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Tribunal scraps green clearance to India's largest FDI, Posco-Debabrata Mohanty

Korean steelmaker Posco’s bid to build a 12 million tone integrated steel complex in Jagatsinghpur, Orissa received a major jolt today after a two-judge bench of the National Green Tribunal suspended the environment clearance granted to the project in January 2011.
 
"The environment clearance granted on January 31, 2011 to the project shall remain suspended till such review and appraisal is done by the ministry," a bench of tribunal comprising Justice C V Ramulu and Devendra Kumar Agarwal said in their order.

The tribunal pointed out that memorandum of understanding between the Orissa government and Posco states the project is for production 12 million tonnes of steel per annum (MTPA) but the environment impact assessment (EIA) report has been prepared only for 4 MTPA steel production in the first phase and not the entire 12 million tonne per annum for which environment clearance was granted.

The NGT bench said the MoEF should take "policy decision" that in projects of such magnitude the EIA should be done for the complete project. "The EIA should assess it for the full capacity right from the beginning," it said.

The Ministry of Environment and Forest had granted environmental clearance to the project in 2007. However, it was re-appraised in 2010-11 by the ministry’s Expert Appraisal Committee after the Meena Gupta Committee appointed by MoEF to inquire into the clearances given to the project found glaring shortcomings in the earlier clearances. But overruling the panel, the then environment minister Jairam Ramesh had issued the final order granting environmental clearance to the project with additional conditions in January 2011.

The MoEF order was challenged by Orissa-based activist Prafulla Samantra, who claimed that the comprehensive environmental impact assessment (EIA) report of the Posco project, was not made available to the public in the project area. Instead a rapid EIA was placed on the basis of which the first clearance was given in 2007. Samantra had noted that the rapid EIA was grossly inadequate to appraise such a big project as it failed to take into account the harmful impacts the project will have on the ecology of the surrounding area, says the appeal.

MoEF, in its reply to Samantra’s petition however claimed that its January 2011 order was just an amendment to the original clearances and was not an environmental clearance but a re-issue of environmental clearance. MoEF’s contention was that since the clearance was granted to the project in 2007, before the green tribunal started operating in October 2010, the clearance could not be challenged.

In its order, the NGT asked the MoEF to review the clearance afresh and attach "specific conditions" which Posco would have to follow in a "defined timeline". The bench said appointment of Meena Gupta as chairman of the committee to review the environmental clearance showed "departmental bias" as she had only "supported" the environment clearance granted to Posco earlier during her tenure as the Secretary of MoEF. "The entire process was vitiated in the eyes of law," the bench noted. The bench also directed the MoEF to set up a special committee to "monitor the compliance to the environment clearance" thus granted.

Posco which signed an MoU with the State government in June 2005 for establishment of the greenfield integrated steel project is yet to start work in the project area due to fierce opposition at the ground. Though as it has over half of the required 4004 acres in its possession, the state government in December last year has put an unofficial ban on the entry of Posco officials after 30-year-old labourer was killed and more than 20 were injured in an clash between anti-Posco villagers and a group of labourers hired by a Posco project contractor in December.

The MoU is also yet to be renewed though it lapsed since June 2010. Posco's bid to get Khandadhar iron ore reserves in Sundergarh district is now locked in court battle after the Orissa High Court struck down the government's move to allot the Khandadhar mines to the company. Three special leave petitions have been filed in the Supreme Court in this regard.

Besides, Posco's bid to get a captive port has been stymied with the Orissa High Court in May last year directing the State government not to take any action on the MoUs and concessionaire agreements that it has signed with several corporate houses for setting up non-major ports on the coastline. Posco's proposed port at Jatadhari river mouth is a non-major port.