https://t.me/pdf4exams https://www.estore33.com/ https://t.

me/TheHindu_Zone_official

>
OPINION 11
STAY INFORMED THROUGH THE DAY @ WWW.BUSINESS-STANDARD.COM.

Volume XXII Number 207

ILLUSTRATION BY BINAY SINHA
MUMBAI | THURSDAY, 31 MAY 2018

Populism over environment

Closure of the Sterlite plant did not follow due process

T
he government of Tamil Nadu has ordered Vedanta Limited, the oper-
ator of the Sterlite copper smelter near Thoothukudi, to shut down the Or is it a surrogate protest against the world-
plant following lengthy protests by local people that eventually turned wide dominance of five American companies,
violent. The plant, which has been in operation since the mid-1990s, against whom the only form of protection appears
has long been a focus of popular protest. It has had mixed fortunes over the two to be to close your borders against them as China
decades of its operation, including periods when it was under administrative has done? Just “protectionism” to help your
orders of closure, a ~1 billion fine imposed for pollution by the Supreme Court national players?
in 2013, and consistent opposition from fishermen. These protests were re-ener- Even the question about how these five
American companies came to achieve such domi-
gised following an apparent gas leak in 2013, and have taken on additional polit-
nance is not easy to get a consensus about. One
ical significance in the unsettled politics of Tamil Nadu after the death of for-
common strand of thought points to their techni-
mer chief minister J Jayalalithaa. The state government — which may have felt cal and financial deep links with the American
it had been backed into a corner — took the decision this week through the Tamil government. To start with, the Internet was built at
Nadu Pollution Control Board (TNPCB) to close the plant permanently. the instance and full financial support of the US
There can be no compromise about the need for effective and fair envi- Department of Defence. That same entity, which
ronmental regulation of heavy industry. However, there are some significant unlike other countries’ defence departments does
aspects of this particular case that give rise to concern. For one, as Vedanta will a very good job of posing challenging technical
no doubt argue in court, due process may not have been followed properly, problems and funding the solutions for these prob-
which in itself is poor governance. Previous attempts to shut down the Sterlite lems, provides an indirect support to these
copper smelter have not endured legal challenge for similar reasons. Before tak- American tech companies. There is an excellent

How the web lost

ing such drastic action, principles of natural justice suggest that the company scholarly account of this in Sussex University pro-
should have been allowed to first explain what pollution control, abatement and fessor Mariana Mazzucato’s book, The
mitigation systems it has or plans to put in place. Some protestors have argued Entrepreneurial State: Debunking Public vs. Private
that this lack of due process means the Tamil Nadu government is not, in fact, Sector Myths, which makes the point that it is the
enthusiastic about shutting down the plant, which was inaugurated in 1994 by US Department of Defence, not venture capitalists

its innocence
and tech visionaries, that has given US tech com-
Jayalalithaa herself. In general, however, it is important to emphasise that due
panies the elixir. She uses the iPhone as an exam-
process must be central to the application of environmental regulation. Without
ple to show how practically every element of the
that, important environment-friendly actions can descend into mere populism technology in his beloved device is an outcome of
and opportunism for political gain. such defence projects: The multi-touch screen, the
When the Supreme Court heard a matter related to the plant's closure GPS system, the microprocessor, the memory
some years ago, it noted the smelter's importance to Indian industry. This is an And how it could return to its original egalitarian goals device, cell phone technology and, most of all, the
argument that still holds true. The Thoothukudi plant accounts for more than Internet itself. The basic learning here is to see, in
a third of India's copper production, and is the world's seventh largest producer India, for example, how our own defence estab-
of copper. About 160,000 tonnes of the 1 million tonnes produced by the unit

I
t all started in 1989 with an inter-office memo, ning to be seen as a fundamental human right! lishment can similarly stimulate technology and
is exported. According to the company, the plant contributes 3.3 per cent of describing in very humble words a “…way to Social networks, originally conceived as places product development.
Tamil Nadu's state GDP, and its shutdown will impact more than 30,000 jobs link and access information of various kinds… where like-minded people could gather and chat What is really worrying about this is in this fren-
directly and indirectly, as well as 800 small and medium enterprises. This is in which the user can browse at will. [through] about either arcane subjects such as programming zy of anxiety about “Data Protection”, “Privacy”,
clearly a major issue for the Indian economy and should have been dealt with a single user-interface to large classes of informa- languages or societal injustices or merely flirt, are “The Frightful Five” and so on, we need to focus our
speedily and with greater sensitivity to law. tion (reports, notes, data-bases, computer docu- suddenly being viewed with suspicion. Will my policymaking effort to get the best of the web for
India's industrialisation is non-negotiable, and the creation of an industrial mentation and on-line help…” That opinions on societal injustices or our ordinary citizens. For example, help India’s
was Tim Berners Lee, an who I flirted with be used against kirana shops that provide 50 per cent of employ-
base and manufacturing jobs should be a major political priority. Naturally, this
Englishman and his colleague, R me in some other context? Will data ment in India (particularly for young Indians drop-
should not come at the expense of stringent and people-friendly environmen-
Cailliau, working at the CERN, the about products I expressed an ping out of school at Class 10 for economic rea-
tal regulation which takes into account the effects on local communities. Yet the European Organization for Nuclear interest in on a shopping site or sons) use the internet to increase their service
answer is rarely to order the wholesale closure of plants, but instead to ensure Research, located just outside how often I opened and read a free quality and profitability (not silently watch them
the application of laws and the levying of proper deterrent fines. Protests Geneva. After describing some of newsletter be used against me being destroyed by Private Equity-funded price-
should be seen as a call for more clear and transparent application of the law, the technical aspects, it proposed somewhere else? subsidised e-commerce players), help our kaali-
not as a venue for petty politicking. The Sterlite saga is not over, but so far its ends with the goal “to provide Being an early follower of the peeli taxi drivers/owners grow (not silently watch
nobody has emerged from it unscathed. the software for the above free of World Wide Web and its innocent them being destroyed by Private Equity-funded
charge to anyone”. AJIT BALAKRISHNAN and egalitarian goals, I nowadays price-subsidised taxi players), help our courts bring
Starting from this universalistic find myself drifting into a reverie down their years-long waiting list (not silently

Trading charges
desire to make all sorts of informa- like some of us do when childhood watch the legal industry profit at the cost of citizens
tion available for free to all comers, how did we memories of loving parents and happy school- by repeated postponement of hearings), and per-
end up in a disconcerting world dominated by five mates come back. I then pinch myself awake and haps, most of all, create a domestically-owned large
American companies that The New York Times ask myself are all the bad things being said about enough number of early-stage Venture Equity
The NSE-SGX dispute raises several questions recently called “The Frightful Five”, who are alleged the web and its players just another example of funds (not be a slave to foreign-owned ones who

T
he dispute between the National Stock Exchange (NSE) and the Singapore to be complicit in providing the tools to fix the NeoLuddism (in case you have forgotten your high will fund only models that have worked in their
Stock Exchange (SGX) is coming up for a fresh hearing in the Bombay election of the current American President Donald school history, the Luddites were a radical group of home countries).
High Court on Thursday. The NSE is trying to prevent the SGX from Trump and for British voters’ shocking Brexit vote English textile workers and weavers, who in the These are the just some of the ways that could
launching new derivative contracts based on underlying Indian securi- — Britain’s exit from the European Union? And a early 19th century destroyed textile machinery as help in returning the web to its original egalitarian
world where the European Union has just brought a form of protest against the Industrial Revolution)? goals in India.
ties, such as the Nifty index. The court will have to consider multiple issues - intel-
into effect very strict rules and hefty financial In that sense, are the protests against possible mis-
lectual property rights, public information and international licensing rights -
penalties for wrong use of its resident’s data. And use of user data an attempt to “destroy the machin- The writer is the author of The Wave Rider, A Chronicle of
bearing in mind that international investors need access to such products. After a world where the Right to be Forgotten is begin- ery” of the Information Revolution? the Information Age. ajitb@rediffmail.com
an 18-year partnership and a licensing agreement that allowed forex-denominat-
ed derivatives of the Nifty index to be traded on the SGX, the two exchanges fell out
in early 2018. The SGX wanted to launch single-stock derivative products for

Corporate reputation vs the cover-up

Indian equities. The NSE was unhappy and decided not to renew the licensing
agreement, which expires in August. In February, three Indian equity exchanges,
the NSE, BSE and MCX, stopped sharing data with foreign platforms.
The SGX intends to launch a new set of derivative products with underlying

O
Indian securities on June 4. It may use price data sourced from the US Commodity ne of the ways in which India Inc is becoming
Futures Trading Commission (CFTC). The SGX logic is that it is offering a non- increasingly "global" in its HR practices is the
Indian product, it is just that the price is determined with reference to publicly avail- blizzard of documents people sign when they
able prices of Indian securities. This is where intellectual property rights come into join a corporation, setting out the terms of employment
play: The NSE has argued that SGX derivative products are similar to available and employee obligations. Until recently, the most
threatening of these documents were Codes of
Indian contracts.
Conduct, Non-Disclosure Agreements, and restrictive
Indian exchanges feared overseas competition for several reasons. Both the
covenants that preclude employees from working for
SGX and Dubai's DGCX, which carries derivatives based on the BSE Sensex, had competitors or doing business with customers for a
permission to offer forex-denominated derivative products to US-based institu- specified period after they leave a company. Now, a new
tional investors. This requires CFTC certification. The Indian exchanges did not contractual animal has been lurk-
have CFTC clearances, though the NSE has subsequently obtained it. In addition, ing in the paperwork: The non-
overseas exchanges could offer hard-currency contracts. Dubai and Singapore are disparagement agreement.
also open for longer hours than the Indian exchanges. Again this situation is due The term recently attracted
to change from August when Indian exchanges will be able to keep their derivatives attention when Infosys' 2018
segment open until midnight. Annual Report revealed that
The case raises several questions. Are share prices and trade volumes of list- Vishal Sikka, the IT major's first
ed companies and indices public data? The answer would be yes. However, the Nifty non-promoter chief executive
indices are also unquestionably proprietary products created and maintained by who left in controversial circum-
the NSE. Can a derivative based on publicly available price-volume data of a pro- stances, and three senior execu-
prietary index be banned? Does an Indian court even have the jurisdiction to stop tives had signed them as part of
overseas trade of such a product? These are hard questions to answer and it is pos- their exit packages.
Infosys may be in a minority in
sible to make arguments in favour of either side.
Whatever the High Court ruling may be, international traders need products
this respect in India. Non-dispar- SWOT
agement agreements appear to
that will enable them to hedge price movements on Indian bourses, and to man- have been used sparingly here not KANIKA DATTA
age currency risks as well. The long trading hours at the SGX are also useful since least because Indian business is
price-sensitive newsflow at odd times can be discounted. Indeed, domestic yet to reach that pitch of professionalism that marks out
investors would also be grateful for access to such products. The NSE is now well the western corporate world.
placed to launch competitive products. An offshore set-up at the GIFT could even Besides, the ambit of these agreements is yet to be
enable forex-denominated versions. Rather than seeking judicial protection from defined by Indian corporate law, nor have they been
overseas competition, it would make sense for the NSE to set up shop and target tested in the courts. So unless the stakes are significant,
the same customer base. A lot is at stake here. Index provider MSCI has already hint- Indian companies would be disinclined to contend
ed that it may reduce India's weight in its emerging market index. The outcome of with the country's judicial system to check the legiti-
the legal case may also establish new international jurisprudence on copyright macy of this type of contract. It is principally compa-
issues surrounding pricing data. nies with global reach and the financial heft to afford
offshore arbitration that rely on such agreements in
employee contracts and settlement pacts as a means of
safeguarding their reputations.
If we assume that Indian companies are slowly get-
ting there — and the chaotic business environment is
certainly encouraging more businesses to explore over-
seas opportunities — then the non-disparagement
agreement could become part of the standard package
that employees sign here, too.
Would the mainstreaming of non-disparagement
agreements be a healthy development in a business
milieu in which good governance comes at a premium?
Several governance advisories
in India have raised doubts on
ethical grounds. They have
company in their counterparts
in jurisdictions that are fre-
quent users of such contracts.
In the US, for instance,
about a quarter of listed com-
panies use non-disparage-
ment contracts for employ-
ees, external contractors and
in settlement agreements.
Silicon Valley is a particularly
enthusiastic user because cor-
porate reputation is the gold
dust for an industry that runs
on human capital. American
law firms say most state and federal courts enforce
them if they are narrowly worded, on the principle
that a contract is a binding agreement if you've signed
it, whatever the contents. Yet more and more lawyers
are advising employees to be ultra-cautious about sign-
ing on the dotted line. Why?
Several recent cases have revealed that by muz-
zling employees, non-disparagement agreements act
as proxies for concealing serious governance failures.
An article in The New York Times last year set out mul-
tiple examples of the ethical conundrums embedded
in non-disparagement agreements in Silicon Valley,
especially in enabling habitual sexual predators to get
away with, well, more harassment. The "tech start-up
world has been roiled by accounts of workplace sexu-
al harassment, and non-disparagement clauses have
played a significant role in keeping those accusations
secret," the article said. The consequences can be more
serious than just one company's reputation. As the
article pointed out, "Harassers move on and harass
again. Women have no way of knowing their history.
Nor do future employers or business partners."
This is one dimension of the problem. Several US
federal agencies, the NYT article said, were examining
non-disparagement agreements to see whether they
are being leveraged to mask broader violations of work-
ers' rights and other transgressions.
The NYT piece did not examine the status of whis-
tle-blowers vis-a-vis these agreements and the rela-
tionship with the laws protecting them. About two
years ago, the Securities and Exchange Commission
said it would consider as illegal restrictions on employ-
ees to disclose confidential information about irregu-
larities in corporate practices. This has prompted some
companies to hone non-disparagement agreements to
leave employees free to disclose unethical or illegal
practices but unlisted companies can probably con-
tinue to arm-twist employees into silence.
Whatever the ethical enablers, here's the catch.
Disparagement is a flexible term that is open to wide
interpretation. Who will decide what is an unethical
practice and what is not? Legal opinion in the US is
increasingly leaning towards more disclosure, not less.
And that's happening in a country where the judicial
system functions more or less efficiently. Given India's
family-dominated corporate ownership with its reflex-
ively opaque traditions of corporate governance, the
non-disparagement agreement is a global "best prac-
tice" that is best discouraged.

Prying open history

line clashes. Mr Hersh won a Pulitzer
Prize in 1970, at 33, for his freelance
expose on the massacre by American
troops at My Lai village during the
Vietnam War.
He was soon hired by The New York
BOOK REVIEW Times and, during the 1970s and early
1980s, did supersnoop work on stories
DWIGHT GARNER including Watergate, the secret bomb-
ing of Cambodia, and CIA spying on
mortal sin. Christopher Hitchens, in his and Yoko. He sees other humans but lenged, and he has been criticised for
memoir Hitch-22, left his romantic and they do not compute. his tendency to make incendiary claims
family life to the side as well. Mr Hersh grew up on the South Side in public speeches that go beyond what
But his book was stacked high with of Chicago, the son of immigrants who the facts he has produced will support.
Mr Hersh was so single-minded that, memories of friendships and avenues had arrived at Ellis Island. His father His comment: “I will happily
in the early 1970s, he met John Lennon of human joy and pain. Hitchens could owned a dry cleaners in a poor and permit history to be the judge of my
and Yoko Ono at a party and had no size up a person, often hilariously, in a mostly black neighbourhood. Working recent work.”
idea who they were. “How was I to paragraph or two. Here’s where Reporter there as a young man, Hersh writes, So many of journalism’s old war dogs
know?” he writes in his new book. falls short. helped give him the gift of gab. have left or are leaving us, and there’s a
“Neither had anything to do with Mr Hersh knew nearly everyone who He did poorly at school and attended sense that we won’t get many more
Watergate.” mattered in American journalism. He a two-year junior college before a pro- memoirs like this one. Mr Hersh was
If Mr Hersh rarely took long walks with his fessor saw his promise as a writer and never a hack or a safe man while he
seems quite human, If Mr Hersh rarely iconoclastic mentor, I F got him into the University of Chicago. leapt tall deadlines in single bounds.
neither does Reporter. seems quite human, Stone. He played tennis reg- He went briefly to law school before Send him into any forest and he would
He piles on the policy neither does Reporter.

T
he qualities that make Seymour
Hersh a first-rate reporter — his
hustle, his wonkiness, his
nighthawk drive to unearth a radioac-
tive fact and then top that fact — make
him a second-rate memoirist. Like a
greyhound or a kamikaze pilot or an
insurance man peddling a policy (he
sometimes reminds the reader of each),
he’s not built for reflection.
It’s all here in his new memoir,
Reporter, if by “all” we mean the filing-
cabinet details behind his greatest
scoops, the settling dust of old dead-
domestic antiwar protesters.
Writing for The New Yorker later in
his career, he was largely responsible
for alerting the world to the torture of
prisoners by Americans at Abu Ghraib
prison in Baghdad.
For Mr Hersh’s subjects, becoming
an object of his interest is like having
the Red Baron on your tail. He made
Henry Kissinger paranoid. (“Sy Hersh is
out to get me.”) The CIA director
William Colby was caught on tape say-
ing, “He knows more about this place
than I do.”
ularly with Ben Bradlee, as falling in love with the Ben Hecht-like come back with two handfuls of arrow-
and deadline details He piles on the policy well as with Bob Woodward romance of Chicago journalism. heads, a buried deposit box and a cigar.
while leaving people and deadline details and the district attorney He loved the wire service copy of the He’s at work on a book about Dick
and their beating hearts while leaving people Robert M Morgenthau. old pros, “just fact after fact, with no Cheney, who has hated him for decades.
mostly behind. and their beating He saw movies with analysis, presented in clean, spare prose Judge a man by his enemies. I’ll place
His wife and chil- hearts mostly behind Daniel Ellsberg; drank mar- under rat-a-tat pressure.” He worked at my advance order right now.
dren, for example, tinis with his neighbour, the small papers before being assigned to
appear in this book mostly as after- columnist Mary McGrory; played poker The Associated Press’s Washington ©2018 The New York Times News Service
thoughts. We do get a sense of his wife’s with others; and calls Gloria Emerson bureau in 1965. He’d achieved liftoff.
suffering when she’s introduced to a and Anthony Lewis, for example, dear In recent years, Mr Hersh has often
REPORTER
senior editor at The Times who says: friends. published his work, including an A Memoir
“Oh my, Mrs Hersh. You have my heart- Yet he barely evokes any of these account of the raid that killed Osama Seymour M Hersh
felt condolences.” people. There’s no crosshatching and bin Laden, in less mainstream outlets. Alfred A Knopf
Omitting family matters is not a little context. It’s as if they were all John Some of this reporting has been chal- 355 pages; $27.95