Frontline, November 20-Dec. 03, 2010

by Praful Bidwai

The government must stop dilly-dallying over the project and apply the law regardless of the fact that it is India's single largest foreign investment proposal.

IN THE PROJECT area at Balitutha in Orissa's Jagatsinghpur district, in 2008, a face-off between police and anti-Posco activists.

TWO giant metallurgical projects, both in Orissa. Both promoted by big multinational corporations with tremendous influence. Both opposed by environmental and tribal rights activists because they would displace vulnerable people and destroy fragile ecosystems. Both backed strongly by State-level and national lobbies that claim they would rapidly transform backward Orissa.

The Posco steel project and the Vedanta aluminium project ran a parallel and close trajectory for years until mid-2010, when facts came to national attention – local people and groups already knew – of Vedanta's blatant violations of the Forest Conservation Act, the Environmental Protection Act and the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, also known as the Forest Rights Acts (FRA), and these began to be confirmed by committees appointed by the Ministry of Environment and Forests (MoEF).

The N.C. Saxena committee, appointed by the MoEF to investigate the FRA's implementation, soon produced a solidly documented and tightly argued report showing that the Vedanta project would destroy the Niyamgiri hills ecosystem, itself very special, and threaten the existence of a “primitive” Scheduled Tribe, the Dongaria Kondh, who number less than 8,000.

With this, the projects' tracks changed. Vedanta rightly became unworthy of clearance for several compelling reasons, including illegally increasing the capacity of its aluminium refinery sixfold and violating the FRA. But Posco, it was quietly claimed in the MoEF and the Ministry of Steel, is a case apart. Not only is it the largest foreign investment proposal in India, with $12 billion capital expenditure, Posco is also a “responsible” and “ethical” company. In contrast, Vedanta stands accused of numerous anti-environment and callously anti-people practices and is boycotted by ethical investment funds, including the Norwegian Pension Fund, and the Church of England. As the Orissa government put it, Posco would bring unprecedented “prosperity and well-being to its people” without causing unconscionable destruction.

It is almost as if someone high-up had decided on a trade-off between Vedanta and Posco. Vedanta would be scrapped: its violations are far too brazen to be “regularised”. But Posco would be treated sympathetically. After all, it had still not acquired any of the 1,620 hectares (1ha = 2.47acres) of land needed, including 1,253 ha of forest land. And it announced (in July) a Rs.400-crore rehabilitation package. If it had not fulfilled certain conditions for environmental clearance, it would still be given a chance to do so. On October 29 in Hanoi, Indian officials, including Prime Minister Manmohan Singh, assured South Korean President Lee Myung-bak that they would treat Posco in a “constructive manner”.

Exactly the same assurances had been offered in late 2009 and early 2010, before Lee Myung-bak's visit to India as the guest of honour on Republic Day. Reports said “the Prime Minister's Office (PMO), the External Affairs Ministry and the Steel Ministry have thrown their might behind the project…” and “…are working overtime to clear hurdles faced by the steel giant”.

Last November, the MoEF granted final clearance for the diversion of 3,096 acres of forest land to Posco – in violation of its own August 3 circular clarifying that no application for diversion can be made unless “the process of implementation of the FRA is complete and all rights have been recognised”. This means the informed consent of the grama sabha. Steel Minister Virbhadra Singh, who met the Posco delegation last January, told reporters: “Efforts are being made to ensure that the entire matter is seen sic, signed and delivered in the next four-five months. This includes physical transfer of land and all regulatory clearances….”

Not only the Orissa and Central governments, but other agencies, including the Supreme Court and the National Council for Applied Economic Research (NCAER), too were compromised in the process leading to clearances for Posco, with misleading claims about its benefits. This is discussed at length in ‘Iron and Steal: The Posco-India Story', an excellent report by the Mining Zone People's Solidarity Group (

However, the Saxena committee put a spoke in the Posco wheel. Its July report made it unambiguously clear that the Orissa government had failed to implement the FRA and had also suppressed material facts. The Centre stopped Posco's land acquisition but resorted to a new device – another committee, headed by former Environment Secretary Meena Gupta, to investigate violations of all laws, government procedures and rules.

The Meena Gupta committee submitted its report in mid-October. Three of its members – Urmila Pingle, a tribal issues expert; Devendra Pandey, the former director of Forest Survey of India; and V. Suresh, a Madras High Court advocate – held that clearances to Posco must be suspended. Meena Gupta – herself an officer of the Orissa cadre of the Indian Administrative Service – pleaded that clearances should not be cancelled and that Posco should be asked to submit a fresh Environment Impact Assessment (EIA) report. Meena Gupta strained credulity by claiming that the committee had no mandate to review the Posco clearances – when it was appointed to do so. Incidentally, Meena Gupta had cleared the steel plant and captive power plant in 2007 as Environment Secretary.

Minister of State for Environment and Forests (Independent Charge) Jairam Ramesh tried to play down the differences within the committee, saying that while “the concerns are identical, it is a matter of different interpretation”. He also attempted to impose a virtual “gag order” on the panel. He was quickly contradicted by Suresh: “As a human rights activist, I am not happy with that.” Some MoEF officials did their best to find a diversionary route by saying that the issue should be referred to the Ministry of Tribal Affairs.

Ultimately, the two reports were placed before the Forest Advisory Committee (FAC). After 10 days of “back-and-forth” debate, on November 2 the FAC decided to recommend withdrawal of forest clearance to Posco. The FAC is a statutory body. The matter should have rested here. But in the latest turn of events, the forest officials on the FAC have reportedly declined to sign the meeting's minutes. They have demanded yet another FAC discussion.

Now, it is known that foresters as a group are opposed to the FRA because they see it as an encroachment on their privileges: it empowers a project-affected grama sabha to make decisions about the use of community land. But this is clearly an act of insubordination on their part, and the foresters must be told their job is to implement the FRA, which was debated for long years and passed in 2006.

More important, the government should stop dilly-dallying over the Posco project and apply the law of the land regardless of the fact that it is India's single largest foreign investment proposal and an integral part of our “Look East” policy. The decision cannot be externally driven nor can it be influenced by the forest bureaucracy.

Three principles are invoked here. First, our environmental and forest Acts, rules, regulations and guidelines are not the first, but the last, line of defence against the depredations of capital, commerce and corrupt bureaucrats. They alone can prevent or hinder the wholesale takeover and plunder of national resources, including invaluable ecosystems and virgin rainforests.

Second, these regulations have been bypassed repeatedly, diluted, misinterpreted and violated – with countless exemptions from and exceptions to coastal zone regulations and for projects such as the opulent gated cities being constructed in the Western Ghats, for projects that intrude into the flood plains of rivers, for urban projects that destroy natural drainage, and severe dilution of EIA procedures.

This must be stopped once and for all with a clear landmark like Posco: no exemptions from the rules, zero tolerance for violations. In place of ad hoc decisions – such as the Navi Mumbai airport and other projects, which “compromise” environmental principles – the country needs a transparent system of rules and a major review and clean-up of environmental law implementation and monitoring. As Jairam Ramesh admits, in the past decade, “we must have approved about 7,000 projects…, each with conditions and safeguards…. But unfortunately, we do not have a system of monitoring compliance….”

Third, the shameful legacy of Bhopal, and the impunity granted to Union Carbide-Dow, must be upturned. The government must demonstrate its determination to take on the most powerful of global corporations that commit crimes against Indian citizens.

If India has any faith in its emergence as a major global power, the least it can do is show that it can stand up to Dow, Posco and others who see India as no more than a plunder-and-profit opportunity.