This piece came in InfochangeIndia in April 2011
Vedanta and Posco: A tale of two projects
Why was the POSCO project treated so differently from Vedanta? One was given clearance, with conditions, while the other was rejected, despite the fact that both were found to be in violation of the Forest Rights Act and other laws. Is it realpolitik that guides these decisions, asks Pradeep Baisakh
On April 1, 2011, the Orissa government filed an application in the Supreme Court challenging the Centre’s rejection of environmental clearance to the UK-based Vedanta Group’s $1.7 billion bauxite mining project proposed in the Niyamgiri hills. The state government filed the application through the Orissa Mining Corporation (OMC) against the Ministry of Environment and Forests’ (MoEF) order, dated August 24, 2010, denying the project clearance. In its petition, the state government said that the MoEF’s decision was in violation of a previous order by the Supreme Court giving the project the green signal. It also contended that the Centre’s order was illegal and arbitrary.
So, why was Vedanta denied clearance and another project, POSCO, given the go-ahead? According to three members of the Meena Gupta-headed POSCO review committee (tribal affairs expert Urmila Pingle, former director general of forests Devendra Pandey and Madras High Court advocate V Suresh), constituted to look into the violation of various laws in the proposed POSCO project: “Both POSCO and Vedanta are alike in the sense that in both instances there is gross violation of the law with impunity.”
This is a view shared by many who have been keenly watching the approach of the state and the central government towards the two much-talked-about projects -- POSCO steel and Vedanta alumina. So there was surprise that Vedanta was given the thumbs-down (August 24, 2010) while POSCO got the green signal (January 31, 2011). One failed to convince Sonia and Rahul Gandhi’s green soldier (Jairam Ramesh), while the other managed to win over Manmohan’s ministerial colleague.
Basic facts about the two projects
POSCO signed an MoU with the Orissa government on June 22, 2005, to set up an integrated steel plant (steel-cum-power plant and captive minor port) in the Paradip area of Jagatsingpur district. Touted as the highest FDI in the country, an investment of Rs 51,000 crore was envisaged for the plant that would have a capacity of 4 MTPA (million tonnes per annum) initially, and would later be upgraded to 12 MTPA. Sterlite Industries Ltd, the parent entity of Vedanta, signed an MoU with the state on June 7, 2003, to set up an alumina refinery with a capacity of 1 MTPA (later an MoU was signed for expansion to 6 MTPA), at an investment of Rs 4,000 crore, in Niyamgiri, Kalahandi district.
POSCO needed an area of 1,621 hectares, of which 1,253 hectares was forest land. Vedanta’s requirements were for 723.343 hectares of land for the alumina refinery and 721.323 hectares for bauxite mining. Forests cover 58.943 hectares of the land needed for the alumina refinery, and 672.018 hectares of that required for the mining project.
The Khandadhar iron ore mines in Sundargarh district were earmarked for POSCO, and the Niyamgiri alumina mines for Vedanta.
Geography and people
There are differences in the two projects in terms of people likely to be affected, and ecological and environmental ramifications. In Niyamgiri, the livelihood and rights of two primitive tribal groups -- the Kutia Kondhs and the Dongaria Kondhs -- are involved. The area is also important from an ecological point of view as it is rich in biodiversity and wildlife. In the proposed POSCO area, the primary sources of livelihood for people are fish, betel vine and paddy. Although few tribals live in the area, it is inhabited by a substantial number of other traditional forest-dwellers (OTFDs). On the ecological front, the project will cause damage to the coast.
Ashish Kothari, member of the inter-ministerial (MoEF and MoTA) committee to review FRA (Forest Rights Act) implementation that visited the proposed POSCO site to study whether FRA claims had been settled, says: “Even though the issue regarding tribals living in the Niyamgiri hills (proposed Vedanta project) are more pressing than those in the POSCO area (as there are very small numbers of scheduled tribes in this area), from the environment perspective and from the point of view of the rights of people, both POSCO and Vedanta are on the same platform. And of course from the point of view of violation of laws like the FRA and others, they are on an equal footing. In fact, Jairam’s decision on POSCO is completely inconsistent with the decision on Vedanta. If he had applied the same yardstick used to deny mining and expansion of refinery capacity to Vedanta, the POSCO project would never have got clearance.”
Initial clearances
Both projects received initial ‘in principle’ forest and environmental clearance (Stage 1), albeit with conditions, by the Ministry of Environment and Forests (MoEF) at different points of time in 2007 and 2008. But in both cases, the companies and state government were criticised for violating forest and environment laws and local people’s rights. Activists who raised their voice and protested the move to displace people were also targeted. In both cases, expert committees were constituted to look into violations.
Expert committees recommend withdrawal of clearance
Dr N C Saxena made some important observations and recommendations on both projects as head of the expert committee formed by the MoEF for Vedanta and by the MoEF and the Ministry of Tribal Affairs (MoTA) for POSCO. In both cases, Saxena recorded gross violations of the Forest Rights Act, 2006 by the state government and the companies involved.
In the case of POSCO, members of the POSCO review committee (headed by Meena Gupta) held that there was gross violation of environmental laws, fabrication of evidence, forest rights violations, and the suppression of facts relating to the Costal Regulation Zone (CRZ). Most members of the Meena Gupta panel recommended prosecution of authorities that had violated provisions of the FRA and other environmental laws. But Gupta differed and gave a set of conditions for granting approval to the project. Incidentally, Gupta was environment secretary in the Orissa government when POSCO was given environmental clearance.
The forest advisory committee (FAC), which is a statutory committee affiliated to the MoEF, recommended withdrawal of all clearances given to Vedanta for mining in Niyamgiri as it found violations of the Forest Rights Act and forest conservation and environment protection laws. In the case of POSCO, the committee observed that due diligence had not been observed in the settlement of forest rights, and therefore it was a breach of law. It recommended temporary withdrawal of Stage 2 clearance for diversion of forest areas to the project.
Similar cases, but different orders
In Vedanta’s case, the MoEF withdrew forest clearance for mining and stopped refinery expansion. But in the case of POSCO, the company was allowed to go ahead with certain conditions. The order did not mention mining at Khandadhar as it was sub-judice.
The order in the Vedanta case reads: “Upholding the recommendations of FAC, I (Jairam Ramesh) have come to the following conclusion: the Stage 2 forest clearance for Orissa Mining Corporation and Sterlite bauxite mining project on Niyamgiri hills… stand rejected.” It goes on: “The primary responsibility of the ministry is to enforce the laws that have been passed in Parliament. For the MoEF, this means enforcing the Forest Conservation Act, 1980, the Environment Protection Act, 1986, the Forest Rights Act, 2006 and other laws. It is in this spirit that the decision has been taken.”
Despite violations by POSCO, as shown in the findings of several expert committees, Ramesh did not deem fit to enforce the laws passed in Parliament. Overlooking the findings of the N C Saxena Committee, most members of the Meena Gupta Committee, and recommendations by the FAC, the order from Paryavaran complex reads: “Projects such as POSCO have considerable economic, technological and strategic significance for the country… 28 additional conditions for steel-cum-power plant and 30 conditions for a captive minor port…” On the issue of the Forest Rights Act, the order says that the state has to give an assurance that no other traditional forest-dwellers (OTFDs) live in the area. Ironically, the state had already submitted that there were no such people living in the area -- a fact found to be incorrect by the Saxena Committee. On August 3, 2010, Saxena wrote to Ramesh after his team’s visit to the area: “There are other traditional forest-dwellers (OTFDs) in the area, contrary to what the district administration is saying. Both documentary and oral evidence exists to this effect…”
Prasant Paikrai, spokesperson of the POSCO Pratirodha Sangram Samiti (PPSS), says: “As POSCO has the highest FDI (as stated by the government) in the country, the central government seems to be interested. Major shareholders in the POSCO project are the US and Canada. The Indian government is carrying forward the western imperialist agenda. This is quite unfortunate. We from PPSS will continue our struggle until the project is scrapped.”
The most ironical part of the two orders is that, in the case of Vedanta it extensively discusses various recommendations made by the expert committee to justify the decision. This is not the case with POSCO.
Decision guided by political compulsions?
Madhu Sarin, noted forest rights activist, says: “Jairam Ramesh seeks an assurance from the state government that there are no OTFDs in the area. This is despite the findings of two committees that he himself appointed and that visited the areas and examined so many records, that there are OTFDs and that the FRA claims of the people in the area have not been settled. This is quite unfortunate.”
Most experts and activists believe Ramesh had little choice but to give approval to the POSCO project given that the PMO was interested in it. Kothari says: “It was easier for the government to say ‘no’ to mining in Niyamgiri as Vedanta already has a refinery in operation in the area. Now it can get mineral from elsewhere, as it is trying to do from Gandhamardan. But in the case of POSCO, if it withdraws forest and environment clearance the project will not come into being. Moreover, POSCO is a much bigger investment and the largest FDI in the country. The PMO is quite interested in this project. There is some inside news that India is interested in entering into a nuclear deal with South Korea. Taking advantage of this, the South Korean government is backing its private companies like POSCO.”
Journalist and agriculture expert Devinder Sharma explains: “While Jairam is confident about 10 Janpath, which is concerned about the environment, he also has to listen to the prime minister and his coterie of economists. His role is to be seen in this difficult context. In the case of Vedanta, both Sonia and Rahul were listening to the concerns of the people, and he stood up for that. In the case of POSCO, it seems his heart was for stopping POSCO, given the kind of committees he set up to study violations of the law in the proposed area. But he was under pressure from the PMO, which is bent on selling out our national resources to companies in the name of development.”
It would seem therefore that realpolitik guides the government’s decisions. The ruling party can ill afford to project an anti-corporate image.
(Pradeep Baisakh is a freelance journalist based in Bhubaneswar)
Infochange News & Features, April 2011
