MAC: Mines and Communities

A double disgrace that shames all India

Published by MAC on 2008-08-11
Source: London Calling

Last Friday, India's highest judicial authority delivered a double whammy to hundreds of thousands of tribal people, poor farmers, human rights campaigners, environmentalists - and those who value both Indigenous law and the country's constitution..

The so-called "Green" bench of the Supreme Court gave the go-ahead not only to Vedanta Resources' bauxite mine on Orissa's Nyamgiri Hills; it also waved through South Korean steel-maker Posco's own massive project in the same state.

The announcements were hardly surprising, though they still had the power to shock. The court seemed determined to display its pro-industry credentials on both sleeves - perhaps (more cynically) also to divide the opposition by throwing it two challenges at once.

And challenges there will be. Further legal recourse now seems heavily circumscribed - although, in March, one beleaguered Orissa community launched an attempt to thwart Posco's moves by using the newly-framed Forest Rights Act (see below).

But we only need recall the huge resistance over the last three years to the siting of other industrial plants in the heart of indigenous and rural communities (Tata's at Kalinganagar, and Singur and a special economic zone at Nandigram) to foreshadow what might happen now at Nyamgiri, and in retaliation to Posco.


In giving its green light for Nyamgiri the supreme court made no pretence (as it did last November) of endorsing an Indian rather than a British firm. Then, it condemned Vedanta's record, citing the Norwegian Pension fund's disinvestment from the London-listed company in doing so. But it still invited Vedanta's subsidiary, Sterlite Industries, to submit a Special Purposes Vehicle (SPV) to mine the hills. Now, the court has recognised the two-headed nature of this modern Minotaur and, in so doing, totally junked its previous moral stand..

From the little announced so far, the SPV will probably see Sterlite/Vedanta in the driving seat, holding 40% of the shares; the Orissa state government owning 26%; and its state-owned mining company (OMC) the remaining quarter. The vehicle would make a payment of the net present value of 55 crore rupees (around 11 million dollars) towards a "wildlife management plan for conservation and management of wildlife around the mine", and Rs 12.2 crore towards "tribal development."

It seems that Vedanta would pay only 1% of London Metal Exchange prices, fixed for aluminium, in order to access the Nyamgiri bauxite - having presented the false assertion that it's impossible to price bauxite in the market.

Even adjusted for the cost of power, infrastructure, and other inputs, this proportion would represent only US$25 per tonne of bauxite, gauged by recent aluminium spot prices. Yet China - India's main customer for exported bauxite - has been paying around $130 per tonne for the raw material. Such an arrangement thus appears to represent a palpable give-away to the UK company.

Consent denied

One of the key challenges for Vedanta will be to present itself as a bona fide partner to the Dongaria Kondh - the custodians of Nyamgiri and upholders of the mountain's own law (Niyam Raja).

Several newspaper reports, in both the UK and India, have claimed that Vedanta's executive chairman, Anil Agarwal, now recognises the rights of the Dongaria Kondh to withhold permission from the project. This, surely erroneous, belief is based on a statement allegedly made by Agarwal at the company's London AGM on July 31st.

However, scrutiny of notes taken at the meeting show he gave no such promise - instead referring to the necessity for permission from the supreme court and the central government. Certainly Agarwal has never paid heed to Schedule Five of India's founding constitution which prohibits the alienation of tribal land to non-tribal private companies.

Already subtle and not-so-subtle pressures, intimidation, and bribes, have been applied to Kondhs on the plains around its Lanjigarh refinery, seeking their acquiescence to the company's ravages. So - savage irony though it may seem - those living in the hills might actually be better off were they now spared further aggressions to gain their pretended "consent" to a project which, according to numerous observers, they resoundingly reject.

Demonstration of this rejection will not be found in further surveys, yet more interviews, or pretences at public enquiry.

The true battle for Nyamgiri - and in the hills themselves - has only just commenced.


Kalinganagar, Nandigram, Singur. See:

Norwegian government condemns Vedanta. See:

Terms of the SPV: Financial Express (Delhi) 8/8/2008

[London Calling is pubished by Nostromo Research, London. Opinions expressed in this column do not necessarily represent those of any other party, including the editors of the Mines and Communities website. Reproduction, in whole or in part, is welcomed, provided acknowledgement is given both to Nostromo Research and any sources cited in this article.]

India's top court clears Posco, Vedanta projects in key rulings


9th August 2008

NEW DELHI - India's top court has cleared South Korean steel giant Posco's plan for a 12-billion-dollar plant in a controversial case seen pitting farmers' interests against growing industrial development.

In another key case viewed as a test of tribal rights, the court approved British mining company Vedanta Resources' proposal to mine bauxite on land held sacred by locals to feed a 900-million-dollar aluminium refinery.

The plant to be built by Posco, Asia's top steel producer, in the resource-rich eastern coastal state of Orissa would be the biggest foreign direct investment in India since it launched market reforms in 1991.

But the plant, which aims to create 18,000 jobs in a poverty-ridden part of the country over the next decade, has stirred violent protests by farmers objecting to loss of their land.

In both rulings Friday, the court imposed environmental and compensation conditions but the stipulations did not satisfy the projects' opponents.

"The ruling has no bearing on our struggle. We'll continue our fight against Posco. We'll never give up our land," said Abhoy Sahu, head of the group spearheading the protests against the steel project.

The government has been keen to draw foreign and domestic investment to create job-generating industries.

But the shift from agriculture has stirred big debate and often violent local opposition as many projects encroach on farm or tribal land.

Seoul-based Posco welcomed the court ruling and said it would proceed swiftly with the project, initially agreed in 2005, requiring 4,000 acres (1,600 hectares) of land.

POSCO plans a four-million tonne steel plant and a 400-megawatt power plant. The company has a "firm commitment to the project" and is determined to move ahead "at full speed," said Posco India senior general manager Vikash Sharan.

Vedanta also said it was happy with the approval of its plan to carry out open caste bauxite mining on what tribals say is their holy mountain, also in Orissa state.

The company had sought permission to mine vast bauxite deposits in the fertile forested Niyamgiri Hills to supply the aluminium refinery it built nearby. Vedanta has been feeding its refinery with bauxite purchased from other Indian states.

The case was seen as an important test of tribal and environmental rights against industrialisation.

London-based Survival International director Stephen Corry called the ruling "a devastating blow" to "all of India's tribal peoples."

In Orissa, Dongria Kondh tribal Jitu Jakaka, said: "We are deeply connected with the mountain... our sacred place. It is home to our god Niyamraja. We will not allow the company to mine our land."

Last November, Norway's state pension fund withdrew 13 million dollars in investments in Vedanta, accusing it of "causing serious damage to people and to the environment" in India. Hosted by Copyright © 2008 AFP.

Indian tribe loses fight to stop UK firm building mine on sacred land

By Andrew Buncombe, Asia Correspondent

The Independent (UK)

9th August 2008

India's highest court has ignored the pleas of tribal people fighting to protect a sacred mountain by allowing a British company to establish a bauxite mine across a vast swathe of the area. Despite months of protests by campaigners who say the mine will all but destroy the Niyamgiri Hills, the Supreme Court said Vedanta Resources had met the conditions required to proceed with the project. It ordered, however, that the company must invest a percentage of its profits from the mine to help local people.

The tribal people have vowed to continue their protests and said they would rather die than give up their homes. Jairam, a villager from the Rayagada district, said: "Even if you kill us we will not give Niyamgiri. Our souls are in Niyamgiri. Our food, water, homes are in Niyamgiri. There is nothing without Niyamgiri."

For the Dongria Kondh tribe, the Niyamgiri Hills in the state of Orissa represent not just their home but their deity. They say the mountain gives them everything they need for their survival and that they could not live anywhere else. They have repeatedly argued that they cannot understand why their homes should be taken over by a company that will destroy the mountain, especially by a foreign corporation.

But the plan has the backing of powerful interests and both the federal and state government have given to their support to the project, saying it will help industrialise and exploit the mineral interests of an underdeveloped region. For campaigners, the battle to save Niyamgiri has become a cause celebre at a time when much international attention focuses on India's economic development.

Some believe yesterday's ruling could come to represent a landmark decision in which the interests of those people left outside the bubble of growth were deemed less important.

Bratindi Jena, of the charity Action Aid, said: "When any country is developing or shining in terms of its economy, it does not help the marginalised communities - the tribal people, women, and so forth. They remain outside of the benefits. [This decision] is devastating for the indigenous people living there."

At Vedanta's shareholders' meeting last week in London, the company chairman, Anil Agarwal, said the project would only proceed with the "complete permission" of the courts and the local people.

A Vedanta spokesman, C B Krishnan, said last night: "A public hearing was held and all the local people supported the project. It's all in the public record." Interesting? Click here to explore further

Hill tribe protests at Indian mine site

By Joe Leahy and Rebecca Bream

Financial Times

8th August 2008

Activists representing an Indian hill tribe have pledged to continue their battle against efforts by Vedanta Resources to mine a mountain revered by the indigenous people as sacred, in spite of a court ruling on Friday that approved the project.

India's Supreme Court overruled objections to the project by the Dongria Kondh tribe. The UK-listed Vedanta's Indian unit, Sterlite Industries, intends to mine the Niyamgiri hills in eastern Orissa state for bauxite to supply an $800m alumina plant.

"We are going to continue to assert our rights within the democratic framework," said Bratindi Jena, an activist from ActionAid, a non-governmental group representing the tribe. "We are going to explore [the] legal options, and we will continue mobilising people, [Vedanta] shareholders and civil society."

The project is one of several large mining and steel projects that have been delayed by protests in eastern India, one of the country's most resource-rich but least developed regions.

Orissa and other eastern states, such as Jharkhand and Chhattisgarh, are home to large numbers of India's "tribal" peoples, who trace their roots back to the country's ancient indigenous forest dwellers.

In another development, the Supreme Court approved a proposal by South Korea's Posco to use 3,000 acres of forest land to build a $12bn steel plant, in what would be India's largest foreign direct investment to date. That project has also been struggling to get off the ground because of fierce protests by local villagers.

The Dongria Kondh, about 8,000 people, last week staged a blockade of a road project to Sterlite's mine site, according to Survival, another activist group. None of the Dongria Kondh will be relocated to accommodate the mine but they are worried about the religious and environmental impact. "The mountain is sacred to them and they are also worried that huge amounts of forest will be destroyed and [about] rivers being polluted," a Survival spokesperson said. The tribe could not appeal against Supreme Court decision but they would petition the court to consider the cultural and religious impact of the mine.Copyright The Financial Times Limited 2008

Orissa village to use forest Act to block Posco project

Nitin Sethi. Times of India

10th August 2008

Posco and Vedanta might have cleared the hurdles at the Supreme Court but villagers on the ground are hoping the card up their sleeve - the Forest Rights Act - is really an ace and can stall the take over of their lands.

In a strategic move, Dhinkia in Jagatsinghpura, the village in the eye of stormy protests against the Posco plant, has passed a resolution declaring its forest as 'protected' community forests under the Forest Rights Act.

Under the FRA, even the government cannot acquire such declared forest land without the consent of the gram sabha. In a precedent-setting move, that sources say, powerful tribal groups are thinking of replicating, Dhinkia villagers have also passed a resolution demanding that any land taken over be stopped till their rights are settled under the Act. The Forest Rights Act, which is being rolled out across the country, disallows any entity, including the government, to displace people from forest lands till their rights have been settled.

With tribal groups, which have found greater political support to tie-up with the implementation of FRA, keen to file similar petitions in other controversial mining projects such as the Vedanta bauxite mining in Nyamgiri hills of Lanjigarh, Orissa, the tribal displacement issue could take a new turn, this time in favour of the forest dwellers.

Sources said that the key tribal groups have been aware that the cases before the apex court have hinged on the Forest Conservation Act and the Environment Protection Act, both of which do not consider tribal or forest dwellers' rights but merely deal with 'ecology'.

The tribal lobby also does not shy in reminding that it was the eviction orders of the Centre and the courts that pushed the demand for FRA into a high pitch. With the apex court having accepted its empowered committee's recommendations to 'put a price' to forests using the Net Present Value formula and the government having supported it too, the key tribal groups, which have largely found support from Congress as well as the Left, are strategising to use the FRA.

One set of people within the groups thinks that it could help delay reaching out to the option of last resort - the apex court - which acts like a double-edged sword. But as of now, the Orissa government has not appreciated the move with the local administration refusing to accept the notice from Dhinkia gram sabha under FRA. The village council had to finally send the notice by registered post.

The PM had earlier written to all states asking that the Act be implemented quickly. But the move by Dhinkia villagers could make it tough for the Orissa government, which has been pushed by the central government to complete formalities on the Posco project.

For the government, this move by the tiny hamlet in Orissa could mean a serious headache in the days to come. Much of the mining reserves are found under forests in India. Nearly 40% of coal reserves are of the magnetite categories, which are naturally found in forests. Almost a majority of these forests are either reserved (a lower level of protection against diversion) and rest are locked under national parks and sanctuaries.

The steel ministry had complained about the difficulty in opening up these areas to mines. Tribal groups have complained that even when the forests get opened to mines, their traditional rights are easily disregarded, as the land records have never been settled.

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