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    Posted on 02 April 2012

    Both Tribunal And CAG Say: This Steel Has Stains

    It’s the biggest FDI project in india. Bibhuti Pati reports from bhubaneswar about the nitty-gritty of the objections of the national green tribunal and the CAG to the way the state government steamrolled the POSCO project

    Just 48 hours before the tribunal ruling on POSCO, the Comptroller and Auditor General (CAG) has pointed out serious irregularities in the allocation of land to private promoters, misuse of emergency provisions for land acquisition and under-valuation of compensation for private land-owners by the Odisha government.

    “The government misused the emergency provision under Section 17(4) of the Land Acquisition Act in several cases depriving the land-losers of the opportunity to be heard,” said the CAG report, tabled in the assembly.

    The state government invoked emergency provisions of the Land Acquisition Act in 85 cases and acquired 4,967.08 acre of private land between July 2002 and March 2011 for establishment of industries by six promoters. While cost of the land was evaluated at Rs 165 crore, the approximate present market value of the land is estimated at `901 crore, taking into account the highest sale statistics of land in those localities. Over 2,021-acre private land was acquired for Aditya Aluminium at a cost of Rs 95.84 crore while current market value of the land will be more than Rs 335 crore. The land remained unutilised till March last year, said the audit report.

    The Bhusan Power and Steel project at Sambalpur was handed over 608.67 acre at a cost of Rs 16.35 crore while the present market value of the land is more than Rs 300 crore.

    The other beneficiaries are Vedanta Aluminum, Dhamra Port Company Limited (DPCL) and POSCO (India) Ltd. All the three companies were shown undue favour by the government. Vedanta paid only Rs 8.10 crore for 826.56 acre while the present value of the land is seven times more.

    Private landowners were paid a meagre Rs 32.77 crore for 1,070 acre acquired for DPCL while the present cost of the land will be about Rs 140 crore.

    It seems the public resistance to POSCO, the South Korean steel major which has proposed to establish a 12 million tonne integrated steel project with an investment of Rs 52,000 crore, is justified. The audit report pointed out that the state government acquired nearly 438 acre by paying a compensation of Rs 11.85 crore while the present market value of the land is more than Rs 65 crore.


    DECEMBER 2009: Forest clearance granted for taking over forest land by environment ministry, then under Jairam Ramesh

    AUGUST 2010: Forest clearance suspended following complaints of violations of law, and Enquiry Committee constituted under Meena Gupta

    OCTOBER 2010: Three member majority of enquiry committee gives report saying environmental and forest clearances illegal. Meena Gupta dissents, holds clearances legal but recommends additional study and time to ensure compliance

    JANUARY 31, 2011: Environment ministry disregards both majority and minority reports, upholds environment and forest clearances, while prescribing some additional conditions (mostly consisting of additional studies to be done in future)

    JUNE 2011: Prafulla Santra challenges final order in National Green Tribunal

    Emergency provisions are invoked only when the land is required for public purpose and the process of acquisition should be completed within six months. However, the government misused the provision for private purposes.

    Days after Prime Minister Manmohan Singh assured South Korea that efforts were under way for an early implementation of the POSCO project in Odisha, fresh uncertainty has emerged for the steel giant’s plans. The National Green Tribunal (NGT) on Friday suspended the environment clearance granted last year, and directed the environment ministry to carry out a ‘fresh review’ of the project to set up the 12 million tonne per annum-capacity iron and steel plant.

    The suspension of environmental clearance has been hailed by the locals, particularly the anti-POSCO activists and environmentalists.

    The anti-POSCO villagers have demanded immediate scrapping of the project and revoking the suspension of Dhinkia sarpanch, Sisir Mohapatra.

    Conditional environmental clearance was given to POSCO by MOEF in January last year by then environment minister Jairam Ramesh though different reports were submitted by Meena Gupta and Saxena committees.

    The activists of POSCO Pratirodh Sangram Samiti (PPSS) stood by their pledge — not to allow any type of construction work. For the last seven years, people in Dhinkia panchayat have been demanding relocation of the project. They claim it will deprive them of their major source of income from the betel vines spread across nearly 3,000 acre of forest land.

    Welcoming the verdict, PPSS activists strongly criticised Ramesh and Chief Minister Naveen Patnaik for selling the livelihood of 4,000 people, and the laws of the land, to the highest bidder.

    As the truth is now out, the project should be scrapped, said assistant secretary of PPSS and former Panchayat Samiti member Prakash Jena.

    Why was the project allowed to continue despite violations?

    Prafulla Santra, convener of National Alliance of People’s Movement, president of Lokashakti Abhiyan, Odisha, and petitioner in the NGT against POSCO, in a hugely attended press conference, stated that it was a victory of the people of Dhinkia, Gadakujanga and Nuagaon Gram Panchayats of Jagatsinghpur, who have sustained their struggles against this giant steel company at a huge cost to their life, liberty, peace and happiness for the last six years.

    “It is quite painful for a conscientious citizen of an independent and democratic nation to realise that its elected representatives are willing to serve unscrupulous and erring corporation even if the people who have elected them suffer in terms of life, livelihood and peace because of them,” he said.

    “It may be recalled here that we, along with others, have raised again and again the issues of violations of forest, the environmental laws of the country with active support from the state government in Odisha. The government at the Centre is equally responsible for any single act of omission and commission.”

    “The NGT verdict to suspend environmental clearance, to review the whole project, charges of suppression of facts, misleading investigations and to have a holistic approach to the project, raises many questions.

    “Who is responsible for the crimes committed? Why was the project was allowed to continue violations? Why did the Naveen Patnaik government ignore the crimes? Why did the Government of India go out of its way to help POSCO out? Who authorised the Prime Minister to declare during his Seoul visit that he would ensure POSCO to happen in Jagatsinghpur? In light of the NGT verdict, I would demand scrapping of the project and booking the firm for all violations. Book the culpable officers for criminal conspiracy against the people and the land.”

    Jena said former Dhinkia sarpanch was suspended at the direction of Ramesh. It was alleged that he was misleading the moef with regard to the Palli Sabha resolutions against acquisition of forest land for the proposed steel plant. The district administration issued a showcause notice to Mohapatra on May 24 and two days later a suspension order was issued against him for violating Odisha Gram Panchayat (OGP) Act 1964 and resorting to fraudulent acts for preparing and furnishing a fake Palli Sabha resolution. Jena claimed that the resolution submitted by Mohapatra was not fake and this has been proved after the cancellation of green clearance. Welcoming the NGT move, Mohapatra said, “I do not want the post of sarpanch but am determined to intensify stir against the project as a PPSS member.”

    Describing the suspension of environmental clearance to POSCO’s proposed mega steel mill as a ‘conspiracy’ against the state, ruling Biju Janata Dal (BJD) mlas wanted the state government to clear doubts over the fate of the Rs 52,000-crore project. The issue was raised in the assembly during zero hour, when members of the treasury bench along with those of the Nationalist Congress Party (NCP) expressed concern over the fate of the proposed mega steel plant near Paradip in Jagatsinghpur district.

    Former minister Damodar Rout alleged that suspension of environmental clearance to the POSCO project is a conspiracy against the state.

    ‘A close scrutiny of the entire scheme … reveals that a project of this magnitude particularly in partnership with a foreign country has been dealt with casually, without there being any comprehensive scientific data regarding the possible environmental impacts. No meticulous scientific study was made on each and every aspect of the matter leaving lingering and threatening environmental and ecological doubts unanswered.’

    Extract from the POSCO judgment

    Senior environmentalist Biswajeet Mohanty says, “The entire POSCO project is shrouded with illegalities. Land acquisition, environmental clearance, forest clearance, port clearances have been done in blatant violation of the laws of the country. As a democracy, we cannot bend laws and overlook violations just for the sake of accommodating the largest FDI in India. We had raised several objections as far back as 2007 about the deficiency in the environmental clearance process, the lack of specific site advantage, the lack of raw material tie-up, the lack of field verification, the non-applicability of the Forest Rights Act. Nowhere in the world is a steel plant project set up along with a captive port. Though the Paradip port is available nearby, the company did not prefer this. The irreversible impact on the Olive Ridley turtles was never considered. The objections by the MOEF’s own officers and expert committees were over-ruled wrongfully by the MOEF.

    “It is heartening to realise that the rule of law has been upheld by the National Green Tribunal. Last year, the Orissa High Court had also stayed the acquisition of private land which was being done illegally by the state government. It is indeed tragic that in independent India, the interests of multinational companies are upheld by an irrational government. The local thriving rural agro-based sustainable economy shall be sacrificed in the name of development. I sincerely hope that the central government will now conduct the clearance process as per law, and not be influenced by American Pension funds and the World Bank, who are the real investors in the POSCO project. This ruling establishes that both the (Odisha) state and the centre violated environmental laws to favour this project proposal,” he further added.

    A government tribunal suspended the environmental clearance for South Korean steel behemoth POSCO’s proposed $12 billion project in Odisha, four days after the prime minister had indicated that the Centre was keen to push the project.

    The NGT, an apex body for environmental matters, has identified irregularities in the environment impact assessment process for the project labelled as India’s single largest foreign direct investment proposal.

    The tribunal has asked the environment ministry to conduct a fresh review of the project, saying that the ministry’s approval, granted in January 2011, appeared to rely on a review report that was ‘hit’ by official, personal, or departmental bias.

    The environment ministry created the tribunal two years ago to provide speedy environmental justice and help reduce the burden of litigation in the higher courts. POSCO has the option of appealing against this ruling in the Supreme Court.

    The Odisha government had signed a memorandum of understanding with POSCO for the steel plant to be set up near Paradip in Kujanga Tehsil in 2005. But, the project has been embroiled in controversy, facing opposition from both local residents and green groups.

    Manmohan Singh told South Korean business leaders in Seoul that the government was ‘keen to move forward with the project’. In a meeting with South Korean CEOs, Singh had said: “India is a stable and profitable long-term investment opportunity.”

    The tribunal said that a close scrutiny of the approval process suggested that the project had been dealt with ‘casually’ without any comprehensive scientific data about the possible environmental impacts.

    “No meticulous scientific study was made on each and every aspect of the matter, leaving lingering environmental and ecological doubts unanswered,” noted the tribunal members CV Ramalu and Devendra Agrawal.

    They said that the ministry, in issuing its final approval in January 2011, had accepted a report by Meena Gupta, a member of a committee asked to review the project, who herself was the environment secretary when the proposal was first cleared.

    The four-member review committee had split 3:1 — three members opposing the proposal, calling for fresh environmental reviews, but Gupta had argued for continuing it. The ministry ignored the views of the three and accepted Gupta’s arguments.

    “Whether the act of Meena Gupta is fair or not, they are definitely hit by her personal, official, departmental bias. In other words, she supported the decision made by her earlier. This is in gross violation of principles of natural justice,” the tribunal stated. It also stated that while the production capacity of the steel plant was intended to be 12 million tonne per year — at which point the project would become viable — the environmental clearance was sought for only 4 million tonne per year.

    Amid a green panel suspending environment clearance to POSCO’s $12 billion steel project, the South Korean steel major said that it is a law-abiding firm and would comply with all the directives in this regard. “The National Green Tribunal has asked the Ministry of Environment and Forest (MOEF) to review afresh the clearance and we will ensure that we follow all directions to us,” said a company official.

    The suspension of environmental clearance to POSCO plant has come as a big relief for the primitive Paudi Bhuiyan tribes here. The Paudi Bhuiyans along with other tribal communities hope to sustain their protest against mining by POSCO in and around the proposed iron ore mining site at Khandadhar. The villagers in and around the bio-rich reserve, about 85km from Rourkela, are apprehensive of losing their ancestral land to the company. They fear massive iron ore mining by POSCO would destroy the Khandadhar reserve and hence have been fighting a sustained battle to impress upon the state government to explore other mining areas.

    Khandadhar Mahila Suraksha Samiti president Baita Pradhan, an illiterate Paudi Bhuiyan, does not understand much of the implication of NGT’s order, but is aware that something favourable had taken place. For the past five years, she and others are living in fear of losing their natural habitat, said Pradhan.

    Social activist Bideshini Patel asserted that the fight for saving the waterfall will continue and appealed to the state government to explore ways to tap the tribal tourism instead of forcibly changing the natural lifestyle of the Paudi Bhuiyan tribe. Sources said political equations surrounding the Khandadhar mining issue have undergone a sea change as BJD has emerged stronger in the rural poll. POSCO had applied for mining rights for over 2,500 hectare at Khandadhar in Lahunipara block of the Bonai sub-division in Sundargarh district. State Bharatiya Janata Party president Jual Oram said at no cost would POSCO be allowed to enter Khandadhar. Welcoming NGT’s decision, he hoped it would consider Khandadhar too.

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    Posted on 02 April 2012



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