POSCO Potpourri

The Odisha government was jolted out of deep hibernation of arbitrariness by the Union Environment Ministry last fortnight, as it held back forest clearance to POSCO’s iron and steel project and directed the Odisha government to recognise the rights of forest-dwellers living in two villages in the proposed POSCO project area. It is noteworthy that the Odisha government sought to arise Phoenix from the ashes by sending a categorical assurance to the Ministry of Environment and Forests (MoEF) just one day prior to the setback struck hard to it. The Odisha government, in the assurance to the MoEF, claimed that no one in the proposed POSCO project area was eligible under the Forest Rights Act. Such an assurance had been demanded by the MoEF as a pre-condition for granting forest clearance to the POSCO project in an order, dated 31-01-2011. The Odisha government’s ‘categorical assurance’ came after two committees–Meena Gupta-headed POSCO Review Committee and Dr NC Saxena Committee–had already substantiated that the Odisha government had lied on this matter. Both the committees had recorded gross violations of the Forest Right Act (FRA), 2006, by the state government and the company involved. In fact, they also held that there was gross violation of environment laws, fabrication of evidence, forest rights violations and the suppression of the facts relating to the Coastal Regulation Zone. So much so that most members of Meena Gupta Committee had recommended prosecution of authorities that had violated provisions of the FRA and other environmental laws. In this backdrop, the Environment Minister Jairam Ramesh has done the right thing by deferring grant of forest clearance to the POSCO project till objections to their land being taken away by two villages in the project area are disposed of in the manner prescribed under law. No less than the World Bank has repeatedly pointed out that projects that break the law and harm the environment do not lead to development, welfare or jobs; they simply lead to profiteering.

                Let me clarify that I am not against development and industrialisation, but it is in reality a fairly bad deal for India, with POSCO getting access to cheap resources and almost free land for very little return. Moreover the job claims are over touted, for most of these would be filled by foreign workers. For, modern steel plants are not labour-intensive, and the few hands needed to run the plant would need well-defined skills, restricting the scope for direct employment of local people. Therefore, some creative engagement with the displaced people and more generous and large-hearted compensation policies are called for, to make it acceptable for people to give up land and the only certain forms of subsistence they have. The company wants to build its own port instead of using an existing one that is equally accessible. This will only allow it to ship away as much steel as possible with little or no checks. This will also pose a security threat to the national interest as any kind of ship (civilian or military) may come in there without any hindrance. It is said to have a plan to build it on land that is inhabited rather than the land that is not inhabited. Thus, an analysis of a direct economic impact highlights the immense loss to Odisha with this deal. POSCO promises to invest $12 billion (Rs 54,000 crore) in setting up the steel plants and running them. However, the number of beneficiaries of all the job dreams would be very low as mentioned earlier. Other economic efforts to sustain schools, services, small businesses etc are other benefits. Some of the investment will also help build infrastructure for mining which may affect local communities–roads, schools, electricity–and that will be 5 per cent if one is magnanimous about ones numbers. The rest of the investment is mostly on equipment and services to support production – investment that does not necessarily trickle into the local economy. Even accounting for such indirect benefits, the state of Orissa would get in return a small percentage of the price of iron ore that the company would sell in the global market. Why such criminal neglect of state’s self-interest by state’s captains? Furthermore, the state government might say that the people of the villages, who have been resisting their land being taken away, are neither tribals nor other traditional forest dwellers. But these villagers are, in any case, people, with rights of various kinds, whether accorded under the Forest Rights Act or not. They are people capable of political action and mobilisation, as they have amply demonstrated. At the same time, they are people who have the normal ambitions and aspirations of people anywhere, to improve their lot and acquire a better standard of living. Strange indeed it is that a Rs 54,000-crore investment does not offer something to satisfy these normal aspirations of the people of the project-affected areas. If this is the kind of investment which India needs to welcome, it is better to reconsider the entire issue keeping in mind the national interest.

Deepak Kumar Rath

Deepak Kumar Rath

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