Business disruption in India: Tilting at windmills

Updated: September 20, 2021 1:27 PM

It is time the Legislature in India starts recognising the rights of the silent majority who are often caught in this crossfire of bandhs, protests, riots and are unable to earn their livelihoods.

workplaceWorldwide the legislature has recognised the irreversible impact these disruptions are having on the economy of the country and have attempted to addresses the concerns of business on this front. (Representational image: IE)

By Abhinav Mukerji,

Infosys, one of the largest tech companies founded in India, now a global giant with more than 40 years of experience, operations in 50 countries and employing 259,619 employees, with a total revenue of US$13.56 billion in financial year 2020-21, is now part of the “tukde-tukde gang”. All because it has been unable to resolve technical glitches on tax portals it manages for the government.

Previously thousands of cell towers belonging to Reliance Industries backed Jio were damaged by protestors during the peak of the farmer protests against the farm laws on the basis of rumours that the company was planning to enter the contract farming space and stood to benefit from the “Farm Laws”. These incidents compelled Reliance to issue a denial of such plans and it had to approach the Courts through petitions seeking restraint orders to protect its infrastructure. In the Court filings the company stated that it would continue to procure farm produce at Minimum Support Price.

Sterlite’s copper smelting unit in Thoothukudi, Tamil Nadu was shut due to public protests over alleged environmental damage. The Adani Group, alleged to be beneficiary of projects which allegedly destroy “Magical Mollem”, Goa’s green heart, comprising 240 sq km of India’s Western Ghats, is also the target of protests along with the Jindal group in Goa. The culture of protests against business organisations is not unique to India alone. For instance, on December 17, 2020, a group of mainly Indian American protestors protested outside Facebook’s Menlo Park headquarters. A few days later, demonstrators protested outside Facebook’s Vancouver office with similar posters. “No Farmers No Food,” read few of the signs. The reason for the protest was that Facebook had taken down pages protesting India’s new agricultural acts.

Closer home we have all suffered due to disruptions caused by protests resulting in road blocks, suspension of internet, demonstrations against certain products, companies, etc. While business has traditionally factored in disruptions to production as a result of regulatory issues, court processes, labour matters, a new challenge has emerged over the last few years of business becoming victims of political and other kinds of protests. These protests once they gain traction have resulted in substantial loss of investment, loss of economic opportunities, unimaginable loss to the idea of ease of business in the country and sometimes unfortunately loss of lives. One of the most famous cases is of the Tata Group proposed factory in Nandigram which became a victim of political protest and caused not only loss to the business group but also substantially dented the business friendly image of the State of West Bengal. Another incident relates to POSCO, the fourth largest steel making company in the world, which was forced to terminate its MoU with the Odisha Government for a Steel Power Project in the year 2017. The economic loss due to such incidents is unimaginable. For instance ASSOCHAM estimated a daily loss of Rs 3,500 crores due to farmers’ protests to the economies of Punjab, Haryana and Himachal and other interconnected economies at the peak of the protests.

In the United States in the year 2020, the protests caused by the death of George Floyd became the first civil disorder catastrophe event to exceed US$1 billion in losses for the insurance industry. Estimates as of February 2021 available with the World Economic Forum, peg it in excess of US$2 billion so far and could still go higher, having affected numerous parts of the United States.

Worldwide the legislature has recognised the irreversible impact these disruptions are having on the economy of the country and have attempted to addresses the concerns of business on this front. In recent years, lawmakers in at least 15 states in the United States have responded to protests against incidents of police brutality and laying of oil and gas pipelines by increasing penalties for unlawful protest activity. Tennessee lawmakers recently increased penalties for a range of offences such as vandalism and assaulting workers, and made it a felony to camp out on the grounds of the State Capitol, which Black Lives Matter protesters did for many days during their protest. The United Kingdom already has a slew of measures to rein in protestors who could disrupt business such as the Public Order Act 1986, Highways Act 1980 – obstruction of the highway-UK Criminal Damage Act 1971, Crime and Disorder Act 1998, Police Reform and Social Responsibility Act 2011, etc

One of the direct legislations on this subject is The Workplaces (Protection from Protesters) Bill – locally known as the “anti-protest” bill that was passed by the Tasmanian parliament in 2014 (Australia) and sought to be amended in 2019 which amendments are still to be reintroduced in the house. The law was introduced as part of the government’s intention to “re-build Tasmania’s forestry industry”. That is currently a source of controversy and division in Tasmanian society.

To achieve its professed aim of workers having a right to go to work, the government has committed itself to a legislative agenda that includes amending the uniform Defamation Act 2005 to allow large companies to sue protesters; defunding community and conservation organisations amongst others. In the words of the Hon’ble Minister who introduced the bill:

“The Bill gives effect to a fundamental principle: that our laws should protect people who are undertaking lawful business activities. This means that people should be able to earn a living without trespassers interfering with their work, threats being made in an effort to shut down their businesses, or the roads they use being obstructed in order to stop their business operations.”

Perhaps it is time the Legislature in India starts recognising the right of the silent majority who are often caught in this crossfire of bandhs, protests, riots and are unable to earn their livelihoods be it working with a company, entrepreneurs, daily wage workers or street vendors and other small shop owners. The right of corporations to carry out business in a stable and regulated business environment must also be recognised. If a project is wrongfully stalled or lawful business activities are impeded the business should not suffer. Allowing economic activity that is the fulcrum of nation building to be hurt in this fashion ultimately hurts all of us after all it is the economy which pays the price and impacts nation building for in the words of Adam Smith “Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice.”

(The author is Additional Advocate General, State of Himachal Pradesh, Standing Counsel State of Bihar, Supreme Court of India. Views expressed are personal and not necessarily that of Financial Express Online)

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