India: Scandalous Decision allows go-ahead for POSCO project

Published by MAC on 2011-02-07
Source: Statement, Hindustan Times, Down to Earth

Scandalous Decision of Jairam Ramesh to OK POSCO project

Environment Minister disregards findings of his own Review and Statutory Clearances Committees

POSCO PRATIRODH SANGRAM SAMITI Release

31 January 2011

Dhinkia, Nuagaon, Gadkujang; Jagatsinghpur District, Orissa - The decision of Indian Environment Minister Jairam Ramesh to give a comprehensive OK to the POSCO India Steel-Power Production-Captive Port project, based on some additional conditions, is nothing short of a total sell out to the politics of power and international capital. In a climate where each and every Minister of the Union Government is tumbling over with scandals, Ramesh had stood tall taking one brave legally and ethically correct decision after another.

An acid test for him to continue this streak of decision making in the wider public interest, keeping in view intergenerational interests as well, was about the POSCO project. By his decision today to clear the project Ramesh has failed not only his own legacy, but has attacked the very rule of law based decision making that he has so often been harping on to be the basis of his functioning.

It is well known that the POSCO Pratirodh Sangram Samithi, a peaceful movement of affected communities, has been systematically raising the deep, inter-generational and irreversible impacts of allowing this massive project to come up in the ecologically sensitive Jagatsinghpur district of Orissa.

This struggle began with the inking of a most controversial MOU between Orissa State and Korea's Pohang Steel (POSCO) in 2005, proposing to establish the largest industrial project ever conceived in human history: a 12 MTPA steel plant backed by captive power plant; a captive port (described as "small" but designed to receive the largest commercial ships ever built - of CAPESIZE variety); a large township to accommodate over 100000 people; a large captive mine in Kandadhar (600 MT for local processing and 400 MT for export over 30 years); fresh water intake from over 100 kms. away (while denying many towns and cities drinking water) and extensive road and rail infrastructure to support the project.

The 4000 acres of land chosen for the plant site comprise of pristine coastal and deltaic ecosystems, with active nesting sites for the critically endangered Olive Ridley Turtles and the Horse Shoe Crabs. Over a third of this land comprises of coastal forests. Over 22000 people will be directly displaced by the steel plant alone, a number that has been repeatedly disputed by Orissa Government based on its spurious claims.

Absolutely no impact assessment of any academic rigour worth its salt or regulatory review of value considering the mega scale of this project, has at all been conducted to support the project is environmentally and socially useful. In fact, the so-called Rapid Environment Impact Assessment reports prepared by M/s Dastur for POSCO India, was only for 4 MTPA steel production and not for the entire project as is required by law.

Clearly against statutory standards and norms, the project was still accorded environmental, forest and coastal regulation zone clearances in 2007. In addition, the Orissa Government engaged the National Council for Applied Economic Research (NCAER) to cook up data claiming the benefits from the project as phenomenal, which when verified even cursorily proved to be junk statistics supporting desperate political games promoting the project.

Background to the Independent Review of POSCO by Ministry of Environment and Forests (MoEF):

Following what is widely regarded as a politically brave but legally correct decision of Jairam Ramesh to reject on grounds of fraud the clearance accorded to the infamous Vedanta Bauxite project in Orissa during 2010, the much larger POSCO issue came into focus.

After all communities affected by POSCO had been engaged for over 5 years in the most outstanding example of peaceful resistance against such unprecedented unjust development. Bending to reason, Mr. Ramesh agreed to constitute a sub-Committee under the N. C. Saxena Committee reviewing Forest Rights Act implementation, to also enquire if the POSCO project's forest clearances were compliant with the Forests Rights Act enacted only in 2006.

Producing their report the Committee put beyond any reasonable doubt that the forest clearances accorded were in comprehensive violation of the Forest Rights Act. A right step taken soon after by the Minister was to stay the forest clearance accorded - a decision taken that was taken at a time when brutal dislocation of forest dwelling communities was underway by the Orissa Government.

Subsequently, Ramesh ordered an independent enquiry into all aspects of the project's clearance coordinated by Ms. Meena Gupta, former MoEF Environment Secretary, with Mr. Devendra Pandey (IFS, Retd.), former Director of Forest Survey of India, Mr. V. Suresh, Advocate and PUCL activist and Dr. Urmila Pingle, expert on tribal affairs, as members.

Following three months of deliberate and extensive consultations, and also detailed investigation into all aspects of the clearances accorded, and on the basis of detailed verification of compliance review files the Committee by a majority decision (3:1) comprehensively rejected all the clearances granted to the project. Ms. Meena Gupta who stood up for the POSCO project, dubiously recommended additional conditions to adjust against serious statutory violations and fraud in the decision making process - a line of thinking that Jairam Ramesh now scandalously subscribes to.

In the subsequent review by Statutory Appraisal Committees of the MoEF, the Committees reviewing the Forest and Coastal Clearances recommended withdrawal of clearances granted. The only Committee that proposed a go-ahead was the one reviewing the environmental impacts under the EIA Notification. It was for Ramesh to now decide on the right steps to be taken to correct this gross injustice and irregularities in environmental decision making.

In the face of extensive burden of proof of fraud involved in securing clearances for the POSCO project, the matter should legally have been to withdraw clearances accorded - as in the Vedanta case. This was the time to test the honesty of a man to stand up and uphold Constitutional and Ethical values, regardless of any and all forms of pressures. Jairam Ramesh has miserably failed this test.

Jairam Ramesh's pro-POSCO decision:

The report presented today by Jairam Ramesh is nothing but a capitulation to corrupt forces both within India and abroad. After all POSCO, though a Korean company, is held largely by American corporations, and no less than Warren Buffet holds 5% stake in this transnational corporation. For the single largest project FDI investment in India at 2005 prices (Rs. 51,000 crores or USD 12 billion capital cost), analysis reveal that this investment can be recovered in less than a decade given the pittance of a royalty that POSCO will pay for iron ore extracted. (Rs. 30/tonne at the official ore valuation of Rs. 300/tonne, compared with the commercial value of Rs. 7,000/tonne).

It is to make such unprecedented profits from the plunder of India's natural resources that POSCO demanded a coastal location for its super large CAPESIZE ships to be berthed to cart away our precious iron ore.

What India would be left with is the toxic residue of its dirty ore processing, while the refined ore (perhaps not even the finished steel) would be exported to Korea and elsewhere to add more value to POSCO's profits. This is not merely a flight of the nation's natural wealth but also a massive planned political exercise for erosion of financial resources with questionable legal sanction.

The POSCO episode, simply stated, shockingly resembles operations of the East India Company, only that this time it is aided not by any Victorian empire, but democratically elected Governments in Orissa and the Centre.

Just as Mahatma Gandhi led India's valiant battle against exploitation of India by the British Empire, it is time now for PPSS to actively challenge this gross violation of Constitutional Rights, Statutes and Norms, dubiously legitimised by Jairam Ramesh ignoring substantive findings of Enquiry Committees that he himself constituted.

The struggle against POSCO in Jagatsinghpur will continue. The struggle against exploitation of tribal, farming and fishing communities of Orissa will continue. The battle to expose corruption in the Orissa Government and the Union Government (especially MoEF) will continue.

This is a struggle to expose the most corrupt and socially and environmentally disastrous deal ever legitimised in India's history.

Abhay Sahoo
President

Prashant Paikray
Spokesperson

POSCO Pratirodh Sangram Samithi

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No lessons from the past

By Kanchi Kohli and Manju Menon

Hindustan Times

1 February 2011

The ministry of environment and forests (MoEF) remains a bundle of convenient contradictions. In its latest decision on the environment and forest clearances for the integrated steel plant and captive port for the South Korean company Pohang Steel Company (M/s Posco), the ministry has listed 28 and 32 extra conditions which the company will need to follow.

According to the ministry's admission, these conditions, along with their faith in the state government of Orissa to follow the recognition of the forest rights process, will be adequate to make the project benign from an ecological and social point of view. The conditions, it is said, will be closely monitored.

The practice of conditional environmental clearances goes back to the time when projects and activities were being reviewed under the Environment Impact Assessment (EIA) notification of 1994 (revamped in 2006). This process involved the process of preparing an EIA, a public hearing and review by a set of expert committees housed within the MoEF, which has till date approved over 7,000 projects, now in various stages of implementation. In the last year and a half, the approval rate under the EIA notification has averaged 97 projects in a month for just four sectors under MoEF's review.

Since 2009, the MoEF has itself acknowledged that its regional offices, which have been entrusted the task of monitoring these environmental clearances, have both humanpower and infrastructure capacities to ensure that the effective monitoring of environmental clearance conditions can take place. This has been stated to justify bringing about institutional reform where the ministry could outsource the task of clearances and monitoring to a seemingly professional body that it seeks to set up.

The current situation is that each project is monitored once in every three or four years by the ministry's regional offices. With an average of two to three officials each in the six regional offices, ensuring compliance of environment clearance conditions is a near impossibility. Evidence from project implementation across the country indicates a near causal approach to the compliance of conditions by project authorities even though violations are evident.

Yet, mega projects like Posco, despite their irreversible ecological and social impacts, continue to be granted approval. They hide behind the garb of conditional clearances with absolutely no guarantee that these would be complied with. These conditions help scuttle the fact that the setting up of a 12 million tonne steel plant and captive port in the area will dramatically change the landscape of a fragile coastal stretch, which primarily supports agricultural and fishing livelihoods.

Posco's operations in Orissa had been accorded environment clearance way back in 2007, based on poor and inadequate assessments. However, the company had not been able to start operations due to sustained protests by the people of Dhinkia panchayat in Jagatsinghpur district of the state.

It was in July 2010 that the MoEF set up a four- member committee to review the environment and forest clearances (issued under the Forest Conservation Act, 1980) for Posco. Three members of this committee had found a huge list of irregularities in the manner in which approvals were granted and recommended their withdrawal; an opinion that the chairperson of the committee, unfortunately, did not agree to.

The final word from the MoEF's corridors states the strategic, economic and technological importance of the Posco project. Even though environmental laws are to be upheld, in Posco's case they only need to be in the form of additional conditions. The rest, as they say, will be history.

Kanchi Kohli and Manju Menon are members of the Delhi-based Kalpavriksh Environmental Action Group

The views expressed by the author are personal

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Letter from Mining Zone People's Solidarity Group

To:
Mr. Jairam Ramesh
Hon'ble Minister of Environment & Forests
Paryavaran Bhavan
CGO Complex
Lodhi Road, New Delhi - 110 003

1 February 2011

Dear Shri Ramesh:

We are writing to publicly challenge your shocking decision to grant a "conditional" and yet also "final" approval to the POSCO project, and to give a go-ahead to the same Orissa government and POSCO Corporation whose violations of due process have been well documented. Objections to the project have been raised not only by the project-affected people, and by environmental and social justice groups, but also by three different expert committees appointed by your own ministry.

Your action exhibits profound disrespect for democratic norms, and comes as a stab in the back of the people who will be displaced and whose livelihoods will be destroyed, people who have been peacefully opposing this project for their very survival for over five years. Your action is also a slap in the face of everyone-ranging from ordinary citizens to public intellectuals to experts, including three committees that you appointed-who have been struggling to inject a modicum of transparency and democratic process into the governance of the country.

The MoEF committees, which investigated the implementation of the Forest Rights Act ("FRA") in the three project-affected Gram Panchayats, found that the Orissa government had subverted the FRA by withholding relevant information and documents regarding other traditional forest dwellers in the region. Given this, your decision to approve diversion of forest land based solely on a "categorical assurance" by the Orissa government that all legally tenable FRA claims have been processed is confounding. We cannot understand why you would privilege the claims of the Orissa government over those of the people whose lives would be destroyed, especially when the same Orissa government has consistently shown utter contempt for the law, and disregard for its own citizens as is evident from its attempts to ruthlessly suppress peaceful protests against the project.

While the open invitation that you have effectively issued to the Orissa government to violate the FRA and forcibly remove people from their traditional lands is at the heart of what is wrong with your decision, there are other aspects that underscore your apparent capitulation to vested interests that are working against the welfare of the nation. We remind you that your own ministry's expert committees have unambiguously pointed out the following:
• possible submergence of the thriving Paradeep port by POSCO's proposed captive port
• exacerbation of the existing water crises in the Mahanadi delta and in Keonjhar
• grossly undemocratic public hearings characterized by threats and intimidation
• the inadequacy of the rapid environmental impact assessment studies

Given that your decision fails to address the above issues, issues that have been repeatedly placed before you by different parties, we are forced to conclude that the "additional conditions" your letter purports to impose while granting the "final" environmental clearance for the project are but a pretense. Instead of restoring democratic control over the process, you seek a post-clearance environmental risk assessment study to be undertaken by POSCO or by the Orissa government and report that to your ministry.

What, Mr. Ramesh, do you expect the foxes to report to you? That the chickens are healthy and fine and clucking contentedly? In hindsight, maybe the error is entirely ours - that we expected democratic behavior from you given that through the entire period while you convened expert committees and MoEF panels, your government was working hard, even before statutory requirements had been met, to assure POSCO and South Korean government officials, including President Lee Myung-Bak, that the project will be approved.

There have been reports of the "[t]he Prime Minister's Office (PMO), the External Affairs ministry and the Steel ministry hav[ing] thrown their might behind the project ..." and "[g]overnment channels working overtime to clear hurdles faced by the steel giant." Was the process you set into motion with the Saxena committee merely eyewash? Or did the "strategic" considerations you mention in your decision get imposed on you at a later stage? (There are certainly no defensible "economic" considerations that would justify the project.) The people of Orissa and of India at least deserve to know the truth of what precipitated your apparent flip-flop.

You assert that "projects such as that of POSCO have considerable economic, technological, and strategic significance for the country." We would like to remind you, as a matter of record, that the "economic significance" of this project is severely contested, and is dubious at best. In our research report-Iron and Steal; The POSCO India Story-we demonstrated that the NCAER (National Council for Applied Economic Research) study on which all of Orissa government's assessments of the economic benefits of the project are based, is deeply compromised.

As we noted, an analysis of the NCAER report reveals that the project is indeed hugely beneficial, but only for POSCO and its investors. Indeed, the captive iron ore mines promised to POSCO in the MoU would help it recoup, in just the first 8 years, the entire sum of $12 billion which POSCO claims it will invest over a period of 30 years. If ever there was a textbook case of the country's resources being given away, this is it.

In contrast, about 22,000 people who currently support themselves by the area's thriving agricultural economy will be displaced and be rendered ‘unskilled' and ‘useless' by the new steel plant and port. An additional 20,000-25,000 people from approximately 30 neighboring gram panchayats and in the Keonjhar mining area would suffer near total loss of their livelihoods. The NCAER claims, through a maze of statistical lies that benefit its paymaster POSCO, that 8.7 lakh direct and indirect jobs will be created by the project.

However, our analysis demonstrates that a maximum of 17,000 direct and indirect jobs, spread over the next 5-10 years, is all that the POSCO project will ever produce. The people affected by the project have been acutely aware of its meager benefits and high costs, and evidently do not share your view of its "considerable economic" significance.

Based upon published reports, it appears that much of the official decision-making on POSCO has been influenced by your government's efforts to "send the right signals to the international investor community."

Must we remind you that the "international community" does not comprise just investors, nor is it safe to assume that all investors will turn a blind eye to democratic process and violations of human rights or environmental rights. Plus, there is a much larger international community that is concerned about economic and environmental justice, about human rights and self-determination, about labour standards and sustainable development, about the very survival of the much larger groups of people on whose backs rides a globalized elite that is blinded with greed.

Your decision today has only helped to strengthen our resolve that we must continue to bring into focus for this much larger international community this resplendent example of the failure of Indian democracy.

These are times when ordinary people anywhere have learnt that their voices will not be heard by their own governments who are beholden to other forces, and hence think of other ways to make their all-too-reasonable anguish and needs seen and heard by those who are prepared to listen.

In this context, the MoEF approval of the POSCO project sadly continues the degradation of Indian democratic institutions, a process that has already reached disastrous proportions with recent abuse of sedition laws that criminalize "disaffection" with government, and sets the stage for a bloodbath, based on what happened after the December 2009 approval and the current spate of "encounter" killings in Orissa.

The world waits and watches out for that kind of an Indian democracy which would inspire confidence and send the right signals to those who matter more than anyone else - the people in whose names democratic governance exists.

Respectfully Submitted,
Mining Zone Peoples' Solidarity Group

Murli Natarajan, (973) 771-8704
Anu Mandavilli, (408) 480-5805

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Forest rights act under scrutiny

By Kumar Sambhav Shrivastava

Down To Earth

15 February 2011

Environment ministry does not seem open to criticism

THE Union government is reviewing its landmark initiative, the Forest Rights Act, four years after enacting it. The aim is to find how to strengthen the law which was legislated to ensure the traditional rights of 100 million forest dwelling people in the country. Two high-level groups submitted their assessment in the first week of January.

But it seems the Union ministry of environment and forests has made up its mind not to accept their criticism. On January 13, Director General of Forests (DGF) P J Dilip Kumar circulated a note in the ministry tearing apart the review report submitted by the National Forest Rights Act Committee (NFRAC). Criticising the role of the forest department and tribal affairs ministry, the report said there are problems with the way the law has been implemented.

The joint committee of the environment and tribal affairs ministries, set up under former bureaucrat N C Saxena in April last year, conducted meetings and public consultations across the country. It pointed out the law is yet to be implemented in 11 states. In most states, majority of individual claims over dwellings and farms in forestland were rejected.

Traditional rights of communities over forest resources like forest produce, water bodies and pastures were hardly recognised. Institutions not constituted as per the law and faulty ways of processing claims are major hurdles, the committee noted. It has called for a second phase of implementation with focus on community and rejected individual claims.

A few days later, the National Advisory Council (NAC), the advisory body of the UPA-led Central government, said it is unhappy with poor implementation of the law. It prepared a set of draft amendments and sent it to the environment and tribal affairs ministries. Both the ministries have sought a month's time to review NAC's draft recommendations.

When asked about the NFRAC report, a senior official in the environment ministry said, "The tribal affairs ministry is 95 per cent responsible for implementing the law. Our role is just of a facilitator." Despite repeated attempts, no one in the tribal affairs ministry was available for comments.

DGF Kumar also refused to buy NFRAC's recommendation, which said the government should not insist that the prior occupation of 75 years is a must for other traditional forest dwellers to claim forestland. "This will open the floodgates to parcelling of unbroken forestland to private users," he said.

Activists and those within the committee have also picked holes in the main report of the NFRAC, though for different reasons. They have criticised the report for its soft stand on issues that impinge on several other rights guaranteed by the law-right to collect and sell minor forest produce (MFP), for instance. The report recommends that trade of all MFPs, except tendu leaves, be deregulated and state governments should announce minimum support price for them.

Ten dissenting members of the 20-member committee, however, recommend deregulating all MFPs and shutting the forest development corporation that acts as a broker between the community and government. Their view has been appended as "alternative recommendations".

The trade of MFPs like tendu leaves, mahua and saal seeds is controlled by state governments. The monopoly curbs competition as well as restricts benefits to collectors and earns high revenue for the government. Civil society groups have long been demanding free flow of MFPs so that communities can earn good prices from them. "Why can't tendu leaves be deregulated like other MFPs?" asked Shankar Gopalakrishnan of Campaign for Survival and Dignity, a Delhi non-profit that works for tribal rights. "This is nothing but an attempt to protect the revenue that the government earns from tendu leaves."

Besides, NFRAC recommends that the right to protect and manage forest resources can be transferred from the forest department to gram sabha only if the community's claim is recognised under the Forest Rights Act. In case the gram sabha is not keen to manage community forest or their claim is declined, joint forest management (JFM) committees should work under gram sabha, the main report notes. JFM committee is a village-level committee that is formed and governed by the forest department.

Talking to Down To Earth, Saxena said, transferring power to communities without their claiming right may not work because forest management depends on how "cohesive and capable" the communities are. "Where the communities are not cohesive to protect and manage the resources, JFM should continue as an interim measure. Gradually the forest department should withdraw and JFM be converted into community forest management," he said.

"We did not agree on the coexistence of the Forest Rights Act and JFM," said Roma, a dissenting committee member. Though JFM committees will be under gram sabha, their structure is such that they will be governed by the forest department, she added. Roma and the other dissenting members have suggested scrapping of JFM and creating an alternative model on the line of the forest rights law in areas where community claims are declined.

"Communities have the right to democratically manage the forest they use, regardless of whether they are ready or capable or cohesive," says the alternative recommendations.

Such differing opinions have left the government with a good scope to interpret the recommendations according to its convenience, rued Gopalakrishnan. Activists are pinning their hopes on the draft recommendations of NAC, which calls for giving more authority to gram sabha over forest rights and curtailing the role of forest department. It calls for suo moto transfer of power to manage community forest resources to gram sabha in all villages irrespective of the claims filed. It also suggested scrapping the confusing marginal note in section 5 of the law that limits community rights of protecting forest resources to areas where forest rights are recognised.

Saxena panel highlights problems in implementation; NAC has concrete suggestions

Issues of contention

Recommendations of NFRAC

NAC's recommendations

Gram sabha is formed at panchayat level. This makes it difficult to recognise community rights

Constitute gram sabhas at hamlet or revenue village level

The government should accept village self-rule as mentioned by Panchayat Extension to Scheduled Areas (PESA) Act in all villages

People's participation in the process of recognition of rights is not followed for which claims are often wrongly rejected or modified. Even if claims are accepted, rights certificates are not recorded

Civil society groups should be involved at all levels of implementation. Tribal affairs ministry should clarify that the rights certificates issued should be recorded in settlement records and the land with individual rights be treated as private land. It must- clarify if it should be converted to revenue land

Forest officials' consent isn't needed to accept claim. Higher committees should not reject a claim or modify it unless an appeal is filed against it. In case of insufficient evidence, claims should be remanded to gram sabha. Lands rights be recorded and converted to revenue land

Right to protect and manage community forest resources have hardly been implemented; the right is not even mentioned in many states

The village and government can have a flexible arrangement of sharing authority over forest resources as an interim measure. Gradually the forest department should walk out and communities should take over

Villages should be presumed to have community forest resource and hence rights over them. Failure to recognise this be explained. Forest department should respect gram sabha's powers. Confusing marginal note in the Act that limits forest rights to areas where the rights are recognised be removed

Joint Forest Management

In areas where the claim of a community to manage its forest resources has been accepted JFM committees should be dissolved. If claims are not accepted, JFM should work under gram sabha

JFM should be replaced with Community Forest Management under the Act. Funds for forestry should be channelled through National Rural Employment Guarantee scheme

Rights over MFP are not recognised in most areas. The right is not even mentioned in the claim form in many states

State governments should stop subsidising MFP to industries, and de-regularise all MFPs, except tendu leaves. Governments should announce minimum support price (MSP) for MFPs

A rule should be introduced giving collectors the freedom to sell and transport MFP, subject to regulation by the gram sabha. State procurement agencies should be mandated to provide MSP.