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Split Jairam panel puts Posco on pause by Amitabh Sinha

The showpiece proposed iron and steel project in Orissa by South Korean steel major POSCO faces a huge cloud of uncertainty with an expert panel set up by the Environment Ministry alleging violations of environmental laws.

Three of its four members today 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 the company should be asked to submit a fresh Environment Impact Assessment (EIA) report.

The committee that included Urmila Pingle, an expert on tribal issues, Devendra Pandey, a former director of Forest Survey of India, and V Suresh, an advocate at Madras High Court, was formed in July this year with a mandate to report on the implementation of Forest Rights Act (FRA), and compliance of 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 — proposed as 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. That order was based on the report of another committee that had alleged violations of FRA in the project area.

Today’s development has raised fresh doubts over the project that plans to produce 12 million tonnes of steel per annum — almost equal to the combined capacities of six of the 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 as well as a captive port facility.

The CRZ and environment (EPA) clearances for the captive port had been given on May 15, 2007 while those for the steel plant and a captive power plant had come on July 19, 2007. Incidentally, the Environment Ministry was headed by A Raja until May 17, 2007, after which Prime Minister Manmohan Singh took charge. Gupta became the Secretary in the Environment Ministry on June 1, 2007.

The project is significant for other reasons too, including the fact that it is the first major investment from a South Korean company and furthers the cause of India’s “look-east” policy.

Environment Minister Jairam Ramesh has said that he was “conscious” of the larger strategic importance of the project. Today he said that the committee pointed to some “weaknesses and infirmities” in the way Forest Rights Act was being implemented and that there was room for significant improvement.

The committee produced two reports — one by Meena Gupta and the second by the other three members. While Gupta adopted a conciliatory tone and suggested remedial measures to deal with the violations, the other three members indicted Central and state government officials for giving the go-ahead to the project.

“There is a flagrant violation of all substantial and procedural rules and regulations in granting the EIA and CRZ clearances to POSCO. The entire clearance process has been reduced to a farcical and empty formality by all concerned,” they said.

On the issue of implementation of Forest Rights Act, which involves compensation to the 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.”

Gupta was of the opinion that the state government should be given a second chance to recognise the claims of affected forest dwellers.

“This fresh exercise proposed may delay the diversion of forest land for the POSCO project by some months, and may modify the extent of land to be given to POSCO, but it will, in the end, be a just and fair action,” she said in her report.

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 Environment Ministry’s final decision on the project.