Split panel puts Posco on pause
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COMMENTS 
An Indian government panel has recommended that environmental clearance for a $12 billion steel plant to be built by South Korean company Posco be scrapped. The plant in Orissa is India’s largest foreign investment project, but critics fear it will exhaust iron ore deposits in 20 years while causing lasting environmental damage
The showpiece proposed iron and steel project in Orissa, by South Korean steel major Posco, is under a huge cloud of uncertainty with an expert panel set up by the Union Ministry for Environment and Forests alleging violations of environmental laws.
Three of its four members recommended that all initial clearances to the project be cancelled. The lone dissenting voice was that of former Environment Secretary Meena Gupta who argued that there was no need to cancel the clearances and that the company should be asked to submit a fresh Environment Impact Assessment (EIA) report.
The committee, that included Urmilla Pingle, an expert on tribal issues, Devendra Pandey, a former director of the Forest Survey of India, and V Suresh, an advocate at the Madras High Court, was formed in July this year with a mandate to report on the implementation of the Forest Rights Act (FRA), and compliance with the Environment Protection Act (EPA) and Coastal Regulation Zone (CRZ) regulations at the project site. The committee was also asked to look into relief and rehabilitation measures being taken by the company.
The $12 billion project -- scheduled to be the single biggest foreign direct investment in India -- is already under suspended animation following the environment ministry’s “stop-work” order in August this year. The order was based on the report of another committee that alleged violations of the FRA in the project area.
The latest development has raised fresh doubts over the project that plans to produce 12 million tonnes of steel per annum -- almost equalling the combined capacities of six existing steel plants in India at Bhilai, Bokaro, Durgapur, Rourkela, Burnpur and Salem. The project involves an iron and steel plant, a captive power plant, and a captive port facility.
The project is significant for other reasons too, including the fact that it is the first major investment by a South Korean company and furthers the cause of India’s “look-east” policy.
Environment Minister Jairam Ramesh said that he was “conscious” of the larger strategic importance of the project, but that the committee pointed to “weaknesses and infirmities” in the way the Forest Rights Act was being implemented and that there was room for significant improvement.
On the issue of implementation of the Forest Rights Act, which involves compensation to recognised forest-dwellers, the three members had this to say: “The committee hence in no uncertain terms comes to the definite conclusion that the FR Act has not been implemented in the project area and in fact the process had hardly begun before it was sought to be scuttled by the district and state administration.”
In Bhubaneswar, Chief Minister Naveen Patnaik refused to comment on the report saying the state was yet to receive a copy of it. A Posco-India official said the company would wait for the environment ministry’s final decision on the project.
India earlier rejected plans by mining giant Vedanta to extract bauxite in eastern Orissa, saying it would damage the local environment.
Source: The Indian Express, October 19, 2010
BBC, October 19, 2010