As Sterlite plant expands, an Indian city erupts in protest

Published by MAC on 2018-04-08
Source: The Wire

As Sterlite Plant Expands, a City Erupts in Protest

For the people of Thoothukudi, the story of Sterlite Copper seems to build like the story of the Bhopal gas tragedy, which left thousands dead, lakhs injured, the land devastated and the company responsible off the hook.

Lois Sofia

The Wire

4 April 2018

As the world watched the ˜March for Our Lives' demonstrations against gun violence in Washington DC on March 24, there was a similar outpouring of emotion on the streets of Thoothukudi, a port city in south Tamil Nadu. The residents of the district had gathered in large numbers to demand the permanent closure of the copper smelter owned and operated by Vedanta Ltd.

The smelter - Sterlite Copper (formerly Sterlite Industries India Ltd.)  - is located within the State Industrial Promotion Corporation of Tamil Nadu (SIPCOT) complex in Melavittan, Tuticorin district, where it has operated since 1997. There are numerous facilities attached to the smelter, including a refinery, a phosphoric acid plant, a sulphuric acid plant, a copper rod plant and three captive power plants.

Sterlite Copper is the Indian copper-producing unit of Vedanta, Ltd., a subsidiary of Vedanta Resources, the UK-based mining and metals conglomerate.

It was founded by Anil Agarwal, an Indian citizen living in London and its current chairman. Agarwal is worth an estimated $3.3 billion. His meteoric rise can be traced to when he set up the first private copper smelter in India, the erstwhile Sterlite Industries Inc., whose net profit rose by 36x in nine years from 1989.

A source of toxins

There have been widespread protests against the establishment and operation of Sterlite Industries in Thoothukudi by local residents since the mid-1990s. Copper production, including mining, smelting and refining, is a hazardous industry that produces toxic byproducts like lead, arsenic and sulphur oxides that adversely impact water, soil and air quality.

The environmental impact caused by smelters is indisputable and the effects extend to several tens of kilometres around the source. Environmental regulations that aim to reduce emissions require operational changes and make production more expensive and less competitive. According to Vedanta itself, the Sterlite plant in Tuticorin has one of the lowest costs of production of all copper smelting operations around the world.

The Sterlite Copper complex is located within 25 km of four of the 21 islands in the Gulf of Mannar, a diverse and sensitive marine ecosystem. This violates the conditions attached to the ˜Consent to Establish" issued by the Tamil Nadu Pollution Control Board (TNPCB). However, the TNPCB bizarrely consented to the plant in the SIPCOT complex. The board also reduced the width of the mandatory green belt around Sterlite from 250 metres to 25 at Vendanta's request.

The environmental activist Nityanand Jayaraman, who has been documenting the issue for several years, has written extensively...about the role played by state regulatory authorities like TNPCB, the Ministry of Environment, Forests and Climate Change (MoEFCC) and the local district administration in facilitating Sterlite.

At various times, the National Environmental Engineering Research Institute (NEERI) and the TNPCB have found evidence that Sterlite contaminated the groundwater, air and soil with its effluents and also violated standards of operation. A 2005 report by NEERI (submitted to the Supreme Court) found high concentrations of copper, lead, cadmium, arsenic, chlorides and fluorides in a sample of groundwater taken from the plant's neighbourhood.

In 2010, Mark Chernaik, a scientist with the Environmental Law Alliance Worldwide, authored a report that concluded, "Recent evidence conclusively demonstrates that the Sterlites Industries (India) Limited copper smelting complex in Tuticorin (SIIL) is endangering human health and the environment and contaminating water supplies." His analysis had found high levels of iron (a toxin in high quantities), cadmium, nickel and arsenic in soil samples collected from near the plant. Chernaik also said that the water from wells and hand pumps in the area were unsuitable for agriculture and that they could damage crops if used for irrigation.

In 2006, researchers from Tirunelveli Medical College conducted an epidemiological study in an area within a five-km radius of Sterlite Industries. According to their report, they found a high prevalence of asthma, pharyngitis, sinusitis and other respiratory tract infections, all proxies for the presence of harmful gases and particulate irritants in the lower atmosphere. They also found an inexplicably high incidence of menstrual disorders, like menorrhagia and dysmenorrhea, in women living in the area.

Thoothukudi is not alone in its suffering. Vedanta Resources (London) and its subsidiary Konkola Copper Mines are currently being sued in English courts by Zambian villagers for polluting their water and destroying their livelihoods through its mining operations.

However, even after multiple toxic gas leaks  and after people proving that Sterlite blatantly violated environmental safeguards in a court of law, Sterlite has been able to expand operations in its Thoothukudi plant. In the meantime, the TNPCB, the National Green Tribunal (NGT), the Madras High court and the Supreme Court have been passing the buck among themselves: one shuts the plant, the other belays the order and opens it.

The court’s view

The most recent protests, which crossed the 48-day mark on April 1, were triggered by Vedanta's move to build another copper smelter in Therkuveerapandiyapuram village to double the company's total production in Thoothukudi from 400,000 tonnes to 800,000 tonnes a year and making it the second biggest in the world.

The protests are spearheaded by the residents of Kumarettiyapuram village, which is within 200 m of the proposed plant.

Sterlite Copper had been trying to expand its production for over a decade in the face of widespread public opposition and legal and environmental hurdles. If the second plant comes up, life will likely become worse for the villagers as well as the beleaguered city of Thoothukudi.

In 2009, Sterlite Industries obtained an environmental clearance from the MoEFCC [Ministry of Environment, Forests and Climate Change] to set up a 1,200-tonne per day copper smelting complex in Thoothukudi without any public consultation. The MoEFCC maintained that the project's location within the SIPCOT complex (est. 1985) exempted it from conducting a public hearing, otherwise required for copper smelters by the Environmental Impact Assessment Notification, 2006.

However, records show that the proposed Sterlite project is located in the second phase scheme of SIPCOT, named Tuticorin Industrial Park, which was given administrative sanction to acquire land in 1996, and not in the existing SIPCOT complex. Additionally, in 2014, SIPCOT had failed to disclose that it had already allocated 324 acres for Sterlite's new project in its application to the MoEFCC.

On May 10, 2016, the Madras high court dismissed a writ petition challenging the environment clearance issued by the MoEFCC without a public hearing to Sterlite. The judgment read, "In view of the consistent stand taken by all the authorities, including SIPCOT, that Sterlite Industries is situated within the SIPCOT complex, we have no difficulty in holding that exemption from public consultation would certainly apply."

A 2018 report published by Nityanand Jayaraman's solidarity group accused the MoEFCC, SIPCOT, the TNPCB and Sterlite of having misled the court about the new smelter's location. The document further alleged that SIPCOT had deliberately withheld the fact that Sterlite had been allotted land in its phase II scheme while applying for environmental clearance.

Worse, the report also found that the proposed complex was located on land designated "dry agricultural land" in the village area masterplan, as approved according to the Town and Country Planning Act, 1971. Finally: Therkuveerapandiyam, a part of whose land has been allotted to Sterlite, is not classified as a "Special Industrial and Hazardous Use Zone", so according to zoning regulations, a copper smelting plant cannot be set up there.

However, bolstered by the Supreme Court's 2014 judgement, the Madras high court's dismissal of the petition against Sterlite and with the TNPCB consenting to establish in 2016, Vedanta Ltd. started working on building its new smelter.

The TNPCB, SIPCOT and Sterlite have not responded to requests for comment.

Political donations

The company has also been trying to secure a political leg-up.

In 2014, in response to a public interest litigation filed by the Association of Democratic Reforms (ADR), the Delhi high court found that the Bharatiya Janata Party (BJP) and the Indian National Congress had violated the Foreign Contributions (Regulations) Act, 1976, by receiving donations from foreign companies. Vedanta among them paid the parties a total of Rs 9 crore between FYs 2004 and 2010.

In fact, Sterlite Industries, which operates the copper smelter in Thoothukudi, was the most generous, having paid the Congress Rs 1 crore and Rs 5 crore in 2004-05 and 2009-10 respectively. Quoting from Vedanta's 2014 annual report:

"It is the Board's policy that neither Vedanta nor any of its subsidiary companies may, under any circumstances, make donations or contributions to political organisations within the United Kingdom or European Union. However in accordance with the normal accepted practice in India of making political donations in respect of elections, the Group made political donations of US$3.7 million (2013: US$0.97 million) either through a trust or directly in respect of the Indian general election. The Board believes that supporting the political process in India will encourage and strengthen the democratic process".

The BJP received a total of Rs 15 crore from Sterlite Industries, and Rs 7.5 crore from Cairn India - a Vedanta Resources subsidiary - in the FY ending March 31, 2014, the year the Lok Sabha elections were held.

The Wire had reported in 2016 as to how the government had slipped in an amendment to the Finance Bill to redefine  "foreign" to include [exclude?] companies like Vedanta to avoid legal trouble for political parties in the future. Similarly, earlier this year, the Modi government introduced a clause in the original 2016 amendment to retroactively absolve the Congress and the BJP for accepting foreign donations.

As the Thoothukudi protests are making clear, this link between Vedanta and political parties has very real victims paying the price with their health and lives.For the people, the story of Sterlite Copper seems to build like the story of the Bhopal gas tragedy, which left thousands dead, lakhs injured, the land devastated and the company responsible off the hook.

Meagre compensation

On April 2, 2013, the Supreme Court struck down the Madras high court's order to close the plant. Once the NGT also ruled in Sterlite's favour on May 31 the same year, the factory was reopened.

While the court had conceded that "the plant of the appellant did pollute the environment" by emitting noxious pollutants and discharging dangerous effluents, it justified its verdict by deferring to the revenue the plant generated for the Centre and the state, to the jobs it provided, to the cargo volume it contributed at Thoothukudi port and to India's copper production.

The apex court also ordered Sterlite Industries to pay a compensation of Rs 100 crore for having polluted the environment and for operating without valid permits. The bench explained these stipulations thus:

* the quantum of compensation must be co-related to the magnitude and capacity of the enterprise because such compensation must have a deterrent effect and the larger and more prosperous the enterprise, the greater must be the amount of compensation payable by it.

* while noting that Sterlite Industries' profit before depreciation, interest and taxes (PBDIT) for the financial year 2010-11 was Rs 1,043 crore.

It may seem reasonable to levy a compensation of 10% of Rs 1,043 crore. but that's actually a pittance. A chart [ommited here] shows that the PBDIT of Vedanta, Ltd. from copper smelted in India and Australia between 2000 and 2017 totalled $3.62 billion. However, it paid only $18.4 million ($1 = Rs 54.34 on the day of the judgment) for having polluted Thoothukudi for 21 years.

The latest series of protests in Thoothukudi is only the most recent show of anger; similar scenes have been playing out for over 20 years, against Sterlite as well as the state apparatus. In all this time, no major politician in Tamil Nadu had engaged with or openly supported the people on this issue, except Vaiko, leader of the Marumalarchi Dravida Munnetra Kazhagam.

In FY 2016-17 alone, the profit-before-tax of Vedanta Ltd's operations in India was Rs 13,946 crore, according to the Vedanta Tax Transparency Report 2016-17. With this number in mind, the government should order Vedanta Ltd. to cease operations in Thoothukudi, make the company clean up the ecological damage it has wrought, and ensure that victims receive fair compensation. Only that will be a real deterrent.

Lois Sofia is studying mathematics in Canada and tweets at @Red_Pastures.