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POSCO Loot Of Our Mineral Wealth And Environment
Is Far Worse Than The 2G Scam

By Leo F. Saldanha

03 May, 2011

Mr. Jairam Ramesh, Minister of State with independent charge for Environment and Forests in the Government of India, cleared the diversion of 3,000 acres of forest land comprising a major part of the 4,000 acres required for the POSCO Steel-power-port project in the ecologically sensitive Jagatsinghpur district in Orissa. Jairam Ramesh's pro POSCO decision was released on the evening of 2 nd May on the Ministry's website . He thus paved the way for acquisition of land for a most controversial project. However, the current decision does not take into account massive additional demands of land required for the project's industrial township and associated water, road and rail infrastructure, and also the most controversial iron ore mining component proposed in the thickly forested and mountainous Kandadhar region which is now a subject of litigation.

This project has been peacefully resisted by local communities for six years now; their staunch resistance to the project demonstrated in their refusal to allow entry of any State or company official into the affected villages. The reaction of the State has been brutal and has involved harsh police action against women, children and men, and the filing of false criminal charges against most adults in the project affected villages – some leaders have been wrongfully arrested and others falsely accused of over 40 crimes, most with serious implications to their normal day to day functioning. All this in a vain attempt to break a fantastic peoples movement, which has resolutely remained peaceful in its methods, in a landscape that is otherwise known for violent resistance to the State's hegemonic efforts to dispossess communities from forests and farms to favour highly questionable projects benefiting the rich and large corporate houses.

“Faith and Trust” over-rides the need for rationale in decision making:

Ramesh's decision is based on an unprecedented claim of the need for “Faith and trust in what the state government says (a)s an essential pillar of cooperative federalism” (emphasis in original). The rationale he offers in taking such a position is that “(b)eyond a point, the bona fides of a democratically elected state government cannot always be questioned by the Centre” (emphasis added). This even when Ramesh expresses what can be termed as very serious doubts about the capacity of Orissa Government to protect the interest of the State of Orissa and the people of India when he says that the POSCO “MOU had provisions for the export of iron ore which made me deeply uncomfortable with this project” (emphasis added). He also admits that he “could well have waited for the MOU to be renewed and for a final decision of the Supreme Court” which is hearing an appeal on the decision of the Orissa High Court cancelling the Orissa Government's allotment of out of turn (ignoring over 200 applicants waiting for long) and large iron ore mining permits benefiting POSCO.

The simple and plain question that cries out for an answer then, is why did he not wait? Especially considering that the mining component of the project is an integral part of the overall scheme of POSCO? This also raises serious questions if he respects the Orissa Government more, and the Supreme Court less? What was the compelling need for him to rush to clear a project that has failed to comply with any of the conditions imposed in the clearances accorded by the Ministry in 2007? And this when the project is without sufficient legal support as the MOU of 2005, based on which most clearances are being secured, has lapsed and has not been renewed yet.

True Federalism is to respect Local Governments as equals:

Speaking in favour of POSCO and comprehensively rejecting serious well documented contestations over the legality of environmental, coastal and forest clearances accorded, Mr. Ramesh has spoken in many ways for the Government of India. After all the forest clearance was perceived as the last major hurdle for this mega project as all other Ministries (such as Coal, Mining, Finance, etc.) were merely waiting for him to make up his mind. In deciding for POSCO, Jairam Ramesh has gone with the Orissa Govenment's claims that the Palli Sabha (1) resolutions of Dinkia and Govindpur Gram Panchayats are “fraudulent” and even invested a lot of paragraphs to ensure that the Sarpanch Shishir Mohapatra who is accused by the Orissa Government of perpetuating this fraud is punished, else “the state government's argument will be called into serious question”. Thus, admitting he is really not sure about the facts of this critical matter involving forest rights.

His unseemly haste to clear POSCO based on his innovative argument of “faith and trust” as an “essential pillar of cooperative federalism” also flies in the face of his recent (14 th April) rejection of the Orissa Government's repeated claim that it had fully complied with and implemented faithfully the provisions of the Forest Rights Act. His argument then was “(i)gnoring.. two Palli Sabha Resolutions and not allowing them to be subjected to a due process of law as enshrined in the Forest Rights Act, 2006 would be tantamount, in my considered opinion, to violating the very essence of this legislation passed unanimously and with acclaim by Parliament”. By so endorsing the legality of Resolutions, this position was consistent with the findings of the two independent investigative committees that he had appointed. These committees had established beyond any doubt, and on the basis of extensive legal evidence, that Orissa State had fundamentally flouted the Forest Rights Act, and other statutory procedures, in its enthusiasm to secure POSCO's interests. His latest and now unconditional “faith and trust” decision now rests on a spectacular speculative argument that simply has no place in environmental decision making, or for that matter any legal decision at all.

In the federal structure of governance in India, local elected governments are in no way inferior to the elected bodies at the State level. Ensuring such separation of powers and autonomy in functioning is the whole purpose of the Panchayati Raj Act, the Forest Rights Act and such other such provisions in the Constitution. When such is the law of the land, a Minister does not enjoy privileges of over-rating the State's position over that of a Panchayat.

Legal evidence loses out to “faith and trust”:

By such arguments, the Minister has not only exposed his prejudice against claims of forest dwelling and dependent communities, operating as they are in a climate of fear, but also his utter incapacity to rigorously enforce the due process of law on the basis of uncontestable facts. He abandons this critical exercise by saying “I have already examined the legal issues... and therefore there is nothing to be gained by seeking further legal opinion. Similarly the facts of the case... are too obvious to require any further enquiry or verification ” (emphasis added). Surely, Mr. Ramesh is aware that the environmental laws are based on criminal procedure code, and that he is duty bound to spare no effort in ensuring that material submitted in seeking clearances are valid in law. The decision has to also satisfy the test of being beyond any reasonable doubt as it directly and irreversibly affects the livelihoods of hundreds of farming and fishing families who have a very weak possibility of restarting their lives, will devastate beyond repair sensitive ecosystems and could annihilate critically endangered species. A d ispute in fact must be fully and legally resolved, and should not become subject to mere opinion of the Minister. Ramesh's decisions fails on all these grounds.

Investigative Committees appointed, and their uncomfortable reports sidestepped:

When Jairam Ramesh appointed very senior and widely respected former bureaucrats and experts in two fact finding committees to investigate into all aspects of the coastal regulation, forest diversion and environmental clearances accorded to the POSCO project, there was widespread hope that he would not keel over to any pressure in this critical decision. But this hope lasted only for a short duration. As the Committees returned with reports exposing extensive illegalities and fraud in the environmental decision making processes, Ramesh chose to sidestep these reports in his 'speaking order' of 31 January 2011. He thus supported the earlier clearances accorded by his scam tainted predecessor in the Ministry, Mr. A. Raja, who is now in Tihar Jail on corruption charges instituted by the Central Bureau of Investigation (CBI).

Of course Ramesh had laboured to justify his claim to being a socially and environmentally conscious Minister by adding dozens of additional conditions. But on close scrutiny these conditions appear to be mere window dressing and rely largely on rhetorical commitment from the investor towards safeguarding peoples' rights and the environment. Experience in India has repeatedly shown that such conditions are rarely complied with and violators even more rarely punished. Interestingly, but not surprisingly, many of these additional conditions articulate the need for thorough assessments and comprehensive studies into environmental and social impacts of the project. Thus exposing the widely known and undeniable fact that the earlier clearance decisions were accorded almost entirely on the lack of any relevant material.

For instance, one of the conditions speaks of the need for evaluating the high risks involved from cyclones and tsunamis in the coastal site selected for steel plant, a point not to be taken lightly following the recent Japanese experience. This is critical considering the fact that 1,000 acres of the 4,000 acres for the steel plant will be only for dumping fly ash and sludge. Nothing is known about how POSCO proposes to contain the regional impacts of such massive storage of ash and that too in an area with super high wind energies. And there is the fundamental concern that the massive port is proposed in the Jotadhar creek, a highly sensitive area known for nesting habitats of critically endangered Olive Ridley Turtles and Horse Shoe Crabs, and as spawning grounds for fishes. A little known fact about the port is that it will have 6 kms. long and 25 metres deep channel into the sea, whose width ranges between 250 to 500 metres. This means a lot of dredging, and almost all the time through the life of the port, as the region is known for a very high accretion of sand. What would happen to all this dredged material? What, if any, are the chances for turtles to navigate a busy shipping lane, involving the movement of the largest commercial ships ever built – as POSCO proposes to build a port allowing the berthing of 170,000 DTW carriers, known as Capesize ships because of their inability to make it through the Suez Canal and thus have to go around the Cape in South Africa. Each of these ships is a quarter of a kilometre long!

Not to be overlooked also is the fact that POSCO proposes to raise the base height of the steel plant from 0 MSL to 6 MSL. This is because it wants to protect its plant from any serious impact from anything like the 5.6 metres tidal wave that slammed this very region with wind speeds exceeding 250 kmph in the super cyclone of 1999 that left a trail of destruction and misery tens of kilometres inland. Historical evidence points to the fact that the Jagatsinghpur region has been the epicentre of many intense cyclones, and thus this is exactly the kind of area that constitutes very high risk for shipping and industrial activity and is a site that must be avoided. There remains then the other serious issue of where all the mud and silt to raise such a large area over so many metres will come from? If it is the dredged material from the sea, clearly it will devastate the wetlands in land supporting very high productivity in paddies, prawn cultures and paan kethis (betel vine). Not to be forgotten, of course, are consequences to the local communities when they have to stare up at a steel plant towering tens of feet over them, with its smoke, ash and dust billowing all around. Their tranquil life in harmony with nature, as they now know it, will end.

In a travesty of the well-honed science of environmental decision making, the single largest steel-power-port-township and potentially mega mining project ever conceived in the history of India, and also the largest industrial project conceived in recent decades world wide, has now got the push forward on the basis of faith. By this decision Jairam Ramesh has chosen to ignore, perhaps even ridicule, the findings of the POSCO Investigative Committee appointed by him with former Environment Secretary Ms. Meena Gupta as chair. The recommendations unanimously made by 3 of the 4 member committee, educate us on how little is actually known about the impacts of this massive project:

•  “....(T)hat in view of the glaring illegalities which render the clearances granted illegal, the EIA and CRZ clearances dated 15.5.2007 for the port and the EIA clearance dated 19.7.2007 for the steel plant should be revoked after following the due process of law.

•  The project proponent if it so desires may prepare a comprehensive EIA for both the port and the steel plant in accordance with the notifications now in force including all the various components of the project such as rail and road transportation, pipe line, township, mining, etc. for the full capacity of the plant and its components.

•  If the project proponent applies, a fresh public hearing may be conducted on the basis of the new comprehensive EIA to be prepared by the company.

•  In the meantime no body should be dispossessed of their land and since all clearances are ..prior to the commencement of construction no alterations of any nature should be permitted on ground.”

Is 'strategic significance' any ground for clearing POSCO?

Enormous volumes of public monies and resources were invested in these investigative efforts, and they were meant to assist the Ministry, and the Minister, in ensuring a fair, just and correct decision was made in this mega project. But Jairam Ramesh decided to dump all this into the trash cans of the Ministry raising serious questions about his credibility in his pro-POSCO decision of 31 January 2011 in which he claims that “(u)ndoubtedly, projects such as that of POSCO have considerable economic, technological and strategic significance for the country” (emphasis added). Despite all of Mr. Ramesh's best efforts to avoid the risk of being accused of “filibustering”, which he claims to avoid in his 2 nd May pro-POSCO decision, he seems to have done exactly that. By overlooking relevant facts, and choosing to rely on the uncertain claims of the Orissa Government that it has complied with key statutory provisions, he now hopes to distract attention from the shocking finding of the Investigative Committees that serious illegalities and fraud backed key environmental clearance favouring POSCO. These are not ordinary or simple accusations for they are often the type of material for investigation into possibilities of corruption.

Such argumentation also raises serious questions about his jurisdiction in so deciding for India, when his job essentially is to ensure that Ministry of Environment and Forests is environmentally sensitive, non-corrupt, efficient and just in its decisions, and protected from extraneous influences of such factors as 'strategic significance', scale or nature of the project, who the investors are, etc. A terrible consequence of such subjective reasoning is that it can now be applied to almost all projects: Jaitapur Nuclear power plant, Lavasa, Gundia power project, some windmills in a forest and so on. By this POSCO decision, Mr. Ramesh has irreversibly lost the opportunity of demonstrating his much proclaimed unyielding commitment to ensure the implementation of rule of law, and lack of corruption and transparency in environmental decision making. Mere sharing of documents backing his decisions does not make for a good and transparent decision. He has to demonstrate the legal and scientific rationale by which he arrived at such a decision, and this has to be on the basis of supportive evidence from subject review committees as per the law. Ramesh has chosen to overlook all these statutory requirements. This is clear demonstration that he has indeed yielded to pressures, whatsoever they might be and wherever they emerged from. The rule of law has been sacrificed on the altars of “faith and trust” and based largely on one man's belief that the project is of “strategic significance” to India, disregarding the widely held perception that the POSCO project constitutes a loot of India's natural resources to benefit a foreign corporate.

Cleared by Raja, is POSCO not scam tainted?

A major development is that the Central Bureau of Investigation (CBI) has begun to investigate the decisions of Mr. A. Raja in according environmental clearances during his term (2004-07) as Union Minister for Environment and Forests. The allegation is that Raja liberally gave environmental clearances to 2,016 projects in a little over two years!
His front man in this operation was Mr. R. K. Chandolia, then director of planning and coordination in the environment ministry. Today both are implicated in the 2G scam and are in Tihar jail.

POSCO was one of the mega projects that Raja cleared, specifically its captive port component. This decision was taken on 15 th of May 2007, exactly a month after the controversial statutory Environmental Public Hearing on the project was held, which the MOEF Investigation Committees have revealed involved major human rights violations. Reports of this tainted Hearing were rushed to Delhi to fulfil a legal requirement and the port was cleared by Raja in the final hours before he transited from the Environment Ministry to his new role as Union Minister for Telecom and Communications. Normally, when such big decisions have to be taken on mega projects, no Minister risks approving them on the eve of his transition, largely to avoid accusations of corruption. But Raja was made of a different mettle, clearly.

The unseemly haste by which Raja cleared the port component of the massive POSCO project was a strong indicator of favourable decisions that were meant to follow. Ms. Meena Gupta, who took charge as Secretary of Environment Ministry on 1 st June 2007, ensured that the environmental clearance to the steel plant was accorded on 19 th July 2007 without much ado. At that time the Environment Ministry was without a Minister and was directly under the supervision of the Prime Minister of India – thus with little possibility of a close watch over executive decisions and accountability to the public. Despite all this evidence, or probably because of which, Ramesh appointed Meena Gupta to officiate over the Investigation Committee into POSCO that he instituted, resulting, not surprisingly, in her single dissenting note which favoured her earlier pro-POSCO decisions that she made on the basis of weak and fraudulent evidence.

It would be specious to believe now that Raja and Chandolia began their corruption racket only in the Telecom Ministry. The CBI's investigative guns are now trained on their long and corrupt politician-bureaucrat alliance, as the agency has discovered that these gentlemen favoured many projects of DB Realty with environmental clearances, a cash rich corporate house accused of benefiting enormously from the telecom scam. Raja's reliance on Chandolia was so acute that he took him as his personal secretary to the Telecom Ministry. When it was pointed out that such an appointment of an Indian Economic Services bureaucrat was violative of law, Raja elevated him as Economic Advisor to the Minister, next only to the position of Secretary of the Ministry.

Could it be at all possible that their corrupt practices were strictly limited to benefit only DB Realty? Not POSCO or any other project?

POSCO sets a new 'race to the bottom' standard in environmental and economic regulation:

The Korean/US TNC POSCO project proposal (Warren Buffet who recently toured India has a major stake in the project) has a capital outlay of Rs. 51,000 crores (by 2005 prices) and involves production of 12 mtpa of steel. It also includes iron ore mining rights of a stupendous 600 million tonnes over 30 years, 60% of which is allowed for export to POSCO's Korean steel mills. As studies reveal, POCSO is likely to recover all of its capital investment in less than a decade, and that too only from profits from iron ore. (2)With a captive port accommodating the movement of the largest commercial ships ever built, and also of a captive power plant in the steel plant, this is undoubtedly a peach of a deal for any industrial house. The unprecedented nature of profits that accrue from such a mega project demands without any doubt a rigorous and serious scrutiny, at many levels of the Union and State governments and by independent regulators as well; far more seriously than efforts are now under way to uncover the scam in the Commonwealth Games, 2G telecom deal, Bellary mining, etc. Most regulatory agencies, though, have inexplicably chosen to not subject this project for their examination.

A review of the Environment Ministry's clearance records reveal that no other project has been accorded such hasty and favourable treatment as the POSCO project in recent times. There are tens of small, medium and large projects that have fully complied with procedural requirements, and yet do not secure environmental clearance within weeks of a Public Hearing. POSCO must have been of 'strategic significance' to Raja, else why would he rush its clearances through with such haste when so little was known of the project, its outcomes and its impacts? Now that Jairam Ramesh has endorsed Raja's decision, it won't be long before Karnataka's Chief Minister Yeddyurappa accuses Ramesh of bias for rejecting the Gundia power plant which the former would claim is of 'strategic significance' to the state. Similarly, Goa will make a case that mining in the Western Ghats is of critical economic importance and Ramesh must have “faith and trust” in the State's assessment of its needs. Mr. Sharad Pawar, Union Agriculture Minister, has for some time now been berating Ramesh's moratorium on Monsanto's Bt Brinjal, claiming this first food GMO in India is critical to secure the future of Indian agriculture! Narendra Modi of Gujarat will spare no words in attacking the Union Government were any of his pet projects rejected.

India could have done well to avoid such propensity of pandering to investor induced pressures and the unsustainable competition between States to secure investments; at the very least in projects that have massive, serious and irreversible environmental, economic and social consequences.

CBI enquiry into POSCO is a must now:

There is simply no option now but for the CBI to completely examine all decisions taken by Raja during his time in the Environment Ministry, thus not limiting the exercise to those relating to DB Realty decisions alone. This is of strategic importance to our country in light of the fact that none less than Mr. Jairam Ramesh has expressed discomfort over the unprecedented “export of iron ore” involving Capesize super tankers that POSCO proposes to employ in shipping out the ore it mines in India. Unprecedented profits are to be made from this virtually business-risk free POSCO project, and it is not an accident that there is so much cooperation between so many different political parties and levels of governments to usher it through.

As revealed in the unbelievable iron ore mining scam in Bellary, there is far too much money to be made from mining iron ore alone in the POSCO deal. The POSCO kind of loot of non-replenishable natural resources, associated with the destruction of thousands of natural resource dependent livelihoods and the environment, is a far worse scandal than the 2G scam. Airwaves are ambient, can be reallotted and the perceived loss is essentially in money terms. Iron ore, forests, coastal areas, livelihoods, critically endangered species simply aren't renewable resources.

Jairam Ramesh was aware that the CBI had begun investigating Raja's possible corruption while in the Environment Ministry and could well have waited for the CBI to review Raja's role in the POSCO decision. But he chose not to, and announced his pro-POSCO decision the very next day after CBI began the investigation. All these circumstances demand that the POSCO project decisions must be thoroughly investigated by the CBI. It is high time that our Parliamentarians also spare some of their time in scrutinising the POSCO decisions, while also attending to the politically juicy spectrum allotment (2G) and other scandals.

Leo F. Saldanha is Coordinator Environment Support Group . He can be reached at leo@esgindia.org



(1)As Gram Sabhas are known in Orissa)

(2) Iron and Steal , by the Mining Zone Peoples' Solidarity Group, published in October 2010, provides a rigorous analysis of the super-normal profits that POSCO will make from the mining/steel project. This report is accessible at: http://miningzone.org/



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