Lessons of Empire: India, 60 Years After Independence

CorpWatch : Lessons of Empire: India, 60 Years After Independence

by Nick Robins and Pratap Chatterjee, Special to CorpWatch
August 14th, 2007

Two villagers who left their mud and wood huts last month to travel to London — Kumuti Majhi and Phulme Majhi — were a stark contrast to the 212,000 wealthy Indians who visited Britain last year on shopping expeditions where they outspent Japanese tourists. The villagers’ mission, rather than the acquisition of designer clothing or the latest electronics, was to try to save the livelihoods of their small tribe that grows millet, fruit and spices in the lushly-forested Niyamgiri hills in eastern India.

Niyamgiri, the Sacred Mountain of the Dongaria Kondhs
Niyamgiri Hill is located in the Lanjigarh block of Kalahandi district. It is a scheduled V area, and is inhabited by Dongaria Kondhs, a primitive tribal group. Niyamgiri hills belong to the Eastern Ghats, and in-situ reserves of metallurgical grade bauxite have been reported from this area. More than 75% of the Niyamgiri hills’ landmass is covered with dense forests and it is one of the biodiversity hotspots of Eastern Ghats. The northernmost hill of this hill country is proposed to be mined by Vedanta Alumina Ltd. who is also setting up an alumina refinery at the bottom of the hill by displacing local Kondh tribals. The proposed mining and refinery has led to local resistance as well as opposition by environmentalists. A case against the Vedanta Alumina Ltd. is pending in the Supreme Court, where the petitioners have indicated that massive irregularities have taken place in the proposed project, specially on the environmental aspects.

On August 1, 2007, the Majhis spoke out at the annual general meeting of Vedanta Resources PLC, a British multinational that is poised to dig a new bauxite mine that threatens the village of Jaganathpur. While Vedanta is incorporated in Britain, it is owned by Anil Agarwal, the world’s 230th richest man according to the Forbes 2007 list, a former scrap metal merchant who was born in eastern India. (See Vedanta Undermines Indian Communities, by Nityanand Jayaraman.)

The timing of the Mahji’s trip to Britain and the protests back in India have a much wider significance. 2007 is marked by a trinity of anniversaries that recall India’s conquest, first struggles and eventual liberation from British rule. On August 15th, India celebrates 60 years of independence. Earlier in the year, commemorations took place for the 150th anniversary of the great rebellion against British rule in 1857 -– known in the UK as the ‘mutiny’ and on the sub-continent as the ‘first war of independence.’ This trinity of historic milestones is completed with the 250th anniversary of the pivotal battle of Plassey in June 1757, when the private army of Britain’s East India Company (which was often referred to simply as the “Company”) defeated the forces of the Nawab (ruler) of Bengal (in eastern India), ushering in first corporate and then imperial domination.

It is this legacy of collusion between global corporations and the expansionist state that makes this year so poignant and full of enduring lessons. Its history provides timeless lessons on how (and how not) to confront corporate power with protest, litigation, regulation, rebellion and, ultimately, corporate redesign. Many of today’s corporate struggles are prefigured in the resistance to the Company’s rise to power. Again and again, “the return of the East India Company” is used as a catch-phrase to describe the recent influx of multinationals into India, whether global mining corporations or foreign business more generally.

And the Mahji’s journey follows in the footsteps of others who have travelled to London to seek redress from corporate abuse. In August 1769, for example, two Armenian merchants, Johannes Rafael and Gregore Cojamaul arrived at London’s docks. The two were rich men and had made their fortunes in India’s most prosperous region, Bengal. However, Rafael, Cojamaul and two others had been summarily arrested by the Company’s chief executive in Bengal, Harry Verelst, who then held them for more than five months under guard. When they were released, they found that the Company had pressured its puppet, the Nawab of Bengal, to change the rules of the game and ban all Armenians from the Bengal market. Sailing around the world to where the Company was headquartered, Rafael and Cojamaul appealed to its board of directors, complaining of their “cruel and inhuman” treatment.

The striking continuity of protest over the centuries is largely buried in today’s celebration of India’s surge to economic prominence. Tata’s acquisition of Anglo-Dutch steel group Corus earlier in the year has been seen by many as symbolizing the end of Britain’s era of industrial supremacy. Tata had already bagged the UK’s iconic tea blend, Tetley, and its automotive arm may be lining up a bid for Land Rover. Writing recently in the Financial Times, Malvinder Hohan Singh, the chief executive of Indian pharmaceutical company Ranbaxy, caught the mood: “500 years ago, a company was formed in London that directly led to British rule in India [and] there appears to be some concern that there is evidence of a reverse trend.”

This theme of reversal has also influenced India’s popular media, most strikingly in a TV advertisement for Rajnigandha pan masala. Set in London, the ad shows an Indian tycoon stopping his car in front of the East India Company’s headquarters and announcing to his secretary that he wants to buy the firm: “They ruled us for 200 years, and now it’s our turn.”

But while the media celebrates India’s rise as the new economic emperors, they would also do well to reflect on the history of the world’s first major multinational.

Down with the East India Company!

Established on a cold New Year’s Eve in 1600, Britain’s East India Company is unarguably the mother of the modern corporation. In a career spanning almost three centuries, the Company bridged the mercantilist world of chartered monopolies and the industrial age of corporations accountable solely to shareholders. The Company’s establishment by royal charter, its monopoly of all trade between Britain and Asia and its semi-sovereign privileges to rule territories and raise armies certainly mark it out as a corporate institution from another time. Yet in its financing, structures of governance and business dynamics, the Company was undeniably modern. It may have referred to its staff as servants rather than executives, and communicated by quill pen rather than email, but the key features of the shareholder-owned corporation are there for all to see.

Beyond its status as a corporate pioneer, the sheer size of its operations makes the Company historically significant on a global scale. At its height, the Company’s empire of commerce stretched from Britain across the Atlantic and around the Cape to the Gulf and on to India. From its headquarters at East India House on London’s Leadenhall Street, the Company managed an extensive import-export business. Trading posts were established at St. Helena in the mid-Atlantic, where Napoleon drank Company coffee in exile. ‘Factories’ were also established at Basra and Bandar Abbas in the Middle East. But it was in India that the Company’s impacts were most profound. Some of India’s major cities grew on the back of the Company’s trade, not least Bombay (Mumbai), Calcutta (Kolkata) and Madras (Chennai). Beyond these coastal ports, the Company established a huge land empire, first as an opportunistic quest for extra revenues and later as an end in itself.

Always with an eye to the share price and their own executive perks, the Company’s executives in India combined economic muscle with its small, but effective private army to establish a corporate state across large parts of the sub-continent. Plassey was the turning point when the Company’s forces defeated the Nawab of Bengal and placed its puppet on the throne.