MZPSG Newsletter No. 2 Nov 2010

November 28, 2010

Cracks in the Steel

MZPSG Newsletter No. 2 Nov 2010

Editors: Prachi Patankar and Vidya Kalaramadam

In This Issue:

1. The Story So Far …

As many of you likely know, the local residents struggling against the Pohang Iron and Steel Company (POSCO), the giant South Korean multi-national corporation are also facing the collective might of the governments of Orissa and India. This popular struggle is led by PPSS, the POSCO Pratirodh Sangram Samiti (Alliance for the Struggle against POSCO).

The agreement initiating the project was signed in June 2005 in the form of a Memorandum of Understanding between POSCO and the Government of Orissa. As of today, the PPSS led struggle has ensured that not a single brick has been put in place for the plant/port construction. As the struggle grew over the last five years, the Central Government was forced earlier this year to open up investigation into the clearances that POSCO has secured over the last five years. Over the last four weeks, there have been some stunning developments in the POSCO-India saga.

2. Sign the “SCRAP THE POSCO PROJECT” Petition Now!

New Delhi is in a pressure cooker situation as opposition to the project grows rapidly. The Association for India’s Development and the Mining Zone Peoples Solidarity Group along with Friends of South Asia, South Asia Solidarity Initiative and Sanhati have launched a petition asking the Prime Minister to Scrap the POSCO Project. Sign the petition NOW! This Petition will stay active at least until Nov 22nd 2010.

3. MoEF Panel Splits: Majority Opinion Rules Against the Project

Increasing exposure by local groups about the major irregularities in the process of granting clearances to the POSCO project forced the Ministry of Environment and Forests (MoEF) of the central government to investigate. The MoEF constituted a four-member committee to look into the legality of the government clearances issued to POSCO. These clearances include compliance with the Forest Rights Act (FRA), Environmental Protection Act and Coastal Regulation Zone Notification. In an odd move, the government appointed Meena Gupta, a retired IAS officer of the Orissa cadre, and former Secretary of the MoEF, to chair the committee. The other three members of this committee were retired forest officer Mr. Devendra Pandey, independent researcher Ms. Urmila Pingle and civil rights lawyer Mr. V. Suresh.

On October 18, a majority of the committee, all except Ms. Meena Gupta, issued a scathing indictment of the process by which clearances were issued to POSCO. The Majority Report states that the clearances were issued by deliberately suppressing information about the potentially destructive social, environmental and economic effects of the POSCO project. The Majority Report calls for the proper and full implementation of the Forest Rights Act and the Coastal Regulation Zone norms.

In stark contrast, the Minority Report written by Meena Gupta was a weak defense of the project, seeking exceptional treatment for the project and a thinly veiled attempt to sweep all the violations under the carpet. It is important to point out that Ms. Gupta was the Secretary, MoEF, when the original Environment Clearance was given to POSCO. This is a very serious conflict of interest, and Ms. Gupta should never have been appointed to the MoEF Inquiry Committee.

The MoEF referred the issue to the Forest Advisory Committtee immediately after the split verdict of the Meena Gupta Committee. The FAC is itself now split as the Prime Minister’s office intervened after the FAC had arrived at a decision to recommend temporary withdrawal of forest clearance. A decision from MoEF Minister Mr. Jairam Ramesh is expected soon.

We join others in demanding withdrawal of all the clearances, and that action be taken against those guilty of committing fraud, all false criminal charges filed against project affected persons and people resisting the POSCO project be immediately dropped, those imprisoned be immediately released and a judicial inquiry be initiated into the systematic human rights violations committed by the State in pushing the POSCO project.

4. Iron and Steal: MZPSG Report says the project’s economic justification is all bogus

On October 20, two days after the Inquiry Committee chaired by Meena Gupta issued its split decision, the Mining Zone People’s Solidarity Group (MZPSG) held a press conference in New Delhi to release its research-based report titled, Iron and Steal: The POSCO-India Story. Speaking about the report, political economist Professor Manoranjan Mohanty commented that Iron and Steal is “the most comprehensive, most persuasive, the best researched report on the POSCO Project.” Professor Amit Bhaduri, another leading economist present at the press conference, commented that governments relying on false and biased information was a deeply entrenched problem in India.

This report records the existence of a vibrant local economy in the POSCO-affected areas of Orissa and is the first published document to clearly challenge the POSCO project’s economic basis itself. Apart from substantiating the findings of the Majority Report of the MoEF panel on violations of procedures, Iron and Steal critically examines the data and conclusions of the National Council for Applied Economic Research (NCAER) report published in 2007, a report that has been consistently used by GoO and POSCO to justify the project. Iron and Steal shows that the economic logic and evidence presented by the GoO, POSCO and the NCAER are fundamentally flawed because the baseline economy is neglected, the socioeconomic cost-benefit analysis uses faulty methodology, and at times dubious data and even outright falsehoods are employed.

News coverage of the MZPSG report and some follow-up investigative work by newspapers can be read at Media Coverage of Iron and Steal

5. International Business School Professors express concern at gross violations of procedures

In another development, a group of more than 50 Business School professors from universities across North America, Europe and Asia have sent an open letter to Mr. Jairam Ramesh expressing concern at the “gross violations of procedures” and questioning the findings of the NCAER report. News coverage of the business professors’ letter can be seen at Media Coverage of Iron and Steal


The resistance movement led by PPSS has withstood repeated police attacks and disruption of livelihoods for over five years. In view of recent developments, international solidarity work takes on a renewed urgency. We hope that we can count on your continued support. If you would like to subscribe to our action alerts and newsletter, or have other comments, please write to us at