MAC: Mines and Communities

Indian officials accused of conniving with Vedanta to avoid water penalties

Published by MAC on 2011-12-27
Source: Statement, Express News Service

It's nothing new for UK-listed Vedanta Resources to be accused (or found guilty) of committing illegal acts - something that's happened on many occasions since the Indian-focused company listed on the London Stock Exchange seven years ago this month.

Now, a civil society organization (Odisha Water Initiatives - OWI) which pledges to protect water supplies for the people of Orissa (Odisha), provided evidence of numerous instances where the company illegally extracted water from rivers and reservoirs.

But, even when fined for these violations, the company failed to pay the penalties - now amounting to some US$2 million.

What's more, says OWI, officials in Orissa's state Water Resources Department were complicit in allowing Vedanta to escape punishment for its illegal acts during the past two and a half years.

The organization is urging the government to "... declare all production of the company using the illegally drawn water as 'illegal' and impose heavy penalty and punish the company bosses and officials suitably."

Open Letter to the Secretary, Water Resources Department, Govt. of Odisha from Water Initiatives Odisha

Odisha Water Initiatives - OWI Letter

16 December 2011

Sir, why is the ‘water looter' Vedanta gets undue favour from your department?

· - Do you know it not Sir that your officers take recourse in ‘telephonic discussions' in waiving off water tax to industries?

- Is this what the reforms you have been talking about in the name of Integrated Water Resources Management (IWRM), as we have been apprehending, actually a plan to take away right of water from common people, farmers and ecology in favour of allocation to blind industrialization that the govt. is committed?

- The people of Odisha need an explanation on this.


Water Initiatives Odisha (WIO) has just learnt that the Executive Engineer, Main Dam Division, Burla, on 18th November, 2011, has written to the Additional Secretary to Govt. of Odisha's Water Resources Department to waive penalty due on the Vedanta Aluminium Ltd. to the tune of about 9 crore of rupees [around US$2 million] against withdrawal of water from the Bheden River and later from Hirakud Reservoir.

The Executive Engineer, citing example of a telephonic instruction from the Additional Secretary of the DoWR, writes that industries having Govt. allocation should not be charged penal rate merely due to non-execution of agreement. In fact, based on such a telephonic instruction, as the letter describes, the company was not being charged any penalty since August 2008.

However, a data sheet on assessment of water rate of VAL drawing water from river Bheden alone, shows that the Company has always been charged ‘six times penalty' on almost each month from September 2007 onwards.

The Executive Engineer recommends the waiver on the ground that VAL has good payment records. The above record however shows that the VAL has always had kept huge amount of arrears and has never cleared its dues as charged by the department. It clearly shows how the Officials are favouring this industry.

We urge upon the Govt. of Odisha to immediately investigate into this matter and let the public know what makes an Executive Engineer favour a ‘Water Lootera' Company like VAL. We also demand stringent punishment to the company for having defaulted so long on the water tax and penalty imposed on it.

This is not the isolated example when it comes to the Vedanta Group of Companies. We at Water Initiatives Odisha (WIO) had been raising the issue of unauthorised exploitation of ground water by VAL at Jharsuguda. The local people have also raised this issue several times. However, the Water Resources Department kept maintaining that there was no illegal exploitation of ground water.

Water Initiatives Odisha (WIO) has just got hold of a letter from the Chief Engineer, OWPO addressed to the Additional Secretary to Govt. of Odisha's Water Resources Department which clearly mentions how the company has been illegally extracting ground water within its Jharsuguda complex through borewells.

The letter dated 17th September 2011 mentions that "1.782 lakh Gallon Water from borewell without Agreement since 08/2007. So, 6 times penalty has been imposed and intimated the industries to seal all Borewell from Sept 2010 vide E.E. Letter No. 15.12.2010".

Accordingly the company, as per the said govt. letter, had a water rate arrear of about 93 lakh rupees [pending against it. Was this free loot of the water resources possible without connivance of the departmental and other officials?

WIO urges upon the Govt. of Odisha to immediately inquire into this matter and punish the company and all officials involved in this fraud. We also urge upon the govt. to inform the public the status of the borewells and the extraction of the water at the moment. Have the borewells been sealed, as mentioned in the above referred letter? We doubt. So, we demand a public audit of the company complex where local people, local self govt. representatives and civil society representatives should go along with govt. officials and verify the situation.

We also urge upon the govt. to declare all production of the company using the illegally drawn water as ‘illegal' and impose heavy penalty and punish the company bosses and officials suitably. As such also this company has all along been a defaulter in paying water rates.

The above letter of the Chief Engineer mentions that VAL Lanjigarh and VAL Jharsuguda together had arrear worth Rs.14,37,99,172/- pending against it as on July 2011. It must have gone much higher by now. Its high time the Govt. took action to show that it respects its own Water Policy and Rules.

The above examples point how the Industries are given a free ride to loot our water resources. We at WIO have raised concerns about several industries already. The same was pointed out by several participants of a recently organised consultation on "IWRM and Baitarani" at Keonjhar by WIO.

We urge upon the Govt. of Odisha to release a status paper of all illegal withdrawal of water by industries in the state, the amount of tariff dues and penalty pending with them, action taken against this illegality and steps taken to restore the water resources from their exploitative clutches. We also urge upon the Govt. to give ‘shut down notices' to all industries who are engaged in water theft.

For further information, please contact:
Ranjan Panda
Convenor, Water Initiatives Odisha
Cell: 9437050103

'Why waive Rs 9 crore penalty on Vedanta?'

Express News Service

18 December 2011

BHUBANESWAR: The move by the State Government to waive Rs 9 crore penalty on Vedanta Aluminium Limited (VAL) for withdrawal of water from Bheden river and Hirakud reservoir came in for sharp criticism from the Opposition in the Assembly on Saturday.

Raising the issue during zero hour, Leader of the Opposition Bhupinder Singh said when farmers are not getting water for cultivation, the Government is protecting the interests of the big industries by allowing them to draw water from Hirakud reservoir.

Sources said the Executive Engineer, Main Dam division, Burla, had written a letter to Additional Secretary in the Water Resources department on November 18 recommending waiver of penalty due on VAL. The Leader of the Opposition alleged that water penalty has not been charged on VAL because of a telephonic instruction from the Additional Secretary of the Water Resources department.

Describing the State Government as the ‘government of big industries', Leader of the Opposition said farmers are ignored as they are not getting water for cultivation and drought situation prevails in entire Western Odisha districts. He said the Government policy is leading farmers towards suicide.

Singh said farmers have suffered huge losses because of the dry spell and subsequent drought during the year. He demanded that the State Government should waive energy bill on the farmers.

Criticising the State Government for its move to waive water cess penalty on VAL, Santosh Singh Saluja (Cong) said farmers never get such concessions. Stating that the State is facing drought and flood for the last three seasons continuously, Saluja said farmers have suffered huge losses due to the inaction of the Government.

He said the main purpose behind construction of Hirakud reservoir was flood control and providing irrigation facilities to farmers. But now water from the reservoir is mainly used for meeting the demands of industries. Saluja supported Singh's demand for waiver of energy bills for the farmers.

Water Tax Issue Rocks Assembly

The Pioneer

Exposing the alleged favouritism to industrial houses at the cost of the farmers, the Opposition members in the State Assembly on Saturday slammed the State Government for initiating a process to waive a whopping Rs 9 crore water tax to Vedanta Alumina.

The issue rocked the House with Leader of Opposition Bhupinder Singh quoting Government sources said that the Additional Secretary of Water Resources Department had recommended to the Chief Engineer, Water Resources to waive Rs 9 crore water tax in favour of Vedanta Alumina, Jharsuguda. He sought the Government to clarify under which circumstances, such a huge amount would be exempted to the "blue eyed" Vedanta Alumina.

He alleged that while the Government was insisting the farmers to deposit water tax in Hirakund command areas one year advance and imposing fines in case of non-payment of water tax, why the Vedanta was shown favour.

He lamented that Government was not giving assistance of waiving the water tax to the farmers for the crop loss during drought and also floods. He urged the Government to order an inquiry into the alleged waiving of water tax to Vedanta.

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