Thursday, March 30th, 2023 14:13:39

POSCO Strife Odisha still awaits highest-ever foreign direct investment

Updated: May 7, 2011 1:16 pm

With the Union Minister of State for Environment and Forest (MoEF) Jairam Ramesh putting the conditional clearance to POSCO’s $12-billion project on hold, one of the biggest foreign direct investment still eludes a poor stake like Odisha. The Union Minister of MoEF deferred grant of the ministry to the proposed POSCO project on April 14, 2011, once again. If the project comes up, it would facilitate the flow of investment into the state, thereby generating large-scale direct and indirect employment opportunities to unemployed youths of the state. It is, therefore, not surprising that the Union Minister is inviting criticism from the state government in the matter.

                Odisha entered into a memorandum of understanding in 2005 with Pohang Steel Company of South Korea POSCO, the world’s fourth-largest steelmaker, for setting up an integrated steel plant with a capacity of 12 million tonnes per annum and it was scheduled to begin production by the end of 2011. But protests, environmental worries, litigation and opposition by a section of residents unwilling to part with their forest land have delayed the project.

                However, Environment Minister Jairam Ramesh had given it clearance on January 31, 2011 on certain conditions, ensuring that tribal rights and forest protection laws would be observed. It is certain that holding back forest clearance to POSCO’s iron and steel project yet again has further delayed the mega project. It has plans to build a world-class steelworks providing extensive value addition to the mineral wealth of the state, and to take Odisha to the pinnacle of the global steel industry. But Ramesh’s move is expected to further delay land acquisition by the state government, as it appears to revocate the clearances given in January.

                Having been tossed between the state and the centre for the past few months, such an avoidable delay has undoubtedly pushed thousands of job aspirants into uncertainty. A study conducted by National Council of Applied Economic Research (NCAER) says that the POSCO-India project would alone contribute about 11.5 per cent to the state’s GDP in terms of value addition. POSCO India will pay to the state government Rs 77,872 crore and to the central government Rs 99,099 crore. To add to this POSCO would generate an additional annual output of Rs 29,760 crore for the state. Employment opportunities to be generated by the POSCO-India would consume much of the backlog of the present unemployment in the state. The labour force amounts to 153 lakh, and of them 9.9 lakh are unemployed. Newly created jobs by POSCO-India project will drastically reduce the unemployment rate in the state if the project comes up. It will create about 8.7 lakh of direct and indirect employment, of which 18,000 will be direct employment. Around 7,000 people would get direct employment when the first phase of the Rs 52,000-crore steel plant of POSCO-India kicks off. The Indian subsidiary of South Korean company POSCO is completed, company sources reveals.


The POSCO imbroglio, over the last six years, has been yo-yoing between the pro-industry hawks and the environmental doves. Hardly does the heat and dust settle on one issue, that another takes over. Beneath all this bedlam the very purpose for which the Korean giant was invited by the government of Odisha and the benefits that it would have got for the state have been all forgotten.

                Agreed that POSCO took things for granted and the leaning back of the Naveen Patnaik government made them complacent, but the role of the Indian steel lobby in keeping things hot cannot be denied. The entry of the Korean steel major would have had serious effects on the Indian steel industry, which still uses technology that is outdated and obsolete. POSCO would have been one of the world’s most competitive steelwork with advanced state-of-the-art FINEX technology.

                This technology, which has been indigenously developed by POSCO, is an environment-friendly iron-making process that allows the direct use of iron ore fines and non-coking coal as raw material input. This significantly lowers the operating costs and emissions compared to the Blast Furnace process. FINEX technology also reduces overall construction costs by eliminating the need for sinter and coke plants. Moreover, a FINEX plant occupies half the area of a Blast Furnace plant of equal capacity, thereby requiring less space to operate. This would have been very beneficial to the state as most of the exports are to China and constitute iron ore fines.

                The long-term goal of the National Steel Policy that was formulated in 2005 was that India should have a modern and efficient steel industry of world standards, catering to diversified steel demand. The focus of the policy was to achieve global competitiveness not only in terms of cost, quality and product-mix but also in terms of global benchmarks of efficiency and productivity. The Policy forecast the requirement of indigenous production of over 110 million tonnes (MT) per annum by 2019-20 from the 2004-05 level of 38 MT. The production in 2007 was 53 MT, in 2008 was 55 MT and in 2009 was 57 MT and in 2010 was 60 MT. The growth has been at a snails pace, whereas demand has risen sharply.

                The government is actively encouraging steel consumption so that the steel industry will act as the locomotive for economic growth. To realise this goal and catapult India into a steel superpower, POSCO India would have produced nearly 12 MT, i.e., more then 10 per cent of India’s steel output from the project. Theoretically it was a win-win situation for all.

                The other benefits that would have brought in were the advanced mining techniques which they have developed in Brazil and Australia. The Indian mining scenario is still in the dark ages, not much improvement has been done over the years. Ore handling too is another sphere where POSCO would have brought in technology that would have been very cost effective. The long unending stream of 40,000 trucks that ply the roads from Barbil to Paradip Port are but an example of this. A trucker thanks his stars if he does more then two trips a month.

                There is not disputing the fact that 97 per cent of the employment for the project would have been from the state. This itself would have cleared up more than half the backlog of unemployed in the state. There would have been a gold rush for downstream industries, and Odisha would have been the new Mecca for steel-based industries.

                The next few weeks will be crucial. There are already rumours of many of the senior staff of POSCO quitting as they can see the writing on the wall. Jairam Ramesh’s latest volley may be the proverbial last straw on the camel’s back, and POSCO may call it quits. It will certainly be Odisha’s and the nation’s loss.

By ANIL DHIR from Bhubaneswar

                In keeping with POSCO’s endeavour to create a truly Indian company, 97 per cent of the plant’s total employee strength would comprise of Indians during phase one—the critical phase—which would lay the foundation of the 12 million tonne project. This is just the beginning of the significant benefits India will derive from the POSCO-India project, the company sources say. The project, which would start with a 3-million-tonne capacity initially, would fetch revenue for the government between the tune of Rs 700 crore and Rs 800 crore annually. It would provide direct employment to 13,000 people and ensure indirect employment for another 35,000. Apart from this, POSCO would contribute Rs 77,870 crore to the state in 35 years from the date of commissioning.

                While the strife continues, the Odisha government has geared up to renew the memorandum of understanding (MoU) with South Korean steel major POSCO for its proposed steel plant near Paradip. The Steel and Mines Department has already received the recommendation of the Law Department in this regard. The nodal department will soon invite POSCO for renewal of the MoU, Odisha’s Steel and Mines Minister Raghunath Mohanty said in Bhubaneswar. The MoU signed between the state government and POSCO-India on June 22, 2005 had expired after the completion of the fixed five years tenure on June 21, 2010. Though nine months have since passed, the state government has not been able to renew MoU with POSCO-India mostly due to addition of some new clauses.


POSCO, the world’s fourth largest steel producer and one of the most competitive steel companies (World Steel Dynamics 2006) has contributed immensely to the rapid socio-economic development of South Korea. It started out 38 years ago with empty fields and rural fishing villages, to create today’s phenomenal steelworks.

Once crushed by Japanese colonial rule, Korea began its journey towards infrastructure development and modernisation in the 1960s. The need for steel led to the establishment of POSCO at Pohang in 1968, and the steel industry saw its birth in the country. Its visionary leaders and determined employees took on challenges of mythical proportions in their quest to build POSCO as a global steel maker. POSCO’s meteoric growth was paralleled by the development of Korea, as a globally competitive nation. Now firmly established as a leader in the global steel industry, POSCO is a respected industry innovator, with production bases and sales foothold across the globe.

POSCO signed a Memorandum of Understanding (MoU) with the government of Odisha in June 2005, to set up a 12 million tonnes per annum (MTPA) green field steel plant near Paradip, with an estimated investment of $12 billion. The company will build a 4 MTPA capacity steel plant in Odisha, during the first phase of its project by 2011-12, and expand the final production volume to 12 MTPA. POSCO-India Pvt Ltd was incorporated on August 25, 2005 with the Registrar of Companies, Odisha, under the Companies Act 1956.

                With the POSCO Pratirodh Sangram Samiti (PPSS) getting successful in holding the project for the moment, the Odisha government has raised doubts over the validity of the “pallisabha resolutions” passed by the Dhinkia and Govindpur villages.The Jagatsinghpur Collector will look into the matter. The state government will shot off a letter to the Union Minister Jairam Ramesh while paving the way for his nod to the final forest clearance.

                However, the ruling BJD Balikuda-Erasama MLA Prashant Muduli has blamed Jairam Ramesh for the delay in getting the final nod of the Union Environment and Forest Ministry for the POSCO project. A selective group of people are opposing the largest ever investment ignoring the interest of the local people and the state as a whole, Muduli said.

“POSCO project to be based on global firms’ finest technology” —Raghunath Mohanty,

                                       Minister for Industries, Steel, Mines and Parliamentry Affairs, Odisha

How would you react to Jairam Ramesh’s recent letter which talks about village council resolutions of Dhinkia and Gobindapur that have not been considered by the state government authority concerned?

Right now, the state government is on the job to comply with the clarifications sought by the Union Environment and Forestry Ministry in the matter.

Do you think the recent move could further delay what is billed as India’s biggest foreign investment?

Union Minister Jairam Ramesh wants the POSCO project to come up certainly near Paradip, with an estimated investment of $12 billion, said to be the highest ever foreign direct investment while complying with all the legal formalities.

The environment ministry, which has already scrapped or halted several industrial projects, is pressing for stricter compliance with green laws, posing what some see as a threat to foreign investment. How would you comment on this?

Both the state and union governments want the POSCO project to come up in a transparent manner while taking into consideration the interest of the people. That is what we are doing in our state to set up the integrated steel plant while doing the best for the affected people.

What benefits would the state get if the POSCO project comes up?

It would generate revenue both for the state and for the union governments. This will go a very long way in helping Odisha enhance its global competitiveness and will also facilitate the flow of investment into the state. We view it as being mutually beneficial for both the governments. It will help spur industrial progress in the state of Odisha and India through the setting-up of the steel plant. This apart, it would be immensely beneficial in generating large-scale direct and indirect employment opportunities in the state.

Are you sure about the Posco Project?

There is no uncertainty surrounding the POSCO project and the project would definitely come up in the state. The land acquisition process would be picked up soon once the Environment and Forest Ministry grants the final forest clearance.

Interviewed by Kishore Dash

Disseminate truth about the project

POSCO Pluses

Ever since POSCO signed a Memorandum of Understanding (MoU) with Odisha government, there have been several agitations against the setting-up of the project in the state. It is, therefore, necessary to analyse the whole proposition to observe whether the project is a beneficial one or not. India’s steel industry is in a transitory stage. Yet, it is one which is seeing exceptional growth, thanks to the overall expansion of the economy. It is also witnessing the injection of foreign investment.

                In this backdrop, National Steel Policy-2005 was constituted with the strategic goal that India should have a modern and efficient steel industry of world standards, catering to diversified steel demands. The focus of the policy is, therefore, to achieve global competitiveness not only in terms of cost quality and product-mix, but also in terms of global benchmarks of efficiency and productivity. This would require indigenous production of over 100 million tonnes (MT) per annum by 2019-20 from the 2004-05 level of 38 MT implying an annual growth of 7.3 per cent. This strategic goal is justified on the ground that global steel consumption, around 1,000 MT in 2004, is expected to grow at 3 per cent per annum to reach 1,395 MT in 2015, compared to 2 per cent per annum in the past 15 years China would continue to have a dominant share of the world steel demand. At home, the Indian growth rate of steel production over the past 15 years was 7 per cent per annum. The projected Indian growth rate of 7.3 per cent per annum compares well with the projected national income growth rate of 7-8 per cent per annum.

                Against this perspective, the global steel giant POSCO signed an MoU with the Government of Odisha in Bhubaneswar in 2005, for the construction of a steel plant as well as development of iron ore mines in the state. This is the first step towards the construction of a steel plant in Odisha. The MoU was signed by Mr Soung-Sik Cho, Executive Vice President of POSCO and Mr Bhaskar Chatterjee, Principal Secretary of the Government of Odisha, with the participation of Mr Ku-Taek Lee, Chairman and CEO of POSCO and Mr Naveen Patnaik, Chief Minister of Odisha.

                According to the MoU, POSCO was to build a 3-million-tonne capacity steel plant, blast furnace or Finex route, during the first phase in Paradeep, between 2007 and 2010 and expand the final production volume to 12 million tonnes. The investment proposed was to the tune of $12 billion, including an initial investment of $3 billion during the first phase. But due to opposition to the establishment of the company in Odisha on one or the other ground, the company could still not kick off.

                It is correct that due process of law should be adhered to both for defending the rights of the local people and to shield the project from legal challenges. But unnecessary criticism and protest against industrial projects like POSCO should not be allowed to ruin industrialisation. For, industries are global today. In fact, starting a company needs greater effort and a lot of investment. In the name of safeguarding the environment, blindly protesting against industrialisation is not only incorrect but also counter-productive. However, it is not to suggest that development should be at the cost of environment. But we have to strike a viable, sustainable balance somewhere.

The Government of Odisha, which granted POSCO a mining lease rights for 30 years, will ensure an adequate supply of 600 MT of iron ore to POSCO. This in turn will ensure the competitive operations of the POSCO India steel plant. The government will also promote the construction plan for railways, roads, industrial water and electricity keeping up with the steelwork construction plan of POSCO. POSCO, as the MoU with the Odisha state government states, will establish a local corporation and after conducting a detailed investigation and economic feasibility analysis, will do land purchase, rehabilitation and resettlement programme, and sign a final Memorandum of Agreement (MoA).

Given this scenario, POSCO’s Indian steel plant project, according to experts, is a significant part of the company’s strategy to enhance its global competitiveness and is seen as a win-win initiative for all the parties involved. Also POSCO’s, which is rated as one of the most respected steel companies in the world, partnering with the Odisha government will go a very long way in helping Odisha enhance its global competitiveness and will also facilitate the flow of investment into the state. So, it should be viewed as being mutually beneficial for both parties. It will help spur industrial progress in the state of Odisha and India through the setting-up of the steel plant, and will also help POSCO secure an economically advantageous steel production base in a country with requisite resources and promising demand levels for steel.

What is more, POSCO project would contribute significantly to India’s rapid economic development and further accelerate the progress being made by India towards achieving the status of an economic superpower, as POSCO’s Indian investment will shed positive light on India for other global investors, attracting more mega projects to the nation. The success of this massive project in Odisha will demonstrate to the world that there is a multi-billion dollar opportunity to build Indian infrastructure. There are tangible reasons for this, which are:

POSCO is the world’s fourth largest steel company with over 30 MT per annum capacity and diversified operations in 16 countries. In fact, founded in 1968 and headquartered in the south-eastern port city of Pohang, South Korea, POSCO operates two of the world’s premier steel works—the Pohang and Gwangyang works. The Pohang works produces crude steel of 13 MT and specialises in small-lot production of a broad range of products, including hot-rolled coil and cold-rolled sheet, plate, wire rod, electrical steel, and stainless steel. The Gwangyang works focuses on mass-production of limited high-demand products such as hot and cold rolled sheet and produces crude steel of 17 MT. POSCO’s products are shipped to over 60 countries around the globe, satisfying some of the world’s most quality-sensitive customers.

POSCO intends to set up a Special Economic Zone (SEZ) in Odisha to manufacture superior steel and export 6.3 MT of its production. This would help in achieving the target for exports set by NSP-2005 annually 26 MT by 2019.

POSCO would invest in both the Domestic Tariff Area (DTA) and the SEZ. Of the total investment of Rs 528.13 billion, Rs 77.9 billion will be in the DTA and the remaining Rs 450.23 billion in the SEZ. The investment would consist of the integrated steel works with linked infrastructure in the SEZ. Having established that steel production will have a much larger impact on the economy in comparison to iron ore extraction. The next step would be to bring in POSCO’s Finex technology for steel production replacing the standard Blast Furnace Technology, which is the latest and economically viable technology, according to experts.

POSCO’s iron ore project would create an additional employment of 50,000 person years annually for the next 30 years. This translates into Rs 20 billion of additional output for Odisha. In terms of value addition, the iron ore project would contribute 1.3 per cent to Odisha’s State Gross Domestic Product (or SGDP) by 2016-17. On the other hand, if POSCO puts up the steel project to utilise the entire iron ore mined in the state, the impact on the economy would be much greater an additional employment to 8,70,000 persons per year over the next 30 years. This translates into Rs 298 billion of additional output for Odisha. In terms of value addition, the steel project would contribute 11.5 per cent to state’s SDP by 2016-17.

Also, POSCO-India has already announced that it will provide suitable rehabilitation, as per the Resettlement and Rehabilitation Policy, 2006 of the government of Odisha, which is considered to be one of the most favourable policies for displaced people in India. The company proposes to have its own plan ready for the rehabilitation colony, with all essential amenities. However, detailed rehabilitation package and plan for rehabilitation colony would be prepared after completion of the socio-economic study. Finally, NSP-2005 has identified inadequate infrastructure and high cost of debt as the steel sector’s weaknesses. POSCO’s intended investments and operations would address these issues, with planned investments in roads, water, power, townships, etc.

Owing to these positives, there has been a rise in support for the project in the state. But there is some misunderstanding among the local community regarding the project and this is the main reason for whatever resistance in the area. This misunderstanding is due to intentional spreading of rumours by certain vested interests, who resort to awful methods of using threat and penalty to the villagers, causing hindrances. Hence, the need of the hour is to constantly try to disseminate true and factual information to the community, so that they can understand the project as well as the potential benefits.

By Ashok Kumar

 Vedanta and POSCO


Why was the POSCO project treated so differently from Vedanta? One was given clearance, with conditions, while the other was rejected, despite the fact that both were found to be in violation of the Forest Rights Act and other laws. Is it realpolitik that guides these decisions? asks Pradeep Baisakh.


The Odisha government filed an application in the Supreme Court challenging the Centre’s rejection of environmental clearance to the UK-based Vedanta Group’s $1.7 billion bauxite mining project proposed in the Niyamgiri hills. The state government filed the application through the Odisha Mining Corporation (OMC) against the Ministry of Environment and Forests’ (MoEF) order, dated August 24, 2010, denying the project clearance. In its petition, the state government said that the MoEF’s decision was in violation of a previous order by the Supreme Court giving the project the green signal. It also contended that the Centre’s order was illegal and arbitrary.

                So, why was Vedanta denied clearance and another project, POSCO, given the go-ahead? According to three members of the Meena Gupta-headed POSCO review committee (tribal affairs expert Urmila Pingle, former director general of forests Devendra Pandey and Madras High Court advocate V Suresh), constituted to look into the violation of various laws in the proposed POSCO project: “Both POSCO and Vedanta are alike in the sense that in both instances there is gross violation of the law with impunity.”

                This is a view shared by many who have been keenly watching the approach of the state and the central government towards the two much-talked-about projects—POSCO steel and Vedanta alumina. So there was surprise that Vedanta was given the thumbs-down (August 24, 2010) while POSCO got the green signal (January 31, 2011). One failed to convince Sonia and Rahul Gandhi’s green soldier (Jairam Ramesh), while the other managed to win over Manmohan’s ministerial colleague.

Basic facts about the two projects

POSCO signed an MoU with the Odisha government on June 22, 2005, to set up an integrated steel plant (steel-cum-power plant and captive minor port) in the Paradip area of Jagatsingpur district. Touted as the highest FDI in the country, an investment of Rs 51,000 crore was envisaged for the plant that would have a capacity of 4 MTPA (million tonnes per annum) initially, and would later be upgraded to 12 MTPA. Sterlite Industries Ltd, the parent entity of Vedanta, signed an MoU with the state on June 7, 2003, to set up an alumina refinery with a capacity of 1 MTPA (later an MoU was signed for expansion to 6 MTPA), at an investment of Rs 4,000 crore, in Niyamgiri, Kalahandi district.

                POSCO needed an area of 1,621 hectares, of which 1,253 hectares was forest land. Vedanta’s requirements were for 723.343 hectares of land for the alumina refinery and 721.323 hectares for bauxite mining. Forests cover 58.943 hectares of the land needed for the alumina refinery, and 672.018 hectares of that required for the mining project.

                The Khandadhar iron ore mines in Sundargarh district were earmarked for POSCO, and the Niyamgiri alumina mines for Vedanta.

Geography and people

There are differences in the two projects in terms of people likely to be affected, and ecological and environmental ramifications. In Niyamgiri, the livelihood and rights of two primitive tribal groups — the Kutia Kondhs and the Dongaria Kondhs — are involved. The area is also important from an ecological point of view as it is rich in biodiversity and wildlife. In the proposed POSCO area, the primary sources of livelihood for people are fish, betel vine and paddy. Although few tribals live in the area, it is inhabited by a substantial number of other traditional forest-dwellers (OTFDs). On the ecological front, the project will cause damage to the coast.

                Ashish Kothari, member of the inter-ministerial (MoEF and MoTA) committee to review FRA (Forest Rights Act) implementation that visited the proposed POSCO site to study whether FRA claims had been settled, says: “Even though the issue regarding tribals living in the Niyamgiri hills (proposed Vedanta project) are more pressing than those in the POSCO area (as there are very small numbers of scheduled tribes in this area), from the environment perspective and from the point of view of the rights of people, both POSCO and Vedanta are on the same platform. And of course from the point of view of violation of laws like the FRA and others, they are on an equal footing. In fact, Jairam’s decision on POSCO is completely inconsistent with the decision on Vedanta. If he had applied the same yardstick used to deny mining and expansion of refinery capacity to Vedanta, the POSCO project would never have got clearance.”

Initial clearances

Both projects received initial ‘in principle’ forest and environmental clearance (Stage 1), albeit with conditions, by the Ministry of Environment and Forests (MoEF) at different points of time in 2007 and 2008. But in both cases, the companies and state government were criticised for violating forest and environment laws and local people’s rights. Activists who raised their voice and protested the move to displace people were also targeted. In both cases, expert committees were constituted to look into violations.

Expert committees recommend withdrawal of clearance

Dr NC Saxena made some important observations and recommendations on both projects as head of the expert committee formed by the MoEF for Vedanta and by the MoEF and the Ministry of Tribal Affairs (MoTA) for POSCO. In both cases, Saxena recorded gross violations of the Forest Rights Act, 2006 by the state government and the companies involved.

                In the case of POSCO, members of the POSCO review committee (headed by Meena Gupta) held that there was gross violation of environmental laws, fabrication of evidence, forest rights violations, and the suppression of facts relating to the Costal Regulation Zone (CRZ). Most members of the Meena Gupta panel recommended prosecution of authorities that had violated provisions of the FRA and other environmental laws. But Gupta differed and gave a set of conditions for granting approval to the project. Incidentally, Gupta was environment secretary in the Odisha government when POSCO was given environmental clearance.

                The forest advisory committee (FAC), which is a statutory committee affiliated to the MoEF, recommended withdrawal of all clearances given to Vedanta for mining in Niyamgiri as it found violations of the Forest Rights Act and forest conservation and environment protection laws. In the case of POSCO, the committee observed that due diligence had not been observed in the settlement of forest rights, and therefore it was a breach of law. It recommended temporary withdrawal of Stage 2 clearance for diversion of forest areas to the project.

Similar cases, but different orders

In Vedanta’s case, the MoEF withdrew forest clearance for mining and stopped refinery expansion. But in the case of POSCO, the company was allowed to go ahead with certain conditions. The order did not mention mining at Khandadhar as it was sub-judice.

                The order in the Vedanta case reads: “Upholding the recommendations of FAC, I (Jairam Ramesh) have come to the following conclusion: the Stage 2 forest clearance for Odisha Mining Corporation and Sterlite bauxite mining project on Niyamgiri hills… stand rejected.” It goes on: “The primary responsibility of the ministry is to enforce the laws that have been passed in Parliament. For the MoEF, this means enforcing the Forest Conservation Act, 1980, the Environment Protection Act, 1986, the Forest Rights Act, 2006 and other laws. It is in this spirit that the decision has been taken.”

                Despite violations by POSCO, as shown in the findings of several expert committees, Ramesh did not deem fit to enforce the laws passed in Parliament. Overlooking the findings of the N C Saxena Committee, most members of the Meena Gupta Committee, and recommendations by the FAC, the order from Paryavaran Complex reads: “Projects such as POSCO have considerable economic, technological and strategic significance for the country… 28 additional conditions for steel-cum-power plant and 30 conditions for a captive minor port…” On the issue of the Forest Rights Act, the order says that the state has to give an assurance that no other traditional forest-dwellers (OTFDs) live in the area. Ironically, the state had already submitted that there were no such people living in the area—a fact found to be incorrect by the Saxena Committee. On August 3, 2010, Saxena wrote to Ramesh after his team’s visit to the area: “There are other traditional forest-dwellers (OTFDs) in the area, contrary to what the district administration is saying. Both documentary and oral evidence exists to this effect…”

                Prasant Paikrai, spokesperson of the POSCO Pratirodha Sangram Samiti (PPSS), says: “As POSCO has the highest FDI (as stated by the government) in the country, the central government seems to be interested. Major shareholders in the POSCO project are the US and Canada. The Indian government is carrying forward the western imperialist agenda. This is quite unfortunate. We from PPSS will continue our struggle until the project is scrapped.”

                The most ironical part of the two orders is that, in the case of Vedanta it extensively discusses various recommendations made by the expert committee to justify the decision. This is not the case with POSCO.

Decision guided by political compulsions? Madhu Sarin, noted forest rights activist, says: “Jairam Ramesh seeks an assurance from the state government that there are no OTFDs in the area. This is despite the findings of two committees that he himself appointed and that visited the areas and examined so many records, that there are OTFDs and that the FRA claims of the people in the area have not been settled. This is quite unfortunate.”

                Most experts and activists believe Ramesh had little choice but to give approval to the POSCO project given that the PMO was interested in it. Kothari says: “It was easier for the government to say ‘no’ to mining in Niyamgiri as Vedanta already has a refinery in operation in the area. Now it can get mineral from elsewhere, as it is trying to do from Gandhamardan. But in the case of POSCO, if it withdraws forest and environment clearance the project will not come into being. Moreover, POSCO is a much bigger investment and the largest FDI in the country. The PMO is quite interested in this project. There is some inside news that India is interested in entering into a nuclear deal with South Korea. Taking advantage of this, the South Korean government is backing its private companies like POSCO.”

                Journalist and agriculture expert Devinder Sharma explains: “While Jairam is confident about 10 Janpath, which is concerned about the environment, he also has to listen to the prime minister and his coterie of economists. His role is to be seen in this difficult context. In the case of Vedanta, both Sonia and Rahul were listening to the concerns of the people, and he stood up for that. In the case of POSCO, it seems his heart was for stopping POSCO, given the kind of committees he set up to study violations of the law in the proposed area. But he was under pressure from the PMO, which is bent on selling out our national resources to companies in the name of development.”

                It would seem therefore that realpolitik guides the government’s decisions. The ruling party can ill afford to project an anti-corporate image.




The Government of Odisha made an announcement on the floor of the Assembly that a special law having sharp teeth would be enacted for removal of illegal encroachments. It appears that the government has failed to see the teeth of the present Prevention of Land Encroachment Act, which is armed with powers to effectively deal with the encroachers. If the government wants to make the law on encroachment more progressive, no body will have any objection. The real teeth of the law is the government which has the responsibility of implementing the law. If the government lacks political will it cannot implement the law, however effective the law may be. We have a burning example of the inefectiveness of the government in implementing the Regulation 2 of 1956 as amended in 2000 which deals with restoration of agriculture land ofadivasis which has been grabbed by exercise of fraud by influential persons.

                Recently, the District Magistrate of Malkangiri along with a Junior Engineer was kidnapped by the Maoists. I don’t like to go into the details of this kidnapping drama, how it was staged, who was the hero or the villain and whether all the demands were made by the Maoists or some were sponsored by the government with some ulterior motive. People are very much concerned with one of the demands, i.e. for restoration of adivasis, land which has been illegally taken possession of by non-tribals and other influential persons.

                If the government fails to solve the problems of the people, specially the downtrodden people of the society, then people will revolt against the government. Is the government unaware of the fact that for recovery of the adivasi land, Regulation 2 of the 1956 is in existence. In 2000 when I was Minister of Law and Revenue in the state government, the law was amended at my instance to make it more progressive and effective. The said law was passed in the state assembly in the year 2000 and got the assent of the President of India on August 20, 2002.

                Regulation 3.B.(1) provides that every person who, on the date of commencement of the Odisha Scheduled Areas Transfer of Immovable Property (By Scheduled Tribes) Amendment Regulation, 2000 is in possession of agricultural land which belonged to a member of a Scheduled Tribe at any time during the period commencing on October 4, 1956 and ending on the date of commencing of the Amendment Regulation of 2000 shall, within two years of such commencement, submit to the Sub-Collector, all the information as to how he has come in possession of such land. According to 3.B (2), if any person fails to submit such information within the period specified therein it shall be presumed that such person has been in possession of the agricultural land without any lawful authority and the agricultural land shall, on the expiration of the period aforesaid, revert to the person to whom it originally belonged and if that person is dead, to his heiRs

                On receipt of the information under sub-section (1), the Sub-Collector shall make such enquiry as may be necessary about all such transactions of transfer and if he finds that the member of Scheduled Tribe has been defrauded of his legitimate right he shall declare the transaction null and void and pass an order for reverting the agricultural land to the original owner and if he is dead, to his heirs.

                Under 7.(1), if any person is found to be in possession of any immovable property in contravention of the provisions of this regulation, then, without prejudice to his liability to ejectment under this regulation, or where any person, having been evicted under any provision of this regulation from any immovable property belonging to a member of a Scheduled Tribe, continues to be in possession of the same, he shall be punishable with rigorous imprisonment for a term which may extend to two years or with fine which may extend to five thousand rupees, or with both.

                Where any person, having been evicted under any provision of this regulation from any immovable property belonging to a member of a Scheduled Tribe, reoccupies the same shall be punishable with rigorous imprisonment for a term which may extend to three years, or with fine which may extend to ten thousand rupees, or with both. Under Regulation 7-A.(1), state government has been empowered to confer, on an Executive Magistrate, the powers of a Judicial Magistrate of the first class or of the second class for the trial of the offences under this regulation, and on such conferment of powers, the Executive Magistrate, on whom the powers are so conferred, shall be deemed, for the purposes of the Code of Criminal Procedure, 1973, to be a Judicial Magistrate of the first class or of the second class, as the case may be. An offence under this regulation may also be tried summarily by a Magistrate. It is unfortunate that in spite of having such a progressive law, the government is searching for the teeth of the law, and faced the humiliating demand of the Maoist on recovery of adivasi land and proved its utter callousness, lack of political will and irresponsibility towards a backward class of people like the adivasis who are now up in arms against the government. A non-functioning whimsical and irresponsible government like Odisha government cannot see its own teeth or the teeth of law. If this law is implemented with all seriousness, not only the land of the adivasis, which has been illegally grabbed, will be restored, there will be restoration of peace in the adivasi areas.

(The writer is former Law Minister, Odisha)


Odisha Government Repeats the Same Old Lies in “Assurance” to Environment Ministry

The Odisha government sent a “categorical” assurance to the Ministry of Environment and Forests recently, claiming that no one in the proposed POSCO project area is eligible under the Forest Rights Act. The ministry’s request for a “categorical assurance” came after two committees had already exposed that the Odisha government had lied on this matter.

The latest “assurance” repeats exactly the same lies that were told and exposed before—as if there had never been any enquiry committees. The Odisha government has also challenged the ministry’s interpretation of the law as well as the ministry’s own orders.

For instance:

■             The government continues to say that the area was “wasteland” and therefore, the people are not forest dwellers The Odisha government’s own revenue maps of 1928-1929 and the Survey of India in 1929 all clearly show the area marked as “dense jungle” and “miscellaneous jungle.” These were brought out by the POSCO Enquiry Committee. Does the Odisha government believe that its own maps are forgeries?

■             The government claims that it “implemented” the Forest Rights Act (FRA) by calling palli sabha meetings in March 2008; and, in just one meeting in each village, apparently the Act was explained, the forms and records supplied and the people trained. But, as per their own records, the required legal quorum was not met in a single village again as exposed by the Enquiry Committee. One of the meeting records attached to the assurance—concerning the village of Govindpur, where a large part of the forest land lies—shows a total of 34 people attending this meeting. Is this what the Odisha government has to show for implementation? A single meeting of 34 people, which is not a valid meeting under any law and certainly not under the Forest Rights Rules?

■             Moreover, what has happened to the claims filed since by the people of the area? Who gave the Collector the unilateral power to decide who is eligible in this area? In what sense is this within the law?

■             The Odisha government not only has contempt for the law—it also has contempt for the Environment Ministry. Despite being explicitly instructed in the January 31 order that people are not required to be cultivating for 75 years to be eligible, it says they do. It has tried to act as if the ministry’s own orders and conditions do not exist, saying that FRA implementation and consent of the gram sabhas are not required—when, in addition to being required by law, the ministry itself made these an explicit condition for this project. Finally, the government has not bothered to reply to any one of the legal points made in the representations forwarded by the ministry to it, except for disputing the validity of some resolutions.

                Every single claim that the Odisha government makes in this assurance has been proven false by us, by political leaders, and by two official Enquiry Committees. There is not a single shred of new evidence in this “assurance”. Moreover, the proof that it is a bunch of lies is already with the ministry.

                The question now before the Environment Ministry is simple. Is it going to continue colluding with a state government that has demonstrated its utter contempt for law, truth and people’s rights? Is it going to grovel before a state government that challenges its interpretation of law and ignores its orders? Is it going to tell the nation that it will ignore lies when they stare it in the face?

                Less than a week after claiming that it is going to battle corruption and remove scams, is the UPA government now going to yet again throw the law to the winds for the sake of vested interests and a private company? Is it going to show again that it is just a front for money and muscle power? Whatever the answer may be, the struggle of the people will go on.

(The writer is Spokesperson, POSCO Pratirodh Sangram Samiti)

              By Prashant Paikray

Taking to task the Union Minister, the BJD MLA said the ministry should act fast on clearing the hurdles to set up the mega steel plant in Odisha to boost the economy of the state. All the people of Jagatsingpur, barring a few, are behind the project which would be immensely beneficial for a poor state like Odisha, he said. However, the Union Minister Jairam Ramesh has yet to give his final nod to the proposed POSCO steel plant, said to be the dream project of the Chief Minister Naveen Pattnaik.

By Kishore Dash from Bhubaneswar








Comments are closed here.