Logjam

Logjam

Unquiet woods

With the ban and without access to forest revenue, Northeast economy is in doldrums

THERE is an unusual quietness in the forests of India's northeast, arguably the country's best timberlands and one of the world's biodiversity hotspots. Brought about by the Supreme Court's blanket ban on tree felling on December 12, 1996, the silence has gained serious undertones over the last few years. For a region that largely depends on forests for economic and livelihood survival, the ban has come short of a death sentence. The economic loss is unimaginable, particularly for poor forest dwellers who form a majority in the seven states - Arunachal Pradesh, Mizoram, Nagaland, Assam, Tripura, Manipur and Meghalaya.

Ask Phok Wang, a 45-year-old farmer from Mopaya Village of Arunachal Pradesh's Tirap district. In October 1996, he was gearing up for his annual logging operation when the apex court gave its ruling. It is five years now and he is still trying to redefine his life. He has switched over to tea cultivation to fill the economic void. But S K Rathore, a timber merchant from Punjab, hasn't been so lucky. He invested Rs 25 lakh in an entire hillock in Tinsukia district of Assam. Now he runs a dhaba near Kaziranga National Park in Assam. The forest in the silhouette has become a distant economic dream.

Financial losses
The economic impact of the ban has been quick and telling. In Arunachal Pradesh, the ban resulted in an almost 84 per cent drop in the state's revenue - from Rs 49 crore in 1995-96 to Rs 7.9 crore in 2000-01. The total contribution of the forest sector to the state domestic product declined from 12.2 per cent in 1994-1995 to 3.9 per cent in 1999-2000 (see graph: Cut to size). "The ban has severely affected us as we are largely dependent on forests," says Mukut Mithi, Arunachal Pradesh's chief minister. "There is no alternative to make up for this economic loss," adds Lalit Sharma, the chief secretary of Arunachal Pradesh. Similarly in Manipur, the revenue from forest products declined from Rs 2.9 crore in 1996-97 to Rs 0.06 crore in 1999-2000. And more than the loss to the state exchequer, it is the loss of employment that is alarming.

In Meghalaya, more than 200,000 people (about 11 per cent of the state's population) are affected, either directly or indirectly, says H S Lyngdoh, the state's former forest minister. The Nocte Timber Corporation in Tirap district of Arunachal Pradesh once employed around 1,500 people. Now the premise serves as a camp base for the Central Reserved Police Force (CRPF). A few metres away is Narottam Udyog, which is now occupied by the Gorkha Rifles. The displaced workers no longer get their salaries, though the judgement ordered the employers to continue paying the workforce even after the ban. "I have not received my salary since July 1997," says N Rai, an accountant with the Narottam Cooperative Industries Limited (NCIL). In Assam's Tinsukia and Dibrugarh districts, mill owners have terminated the services of their employees, leaving the future of more than 1 million people at stake.

For the Arunachal Pradesh Forest Corporation Limited (APFCL), once a much-envied corporation, the financial losses have been staggering. Its cash reserve declined from Rs 28 crore in 1997 to just Rs 8 crore in 2001 and the future of its 400 employees is now at stake. In a report submitted to the Supreme Court in May 1997, the Meghalaya government stated that 5,396 people employed in wood-based industries were directly affected by the ban.

Forest insurgency
While the forest bureaucracy supports the ban, the political leadership is opposing it. Arunachal Pradesh chief minister, Gegong Apang, warned that unemployment would lead to insurgency in the state. In fact, most states have petitioned the Supreme Court linking unemployment with insurgency. "It is easy for the unemployed to get involved in kidnapping and extortion," says Zoramthanga, Mizoram's chief minister.

The ban may have put an end to timber felling, but the displaced youth are taking to anti-social activities. Timber logging was an easy way of making fast money and many youngsters were involved in this trade given the huge volume of illegal timber trade in this region. Says S R Mehta, Arunachal Pradesh's principal chief conservator of forests, "Incidents of illegal felling in the area has increased." Local people allege that timber is being smuggled to neighbouring Myanmar and Bangladesh.

The ban has also had a major impact on timber trade, as the Northeast accounts for one-fourth of the country's forests and half the domestic timber trade. Over 90 per cent of the production units have been shut down. Now the price of wood materials in Delhi has increased by 20-30 per cent on account of the shortage.

As a result, companies from Malaysia, Myanmar and Nigeria are entering the Indian market. Earlier, imported timber accounted for only 10 per cent of the timber supply in Delhi. "Now it is almost 90 per cent," says Narendra Gupta, president of Paharganj Timber and Plywood Association. In Nangloi and Kirti Nagar, Delhi's biggest timber market, around 50,000 workers engaged in the business have been affected. Public anger seems directed towards the courts. But the real culprits, few realise, are the Northeast governments.

The accused

Governments clinically interpret the ban to make space for the forest bureaucracy, alienating people from their own habitats

AS PUBLIC anger mounts against the court order, what comes out clearly is that state governments are pulling all stops to derail a well-intentioned ruling. The relentless tirade of the state governments against the Supreme Court for robbing away people's livelihood is just another ruse to hide its own incompetence - both in recognising the importance of forest livelihood and also in acknowledging the community's role in managing forests. This is more true in the case of the Northeast region, which has an effective traditional system of forest management through autonomous institutions.

The ruling is an interim one and the ban on felling is conditional to certain rules the court has asked from state governments. This means if the conditions are met, felling can start. The apex court's conditions are as simple as just making a few corrections in the official books. The government's cry for people's livelihood is more to do with its own ineptness than anything else.

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The accused

Reinforcing laws
The court acted methodically. First, it asked states to define forests. Interestingly, a clear definition of forests is not given in the existing legal instruments - Forest Conservation Act (FCA), 1980, Forest Conservation (Amendment) Act, 1988, and the Indian Forest Act, 1927. Under Section 2 of the FCA forests are defined as "reserved forest, protected forest or any area recorded as forest in the government record". The court also stated that forest should be understood according to its dictionary meaning - "a large area of land thickly covered with trees, bushes, etc". Then it ordered every state to form an expert committee, which would identify forests, irrespective of class or ownership; all wood-based industries and assess the sustainability of forests.

A more detailed verdict ensued on January 15, 1998, which gave instructions on working plans, industrial zones, disposal of felled timber, transportation (see box: Court's log). Significantly, it ordered a complete ban on the permit raj in Arunachal Pradesh, a system that was gaining notoriety (see box: Abuse). The court also ordered all wood-based industries to be shifted to industrial zones or face closure.

The Supreme Court order, in a way, has nothing radical about it. It is merely about enforcing the laws laid down by the government. Ban on tree felling without a working plan approved by the Union ministry of environment and forests (MEF) already exists under the Forest Conservation Act, 1980. However, hardly any state implements this provision. The ruling only reinforces the formulation of rules before any felling. Though private plantations and social forestry programmes, were excluded from the ban in the first ruling, the court brought these areas in the ambit of the ban in its next ruling.

But state governments have left no stone unturned to derail the court order. They have been painfully slow in formulating the working plan, mandatory for carrying out felling. Only 14 per cent of the plans have been completed since the last five years and some states still do not have a single working plan in place, according to Pramod Kant, regional officer-in-charge with MEF. Till October 2001, Manipur and Mizoram did not have even a single working plan in place. Similarly in Nagaland, where timber is the main source of livelihood for local people, the state formulated working plans for just 0.1 per cent of forests (see graph: Not working in the Northeast!). This is despite MEF setting up a regional centre in Shillong for easy access.

Finding fault
State governments are blaming the managers of community-managed forests for their failure of formulating working plans. The Meghalaya government has said that identifying forests was difficult as areas outside the reserved forests were under the control of the autonomous district councils. It also cited lack of proper forests records. However, its own track record of managing the three per cent state-controlled reserved forest is abysmally poor. In 1995, a major felling scam worth Rs 400 crore came to light, which involved several officials and politicians. The then state principal secretary termed it as a 'systematic collapse'.

Instead of addressing the issue of sustainability of forests, governments are playing up the economic losses. In an attempt to dilute the order, the Meghalaya government has urged MEF to recognise all unregistered, community or individually-owned forests as plantation forests and to exclude it from the purview of a working plan or scheme. Instead, the order could have been used to encourage local people to make their own working plans and build confidence among communities that working plans would not mean an indirect takeover of people's forest by the government.

The order is also being misinterpreted to bureaucratise forests. Since the order asks for a clear definition and identification of forest, some state governments see this as an opportunity to gain control over large areas in the Northeast that remain 'unclassed' even today. Forest officials, who want to do away with 'unclassed' forests, see this as a chance to alienate local people by claiming ownership, which is otherwise under the control of the community.

Angered by the way governments are trying to frustrate the implementation of the ban, the Supreme Court is beginning to crack the whip. On February 18, 2002, the apex court slapped a fine of Rs 5,000 on the Union government for not framing a comprehensive scheme regarding forest land approved for deforestation. Similarly, state governments too are being pulled up for misguiding the court (see box: Operation hoodwink). The axe falls
For the Northeast, the order comes at a time when the region is losing 31,700 hectares of dense forest every year. The illegal timber seized from the entire northeast region is estimated to run into several hundred crore per year. In the forests and depots, there is about 0.12 million cum of such illicit timber. Since most of the timber stock is illegal, it is impossible to prepare an inventory, a process mandatory for its disposal, which consumes time and money. In some cases, it was feared that new timber were being used to replace old stock.

The court also unmasked the rot in the forest bureaucracy, which is popularly known as the 'corrupt band'. "Forests were plundered and everyone was out to make a quick buck," says Asham Borang, a senior scientist at the State Forest Research Institute in Itanagar. The permit system, introduced to help the local people, became an instrument for siphoning huge number of trees out of the region by influential politicians and timber traders. The sawmills, mostly owned by influential politicians, used to continue operations long after their quota were over. The number of sawmills in Arunachal Pradesh increased by 400 per cent from 1983 to 1994. In some places, sawmills were located deep in the forests, making it inaccessible for forest officials.

Felling was so rampant that the HPC stated that tropical wet evergreen forest of Debang valley in Arunachal Pradesh was almost denuded. The HPC blamed the check posts located at the border of the autonomous councils for the increase in timber trade. These check posts are manned by private individuals, selected according to an auction system, whereby those agreeing to pay the more got the right to man them.

Benefiting no one
Though a majority of people depend on forest for their livelihood, it is the power brokers, politicians and government officials who benefit the most from timber trade. According to North East Sun, a fortnightly magazine published from Delhi, only one per cent of the timber from the region is utilised by local communities. The high power committee (HPC), set up by MEF to oversee the implementation of the court order in the Northeast, also endorses this view. It is the fly-by-night traders and influential politicians who plunder forests. Hillocks are reportedly leased to traders at throwaway prices. "Local people, who work for these traders, are content with meagre wages," says Borang.

Some state governments have been petitioning the court to lift the ban by using the livelihood issue to further their own interests. The truth is they want to protect their ongoing contracts with the Union government. In Meghalaya, three companies have been exempted from the purview of the ban as these had ongoing contracts with the government-run ordinance factory, currency press and the northeastern coalfields. Not surprisingly, the local people operate none of these companies.

The effort to undermine the court order and gain control over community-managed forests also underplays the role of the land ownership system that is unique to the region. Since the system has been in place for generations, local people refuse to acknowledge a different working scheme. "We will not follow the working plan scheme, but will appeal for the continuation of the United Khasi-Jaintia Hills Autonomous District (Management and Control of Forests) Act, 1958," says K K Phanbuh, chairperson of the Association. The Act classifies forest in Meghalaya into nine classes and prohibits felling and export of undersized trees whose girth is less than 1.3 metre at breast height. "Since the private land owners are aware of the good returns, they will preserve it," adds Phanbuh. This is where the solution lies: to use people-managed forests as a tool for development.

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The verdict

THE ban comes at a time when the region's economy is in an inertia and is desperate for an economic miracle. The post-ban realisation of the economic potential of forests and the apex court's instruction to measure the sustainability of forests comes as a reminder of the development model that the region needs to adopt.

In search of economic prosperity, the region has landed up in a deadly financial mess from where it doesn't have money to run even for a few weeks. Heavily dependent on the Union government's doles as special status, its sustainability has come down to such a level that even for basic commodities like cereals, pulses, meat and eggs, it spends Rs 1,000 crore per year in imports. While its per capita plan outlay is highest in India, in development monitor, it ranks below Bihar.

For a remote region with fragile ecology and poorly developed infrastructure, there is limited scope for promoting a sustainable, yet modern economy. The most viable option is from the rich biodiversity, which the region is abundantly blessed with.

Forests are a major source of livelihood for the indigenous population of Northeast. Over the years, communities have managed to incorporate their traditions into effective forest management systems. For instance, in the United Khasi Jaintia Hills Autonomous District (Management and Control of Forest) Act, 1958, in Meghalaya, forests are protected by a unique system. Forests are divided into nine categories, where land is preserved for sacred groves, watershed and so on. Similarly, in Mizoram, village councils efficiently manage more than 40 per cent of the forests. To safeguard these social and cultural institutions and traditional rights over land and forest, states have been conferred with special powers under the Constitution - they can enact laws for land and forests.

Despite their enormous potential to generate wealth, governments have undermined and neglected these land management systems, leading to stagnation in the rural economy. This was clearly pointed out by the S P Shukla Committee, formed by the Union government, to evolve strategies for developing the economy of the region. The Committee is the region's most comprehensive development planning exercise ever done. "Traditional institutions have been carelessly bypassed for newer structures that are perhaps not always suited to the region," said the report.

Plans on paper
Many plans and recommendation have been mooted to the economy of the region. But none have taken off. One reason is that some proposed development models do not suit the region. As the Shukla committee report pointed out in Transforming the Northeast: "All-India norms and patterns of administration and planning have been extended to or have sometimes been sought by these units only to prove an embarrassment." It further suggested the need for change in basic planning pattern from 'planning for the Northeast' to 'planning with the Northeast'.

Planning with Northeast means planning the economic use of the natural resources. For instance, bamboo, aptly termed the 'green gold', is abundantly found in the Northeast from which high value products can be developed. Out of the estimated 13.47 million tonnes (MT) of bamboo supply in the country, the Northeast region alone contributes to 8.11 MT. Bamboo in its raw form is estimated to generate an amount of Rs 5,000 crore in the northeastern region alone. According to a study by the Cane and Bamboo Technology Centre in Assam, a value addition of two times can create an industry worth Rs 10,000 crore. So far, bamboo has been treated as a low value addition product, mainly due to the lack of awareness among the business community about its modern uses. Forest value
There is a belated realisation in a few Northeast states of this enormous potential. States like Mizoram, Arunachal Pradesh and Nagaland are showing interest in the economic exploitation of resources."Bamboo will totally revolutionise the state's economy," says Zoramthanga, Mizoram's chief minister. "Once it is processed, it can totally substitute the timber and I feel it is much better than timber itself." Tripura and Mizoram are out with bamboo policies, including its market potential and its benefits for the local people, which is necessary for large-scale economic progress. "A local based economy can generate employment and this can also lead to peaceful atmosphere in the Northeast region," adds the chief minister.

Similarly, Arunachal Pradesh, the most vocal opponent of the ban, now plans to use its forest resources. "We have plenty of medicinal plants, which can be marketed and also tourism can fetch money," says Mukut Mithi, the state's chief minister. "We are also rich in cane and bamboo and have banned the export of cane in its raw form so that the local industries can benefit."

But words have not matched with long-term policy implementation. For example, at a conference of Confederation of Indian Industries (CII) to develop Northeast states in 1995, only two chief ministers turned up. The project presented a three-pronged approach - geographical, industrial and cultural -for the development of the region. The plan included the development and marketing of handicrafts, agro products, opening of borders with neighbouring countries and the promotion of tourism. Nobody knows what happened to the proposal.

Similarly, the Northeast council - established to plan the region's development keeping in mind its unique socioeconomic status - has become a platform for interested fights over fund allocation. The Shukla Committee report aptly observed that modernisation and development should not "subvert the statutory features of the social collections operating at the grassroots in tribal areas, nor destroy biodiversity through indiscriminate propagation of uniform varieties for the short term profit of the corporate sector". State governments have long forgotten the Shukla Committee recommendations.

At the crossroads

As the debate continues, the Northeast must stamp the decision: log out of forest bureaucracy and log in to local-based prosperity

THE big question is whether the ban has boomeranged. "People are now resorting to illicit activities by burning pine trees to produce coal," says H S Lyngdoh, the former minister of forest of Meghalaya. At the same time, many see no reason for preserving forests if they can no longer derive any financial benefit from it. According to Lyngdoh, jhum fields have increased, though there are no clear estimates. Jhum, or shifting cultivation is blamed for large-scale deforestation in the region. Says P S Ramakrishnan, school of environmental sciences in Jawaharlal Nehru University: "Imposition of the ban will not prove successful unless a sensible alternative to jhum cultivation is introduced." He stated that the Supreme Court imposed the ban with good intentions but many crucial issues have to be dealt with first.

On the other hand, the ban has not affected some from continuing their illegal ventures. As recently as 2000, the Special Investigation Team constituted by the MEF conducted random inspection and confiscated as many as 202 wagon loads of timber near Tinsukia and Delhi. Of this, substantial amount of illegal timber had no hammer marks. Fake, tampered and expired transit passes were also used. The Assam forest department claims that it is not involved in felling activities except for the dead and dry timber and the raw material for its 427 timber-based industries was from the seized illegal timber allotted to these factories. However, the HPC report stated: "This means that the forest department indirectly encourages illicit felling on a big scale."

Though the intensity has declined considerably the illegal operations continue. Many wagons of timber still pass the North Lakhimpur Rangia junction, daily. "This illegal activity happens right in front of the forest officials, but nothing is done about it," says Gautam Uzir, an advocate. A complaint was filed against the officials, but no action has been taken so far. "Imposing a ban is not enough, there should be strong enforcement and implementation," says Bibhab Talukdar, director, Aaranyak, a Guwahati-based NGO.

Though the restriction has come as a shock to many, it is also been widely appreciated. "The ban should have come three years back," says Wangki Lowang, an MLA from Deomali division of Tirap district in Arunachal Pradesh. Hari Dasan from the State Forest Research Institute at Itanagar in Arunachal Pradesh explains that the vegetation is already regenerating due to the fertile soil condition of the region.

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At the crossroads

Ban blessing
Some people in the region regard the ban as a blessing in disguise. Though the situation was difficult initially, they have ventured into other sources of income. In Tirap district, many people once involved in timber trade have now switched to tea cultivation. Says Mithi: "We are promoting other means of revenue generation like tourism and hydroelectricity." The abundant bamboo cover is also instrumental in providing employment to the numerous skilled crafts workers of the region, though research is still nascent as compared to other south east Asian countries, where bamboo forms the basis of the revenue. According to Kishore Seram, executive editor, North East Sun: "The region should not be just a source of raw material, it should also be a source of finished products." He adds: "If small-scale industries are set up in the region it will generate employment."

Sanjoy Hazarika, senior fellow, Centre for Policy Research, and author of Strangers of the Mist, expresses similar concern: "There is little understanding of the customary laws in the region." He says that there must be appreciation and respect of these customary laws, rather than imposing new laws as the bureaucracy that understands so little about the region. "The best way is to empower local people by recognising their rights."

Most of the states in the region have strong and effective customary laws. In Mizoram, though the forests are officially owned by the state government, around 40 per cent is controlled and managed by village councils. The democratically elected council system, which is similar to the Panchayati Raj, was established more than half a century back. However, these systems are hardly known even in the official circles, says Daman Singh, author of The last frontier: People and forests in Mizoram. "This is quite a loss as Mizoram has much to offer in the current debate over greater devolution of powers to local institutions," says Singh. For policymakers and administrators, it is time to learn from past mistakes, by recognising and upholding the long, tested management practices prevailing in most states of the northeastern region. Instead of playing games with the Supreme Court's well-intentioned orders.

With inputs from Richard Mahapatra

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A case of myopia?

When the time comes to phase out the manufacture of ODS in India, like other developing countries, the country has three options. They can either buy alternative technologies from the West or fund and develop indigenous alternatives or shut shop. Each ODS has a range of substitutes. CFC manufacturers can make the shift to three options: HCFCs, which also deplete the stratospheric ozone layer and which they already produce in their plants in lesser volumes; HFC-134a, a greenhouse gas not yet produced in India, or hydrocarbons, such as cyclopentane, which are the cleanest choice. Producers of other ODS, such as halons and carbon tetrachloride, too have a host of alternatives to look at.

The CFC producers need to be especially careful and quick in their decisions. While their own phase out date is fixed for 2010, production of CFC-based products is banned in India beginning January 1, 2003. The exports markets in other developing countries become crucial for them during the period 2003-2010. But companies in industrialised countries too eye this market. They are allowed under the Montreal Protocol to produce and export a fixed percentage of ODS to developing countries. With Southern companies competing in the same shrinking market, competition is bound to get tougher.

Pontification
Considering that protocol's multilateral fund is supposed to finance technology transfers to industries in developing nations, procuring technology from the West looks the most lucrative option. But accessing technology remains a nightmare. Patents and intellectual property rights (IPRs) over technologies are held by multinationals that either jack up the prices exorbitantly or lay down impossible conditions. They demand domestically owned firms to give up majority equity holding through joint ventures or to restrict exports. Multinationals like Du Pont do not want industry in the South to become their competitor in the international markets.

The North-based multinationals take advantage of the fact that the protocol fund does not cover high costs of buying IPRs. According to a World Bank study, all producers of HFC-134a, an important substitute for the refrigeration and air conditioning sector, for instance, hold at least one worldwide patent for the production and purification process. The patents expire beyond 2010, the date by which developing countries have to complete their phase out of CFC production. The high cost of patented technology, designs and royalties are not covered by the multilateral fund. The idea of North-funded technology remains a pipe dream.

To frustrate any miniscule chance of countries like India securing technology despite the restrictions, the prices are raked up to preposterous levels. In the experience of one Indian company, the price of technology quoted by an MNC producer for HFC-134a was US $25 million, whereas estimates place its actual cost at no more than US $8 million.

The North-based ODS giants naturally are more keen on exporting their finished goods - HCFCs and HFCs - to India rather than part with the technology for a reasonable price. "In the short-term, environmental agreements like the Montreal Protocol make developing countries dependent on imports," says K P Niyati, head of the environment management division at the Confederation of Indian Industry, Delhi. The duplicity of the multinationals has been in evidence right from the beginning of the protocol deliberations (see box: Dubious substitute). Ingenious trap
Faced with the bullying multinationals, the second option for the ODS manufacturers of India is to take funds from the protocol to research and develop indigenous technologies for alternatives. But here too they are caught in a bind that strengthens the North-based companies producing the alternatives. The funds are disbursed for development of technology only if a country commits to never demanding money for the transfer of technology in that sector, even if the indigenous research fails to deliver. The real speak is: the fund does not finance any research for a developing country. If the country wants to break the monopoly gridlock of the multinationals, it does so at the cost of putting at risk its economy.

Despite this, two Indian producers, SRF Limited and Navin Fluorine Industries, have partly funded research into the development of HFC-134a at the Indian Institute of Chemical Technology, Hyderabad. The institute has set up a pilot project and if it succeeds the economic balance could be altered. HFC-134a manufacturing is today monopolised by the US-based Du Pont, UK-based Imperial Chemical Industries and the French mulitnational Elf-Atochem. Meanwhile, some sections of the Indian industry have found that the Montreal Protocol can be milked to their advantage as well.

Sitting pretty
For Indian CFC producers, the Montreal Protocol is a windfall. Consider this: India has secured US $82 million from the fund to phase out CFC production. The production will be gradually reduced from the last year's production of 18,000 MT to nil by 2010. Of the money secured, US $80 million will go to the four producers as 'compensation'. And with the money in their kitty the four have, sources reveal, begun looking at the easy option of producing HCFCs. Though HCFCs are also harmful to the ozone layer, they have been scheduled for phase out by 2040. And the four companies already produce HCFCs. They now need to only upgrade capacities to meet the demand. In such a win-win situation, quite obviously, neither the industry nor the government foresee any problem in the so-called 'transition'. The industry remains quiet and refuses to share information with the public about how the US $80 million of public money is being spent. Public money and public disclosure, they forget, goes hand in hand.

But even if they do shift to HCFC they need to be cautious. Chinese companies are already producing them on large scale and have the edge over Indian manufacturers because the raw material to produce HCFC, fluorspar, is found in China. Indian companies pay a high custom duty of US $50 per tonne of fluorspar imported. "The export market for HCFC-22 has been badly hit because of China's increasing share in it. As a result, there is a tremendous pressure on margins," says W J Samuel, president, Refrigerant Gas Manufacturers Association.

(W)holesome protocol
In its hurry to get what money it can from the fund, the Indian industry leaders have negated the protocol's professed vision. The big manufacturers of the North and the South have become bedmates, using the Montreal Protocol's weak provisions as a cover (see box: Happy bedfellows). The Indian industry has, in its haste, even forgotten that if they opt for HCFCs or HFCs, these two groups of substances too will be phased out in due time. HCFCs will be phased out because they too are ozone depleting and HFCs because they are greenhouse gases. But the companies will not get any money from the fund to make another transition. The protocol only provides for funding one transitory phase. Any changes that they have to make in 2040 when HCFCs are phased out will be totally at their own cost. Also the list of substances that harm the ozone layer is an ever-increasing one. The companies need to be additionally cautious in investing public's and their money in any technology.

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Hush!

WHILE the manufacturers of ODS hit their first deadline as far away as 2010 for the users of these chemicals the clock is ticking at a much faster pace. Those using chlorofluorocarbons (CFCs) in their products will have to stop selling, stocking, exhibiting for sale or distributing foam, refrigerators, mobile air conditioners and aerosols by December 31, 2002. There are only eight months to go. Once past the deadline, a refrigerator manufacturer will not even be able to stock a refrigerator made with CFCs. All of them will have to shift to alternatives. The alternatives suitable to the product vary from industry to industry. And so do the problems attendant with the transition in the industry. The solvent sector accounts for the maximum domestic consumption of ODS. Use of ODS in the aerosol sector is the minimum.

The manufacturers are miffed at the idea of a cut off date for keeping stocks of ODS. They claim time to sell what has been manufactured till December 2002, allowing dealers and distributors breathing space to clear existing stock. But sources within the Union ministry of environment and forests (MEF) say the manufacturers were given nearly two years warning. They had sufficient time to get their act together.

Though the deadline for developing countries to phase out CFCs is 2010, the process has been accelerated in India. It has its advantages. "The multilateral fund kitty is limited and the early bird gets the worm," explains Niyati. "Secondly, if the Indian industry is interested in tapping the export market, especially in the Middle East and Africa, it is necessary that it changes gears as fast as manufacturers elsewhere."

Frozen mindsets
The RAC sector promises to be one of the most problematic. The sector is one of the largest consumers of CFCs. Between 1995-97 the sector used about 2,770 MT of the total of about 6,600 MT of CFCs. There are many big players in this multi billion-dollar sector, including the multinationals that have joint ventures with domestic companies. For these multinationals, the Montreal Protocol has come like a boon. They have found in it the perfect tool to ditch their local partners and bring in the non-ODS using products on their brand names. Take the case of Whirpool and Kelvinator. They have a joint venture producing domestic refrigerators, with Whirpool, the US-based giant, holding 57 per cent of the equity. But Whirpool sells non-CFC refrigerators under their brand name. It's given Kelvinator a short shrift.

Public disclosure
For the domestic producers the problem remains that the price of importing alternatives has constantly risen. For example the cost of a kilogramme of HFC-134a - an alternative with zero ozone depleting potential - has risen from US $ 2.5 in 1997 to about US $5.5.

TO help the industry in its phase out the government has secured phase out projects worth more than US $ 75 million from the multilateral fund under the protocol. The RAC sector is the biggest beneficiary of this largesse (see table: Money for nothing?). But what is it doing with this money? The industry refuses to divulge information. The producers of ODS-based goods too care little for making their actions public. Industry watchers fear that the industry, blinded with the money pouring in, has become shortsighted enough to choose HCFCs over better alternatives like hydrocarbons. The RAC industry's silence on the issue seems ominous.

Easy targets
The aerosol sector on the other hand is easily dealt with. It is relatively easy to acquire and develop technology for the transition in this sector, which mainly involves using a different machine for filling the propellant. The substitutes, like liquefied petroleum gas, are even cheaper than the ODS currently used.

The people engaged in the foam sector have also responded well, possibly because transition also implies upgrading. The industries using CFCs for foam blowing rely on mechanical ways, but using the substitute HCFC-141b requires computerised machines. They are happy to improve their work and their technology with grants. And the costs of using HCFC-141b are affordable. Cyclopentane, a hydrocarbon and a better option, is also gaining acceptance in insulating foam used in refrigerators.

For the fire extinguishers sector though, the price of the best technology is too high. The industry is opting for domestically produced HCFCs blends and a variety of HFCs. The larger trend in the three sectors looks again to be that of a shift towards HCFCs.

The bigger problem of small
While the government in its country phase out programme has netted the larger players in the market, the government has all but forgotten the small-scale segment within the ODS-using industry. Small-scale businesses operate primarily in the refrigerant assembling and repairs industry or in the huge solvents industry. The government seems completely foxed about handling these businesses. MEF claims the sector is highly unorganised, widely scattered and too diverse in terms of its application in various industries. Even identifying the people in the trade is difficult. Putting a number to them is harder for the clueless government. Estimates range from 2,000-3,000, with 200 industries in Delhi alone.

The government has only recently begun surveys to identify persons, workshops and agents engaged in this business. Following the identification, a phase out strategy is to be formulated. But, little or no money from the multilateral fund has been spent to ensure their transition as yet. The government does plan an umbrella project for a clutch of small-scale operators because the protocol disburses funds to units consuming 10 tonnes or more of ODS each year. But few wish to come forward fearing harassment and bureaucratic delays.

The government seems content with just contacting industry associations like All India Air-conditioning and Refrigeration Association and Aerosol Promotion Council. These associations, with their well-established members, are anyway aware of the phase out process. It is the unorganised units, like that in the solvent industry, which should be targeted.

The limited strategy of the government right now is to advertise in the media. The government's programmes, sadly, trust the grapevines to work for them. As a result only 307 small-scale industries in Delhi had registered with the ozone cell by July 19, 2001. Registration started way back in July 2000. Out of this, 296 are into refrigeration and air-conditioning. The other sectors have been left out. But the government has its argument ready for the lack of initiative. It says once ODS production is completely phased out, these businesses will be forced to make the change over. However, they will not be able to secure any financial assistance from the multilateral fund, it forgets to mention.

CFC dumps
Issues of safe handling of new coolants like hydrocarbons and training take priority here. Imparting skills to people in the servicing sector in the use of evacuation systems and making them aware of the option of recycling are two urgent tasks. The evacuation system is not expensive and can be easily manufactured domestically.

At present, no infrastructure exists to recover ODS coolants and store it to prevent release into the environment before sending it back to the producers who have the facility to purify and reuse it. This aspect will gain more importance after 2010 when the large fleet of old refrigerators and air conditioners will have to be destroyed without releasing the coolants into the atmosphere. Moreover, not every end-user is expected to buy a new refrigerator operating on a non-ODS refrigerant when ODS-based refrigerators are available in the market till 2002. "Older refrigerators will have to be retrofitted," Niyati explains. "Facilities to do that are lacking and no one is paying attention yet." It's a problem even industrialised countries are just learning to deal with.

The evidence against the logic of the Montreal Protocol is out there: it may be touted as the biggest successful case of international cooperation to save the environment. But the only people it has helped prosper are the ones to blame in the first place for the problems. So distant from the ground realities, the protocol can be enforced upon the moneymaking big businesses because it does not hurt them. But the thousands of small-scale industries - which form the bulk of the users of ODS in developing countries - either get left out of the loop or face a future in deep freeze. It is time the international community learnt from India's experience and not let environmental conventions be led by gluttonous desires of North-based multinationals.