The Dark Side 3

Critical Cases on the Downside of Business

Fernanda Sauerbronn, Pauline Fatien Diochon, Albert J. Mills, Emmanuel Raufflet, Fernanda Sauerbronn, Pauline Fatien Diochon, Albert J. Mills, Emmanuel Raufflet

• Publisher: Routledge
• Year: 2017
• eBook ISBN: 9781351269025
• Topic: Business
• Subtopic: Business General
• Index: Business

This third collection of outstanding contributions from the Critical Management Studies (CMS) Division of the Academy of Management (AOM) continues to challenge business practice in ways not tackled by other more typical business case studies.

There is a critical need for business educators to expose students and managers to the multifaceted phenomena of doing business in the twenty-first century; to support critical, reflective moral development; and to reflect and understand the complexities of organizational life. Is the system broken? Is there need for more systemic change? The cases explore a number of critical issues at some of the largest industries and companies in the world, including wealth creation and human rights in mining, the CSR approaches at Coca-Cola, the palm oil industry, and the supply chain at Apple Inc.

Online Teaching Notes to accompany each chapter are available on request with the purchase of the book.

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Part I

Business, community and environment

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1

Compromised livelihoods in Vapi

What needs to be cleaned up in the armpit of India?

Nimruji Jammulamadaka

Indian Institute of Management Calcutta, India

Biswatosh Saha

Indian Institute of Management Calcutta, India

Manisha Goswami

CPR-Namati, India

Bharat Patel

Machimar Adhikar Sangharsh Sangathan (MASS), CPR-Namati, India

Case overview

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Vapi in the western province of Gujarat in India has the longest chemical corridor in Asia with over 1000 industrial units. It also has the notorious distinction of being the most polluted place in India in the assessments of various organizations. In recent years, the impact of industrial pollution has been felt even by the fisherfolk living along the nearby coastline. This case profiles the institutional processes for management of pollution in Vapi in a chronological fashion and examines the delayed emergence of fisherfolk as a stakeholder within this institutional arrangement.

Part A: Introduction

Vapi: December 2015

Vapi, a well-known industrial town in the Valsad district of the western province of Gujarat, India, is located about 20 km from the sea coast and forms part of the approximately 200-mile industrial belt in Gujarat running from Vapi to Ahmedabad. The belt has generated immense wealth for India. Gujarat produces around 6600 types of chemical products and accounts for an 18% share in India’s chemical exports and over 80% in dyes and intermediates’ production. The chemical sector in Gujarat has 11,302 units, (Micro- 6376, small- 1933, medium- 1206, large- 1787) which employs 120,000 people with an annual production of 420,000 metric tonnes valued at Rs 62.73 billion.¹ Vapi is an important zone of this chemical production. A stretch of approximately 21 km around the town of Vapi is dotted with over 1000 chemical companies of various sizes. Most of these factories are located within the Gujarat Industrial Development Estate (GIDC) at Vapi. The chemicals manufactured here cater to both domestic and export markets. The Vapi stretch is the longest chemical industrial corridor in Asia. In 2015, Vapi Industries Association (VIA) counted about 1500 industrial firms in its membership, most of which were small and micro enterprises. About 70% of the industries in the industrial estate are engaged in the manufacturing of chemicals, dyes & dye intermediates, pigments, pesticides, and pharmaceuticals. Out of this, approximately 600 units are manufacturing a wide range of chemicals for industrial and agriculture sectors. The township represents an investment of Rs 20 billion and generates exports worth Rs 2 billion per annum.²

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An unmistakable stench welcomes one into Vapi. Over the years Vapi has earned the reputation of being one of the most polluted industrial stretches in the world, with its air, water and ground deeply contaminated.³ This has earned it another epithet, ‘the armpit of India.’’ It has been consistently ranked among the most polluted places in the world during the last few years mainly due to its poor air and water quality. A quick look at Vapi on Google Earth shows colored water in the two rivers Daman Ganga and Kolak which flow through the municipal limits of Vapi. While the river Kolak flows through the northern end, the river Daman Ganga borders the southern end of Vapi. Another stream, the Bil Khadi, lies near the GIDC and flows into the Kolak river. Both these rivers join the sea at the coastline which is about 20 km from the municipal limits. The pollution at Vapi has impacted both agriculture and the sea coast. Even the fishing communities on the coast are now suffering from the impact of pollution.

Part B: Vapi – beginnings

GIDC Vapi

During 1967–1968, the Gujarat Industrial Development Corporation (GIDC) established a 1140-hectare industrial estate that could accommodate about 1500 chemical industries at Vapi. The estate was developed over four phases. Up to 70% of the estate was dedicated to chemical industries such as dyes, pigments, pesticides and pharmaceuticals; 30% was allocated to paper-mills, plastics, packaging and small engineering. In 1971, the Vapi Industrial Association (VIA) was formed to cater to the needs of the industries at GIDC Vapi and to protect their interests.⁴ Industrial activity at Vapi pre-dated any pollution management efforts in India. Initially the effluents of the industries were simply pumped underground into the soil or dispersed into open drains which flowed into the Daman Ganga and Kolak rivers.

After the United Nations Conference on the Human Environment in Stockholm in June 1972, India enacted different environmental legislations. The Water Pollution Act was enacted in 1974. After this the institutional set-up for monitoring pollution was created in the form of the Central Pollution Control Board (CPCB). The CPCB operated under the auspices of the Ministry of Environment and Forests (MoEF), Government of India. The CPCB in turn had provincial level offices. Thus the Vapi GIDC came under the jurisdiction of Gujarat Pollution Control Board (GPCB). The provincial level GPCB office at Gandhinagar issued licenses, consent to operate and prescribed permissible standards. This office was responsible for the implementation of up to 20 different legislations pertaining to the environment. The regional offices of GPCB within the province took up other activities such as periodic monitoring. The pollution monitoring organization was therefore a decentralized organization (See Exhibit 1 for structure, also refer to http://www.gpcb.gov.in/ for further details about GPCB functioning).

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Pollution at Vapi

In May 1989, for the first time the Central and State Pollution Control Boards undertook an exercise to identify critically polluted areas in India. Their list had 24 names including Vapi.⁵ It was then decided by the CPCB that a comprehensive, time-bound programme would be established for these areas.⁶ In the interim, in 1992, a public interest litigation (PIL) (See Exhibit 2 on PIL) was filed in the Gujarat High Court at Ahmedabad by advocate Ajit Mehta complaining about the increasing levels of pollution at Vapi. The Court then ordered the closure of the polluting industries. The Court also ordered that drinking water be supplied in the said areas by tankers, since ground water was contaminated and unfit for consumption.

In the aftermath of this 1992 crisis, the government of Gujarat set up a special High Power Committee in 1993 to suggest an approach which safeguarded the interests of the small scale industries (which formed a majority of the factories) at Vapi, while addressing the needs of the environment. The Committee recommended implementation of the Common Effluent Treatment Plant approach (CETP) (See Exhibit 3 on CETP) to treat the effluents and manage water pollution. The VIA and GIDC commissioned another environmental organization called NEERI to assess the feasibility of setting up a CETP.⁷

By the time the CETP became operational, pollution of the Daman Ganga and Kolak rivers and their feeder streams had become a critical problem. And in 1995, a writ petition was filed in the Supreme Court by an NGO Research Foundation about water pollution in Gujarat and Madhya Pradesh. The Supreme Court set up a monitoring committee to study the situation and submit their recommendations to the Court. The case however is still pending.

Vapi CETP

The work for setting up the CETP started in 1993 and in 1997, VIA took over its operation. VIA formed a separate organization named Vapi Waste Management Company (VWEMCL) to look after the management of CETP.⁸ VWEMCL was managed as a not-for-profit entity with industrial units who took membership in VWEMCL electing most directors on the board. The estimated capital cost of setting up the CETP was Rs 260 million. Of this, 20% was shared by 650 member industrial units in VIA. Another 58% was through a term loan based on World Bank financing and the rest was a subsidy from the government of Gujarat and the government of India. The cost of running this CETP was about Rs 5 million per month. The running costs were collected from member units every three months according to the water flow. The plant initially had a capacity of about 55 million litres. Inlet standards, based on the Biological Oxygen Demand (BOD) and Chemical Oxygen Demand (COD), were set for the quality of effluents being discharged by the industries into the CETP. CETP discharged the treated effluent in the Daman Ganga river at a distance of about 300 m from the CETP. Further ahead this river met the Arabian Sea. Another drain from the CETP discharged untreated effluent into the river. The Vapi CETP eventually became the largest in Asia.

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Part C: Vapi – pollution continues

Pollution status

An early 2004 Supreme Court monitoring committee’s affidavit stated, “The committee has found in some of these areas that the indiscriminate dumping of hazardous waste due to non-existent or negligent practices together with lack of enforcement by authorities has affected the ground water and drinking water supply which has been consequently damaged. Site inspections at the industrial estate of Vapi, Ankleshwar, and Vadodra in the state of Gujarat . . . . have revealed that the dumping of hazardous waste or their neglect has resulted in total unavailability of ground water supply.”⁹

The affidavit added that not much improvement could be found even after the 2001 recommendations submitted by the committee to the Court. They had urged the Court to direct the respective provincial governments in this regard. It also laid out recommendations for improving the ground and drinking water situation. The Court took cognizance of the report and recorded that “ . . .due to indiscriminate dumping of hazardous waste due to nonexistent or negligent practices together with lack of enforcement by authorities the ground water and therefore drinking water supply have been affected/damaged.”¹⁰ The Court also ordered the sealing of all contaminated wells and bore wells due to the public health risk they posed.

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Several review meetings followed betwee...

Table of contents

• Cover Page
• The Dark Side
• praise
• Title
• Copright
• Contents
• List of Contributors
• Introduction – Dark Side Series: an Encouragement to Revisit Dominant Capitalist Models
• Part I: Business, Community and Environment
• Part II: Working Conditions and Labour Relations
• Part III: Gender and Power
• Part IV: Management, Technology and Education