MAC: Mines and Communities

Break it up and speed ahead

Published by MAC on 2007-06-15

Break it up and speed ahead

By Kanchi Kohli, InfoChange News & Features

June 2007

Although not a new phenomenon, the trend of breaking up various components of an infrastructure or industrial project in order to bypass environmental clearances and seemingly reduce the project's overall impact, is gaining in popularity all across India

The new recipe for environment clearance that's being followed these days goes like this: Take a large industrial project. Break up into three components. Show that each has limited impact on the environment and people's livelihoods. And the required clearance is yours!

One large costly irrigation scheme requiring the mandatory environment impact assessment? No problem. Show that the two dams are two different projects, and do away with the legal requirement altogether.

There is a list of projects specified under the Environment Impact Assessment (EIA) notification that require environmental clearance before construction begins. This includes commissioning an EIA report and, in most cases, conducting a public hearing. The related process of seeking forest clearance under the Forest (Conservation) Act, 1980, comes into play when a project calls for the diversion of forest land for non-forest use, such as for industry, roads, mines, dams, etc. No construction activity can begin on forest or non-forest land until both these clearances are in place.

But the reality on the ground is different.

The most talked about example of the trend of splitting up projects is the Lanjigarh refinery and proposed bauxite mine in the Niyamgiri hills of Orissa by Vedanta Alumina plc. Construction on the refinery began without clearance for the mine. The mine site, which is 4 km from the refinery, is an important and ecologically sensitive area. It is also the home of the Dongria Kond tribals.

When the issue was brought up before the Central Empowered Committee (CEC) of the Supreme Court, the project proponent delinked the two components as a safeguard against penalisation for violation of the provisions of two critical environmental laws. Construction of the refinery was not stayed. Today, the case is still being argued in court and clearance for the mine remains pending.

Meanwhile, the project proponent has changed its stance completely. It now says upfront that the mine is critically linked to the refinery project. And that the refinery cannot function without ore from the Niyamgiri hills. Connecting or breaking up project components has become a matter of convenience. A final decision on the matter is yet to be taken, although the CEC is of the strong view that forest clearance should not be granted to the project.

Another example is in the neighbouring state of Chhattisgarh. The government of that state recently moved a proposal for forest clearance of 1.517 ha of protected forest land to lay a water pipeline from the village of Rabo to the Tamnar thermal power plant belonging to M/s Jindal Power Ltd, in Raigarh district. The total length of the pipeline is 23 km. The proposal claims that no trees will be felled in the course of laying the pipeline. The pipeline is centrally linked to another project with two other components, which was challenged before the CEC on similar grounds as the Vedanta case. Only this time, the linked components were a 1,000 MW thermal power plant at Tamnar and an 18-metre-high dam to be constructed near Rabo village on the Kurkut river. The environment clearance letter for the thermal power plant clearly mentions the need for a dam that necessitates diversion of forest land. It also states that construction cannot begin without the forest clearance in place (see

Despite this, construction at both Tamnar and Rabo ("preliminary work", as the project proponent admitted before the CEC) began before forest clearance for the diversion of 177.542 ha was granted. When the Ministry of Environment and Forests (MoEF) carried out a revalidation of environment clearance, it was on the grounds that construction activity had begun. Legally there should have been no construction there, as forest clearance for the project was not yet in place. But nothing could be done as, by the time the matter came up for hearing, forest clearance for the dam had come in: three years after environment clearance for the thermal power plant was revalidated. Now, the same company, through the state forest department, is seeking additional forest clearance for the third linked component -- the pipeline. Surely the project proponent knew about all these components from the project design!

Let us return to Orissa where POSCO, in Jagatsinghpur, is making news and local agitations clearly show that the people here are not in favour of the project.

According to the Memorandum of Understanding (MoU) signed by the Pohang Steel Company (POSCO) and the Government of Orissa in 2005, POSCO plans to set up an integrated steel project in Orissa with the following components:

* A mining project or captive mines to meet iron ore requirements.
* A transportation component -- a captive port along with road, rail infrastructure including a dedicated railway line from the mine belt to Paradeep.
* An integrated township.
* A water infrastructure project.
* An integrated steel plant of 12 MTPA, to be built in three phases.

With a delay in the granting of Special Economic Zone (SEZ) status, POSCO began pursuing clearances for the mining, steel plant and port components of its project separately. It made separate applications for environmental clearance of the port and the first phase of the steel plant. On April 15, 2007, a joint public hearing for the captive port and first phase of the steel plant was conducted under heavy police supervision. The third component of the mine in Kandadhar is stuck in a legal tussle with the Kudremukh Iron Ore Company Ltd (KIOCL), as the area was originally allotted to them.

Although the various links in the project are clearly and publicly known, the Ministry of Environment and Forests accepted the break-up model and went ahead in granting environment clearance to the captive port on May 15, 2007. The clearance letters are still not available on the MoEF's website and have also not reached the local panchayats. POSCO officials have, however, made statements about it to the media.

The break-up theory is not a new phenomenon. Let's look at an example that attracted the provisions of the 1994 version of the EIA notification.

The project related to the diversion of the west-flowing Mahadayi river in Belgaum district of Karnataka to the east-flowing Malaprabha river, by the Government of Karnataka. Two earthen dams are proposed to be built on the Bhandura and Kalasa Nalas. When originally envisaged, diversion of the Kalasa entailed an estimated cost of Rs 44.78 crore and Bhandura, Rs 49.2 crore. It is important to note that both proposals were components of the larger Mahadayi Diversion Scheme. When first envisaged, the combined cost of the projects was over Rs 90 crore, making environment clearance from the MoEF mandatory according to the 1994 EIA notification. The notification requires that any project above Rs 50 crore must go through the environment clearance process. But, split up into two separate proposals, the project cost was under Rs 50 crore, thereby escaping the mandatory requirements.

Then, in 2002, the entire scenario changed with an amendment to the notification itself, raising the financial limit of projects requiring EIA and a public hearing to over Rs 100 crore.

Why are proponents seeking separate clearances for their projects? Is it not simpler to show all the links between the components and get one clearance? But then obviously, when assessed, the cumulative impact of the project will be greater. In most cases, each component of a project cannot operate in isolation. Very often, grant of clearance to one component and the subsequent investment in construction are used to argue grant of clearance to another component. It's the old fait accompli argument.

The real problem lies with the ministry that grants clearances. It's important that the impact assessment division looking at environment clearances and the forestry division looking at forest clearances work in tandem. And the expert committees looking at various components of a project consult with each other. Often, different expert appraisal committees at the MoEF (mining, industrial, river valley, new construction projects, etc) appraise environment clearance for different components; forest clearance is pursued separately. There is no mandatory requirement or scope (or perhaps even desire) to look at the impacts of projects cumulatively and arrive at decisions that, in most cases, are extremely critical.

Such trends in the environment and forest clearance process are totally unacceptable; they make a mockery of the very purpose for which they were introduced. The examples given above are only illustrations of what's happening right across the country, on entire river basins, in forests and along our coastline. We must take action now.

(Kanchi Kolhi is a member of Kalpavriksh Environment Action Group and is based in Delhi)

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