Assam: The Costs of Insurgency

Leading corporate groups in India, including Reliance Industries and the Tata Group, are keen to invest in Assam following a marked improvement in the State's overall security situation, according to Assam Chief Minister Tarun Gogoi. On November 4, 2006, Gogoi said, “Today I am getting investors from across the country, including big players like the Tata Group, willing to set up businesses here.”

Corporate heavyweights like the Reliance Industries, the Tata’s Infrastructure Leasing and Financial Services, and Videocon Industries, are expected to invest INR 300 billion in the development of rural infrastructure, promotion of agriculture and the setting up power plants, IT parks, and other projects. An expansive Gogoi declared, “Investors look for security and an environment that is peaceful. A few years back, the situation here was not conducive enough to attract big investors. But today the situation has changed and peace is dawning in Assam and hence a suitable climate for business to grow here.'

The Chief Minister's boast of the dawning of peace may, however, seem somewhat premature. On November 5, fourteen persons were killed and at least 50 sustained injuries in twin bomb blasts in the Noonmati and Fancy Bazaar areas of Guwahati city. Indeed, Gogoi simultaneously confessed, on November 6, that the State Government has failed to provide security to the people of Assam: “I have to admit that we have failed to provide security but we have taken this development very seriously and operations against the militants have been intensified.” There was evidence of a worsening of the security scenario since October 2006. At least 27 bomb explosions occurred during October 1-November 24 period, while, between January and September, there were a total of 43 blasts across the State. At least 151 people, including 82 civilians and 30 Security Force (SF) personnel, have died in insurgency-related incidents in 2006.

Jayanta Madhab, a noted economist from the region, injected a note of sobriety in the current and sanguine assessments of Assam’s economic potential, arguing that insurgency has always played a negative role so far as enticing outside investment is concerned. The persistent insurgency has substantially weakened the productive capacities of Assam’s socio-economic infrastructure. Consequently, the productivity of capital is low compared to other States. Assam is one of India’s poorer states with about 36 percent of its population of 27 million living below the poverty line and per capita income (INR 13,925) 40 per cent below the national average. The State is marked by poor road infrastructure, tenuous communications, low agricultural productivity, and low levels of industrial activity. According to a study by the Planning Commission, between 1980 and 1990, per capita income at 1980-81 prices grew by 20 per cent in Assam, compared to 40 per cent for the entire country. The period 1980 – 1998 was worse, with per capita income in Assam growing by just 10 per cent as against 39 per cent at the all India level.

Domestic industry has been variously affected by the insurgency. While there have been the more direct attacks on physical infrastructure and manpower, there are also substantial costs incurred through extortion and ‘levy’ charges. In the latter case, some instances of non-compliance have translated into attacks against and murders of managerial cadres and businessmen. The United Liberation Front of Asom (ULFA), moreover, continues with its random depredations, bombing markets and public places, as well as oil and gas pipelines and other key installations.

The oil and tea industry, the mainstays of Assam’s economy, has been targeted by the ULFA virtually since the creation of the group. The outfit has blown up oil pipelines and installations, abducted officials, and killed personnel and official, including a Russian petrochemical engineer engaged by the Oil India Limited (OIL) in the Sate. OIL sources indicate that the number of explosions targeting oil and gas pipelines in 1996 was 1; 1997: 1; 1998: 1; 1999: 3; 2000: 3; 2003: 2; 2004: 7; 2005: 12; 2006: 2 (till November 23). Further, sources disclosed that the vital crude oil pipeline from Duliajan through Bongaigaon in Assam, to Barauni in the Begusarai district of Bihar, was repeatedly sabotaged by militants in 1995, 1996, 1997 and 1998, causing massive disruption to the oil industry. According to SATP data, 11 explosions were triggered by ULFA, targeting oil and gas installations in 2006 (till November 23). India produces about 30 million tonnes of crude oil annually, with Assam accounting for about five million tonnes of the total. The State has over 1.3 billion tonnes of proven crude oil and 156 billion cubic meters of natural gas reserves, of which about an estimated 58 percent of existing hydrocarbon reserves are yet to be explored.

In January 2006, ULFA sent alarm bells ringing in the State's industry and security establishment by slapping an INR 5 billion (USD 112 million) extortion demand on the state-owned Indian oil major, Oil and Natural Gas Corporation (ONGC), forcing the authorities to intensify the vigil on oil and gas installations across the State. Then, on July 3, 2006, the Reserve Bank of India, the country's central bank, was served an extortion demand for INR 1.5 million by ULFA. Further, on November 2, 2006, ULFA threatened to strongly resist OIL exploration of petroleum oil in the Brahmaputra basin. A statement issued by the group read: “The Indian Government has for long been exploiting Assam's natural resources and now it plans to extract oil from the Brahmaputra. This is nothing but another clever attempt to take away local resources at the cost of our people… We shall not allow such a thing to take place.” The threat followed an agreement worth USD 22 million signed by OIL with Kazakhstan Caspi Shelf, a Kazakhstan-based oil exploration firm, to conduct a 2-D seismic survey along 175 kilometres of the Brahmaputra River in Assam. Paresh Baruah, the ‘commander-in-chief’ of ULFA, in a statement made on June 10, 2006, claimed that the attacks on pipelines were carried out ‘in protest against’ the tightening of security around oil installations, which was to "facilitate the plundering of Assam's natural resources."

ULFA’s sabotage targeting the oil sector has coincided with opposition to oil exploration projected through a section of civil society organisations, especially certain environmental groups. Conservationists are worried about the possibility of oil exploration impacting on the survival of highly endangered freshwater dolphins and other aquatic species living in the Brahmaputra basin. While joining the campaign to block oil exploration in the basin, the ULFA found in such ecological issues an opportunity to legitimize its subversive operation targeting the oil industry. The outfit also identified, in its publication Freedom, another vulnerable ecological space, Dibru-Saikhowa National Park, which could be affected by oil exploration. ULFA accused a British oil firm, Premier Oil, of harming the ecology of the Dihing Patkai Forest Reserve in the name of oil exploration.

The Central Industrial Security Force is currently responsible for the security of oil installations. However, it is concerned primarily with guarding the installations, leaving the pipelines – mostly underground – vulnerable to attacks.

Apart from the oil industry, other sectors like tea estates, the banking sector, railways and communications are also being subjected to disruption by the insurgents through extortion, abductions and violent attacks on a regular basis. The tea industry (the State has some 800 tea gardens) is another vital economic construct of Assam, with an output of 475 million kilograms, more than 50 per cent of the total national tea production of 928 million kilograms. Sections of the tea industry have blamed the Union Government and its recent peace initiatives (which collapsed on September 20, 2006) with the ULFA for the spurt in terrorist activities. One industry leader was quoted as stating: "In the last one month [September], as the Army officials moved out of the valley, the ULFA activists regrouped and we started receiving the extortion notices and the situation drastically deteriorated." On September 17, the ULFA served an extortion note to the Nagrijuli tea estate in the Baksa District demanding INR 10 million. On September 19, it served an extortion notice to a tea garden in upper Assam's Dibrugarh District belonging to tea major Mcleod Russel, demanding INR 10 million. And on September 23, four ULFA cadres shot dead Haren Das, a manager of the Hailanga Tea Estate in front of his residence in Digboi town. On September 22, a policeman was killed in an encounter with the ULFA in Dibrugarh District, when a police team had gone to arrest an ULFA activist who had allegedly handed over an extortion notice of INR 800,000 to the manager of Sessa Tea Estate. Earlier, the Ramanugger Tea Estate in Karbi Anglong District was closed down on July 5 following the abduction of its Assistant Manager, N. Bora, from his residence by unidentified militants. Even before the truce collapsed, the ULFA had reportedly stepped up extortion demands from tea plantations. Dhiraj Kakati, secretary of the Assam branch of the Indian Tea Association, articulated the industry’s concerns: “They’re very vulnerable, living in isolated areas and working outdoors… They can’t afford to pay — they can barely meet their own costs.”

During his presentation at a meeting of the Strategy Group of the Unified Command in Guwahati on October 11, 2006, the General Manager of the Northeast Frontier Railway, A.K. Sanwalka, sought adequate security for the Lumding-Silchar gauge-conversion work. He said only 37 per cent of the work of the INR 1,500-crore project had been completed. "Black Widow," an anti-talks faction of the Dimasa militant outfit Dima Halim Daogah (DHD), had been demanding a 10 per cent cut from every contractor involved in the project. It had also been serving extortion notices to others in the North Kachar Hills and Karbi Anglong areas of Assam.

The modernization of the oil industry lies at the heart of the development of Assam, since every region develops its own pattern of industrialisation depending on the type of natural resources it has. The oil industry and other economic sectors can only prosper when basic governance is assured, not only in terms of providing physical infrastructure, but also in ensuring adequate security for industrial enterprise against the anti-development agenda of violent non-state actors. Expressions of interest in the State from the corporate sector notwithstanding, such a situation is still far from the realities of the ground in Assam.