22nd August 2010
Prabir Purakayastha

THE civil liability for nuclear damage bill has now gone through the standing committee of the  parliament. Though some amendments have been added, the major thrust of the bill of protecting suppliers from significant damages has not only been maintained, it has even been strengthened.  Unfortunately the major opposition parties such as BJP either refused to see this aspect of the bill or tacitly agreed with the government on the “need” to protect foreign suppliers. Consequently, the government has the requisite majority now in Rajya Sabha as well to pass the bill, the only significant opposition being the Left parties.

What were the major issues with the nuclear liability bill? As has been widely written about, the total liability due to a nuclear accident has now been capped at 300 million special drawing rights (SDRs) or about Rs 2,500 crore. This cap is for the operator and the government jointly – and if any accident happens whose damages run beyond Rs 2,500 crore, the people can be denied further compensation beyond this figure. If we look at the Bhopal disaster, which was from the leak of a poisonous gas and not as devastating as a major nuclear accident can be, everybody including the government now agrees that $470 million was grossly inadequate for the damages that people suffered. The total amount that the standing committee has now agreed is less even than this inadequate Bhopal amount. This is what the major parties in the parliament – the Congress as well as the BJP have now agreed.  Not surprising, considering that both were involved in various stages of the Bhopal disaster and therefore have now a vested interest in not learning the lessons from Bhopal.

NO ARTIFICIAL CAP ON LIABILITIES

The Left’s position, as well as most other public voices have been very clear on this issue. There is no way the government can absolve itself of its liabilities. Therefore, there can be no artificial cap for damages.

What does this cap on liabilities mean? Does it mean telling the nuclear plants not to inflict damages beyond 300 million SDRs in case of an accident? Since this is patently absurd, all it means is that the government is putting a cap on what damages the claims commissioner can award; it is this that is being capped. The Left argues, as did others that there should be no cap on total liability at all – the government is responsible finally for addressing the peoples’ problems arising out of a nuclear accident and cannot therefore artificially cap its own liabilities.

The next question is considering what should be the operator’s liability? In the original bill, there was the possibility that private operators may enter the nuclear power sector and therefore would have only a small fraction of the total liability. The cap on nuclear operators was therefore seen as a concession to private capital, which might enter the nuclear energy scene in the future. The standing committee has now put two amendments – one is to limit this bill only to government or government companies as operators, the second is to raise the cap to Rs 1,500 crore.

It is welcome that the standing committee has plugged for now the possibility of private entry with such low operator liability caps to enter the nuclear power sector. Why then is there a separate liability cap for the operator when as per the current bill, the government in any case is the owner? Would it not have been simpler to introduce just one cap – 300 million SDRs equivalent as the operator cap? The mystery is solved when we look at the section 17 of the proposed bill – only the operator can exercise recourse from the supplier. Since the operator cannot take recover more damages than what he has paid out, the operator cap in this case is actually the supplier’s cap. Simply put, by limiting the government’s liability as an operator though not as government, the bill is capping the supplier’s liability to Rs 1,500 crore. The government may have to pay out more compensation beyond Rs 1,500 crore. However, as the bill stands, it cannot recover the amount beyond Rs 1,500 crore from the supplier.

The section 17 is the one that provides for suppliers' liability. The operator of a nuclear installation shall have the right of recourse where

(a) such right is expressly provided in the contract

17(b) the nuclear incident has resulted from the wilful act or gross negligence on the part of the supplier of the material, equipment, or provider of services or his employee

Both sections were independent - 17a and 17 b were to run independently. In the committee, it was agreed that the section 17 was weak and needed to be strengthened. This is also the view presented by the secretary, legislative department. The report states : In case an incident takes  place it would be difficult to prove and establish the fact that it was a wilful act or gross negligence on part of the supplier. Hence there should be clear cut liability on the supplier of nuclear equipments/material in case they are found to be defective. Clause 17(b) gives escape route to the suppliers of nuclear materials, equipments, services of his employees as their willful act or gross negligence would be difficult to establish in a civil nuclear compensation case. Mens rea, which is only amplifying the intent in clause 17(b), as argued by the secretary (legislative department) is generally used in criminal and taxation laws, but in compensation cases the use of this doctrine is grossly inadequate and misplaced. The committee therefore recommends that clause 17 (b) should be modified as: “The nuclear incident has resulted as a consequence of latent or patent defect, supply of sub-standard material, defective equipment or services or from the gross negligence on the part of the supplier of the material, equipment or services.”

After this, the real twist took place. In the last draft submitted to the committee, an extra half sentence was introduced which read that clause 17 a end with “and”, then continue to 17b.

With this, 17b can be invoked only if 17a holds: the right to recourse exists only if it is there in the contract. This is what the US  has been asking, that any recourse against the supplier should be there only if it is provided for in the contract. As it stands, it is even worse than the original provisions, where even without being in the contract, the operator could exercise his right to recourse against the suppler, even though it is difficult to prove wilful act or gross negligence.

RIGHT TO RECOURSE WEAKENED

If the stated intention of the standing committee was to strengthen clause 17, the reverse has been done – it has been weakened to make the right to recourse a mere private contractual arrangement between the supplier and the operator. The legal right of the owner to normal recourse for defective supplies under law of torts no longer exists. Worse, it has been done surreptitiously in the guise of strengthening the provision of the right to recourse.

Why has this been done when it was admitted that the provisions of clause needed to be strengthened? It is simply because the government has committed to the US that its liability law will conform to CSC. And CSC demands that suppliers liability should not be there in the liability law and can at best be in the contract. The American suppliers' had complained earlier that clause 17 as it stands allows for some legal right to the operator to seek recourse beyond the contract. This is why this right has now been extinguished and made into a contractual arrangement. And even there, the cap of Rs 1,500 crore will hold good.

The suppliers’ liability is the crucial issue for the US. They have made no bones about it and the attempt to force India to join the convention on supplementary convention (CSC) is also guided by the protection it offers to nuclear equipment suppliers. Contrary to what the Atomic Energy establishment has claimed in front of the standing committee, the fact remains the driver for India joining CSC is the US.

CSC was created as an instrument specifically post-Bhopal to protect US companies from being sued for large sums as damages. Omer Brown, the spokesperson of the nuclear suppliers’ lobby in the US, stated in a conference as far back as 1999, “Because of the large judgements and legal defence costs that unfortunately are a part of the American tort system, contractors and suppliers feel particularly vulnerable (especially to Bhopal-type lawsuits in US courts)”. It is no accident that the work by the US government to move for a stand-alone convention which would protect the suppliers started post-Bhopal, and the US is the country that initiated the CSC in IAEA. The CSC provisions are what India promised to the US during the India US nuclear deal and that is why the need for India to craft a liability law that will adhere to the provisions of the CSC.

The issue is not simply that the aims and objectives of the bill talk about joining the CSC; the issue is also the provisions of the bill, which have been crafted to ensure suppliers’ protection from damages that a nuclear accident might cause. This commitment to adhere to CSC provisions was made in writing by the then foreign secretary, Shiv Sankar Menon in a letter to the US under secretary, William Burns, (September 10, 2008), “India also recognises the importance of establishing an adequate nuclear liability regime and it is the intention of the Indian government to take all steps to adhere to the convention on supplementary compensation (CSC) for nuclear damage...”

The US has made no bones about the need to protect US suppliers and a liability to this effect. US assistant secretary of state for South and Central Asian Affairs, Robert in an interview (March 10, 2010), said, “We also are very much hoping that the Indian government will proceed with very important legislation on nuclear liability, that will be very important protection for American companies who are seeking to do more business in the civil nuclear area, in India.”

With this, the BJP has now joined the Congress in creating a bill that protects US suppliers from any defective supplies. The amount of Rs 1,500 as a damage cap on operator is way below the Bhopal disaster and what the government of India had asked from Union Carbide. It is even well below the Bhopal settlement figure of $ 470 million.

The only way to prevent this bill from being passed is for the people to demand of the legislature not to accept this shameful legislation. If this bill passes the parliament in its present form, it will add another sorry chapter in the long history of the India-US nuclear deal.

25th July 2010

Amit Sen Gupta

LAST month saw the release of the India Country report for 2010, regarding progress made till date towards achieving specific targets in eight different areas, set by the United Nations in 2001 – known as the Millennium Development Goals (MDGs). The MDG targets are supposed to be achieved by 2015. While official pronouncements were an occasion to indulge in self congratulatory claims, a closer look at the real progress made, paints an entirely different picture. We examine here the claims being made and the reality as regards Goal 6 of the MDGs, titled: “Combat HIV/AIDS, malaria, and other diseases”.

HIV-AIDS: NO ROOM FOR COMPLACENCY

The 2010 India country report on MDGs states that: “However, the spread of HIV/AIDS in the country shows a downward trend: from 2.73 million (0.45 per cent) people living with HIV/AIDS in 2002, the number has declined to 2.31 million (0.34 per cent) by 2007. The prevalence rate of HIV infection in the country also seems to have stabilised over the last few years”. These figures are, at best, an educated guess based on surveillance data generated by the National Aids Control Organisation (NACO). We may recollect that in 2007 the estimate of HIV positive cases in India was drastically reduced from 5.7 million cases (as estimated then by UNAIDS) to less than 3 million. This reduction was not a consequence of any remarkable public health effort but because it was felt that earlier estimates were based on faulty data. The crux of the problem lies in the fact that data on HIV is estimated from that generated by surveillance centres, numbering just a few thousand. This again is a function of the moribund public health system in India, which is not geared to serve as medium of surveillance and treatment. The National Aids Control Organisation (NACO) has, as a consequence, built up a parallel structure that intersects very little with the government health system. In addition to the obvious problem of duplication of efforts, this means that data available on HIV in India has a narrow base and cannot be relied upon entirely.

The table below provides comparison with other countries in a similar situation (low and middle income countries where the HIV epidemic is characterised as “concentrated,” i.e. limited largely to specific ‘high risk’ groups) regarding availability of HIV testing and counseling services. In India one such centre is available per 1,30,000 population of people over 15 years of age. India continues to lag behind most countries in a similar situation, in spite of recent efforts to scale up the availability of counseling and testing centres.

Table: Facilities with HIV Testing and Counseling Services

Source: Towards Universal Access: Progress Report 2009, World Health Organisation

There has been significant scaling up of antiretroviral treatment (ART) availability but it still lags significantly behind requirement. The following table from NACO’s annual report for 2010 gives details of ART treatment access.

Table: People on ART in India

Source: NACO, Annual Report, 2010 (Data Till January 2010)

Thus less than 50 per cent of those registered actually have been started on ART. More importantly about 33 per cent of those who started treatment have either died or not continued treatment (meaning that they are at risk of succumbing to the disease). Moreover, if we take the estimate of 23 million HIV positive cases as the baseline, we would expect that an excess of 7,00,000 patients would require to be on ART. In contrast, only about 40 per cent of them are receiving ART.

An emerging threat is the poor roll out of second line ART, i.e. treatment with newer (and more expensive drugs) for those who become resistant to the first line drugs. At present there are just 10 centres in the entire country that provide treatment with second line drugs. NACO reports that 2,750 patients have been referred for second line treatment and 970 patients are on such a regimen. This is a clear under-reporting of the requirement, and a large number of patients are being denied second line treatment because of lack of infrastructure and medicines. It is, furthermore, a problem that is likely to increase exponentially in the coming years.

To sum up, there is clearly little room for complacency. While significant progress has taken place in the last decade, India still sits on the brink of a generalised HIV epidemic. The claim that India is poised to meet its MDG targets vis a vis HIV is foolhardy and can disarm continuing efforts to scale up interventions.

MALARIA: VERY LITTLE PROGRESS

The Country Progress report of 2010 states that: “The incidence rate of Malaria and deaths due to Malaria in recent years show that while incidence of Malaria has declined … the percentage of deaths of Malaria patients has not declined”. Evidently this is not a very encouraging report! The official data indicates a marginal decrease in incidence with no significant decrease in the number of deaths. All mortality and morbidity data in India is open to being questioned, because of the poor state of the public health system, and its ability to carry out surveillance in any meaningful manner. This is particularly so in the case of malaria, where several reports and expert opinions indicate that actual incidence rates are 10 times or more higher than reported rates. Even scientists at the National Institute of Malaria research have commented on this in a paper published in 2007, stating: “It is now well accepted that the reported incidence of malaria at the national level on the basis of surveillance carried out in the primary health care system at best reflects a trend and not the true burden of malaria.”

In 1953 when a national eradication programme was launched, some 75 million malaria cases and eight lakh deaths were estimated to be occurring in India which then had a population then of about 360 million. With the eradication programme in full swing, incidence of the disease dropped rapidly. By 1965-66, there were just one lakh cases and deaths were completely eliminated. But malaria, instead of being wiped out from the country, made a comeback. After renewed efforts (in a period when the malaria eradication programme was renamed as the malaria “control” programme, reported incidence ranged between 2-3 million per year, and deaths reported were between 200 – 1,000 per year. As against this the MDG 2010 report indicates that between 2005 and 2008, the number of reported cases ranged between 15 and 18 million and reported deaths were between 10,000 to 17,000 per year. In other words, official data indicates that there has been a ten fold rise in the number of malaria cases and in the number of malaria deaths in this decade, as compared to the last decade! If we extrapolate the official data with the widespread understanding about under reporting, we are looking at 50-100 million cases in a year and 50,000 to a 100,000 deaths each year due to malaria. Even this may be an under-estimation -- a paper published in the open-access journal PLoS Medicine, put the extent of disease caused by P falciparum (which currently accounts for about half of malaria cases) in India at about 102 million cases in 2007. Clearly, we are nowhere near a situation where we can claim that the country is on its way towards meeting its MDG goal as regards malaria control.

Of particular concern is the fact that about half, and in some districts a large majority (such as the forested areas inhabited by adivasis in the states of Orissa, Jharkhand, Madhya Pradesh and Chhattisgarh), of the cases of malaria are being caused by the most virulent strain of malaria – plasmodium falciparum. The emergence of falciparum malaria in such a large epidemic form has complicated malaria treatment, and in endemic areas conventional treatment with drugs such as chloroquine are proving to be virtually useless. Newer drugs, such as mefloquine and the artemisinin based combinations have been introduced. These are more expensive (Artemesinin is 20-30 times more expensive than chloroquine) and toxic and have made the treatment of malaria more complicated. After the introduction of Artemesinin, there are no new drugs on the horizon. There is a real threat that the widespread (and often unnecessary use of this last line drug) will lead to resistance, and the emergence of malarial super-parasites that would be immune to all available drugs.

TUBERCULOSIS: AT THE BRINK OF A RESURGENCE

Tuberculosis is a disease of poverty and poor environment. The developed world saw the eradication of TB in the 1920s (including in most countries in the entire continent of Europe) a good 15 years before the introduction of the first medicine to treat Tuberculosis. Yet about a quarter of a million people die of TB in India every year. India is clearly indicated as the Tuberculosis capital of the world – every fifth person suffering from TB in the world is an Indian.

There have been fairly impressive advances made in India in the last decade and a half, since the rollout of the Revised National TB Control Programme(RNTCP). As a consequence the number of deaths due to TB has halved, from about half a million to a quarter of a million each year. Much of this advance has taken place, not because of improved public health measures, but because of global technological advances – especially with the introduction of new ant-TB drugs that are more effective and have reduced the average duration of treatment from 18 months to just 6 months. However prevalence rates and the number of deaths due to TB remain unacceptably high.

Further, a new threat looms large. With widespread use of the new anti-TB drugs, we are witnessing the emergence of what is known as multi drug resistance TB (MDR TB). The present short course therapy is ineffective in MDR-TB and cure rates have generally been less than 60 per cent. Treating such cases can be extremely expensive – up to 10 times as expensive as with the short course therapy. A recent paper published in the Indian Journal of Tuberculosis estimates about half a million MDR-TB cases emerge every year amongst new and previously treated cases, with half being in China and India. Estimates for 2007 suggest that India has the highest burden of MDR-TB in the world, with 131,000 cases of MDR-TB. In India, MDR-TB amongst new cases is estimated at 2.8 per cent and amongst previously treated patients at 17 per cent. As long as the RNTCP does not offer easy and heavily subsidised (or free!) access to quality assured diagnostic and treatment services for MDR-TB, patients will seek unaffordable and inappropriate care in the private sector, which will result in further emergence and spread of highly resistant M/XDR-TB strains. There are thus indications that we are poised on the brink of a resurgence of a new TB epidemic unless steps are taken to remedy the situation.

GROSS NEGLECT OF PUBLIC HEALTH

The above situation needs to be seen in a context. India continues to be one of the worst performers in world as regards public provision of health services. The Indian health system is one of the most privatised in the world and government expenditure (as per cent of GDP and in real terms) one of the lowest in the world (see following table).

Per Capita Public Expenditure on Health (in ‘purchasing power parity’ US dollars)

It is no mystery, thus, why India is poised to miss out on achieving the targets set in the MDGs as regards health care. Only a sustained and incremental strengthening of the public health system can remedy the situation. Till then pronouncements of “achievements” will continue to obfuscate the real situation.

15th July 2010

D. Raghunandan

The UPA government is once again attempting to completely open up the retail sector to foreign direct investment including, possibly, 100 percent FDI in organized multi-brand retail or supermarket chains. The Department of Industrial Policy and Promotion has issued a discussion paper on this subject, significantly without suggesting any upper limit on FDI. Currently, FDI is permitted up to 26 percent under the automatic route in wholesale so-called cash-and-carry operations and up to 51 percent with government approval in single-brand stores such as Nike shoes, Levi jeans or Calvin Klein readymades. These measures have been welcomed by industry, and seen by critics as the thin end of the wedge. Opening up the retail sector in India to foreign players has been a gradual process but the end-goal has always been clear, namely the unfettered entry into India of global supermarket chain stores such as Wal-Mart of the US, Carrefour of France, Marks & Spencer and Tesco of UK, Shoprite of South Africa and so on, all of whom have already established a substantial presence in India. The Indian retail market, with its burgeoning middle-class with growing purchasing power has, after the opening up of China, long been considered the last major frontier of globalized retail.

From the beginning these moves have been totally opposed by the Left and other progressive sections. Opposition has also come, albeit somewhat two-facedly, from the BJP with one eye on corporate interests and another on its major constituency of small traders who are deeply apprehensive. Arguments against have mostly centered around the potential adverse impact on the mostly unorganized small retail sector of so-called mom-and-pop stores (in India more often father-and-son stores) and the likely large-scale loss of employment in this sector. These arguments have been dismissed by proponents as being purely ideological and as going against modern trends and the opinions of experts. Arguments advanced in support of this policy by corporate houses including Indian retail chains, business associations, consultancy firms and government officials have revolved around two major propositions which, this article would show, are complete myths.

First, huge wastage in the agri-produce supply chain in India will be avoided because MNC retail giants would make the huge investments required in storage, cold-chain and transportation infrastructure and also bring in new technologies. Second, the farmer in particular would benefit from this improved efficiency and by the elimination of middle-men, the customer too ultimately benefiting through better quality produce and lower prices. A win-win scenario advanced as the gospel truth.

On the contrary, international experience has shown that, except for the huge profits raked in by the supermarket chains, organized retail has been a lose-lose scenario for farmers, small traders and wholesalers, consumers, and the environment and therefore society as a whole.

Food waste in Supermarkets    India is the world’s second largest producer of fruits and vegetables in the world after China, producing around 180 million tonnes. Official estimates are that about 25-30 percent of this produce goes waste between harvest and consumption. In theory, if fresh produce is collected efficiently at the farm-gate, and end-to-end cold-chain is maintained in storage and transportation till it reaches supermarket shelves as in developed countries, this wastage can be eliminated, translating into better prices for the farmer and lower prices for the consumer besides greater availability of the produce for processing, export and other value-addition. In practice, a very different story emerges from the West.

In the US, official data show 27-33 percent of food being wasted between farm and consumer during collection, storage, distribution and consumption! Of course, this also includes the horrendous amount of food waste generated in households and restaurants, but the amount of wastes within the distribution system is not much less.

Supermarkets themselves in the US are estimated to throw away $20 billion (Rs.95,000 crores) worth of food every year, more than twice as much as in the EU. Huge quantities of fresh fruit, vegetables and meats are routinely thrown away by supermarkets every day partly from fear of spoilage but also simply because they appear unappealing to consumers. Food products constitute 63 percent of a supermarket’s waste, according to a study by the California Integrated Waste Management Board. The logic of supermarkets dictates that they stock and display huge quantities of fresh produce, unsold stocks being simply thrown away. Supermarkets also compete with each other on the quality of their produce. This requires bulk suppliers to conduct ruthless sorting, throwing away otherwise edible but unappealing produce. In fact in the EU, prior to 2009 when a new policy came into effect, supermarkets were required by law to discard misshaped fruit and vegetables!

Supermarkets in the EU and USA are now being motivated to dispose of their wastes in an environment-friendly way in sanitary landfills or even through gasification or converting to manure, which can also generate some revenues although, of course, it would have been far better if food had not been allowed to become trash in the first place. And all this is only with respect to fresh produce. The supermarket culture of course also encourages packaged, pre-cooked or semi-cooked foods with expiry dates, huge quantities of which again get thrown away by supermarkets each year because of over-stocking. Pre-packaging of groceries and other food items also leads to huge accumulation of packaging material which has to be discarded posing a huge waste disposal and environmental problem, amounting to 5.3 million tonnes in the UK alone!  So much for the saving wastage argument!

Farmers and small traders lose    The other myth about organized retail is that it would benefit farmers and also not harm small traders who could simply shift from the traditional supply chain to the modern one linked to supermarkets. Again the facts are exactly the opposite.

The authoritative UK Competition Commission found in a 2000 study of major retail chains including Marks & Spencer, Sainsbury and Tesco that supermarkets had a poor record on treatment of all categories of suppliers, specifically that “the burden of cost increases in the supply chain has fallen disproportionately heavily on small suppliers such as farmers” (http://www.competition-commission.org.uk/rep_pub/reports/2000/446super.htm#full). Apart from prices, smaller farmers came under severe pressure from supermarkets due to the latter’s requirement for large volumes of each product, pushing farmers to grow single crops rather than the multiple produce they would usually grow to minimize risk. Similarly, insistence on or good prices only for similarly sized produce again works to reduce bio-diversity, pushes prices down and drives suppliers towards more input-intensive factory-farming. The Commission called for greater regulation and enforcement of the UK Fair Trading Code of Practice which it said itself needed to be strengthened to protect smaller suppliers from exploitation engendered by the immense power exercised by large buyers.

Numerous other supermarket practices too worked against the interests of almost all other stakeholders. Supermarket chains routinely sell some products at lower than market prices, which appears to benefit to consumers, but this puts pressure on small local stores in turn having adverse impact especially on low-income and elderly consumers who rely on local shops. Supermarkets also tend to alter prices in different branches adjusting to local rivals, “price-flexing” as the Commission termed it, again working to the disadvantage of local mom-and-pop stores. All in all, the Report said, “27 [such] practices by… major buyers operate against the public interest.”

In its January 2010 report, the UK Competition Commission concluded that the situation had not changed in over a decade, and that the practices of big retail chains continued to cause losses for farmers and small stores. The near-monopoly of supermarket chains, which procure over 70 percent of food products in the UK, enables them to “dictate prices and force farmers into trading for less and less.”  The UKCC found evidence that some chains including Tesco were bullying producers into lowering prices, a charge also leveled by the National Farmers’ Union, with dairy farmers receiving 20 percent less for milk than they did 19 years ago, and over 1,000 dairy farmers having gone out of business in 2009 alone.

FAO in its “Spotlight 2005” Report (http://www.fao.org/ag/magazine/0505sp1.htm) concluded that these trends are witnessed in other countries and regions too, showing once again that these patterns are inherent to the very logic of supermarket chains, not to some peculiarities of Western cultures. Organized retail increases pressure on farmers to produce standardized produce, pushes down prices and margins, and over time weeds out larger numbers of smaller suppliers in favour of fewer and larger “preferred suppliers”. In Malaysia, one chain that had started with 200 suppliers had whittled them down to just 30 within 2 years. Despite the famous sharp preference of Asian consumers for fresh produce from local so-called “wet markets”, big cities of Malaysia saw the share of supermarkets in fresh produce retail rise to 60 percent in fruit and 35 percent in vegetables. Similarly in Bangkok, supermarkets were selling 40 percent of fruit and 30 percent of vegetables by 2002. The FAO Report predicts that, following trends in Europe and the US, Asian markets too will witness gradual marginalization of traditional wholesalers in favour of increasingly consolidated “preferred suppliers” and “dedicated wholesalers” who would be brought into joint ventures or tied-up in long-term contracts.

The Washington-based International Food Policy Research Institute says that the heightened penetration of supermarket chains into Asia, Africa and Latin America is locking small farmers out of the supply chain and driving millions of farmers into poverty. Latin America has been the worst hit with the fastest growth in supermarkets, achieving in 10 years diffusion rates that took 50 years in the US! In Brazil, the share of supermarkets in fresh food sales went up from 30 percent to 75 percent in just 10 years between 1990 and 2000.

Supermarket culture and need for Regulation     Colossal waste and inordinate pressure on suppliers are part of supermarket culture. In Singapore, studies have found that close to 30 percent of fresh produce is thrown away in wholesalers’ sorting yards or supermarkets even before they appear on shop shelves because of ostensible defects or being otherwise deemed non-saleable. Within supermarkets themselves, food wastage in Singapore is estimated at 20 percent compared to 30 percent in the US or UK.

Indeed, supermarket waste has reached such proportions that the UK has an active Waste & Resources Action Programme (WRAP) aimed at reducing all forms of wastage in supermarkets. WRAP studies have found that many factors drive such wastage, chief among them being the very character of supermarkets and the type of shopping practices they engender. People shop more and buy far more than they actually consume simply because they can! In major urban centres, where supermarkets are often open round the clock, shoppers end up buying many other items than what they may have come in for, and more than they need. Promotional offers such as buy-one-get-one-free and other so-called multi-buy promotions means that more groceries get pushed than are consumed.

Yet the pressure exerted by the powerful retail chains is such, and the ideology of de-regulation is so strong, that of course one can barely talk of regulation in the US while efforts at regulation in the Eurozone and UK have not made much headway.

The influential UK Sustainable Development Commission (UK-SDC) in its study of policies relating to supermarkets strongly criticized the British government for allowing WRAP to leave it to the supermarkets themselves to formulate a voluntary self-regulatory set of practices to reduce waste termed the Courtald Agreement. UK-SDC stated that “too many supermarket practices are… unhealthy, unjust and unsustainable.” Needless to say, the UK-SDC report covered many other areas of supermarket operations too besides the issue of food and other waste.

An even broader ambit was covered by the UK Competition Commission whose 2000 Report cited earlier led to the proclamation of a Supermarkets Code of Practice which was later amended in 2009 to the Groceries Supply Code of Practice (GSCOP) that lays down standards and procedures for procurement, fair trade, inventories and sales, and so on.

It is indeed significant that in all the debate in India around organized retail, no industry or government body has said a word about regulation or the need for it. For all their weaknesses, it is the presence and functioning of regulatory bodies in the UK and EU, in contrast to the situation prevalent in the US, that has at least thrown up a substantial amount of data and analytical information, and brought supermarkets under public scrutiny and the possibility of at least some social control.