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Mainstream, Vol XLIX, No 8, February 12, 2011

Scandalous Decision of Jairam Ramesh to Clear the POSCO Project


Saturday 19 February 2011

The following is the statement issued to the press by Abhay Sahoo, President of the POSCO Pratirodh Sangram Samiti (PPSS), and Prashant Paikeay, the PPSS spokesperson, on January 31, 2010.

The decision of Environment Minister Jairam Ramesh to give a comprehensive okay 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 the inter-generational 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 known that the POSCO Pratirodh Sangram Samiti, 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 the 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 a 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 100,000 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 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 coastal forests. Over 22,000 people will be directly displaced by the steel plant alone, a number that has been repeatedly disputed by the 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 that 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, were 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 five 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 the 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 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, the 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) com-prehensively 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 the Statutory Appraisal Committee of the MoEF, the Committee reviewing the Forest and Coastal Clearances recommended withdrawal of the clearances granted. The only Committee that proposed a go-ahead was the one reviewing the environ-mental 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 the fraud involved in securing clearances for the POSCO project, the step should have legally been taken to withdraw the clearances accorded in the matter—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 five per cent stake in this transnational corporation. For the single largest project of FDI investment in India at 2005 prices (Rs 51,000 crores or US $ 12 billion capital cost), analyses reveal that this investment can be recovered in less than a decade given the pittance of a royalty that POSCO will pay for the iron ore extracted. (Rs 30/tonne at the official ore valuation of Rs 300/tonne, compared to the commercial value of Rs 7000/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 the 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 at the Centre. Just as Mahatma Gandhi led India’s valiant battle against the exploitation of India by the British Empire, it is time now for the PPSS to actively challenge this gross violation of Constitutional Rights, Statutes and Norms, dubiously legitimised by Jairam Ramesh ignoring the 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 Union Government (especially the MoEF) will continue.

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

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