Posco Project – PPSS, MZPSG, NFFPFW, ESG, Manoranjan Mohanty respond to MoEF Committee’s new reports

October 19, 2010

October 19, 2010

Statement from Posco Pratirodh Sangram Samiti


Today, three of the four members of the committee set up by the Ministry of Environment and Forests confirmed that the POSCO project is illegal and that all of its clearances were obtained by breaking the law. The Committee has also found that the project has potentially very dangerous impacts on issues like water, air pollution, and the coastline, and none of this was ever properly evaluated. After a detailed discussion of the huge number of criminal actions by the company and the Orissa government, the Committee says (in the conclusion of the report):

“The POSCO project is an example of how a mirage of “development” can be used in an attempt to bypass the law. Such attempts, if allowed to succeed, will result in neither development nor environmental protection, but merely in profiteering. This will cause immeasurable harm to the nation and to the rule of law and justice in our society.”

We particularly draw attention to the fact that the majority found that:

• The Orissa government and the Central government have violated the Forest Rights Act and tried to grab forest land that belongs to the people. This is the second official committee that has reached this conclusion.

• The project could cause environmental devastation particularly in regard to water, air pollution, coastal damage, danger of industrial disasters in case of cyclones, etc., all of which was ignored by the government.

• POSCO suppressed facts and tried to get around the requirements of law.

• The environmental, forest and coastal regulation clearances obtained by the project were all illegal and should all be revoked.

• The forest clearance can only be given subject to the recognition of rights and the consent of the gram sabha under the Forest Rights Act.

Those who keep talking of the POSCO project as one of “national importance” should answer these questions: would any other country in the world tolerate such violations of their law? Would South Korea tolerate an Indian company grabbing their land, breaking their laws and threatening to cause an environmental disaster? Is this what development means – robbing thousands of their lands and threatening lakhs with water shortage and other catastrophes?

As for the dissenting report of Ms. Meena Gupta, her position reflects her own interests. She was the Secretary that granted the environment clearance, and asking her to review it is like asking a thief to don a police uniform. Naturally she has said that all the clearances should continue. Her report is full of distortions, such as claiming that there are only 700 families in the area (when over 4,000 will lose their lands and/or homes). She tries to cover up crimes by saying that it does not matter if the law was broken; all that is required is to impose some additional “conditions.”

We call upon the Central government to heed the voice of the people and the findings of the majority report, withdraw all clearances and cancel this unjust, illegal and brutal project.

Abhay Sahoo, Chairperson, PPSS


Press Release from Mining Zone Peoples’ Solidarity Group

New International Report Says POSCO Project Economically Not Viable:
Validates Majority Opinion of POSCO Enquiry Committee

Coming on the heels of the report by the POSCO Enquiry Committee, a new report by a US-based group of researchers says that not only are the clearances granted to the POSCO project in violation of the law, but that even the economic arguments advanced by various parties in favour of the project are deeply flawed.

Pohang Iron and Steel Company (POSCO)’s proposed project in Orissa is the largest foreign direct investment project in India to date. It comprises a steel processing plant and a captive port in Jagatsinghpur district, and iron ore mining in Keonjhar and Sundergarh districts. The MoU for the project was signed in June 2005. The government of Orissa has pulled out all stops to get the project going and appears to have the support of the center, but the project has been stalled because of strong resistance from the local residents, a resistance that the government has tried to bypass and crush in myriad ways. Based upon new research into livelihood, financial, governance and environmental issues in Orissa’s Jagatsinghpur, Keonjhar, and Sundergarh districts, a US-based group of academics and professionals are poised to publish a startling new report that points out the lack
of economic viability of the project in addition to the illegalities and process failures in the grant of various clearances by the State and Central governments. This new report:

– challenges the purported benefits such as tax revenues and employment growth of the POSCO project,
– points to gross violations of the law by the State and Central governments, and
– raises troubling questions about the disregard for democratic processes by the Government.

The report will be released at a press conference on Wednesday:

WHO: Mining Zone Peoples’ Solidarity Group
WHAT: Public Release of Report challenging government claims about purported benefits of the POSCO project
WHEN: Wednesday, October 20, 2010; 11 am – 1 pm (lunch will be served)
WHERE: Indian Women’s Press Corps, 5 Windsor Place, New Delhi

Speakers at the Press Conference will include:

Girish Agrawal, California-based Lawyer and Civil Engineer, and one of the authors of the report
Shankar Gopalakrishnan, Campaign for Survival and Dignity
Professor Manoranjan Mohanty, Delhi Solidarity Group
Professor Amit Bhaduri, Professor Emeritus, Jawaharlal Nehru University

The Mining Zone People’s Solidarity Group is an international research group focused on India, with core interests in new economic policy. We have been following the development of several large projects in India. Between February and September 2010, MZPSG has investigated claims made by the Central and Orissa state governments, POSCO, and allegedly neutral research bodies such as NCAER about the benefits of the proposed POSCO integrated steel project and captive port in Orissa.


Press Statement from NFFPFW, ESG and Manoranjan Mohanty

October 22, 2010


The Majority Report of the 4 member Committee appointed by Indian Minister of State for Environment and Forests, Mr. Jairam Ramesh to go into all issues relating to the environmental and forest clearances granted to the POSCO project in Orissa, has unequivocally recommended the revocation of the environmental, coastal regulation and forest clearances granted to the project. Their voluminous report based on a variety of findings state one simple fact: that these clearances were secured by deliberately suppressing relevant information by the project proponent, regulatory agencies systematically overlooked critical concerns and key appraisal bodies of the Ministry of Environment and Forests and the Orissa Government ignored expert demands for comprehensive enquire and rushed the clearances through regardless of the project’s irreversible and widespread social, environmental and economic consequences. That such methods were employed benefiting the single largest foreign direct investment in Indian history (the initial capital outlay of the project per the MOU is Rs. 51,000 crores or USD 12 billion), and the largest steel-power-iron ore mining-port-township complex in Asia, is a statement of how susceptible regulatory agencies are to investor induced pressures. The Majority Report has also uncovered what appears to be uncalled for interference from Ministry of Finance and other Ministries in securing POSCO clearances, even when it was more than evident that it would amount to serious statutory violations and result in irreversible damage to human settlements and the environment.

Curious role of Ms. Meena Gupta:

Ms. Meena Gupta, former MOEF Secretary, was appointed the Chairperson of this Committee. In her letter (18.10.2010) submitting the report, Ms. Gupta did not at all make the effort to present the reports for what they were: that hers was after all a Minority view supporting the POSCO clearances, whereas the Majority view was to reject the same. Yet she made a vain effort in masking the majority report and claimed a moral high ground as she wrote to Mr. Ramesh that “though a minority view is not necessarily less valid than a majority view, it is always difficult to be in a minority. You feel safe and vindicated if you are in a majority, if others agree with your views or vice versa. However, if one is convinced about the correctness of one’s decisions, one should not be afraid to go it alone.” By implication, therefore, Ms. Gupta was promoting her view as right and that of the other three members as wrong. This even as Ms. Gupta admitted that she had “several reservations” chairing the committee considering that she had been the Secretary of MOEF when the clearances for POSCO were accorded. After all, she could have excused herself of the role in true demonstration of this moral high ground.

Ms. Gupta’s bias for POSCO is not revealed as much in her highly opinionated report, as it is in the fact that she drops reference to a critical clause of the TOR of the Committee in her reporting as she drops all references to clause (iv) that empowers the Committee to “review compliance with statutory provisions, approvals, clearances and permissions under various statutes, rules, notifications, etc.” For an experienced bureaucrat as Ms. Gupta is, this is no oversight or inadvertent error, but is a deliberate act of obfuscation. She then attacks other members of “going beyond the Committee’s terms of reference when they wished to assess not merely the compliance with the clearances granted, but the grant of the clearances, per se”. For their part, the three members who concurred with each others findings have rightly rebutted Ms. Gupta’s outrageous claims in their letter to the Minister (dated 19.10.2010) in which they expose the fact that “the recommendations of Ms. Gupta are not in accordance with law” and that the “Committee has serious reservations to (such) recommendations” made by her as they are “not only untenable but also legally impermissible”.

It is no surprise that Ms. Gupta uses her strange justification to merely recommend some additional conditions as ameliorative measures while promoting a business as usual approach – that POSCO project should go ahead, based on more comprehensive studies that would have no bearing whatsoever on mitigating the project’s massive environmental and social impacts. In a disturbing stand, Ms. Gupta has argued that the fundamental question if the clearances were secured legitimately should not be investigated, clearly a convenient position to take considering that she was at the helm of affairs at the time.

Facts reveal fraudulent clearances

The Majority report, unanimously endorsed by Dr. V. Suresh, Dr. Devender Pande and Dr. Urmila Pingle, is clear and categorical that the clearances – forest, coastal regulation and environmental, were all obtained by fraudulent means. How so?

Firstly, the largest iron ore mining – steel plant – captive port – power complex ever project ever conceived, was deliberately unbundled into its smaller parts and applications moved to secure their clearances as though they were independent projects (4 MTPA steel complex, 400 MW power plants and captive “minor” port), even though they wera all one and situated within one complex. What was deliberately suppressed was that POSCO had clear intentions of ramping up production to the full capacity of 12 MTPA (per 2005 MOU) in just six years.

No mention whatsoever was made about the massive township that would be developed demanding additional land, and similarly of the impact of the 86 kms water pipeline from Jobra, and the other pipeline from Hansua, and also of the road and rail networks that would be required. The fact that the port was claimed to be a minor one is an alarming aspect as it was designed for CAPESIZE ships – 170,000 DTW capacity, each approximately 280 m in length, perhaps the largest built in Asia to come into the ecologically sensitive Jatadhar creek. This would require 12 kms channels and tranquil berthing facilities for which there would be massive sea walls built – one 2 kms and another 1.6 kms (approx.). The devastation that such a massive infrastructure facilities would cause is unimaginable, particular considering that the Jatadhar creek is an important nesting site for the critically endangered Olive Ridley Turtles. This is the region of Paan kethis (betel vines) as locals say sand dunes provide them sweet soil and water while also protecting them ably from the worst of a cyclone’s impact.

POSCO also did not come clean on the fact that it would raise the entire base of the 4004 acres plant area by 5 metres by dumping millions of tonnes of sand dredged from the sea to protect the plant from a super cyclone like the one that slammed Orissa in 1999 – wind speeds of 260 kms, wave heights of 5.6 m, and wave lengths of 100 kms, that swept some 20 kms into the hinterland killing about 15000 people and devastating entire villages. That the implications of such a plant design will devastate the ecologically sensitive estuarine and deltaic complex and potentially increase vulnerability of surrounding regions was clearly not a concern for POSCO. Then there was the deliberate suppression that there would a large township developed, for about 1 lakh people, in which there would be a separate gated community of Koreans, reminiscent of the British Raj and its cantonments.

All this takes land, and the project applications claim 4,004 acres is necessary for the plant and the port. There has never been any verification of the actual extent of land necessary. The company has been extremely conservative in sharing information and the regulatory agencies have never exercised their right to demand the same. There is yet no idea of how much more land will be needed for the township, the pipelines, road and rail networks and a variety of ancillary facilities. The Report has revealed that the plant is proposed in total violation of the Coastal Regulation Zone Notification, including a 1000 acres plot for dumping ash!

Critical Concerns raised, and deliberately suppressed by key decision makers:

It is not that these concerns were not at all raised. Indeed they were in technical review meetings relating to environmental, coastal regulation and forest clearance applications. But in order to secure land that is 75% forest – heavily used by local communities – both agrarian and fishing, and also a delicate coastal and deltaic complex, several lies had to be manufactured, and many regulatory officials silenced. The Orissa Government sought to silence the local community protests against diversion of forest land by claiming they were not at all Other Traditional Forest Dwellers per the Forest Rights Act, but were instead mere ‘encroachers’. And officials and experts at the highest levels of review in MoEF saw to it that none of the site visits sought for were undertaken, none of the comprehensive analysis demanded were actually done, and none of the critical concerns raised were at all addressed. As is evident the clearance were rushed through in 2007, in a matter of months, based on a highly vitiated Statutory Public Hearing held without dissemination of basic information on the project (eg. EIA) and by holding the hearing 15 kms from the project affected villages under very heavy and highly intimidating police presence.

Were it not for the resurgent movement of the local project affected villagers, none of these facts, perhaps, would ever have been brought to our collective attention. It is this resistance, fought despite some of the worst police terror tactics and human rights violations, under the leadership of the POSCO Sangram Pratirodh Samith, and the active association of tens of progressive groups, networks and individuals, that today we have an opportunity to revisit completely what can be termed the greatest planned economic and environmental disaster of Orissa – averted.

The majority finding is clear that there is comprehensive violation of the due processes of the Forests Rights Act, in the Orissa Governments efforts to sidestep the due settling of traditional and legitimate rights to forests. Thus the Forest Clearance, now suspended, has to be revoked.

The majority finding is absolutely certain that the deliberate suppression of critical concerns of the environmental and social impacts of the project, raised in the decision making processes of the Orissa State Pollution Control Board, Regional Office of the Ministry of Environment and Forestst (Bhubaneswar) and also in initial meetings of the Environmental Appraisal Committees of the Ministry, and the rushing through of the clearances, warrant their immediate revocation.

The Majority Report reveals from file notings that there were pressures – especially from the Union Finance Ministry. There are revelations that where there should be only one set of minutes in the final decisions of the Expert Appraisal committee of MOEF, there are actually two, the unofficial version amended by the Chair benefiting POSCO.

The list of such deliberate underplaying of statutory procedures is endless. In fact almost all features of the clearance are based on fundamental statutory violations. Encouraged by such weak review, POSCO has clearly not been about complying with Indian law – indicative in the fact that the company hurried to submit its comprehensive EIA days before the Review Committee was to submit the report to Minister Ramesh!

POSCO: Orissa’s greatest Loot project

What all this reveals is that the POSCO project is perhaps the greatest fraud and loot project in the history of Orissa. Were one to factor in the issues involved in the mining clearances, not yet secured, particularly the revenue stream losses – given the pathetically low royalties now required to be paid, the project is certain to be an amazing exercise in looting Orissa for South Korea’s gain.

On 11th November 2010, Prime Minister Dr. Manmohan Singh will visit South Korea. Surely he would want to take good news. The state of the POSCO project in Orissa is clearly not that now. In the coming weeks, the Majority findings will be reviewed by the Forest and Environmental Appraisal Committees of MOEF (perhaps involving the same members who had deliberately underplayed the project’s serious adverse impacts). Would these Committees step up to the challenge of truthfully implementing the law of the land? Or would they take the lame ground of development has consequences and push through the project? Time will tell.

For project affected communities, the Committee’s majority findings are a strong vindication of their resolute stand that the POSCO project represents the worst form of development – where our nation’s resources are looted, our environment is devastated and Transnational Corporations walk away with tonnes of money, and not merely our iron ore.


* Given that fraud has been the basis of securing forest, environmental and coastal regulation zone clearances, the Ministry must immediately withdraw these and initiate a comprehensive enquiry to fix individual responsibility of officials involved in this fraud. Concomitantly, all clearances extended by the Pollution Control Board must also be withdrawn.

* In conformance with criminal procedure provisions of the Environment Protection Act, action must be forthwith initiated against those guilty of committing fraud – both in the POSCO company and amongst regulatory agencies.

* The State and Central Governments must forthwith scrap this project.

* All false criminal charges filed against project affected persons and people resisting the POSCO project must be immediately dropped, and those imprisoned must be immediately released.

* A Judicial Enquiry must be initiated into the systematic human rights violations engaged by the State in pushing the POSCO project.

Ashok Chowdhury, National Forum of Forest People and Forest Workers

Dr. Manoranjan Mohanty, Retd. Professor of Political Science, Delhi University

Leo F. Saldanha, Coordinator, Environment Support Group


Recommendations of Ms. Pingle, Dr. Devendra Pandey and Dr. V Suresh (of PUCL) — the other three members of the MoEF committee headed by Meena Gupta — which call for canceling the forest and environmental clearances and starting FRA afresh.

15. Recommendation- The committee therefore feels that the final forest clearance dated 29.12.2009 of the MoEF has overlooked serious violations of their own directions and the procedures prescribed by law. Imposing additional conditionalities as in the clarification given by MoEF in January, 2010 while allowing the clearance to stand does not remedy the illegalities. The Committee therefore strongly recommends that the final forest clearance referred above be revoked forthwith.

16. Recommendation: Orissa government must initiate implementation of the FRA process afresh in the project area in a transparent and democratic way and ensure settling of individual and community rights as per the provisions of the Forest Right Act and Rules made there in.

21. Recommendation – Though the R & R scheme has not yet started fully, the Committee feels that the rehabilitation package should take into account the loss of livelihoods, provide for land for land compensation, account for vulnerable sections including women, labourers and old people and decided upon through a transparent and democratic process.

32. Recommendation- The Committee strongly feels that there have been many serious lapses and illegalities in the EIA process. The EIA for such a megaproject is rapid, based on one-season data without taking into account all the components of the project like the township project, water project, railroad and transport facilities etc. Moreover it is limited only to Phase I of the project. There are serious violations in the public hearing process where many communities have been left out. The imposition of additional conditions to the existing ECs will not at all remedy the lapses and illegalities. The Committee therefore strongly recommends that the Environmental Clearance given by the MoEF dated 15.5.2007 for minor port and 19.7.2007 for the steel plant should be immediately revoked

39. Recommendation: In view of the above observations the committee feels that POSCO-India Pvt. Ltd has not been able to address all the issues relating to CRZ notification. There are a number of serious lapses and violations, including suppression of facts. The environment clearance given by the MoEF vide letter dated 15 May 2007 should therefore be revoked forthwith.