MAC: Mines and Communities

India's biggest minerals project may be axed

Published by MAC on 2010-10-25
Source: Statement, Business Standard, Economic Times

It was to be the biggest, most expensive, mining and minerals' project in the whole of India. But South Korean POSCO's plans for Orissa have been under concerted attack, by communities and environmentalists, since it was agreed between the company and state government in 2005. For most recent MAC posting, see: Orissa police shoot POSCO protesters

Now, a high-level government enquiry has, by a 3:1 majority of its members, ruled that the project should not proceed.

On October 25th their report will be heard by a committee of India's Ministry of Environment and Forests. If the committee accepts its findings, another parlous venture may soon follow in the path of Vedanta's proposed Nyamgiri mine.

Majority of Posco Enquiry Committee Confirms that Posco Project is Illegal


Gadkujang, Nuagaon, Dhinkia Gram Panchayats, Erasama Block, Jagatsinghpur District, Orissa

18 October 2010

Today three of the four members of the committee set up by the Ministry of Environment and Forests confirmed that the POSCO project is illegal and that all of its clearances were obtained by breaking the law.

The Committee has also found that the project has potentially very dangerous impacts on issues like water, air pollution, and the coastline, and none of this was ever properly evaluated. After a detailed discussion of the huge number of criminal actions by the company and the Orissa government, the Committee says (in the conclusion of the report):

"The POSCO project is an example of how a mirage of "development" c an be used in an attempt to bypass the law. Such attempts, if allowed to succeed, will result in neither development nor environmental protection, but merely in profiteering. This will cause immeasurable harm to the nation and to the rule of law and justice in our society".

"We particularly draw attention to the fact that the majority found that:

Those who keep talking of the POSCO project as one of "national importance" should answer these questions: would any other country in the world tolerate such violations of their law?

Would South Korea tolerate an Indian company grabbing their land, breaking their laws and threatening to cause a n environmental disaster? Is this what development means - robbing thousands of their lands and threatening lakhs [hundreds of thousands] of people with water shortage and other catastrophes?

As for the dissenting report of Ms. Meena Gupta, her position reflects her own interests. She was the Secretary that granted the environment clearance, and asking her to review it is like asking a thief to don a police uniform. Naturally she has said that all the clearances should continue.

Her report is full of distortions, such as claiming that there are only 700 families in the area (when over 4,000 will lose their lands and/or homes). She tries to cover up crimes by saying that it does not matter if the law was broken; all that is required is to impose some additional "conditions".

We call upon the Central government to heed the voice of the people and the findings of the majority report, withdraw all clearances and cancel this unjust, illegal and brutal project.

(Abhay Sahoo)


MoEF Panel to submit POSCO report on October 18

Business Standard (India)

18 October 2010

The four member committee set up by Ministry of Environment and Forest under former Union environment secretary Meena Gupta to look into issues of violation of forest right act and other statutory clearances relating to the Posco's mega steel project in Orissa will submit its report to the MoEF on October 18.

This will be followed by a meeting of the Forest Advisory Committee (FAC) on October 25 where the findings of the Meena Gupta panel will be discussed and a final view will be taken on the fate of the project.

The Meena Gupta committee will submit its report on October 18 and FAC will meet on October 25 to discuss the report. Orissa government will also be given an opportunity to put its side before FAC", said Union environment and forest minister, Jairam Ramesh.

The four member panel, set up on July 28, had visited Orissa twice in August and September during which it had made field surveys at the Posco site and held discussions with the locals and government officials on various issues related to the project and its captive port at Jatadhari near Paradip.

It may be noted the Meena Gupta panel was constituted after the NC Saxena committee set up to look into forest rights act (FRA) violation in different parts of the country found instances of FRA violation in the Posco site. On the recommendation of the panel, the MoEF had ordered stoppage of all work including land acquisition at the project site on August 5.

The Meena Gupta committee was initially given a mandate to investigate and ascertain the status of the implementation of the Scheduled Tribes and Traditional Forest Dwellers (Regulation of Forest Rights) Act, 2006 in and around the forest land within the project site and look into the status of the implementation of the Rehabilitation and Resettlement provisions with respect to the project affected people.

However, the terms of reference of the Meena Gupta committee was later expanded to review the compliance of the project with Environment Impact Assessment (EIA), Coastal regulation Zone and other clearances granted by MoEF and other Central, state and local authorities.

Besides, it was asked to review the compliance of the project and the state authorities with statutory provisions, approvals, clearances and permission under various statutes, rules and notification etc.

During interaction with the panel members at the project site, the anti-Posco brigade, through oral and documentary submission, pleaded that there were hundreds of Other Traditional Forest Dwellers who had been denied their rights under FRA. On the other hand, the project supporters argued that there were neither any tribal nor any villager dependent on the forest land for livelihood for three generations to attract FRA provisions.

The other members of the team were Urmila Pingle, an expert on tribal issues, Devendra Pandey, a Rtd IFS officer and V. Suresh, an advocate of Madras High Court.

ArcelorMittal, Posco & Vedanta scale down plans in Orissa due to delay in acquisitions

Economic Times

18 October 2010

BHUBANESHWAR: They were once held up as the three core projects that would catapult Orissa into the big league and as one of the most favoured business destinations globally.

But five years down the line, the dreams have turned sour for ArcelorMittal India , Posco and Vedanta Resources as long delays in land acquisitions and slow clearances of projects prompt these companies to scale down plans and look for alternative destinations.

While smaller projects have taken off the ground and have started functioning, the larger ones have been bogged down due to a slow rehabilitation and resettlement (R&R) policy, say people connected with the projects. The situation has worried the ruling Biju Janata Dal (BJD) government, which has been widely seen as industry-friendly.

South Korean steel major Posco was among the first to arrive in Orissa, committing to mine ores, build a steel plant and set up a port for an estimated Rs 51,000 crore, while metals tycoon Anil Agarwal-owned Vedanta Resources, which has so far invested about Rs 45,000 crore in its alumina refinery and power projects, has said it will spend Rs 15,000-crore on a mega university project also.

ArcelorMittal, the world's largest steelmaker, was to invest Rs 40,000 crore for its 12 million tonne steel project in Keonjhar district.

But Posco, which was all set to start work at the site in Jagatsinghpur early this year after grant of mining licence, has not yet made progress on land acquisition. The delay has prompted Posco India to look at options in states like Maharashtra, Jharkhand and Karnataka.

"We've received a favourable investment and facilitation climate in all these places," said a Posco India spokesperson.

Posco had signed a Memorandum of Understanding (MoU) with Orissa in June 2005 for the 12-million tonne-capacity steel plant to be built in three phases by 2016, with production scheduled to begin by end of 2011. However, farmers in Jagatsinghpur are not ready to part with their land - Posco needs 4,000 acres for the 12 million tonnes steel plant - throwing awry the entire plant schedule.

"This is a process that has to be followed," said one senior government official who is part of the department that approves the R&R policy. "It typically takes four to five years for land issues to be resolved. They can't be speeded," he added.

However, a Posco executive says the company has made it clear that it would not hesitate to move out of the state, as the government had promised "all help to set up the steel project at a cost of Rs 51,000 crore near Paradip port."

What has complicated most mega projects is the faceoff between the state government and union ministry of forests and environment.

The focus on the environment sharpened after a report by the four-member Saxena Committee declined to clear Vedanta's mining project and eventually denied permission to mine. Vedanta is contesting the matter.

Similarly, the environment ministry also stopped all project-related works at Posco's proposed site after the Saxena committee reported alleged violation of the Forests Rights Act.

A non-starter from the start

Girish Agrawal

Hundstan Times

21 October 2010

Paan kheti [betel vine cultivation] is our lifeline...why does the government want to destroy it and force us into being labourers?" asked Niranjan, a 60-plus-year-old farmer who would lose his betel vines to the Posco steel project in Orissa. This is one of the questions that haunted us, when we, a group of US-based researchers interested in the new economy of globalised India, started looking into the Posco project. We had followed the development of several large projects in India, but earlier this year, when Posco was in the news due to the imminent expiry of the MoU between the company and Orissa, we were intrigued that even five years after the MoU had been signed, the project - widely celebrated as the single largest Foreign Direct Investment in India - had failed to make any headway at all.

The lofty claims of the government, that the project would contribute over a tenth of the total economy of the state, besides almost wiping away the widespread unemployment in Orissa were well-known to us. So why, we wondered, would there be such a strong resistance to this project on the ground? We wanted to go beyond the standard narratives of cash flow and revenues, and look at the actual impact of the project on the residents of Jagatsinghpur, Keonjhar and Sundergarh, where the steel plant, port and mines would be set up.

In pursuing these questions, we were surprised to discover that despite the size and scope of the project (encompassing the biggest steel plant in India, a captive port, extensive iron ore mines, two townships, a rail and road network and the largest ever industrial allocation of water in Orissa), the government had never really bothered to evaluate the impact of the project on the people, their environment or on the state's economy.

While the government had made loud claims around tax revenues and increased employment-claims, which have never been substantiated - it uttered not a word as to the costs involved (social, economic and environmental), to help us compute how these compared. The environment assessments were still incomplete, the socio-economic data from the affected villages had been erroneously gathered, and all the economic claims came from one single study conducted by the National Council of Applied Economic Research - a study paid for and commissioned by Posco-India itself.

Our findings, published in the report, ‘Iron and Steal: The Posco-India Story', describe the pivotal role played by the various institutions of the government in justifying and implementing the fundamentally flawed Posco project, many times in an undemocratic, illegal and coercive manner.

The claims of the government about benefits to the state are based on fudged numbers, sloppy calculations and flawed methodology. Coming in the wake of the divided ministry of environment and forests (MoEF) committee report on Posco, our research report adds a depressing dimension to the development policies being pursued across India in a mad rush to please global capital.

Not only is the Posco project illegal, as declared by the majority of the MoEF Posco panel, but the very justification of the project by the government is based on falsified information. Our report suggests that besides being illegal, the Posco project is fundamentally flawed from an economic standpoint. We conclude that the Posco project as it currently stands is poorly conceptualised. Its financial benefits are grossly exaggerated and its costs minimised. If carried forward in its current form, it will certainly result in the repetition of a process that is now known internationally as "growth without human development." Overall, the country stands to lose rather than gain from the Posco project.

How does one hold the government accountable for such seemingly insane ‘development' projects? As one of the villagers in Jagatsinghpur, where a strong and popular resistance to the Posco project exists, asked us: "Can somebody go to jail for breaking democracy?" This is surely the core question: what can the people do to bring to justice those who violate rudimentary democratic norms and procedures? When rights of capital take precedence over the rights of people, and when elected governments start to act as promoters and paid consultants for a private company, what recourse do people have?

Girish Agrawal is a California-based lawyer and civil engineer The views expressed by the author are personal

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