be brought before the parliament for legislation in the first instance. According to the PRS Legislative, the government in the last three years has promulgated 27 ordinances, including the ones on land acquisition, demonetisation, payment of wages bill, etc. Many of the ordinances were promulgated multiple times. It is interesting to read the observation of the Constitution Bench of the Supreme Court observation in Krishna Kumar Vs State of Bihar delivered on January 2, 2017, that promulgation of ordinances is a fraud on the Constitution and a subversion of democratic legislative processes. The latest subversion is the Banking Ordinance, on which the finance minister refused to share details of the ordinance before Presidential assent.

While there were interesting debates in the parliament this session, it seems some of the issues are not being captured in the discussions.  This includes life and livelihood issues of people who are getting displaced/ affected by development projects, investments of bilateral and multilateral agencies including World Bank, Asian Development Bank, IFC and new development banks like New Development Bank, Asia Infrastructure Investment Bank, etc.  A point to make in this regard is about New Development Bank, a multilateral Bank initiated by BRICS nations.  There seems to be no real engagement of the Parliament in influencing the nature of the Bank given that Mr K. V. Kamat is the chief of the Bank.  The Bank is in the process of developing its policies with regards to the environmental and social framework, disclosure policy, etc in their lending.

The other major lack of oversight is on negotiations in the trade policy.  India is Negotiating a free trade agreement, Regional Comprehensive Economic Partnership – RCEP [2] in the Asia Pacific region.  According to India FDI Watch, “In the past four years and to this day, no text has been made available to members of the public, parliamentarians, civil society or media,”. The trade negotiations are happening under a veil of secrecy where Parliament and parliamentarians are kept in the dark.

Parliament does not have an institutional space like Standing Committee where trade negotiations, Indian investment abroad and Multilateral and Bilateral investments to India and its effects on Indian policy environment is being discussed.  The failure of the Standing Committee to come out with a report on the demonetisation in this session with full facts and figures were a let down on the process particularly when it was announced that it would come out before the end of the budget session.

[1]          The finance bill is for ordinarily introduced to give effect to financial proposals of the Government of India for the following fiscal year and not to make permanent changes in the existing laws unless they are consequential upon or incidental to the taxation proposals.

[2]          RCEP is a 16-nation trade pact that includes the Association of Southeast Asian Nations (ASEAN), along with China, Australia, India, Japan, South Korea and New Zealand, a region that accounts for 46 percent of the world’s population and that produced nearly 30 per cent of global GDP in 2016.