Conditions apply, says Ramesh. But who will ensure that POSCO complies?


By Tusha Mittal

Plenty to answer Jairam Ramesh faces a barrage of questions
Plenty to answer Jairam Ramesh faces a barrage of questions
Photo: Pib

On 31 January, India’s largest FDI cleared what could be its last hurdle. Environment and Forests Minister Jairam Ramesh gave his final verdict on South Korean giant POSCO’s Rs 52,000 crore steel and mining project to be set up in Odisha’s Jagatsinghpur district. The nod came with 60 conditions.

In what has been perceived as confrontation between industry and environment, the verdict could have attempted equilibrium. As it stands, however, the order is an eyewash; the equivalent of allowing a serial thief into your home on the condition that he will not steal again.

None of the conditions attached to this final approval undo the grave violations or redress the concerns reported by three MoEF-appointed committees. This decision also fails to hold anyone accountable for the many anomalies already documented, even though violating the Environment Protection Act (EPA), as both POSCO and the Odisha government have done, is a criminal offence.

Ramesh’s closing decree comes after the internal scrutiny threw up uncomfortable questions — a choice between enforcing environment laws or turning a blind eye for the greater good of investment climate, a choice between UPA Chairperson Sonia Gandhi’s commitment to the Forest Rights Act (FRA) or Prime Minister Manmohan Singh’s commitment to South Korean President Lee Myung-bak. The president also happened to be India’s chief guest for the 2010 Republic Day celebrations. His visit was meant to coincide with the inauguration of the POSCO project. When it became clear that a ‘minor’ people’s agitation would make this untenable, Odisha CM Naveen Patnaik rushed to New Delhi to offer necessary assurances.

In that sense, Ramesh is only the public face of many crucial choices. The real incongruity of the POSCO story is that it spreads across sectors and involves myriad stakeholders — the steel and mining industries, the MoEF, the finance and commerce ministries, the external affairs ministry, the PM’s office, the Odisha government, the BJD, and most significantly the Congress, each with their individual agendas, each wielding influence on the other. None of these stakeholders are operating together to pragmatically assess what India truly stands to gain from its largest FDI, to assess why the Indian government should violate laws for it?

That is why the POSCO project has been deemed sacrosanct, not after irrefutable empirical evaluations, but merely on the symbolism of a large FDI, on the lure of three magic words — investment, development and technology. Why India cannot purchase the new technology POSCO proposes to bring – a tactic that South Korea had itself used while growing into a steel giant – remains a mystery. While the only cost-benefit analysis that measures what India stands to gain from this FDI has been funded by POSCO itself, what India stands to lose, in addition to the mammoth environmental and social costs, is a scarce national resource. That is why those who have dug deeper understand that POSCO is not in India to produce steel or develop Odisha, but to extract high-grade iron ore at throwaway prices and export it from POSCO’s private port – a first in India – at a time when iron ore prices are sky-rocketing.

In June 2005, POSCO signed an MoU with the Odisha government. It received conditional environment and forest clearances in 2007 and 2009 and began land acquisition last year. Shortly after, an MoEF committee reviewing the FRA found that the project had been cleared in violation of the Act. Subsequently, Ramesh issued a stop-work order and constituted a four-member Meena Gupta Committee for greater examination.

Last October, three members reported shocking violations of the both the EPA and the FRA: None of the conditions were met; the clearances themselves were obtained on false maps and suppressed facts; and official minutes had been manipulated.

Sample the alterations and the troubling priorities become clear. For instance, there are two sets of minutes of the 67th meeting of the Expert Appraisal Committee (EAC) – a sub-committee of the MoEF that reviews projects. The original minutes said: “The committee noted that numerous issues had been raised at the public hearing that would have a bearing on human settlements, habitations, agricultural occupation in the villages. Members desired to go into each significant objection raised in detail to satisfy themselves that the project poses no threat or insurmountable problem from an environmental point of view.”

The second version, revised by the then chairperson, read: “The committee was convinced that a sunrise industry of great importance is proposed presenting a leap forward in steel production and needs expeditious, prompt clearance by the government. Certain issues have been raised at the public hearing that may have a bearing on human settlements, habitations, agricultural occupation. These must be looked into and resolved.”

The POSCO project was given environment clearance in the next meeting after an ‘appraisal’ that was clearly a mere formality, a procedural impediment to “a sunrise industry”.

To expedite the “leap forward in steel production”, POSCO was allowed to submit a rapid environmental impact assessment (REIA). As opposed to a comprehensive EIA that assesses potential damage through the year, across all seasons, the REIA, as evident, is a speedy assessment ranging from a few weeks to a couple months. In a mega project – the size of six of India’s largest steel plants combined – that will displace more than 20,000 people and could fundamentally alter the ecological landscape of a fragile coastal zone, a comprehensive assessment would seem imperative. Even the REIAs were obtained only for parts of the project – the steel plant, the port. For the port, the REIA was conducted during the monsoon months, something the law forbids. The continuation of this 2007 clearance means that there is no real understanding of how the POSCO project will impact its environment, that there is no real evaluation of the possibility of a natural disaster.

This is why in a scathing indictment, three members of the MoEF committee concluded that “the EAC had not applied its mind” in granting approval and recommended that POSCO’s environment clearance be scrapped.

That Ramesh’s final order does not revoke the 2007 clearance, that the MoEF has disregarded legal violations reported by its own committee, is a disturbing sign of the government’s priorities. It is proof that real confrontation is not between local livelihoods and industry or between environment and development. The POSCO story, and India’s growth story itself, is about something more rudimentary –– it is about development versus the law. It is about how many laws we are willing to subvert and how many Constitutional rights we are willing to forgo for good investment climate, for what we define as development, for the great Indian Dream.

That is why the 60 conditions given to POSCO mirror one of the central problems with India’s development debate — the assumption that private entities can or should operate in public interest.

In his final order, Ramesh has passed the buck entirely to POSCO. The steel giant has been asked to “voluntarily sacrifice” water should residents fall short of it, since it is Cuttack’s drinking water source that will supply POSCO’s water. Another condition asks POSCO to assess the impact of this project on the fishing community and identify beneficiaries, even though it was POSCO’s first assessment that failed to include thousands of fishermen as project affected. The minister also tells POSCO to comply with Odisha’s rehabilitation package and allocate two percent of its net profits for corporate social responsibility (CSR). While the definition of CSR has been left to POSCO, the compensation package currently on offer to more than 4,000 displaced families — living in a thriving agrarian economy — is less than one percent of their annual earning potential.

The most perplexing condition relates to perhaps the most controversial aspect of this project: POSCO’s private port, which is located 12 km from an existing major Paradip port, even though government guidelines prohibit two ports within such proximity. Uncovering details that POSCO had suppressed, the MoEF committee revealed that the port will lead to construction and waste dumping in high erosion areas in blatant violation of the Coastal Regulation Zone (CRZ) notification. The port also endangers the world’s largest nesting grounds for the Olive Ridley turtles.

In his final approval, Ramesh has asked POSCO to ensure that “there is no industrial activity in the CRZ zones”. For this to happen, POSCO will have to entirely redesign its port. It is unclear whether this is a pre-condition for the port construction. If not, it only perpetuates the violations of the CRA Act.

In another confounding and futile exercise, Ramesh has asked the Odisha government for a “categorical assurance” that the FRA is not being violated, after which he will issue POSCO its forest clearance. POSCO needs this to acquire forest land. Ramesh’s latest request comes after repeated “assurances” from the Odisha government that no traditional forest-dwellers exist in the area, hence there are no forest rights to be upheld. Two MoEF-appointed committees have disputed this, accessing land maps and revenue records to prove otherwise. Tehelka’s last story (Whose Steel? Who’s Steeling? 11 December) also showed how the district administration has been complicit in violating the rights of traditional forest dwellers.

Seeking yet another “assurance” from the Odisha government only means that the MoEF has decided to – perhaps been required to – look the other way, in the name of development, for the greater good of a ‘sunrise’ industry.

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Tusha Mittal has been with Tehelka since March 2008. She was educated at La Martiniere, Kolkata, and has a bachelor’s degree from Depauw University in Indiana. While in the US, she worked as a reporter and a special sections editor for a local newspaper in Boston. She also interned with CNN Internationalin Atlanta and NBC Universal in London. In her final year in college, she studied the idea of peace journalism and the role of the media in covering conflict.

She travelled to Kashmir for her graduation thesis, which dissected the role of the Indian and Pakistani media in shaping public perception of the Kashmir conflict. Her journalism interests include reporting on environment, human rights, and conflict. She has recently won The Press Institute of India award for best articles on humanitarian issues published in the Indian media. AtTehelka, she has written extensively on land rights and displacement struggles. She is based in New Delhi.


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