South Asia Update

South Asia update

18th February 2007

The Italians are invading India - at least, that's how it must have seemed to some last week, as a top level delegation from the European state arrived in West Bengal to pick whatever lucrative deal it could. Central to the Italian mission is an alliance between Fiat and Tata in delivering the "peoples" car. And central to that is an issue that's had many citizens up in arms over the past year: the designation of special economic zones (SEZs) which seem to overwhelmingly favour industry over needs of the rural poor.

In the biggest Indian foreign takeover to date, the country's leading aluminium producer, Hindalco, has taken over Novelis - the US company spun off from a merger between Alcan and Pechiney in 2005. This follows swiftly on the heels of Tata's takeover of the UK-Dutch steel company, Corus. Doubts have been expressed about the wisdom of the Novelis deal from the Indian point of view. It's also worth noting that Novelis has a major contract to supply rolled aluminium to Coca Cola - long the target of vigorous opposition by Indian organisations for its alleged massive pollution and exhaustion of precious groundwater resources in the country.

Although promoted by the steel industry as a means of reducing energy in steel-making, and hence emissions of CO2, communities living around sponge iron (direct reduction, or DRI) plants beg strongly to differ. It is claimed that these plants, many of which have no proper environmental clearance, have become a major threat to environment and livelihood of people in Chhattisgarh, Orissa, Jharkhand, and other states.

Now, an illuminating , well-illustrated, investigation of the impacts of sponge iron plants in Chhattisgarh - specifically one operated by Jindal , concludes that they should be closed immediately. The report points to significant cancer and non-cancer risks to nearly 200,000 people living within a 10km radius of the plant.

[The report is 7.5 mb, and can be downloaded at:

http://www.cgnet.in/Min/Pollutionbyspongeironplants.pdf ]

Depending on the outcome of the next elections, Tata seems to be reviving its previously-suspended takeover plans for Bangladesh. Also waiting in the wings, as the government publishes a "new" coal policy, is the disgraced UK company, Global Coal Management (formerly Asia Energy).