Vedanta gets stop-work notice, faces legal action
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COMMENTS 
The Union government has ordered Vedanta to immediately halt expansion work at its troubled alumina refinery in Orissa’s Lanjhigarh, and has told the company to fulfil a number of conditions in order to operate its existing facility
In another setback to Vedanta Aluminium’s Orissa ambitions, the environment ministry has rejected the company’s plan to expand its Lanjhigarh refinery and directed the state government to take legal action against it for illegally beginning expansion without permission.
This comes almost two months after the government rejected the company’s proposal to mine bauxite in the Niyamgiri hills near the refinery, in Kalahandi district. Both decisions were taken on the basis of the N C Saxena Committee report that details Vedanta’s violation of environmental norms.
The Lanjhigarh refinery is caught up in an environmental wrangle. The existing facility with a capacity of 1 million tonnes was found to be in illegal occupation of 26 hectares of forest land. Vedanta Aluminium had a $5.8 billion plan to increase production capacity at its Lanjhigarh alumina refinery from the current 1 million tonnes to 6 million tonnes per annum.
In a letter, dated October 20, to Vedanta, the ministry directed it to “maintain status quo at the site and no further construction activity shall be undertaken with respect to the expansion project”. The terms of reference granted to the company, as well as the public hearing conducted in April 2009 were cancelled. “The secretary, forest and environment department, government of Orissa, shall take legal action under provisions of the Environment (Protection) Act, 1986 for violation of the EIA Notification, 2006,” the order said.
The Ministry of Environment and Forests (MoEF) served the company a show-cause notice in August. The company responded in September and made a personal appearance to explain the case. At a hearing held by the ministry on September 30, Vedanta officials admitted that they had completed 40-45% of construction work for the expansion despite the fact that they had no environmental clearance.
They pleaded that clearance could now be granted “considering the magnitude of the project and the wide-ranging benefits,” including 5% profit-sharing with the local community as mandated by the Supreme Court. “They are ready to pay any penalty for violation but not to stop the project,” says the minutes of the hearing.
In another order, the ministry asked Vedanta Aluminium to put strict pollution monitoring and control facilities in place at the existing 1 million tonne per annum refinery, and also develop a green belt in 25% of the plant area. The company will not be allowed to source bauxite from any mine without prior environmental clearance. It was also told to come up with a Rs 10 crore bank guarantee with the state pollution control board to ensure compliance with the directions.
Source: The Hindu, October 22, 2010
The Indian Express, October 22, 2010