TEARING THROUGH THE WATER LANDSCAPE Evaluating the environmental and social consequences of POSCO project in Odisha, India A Study prepared at the request of POSCO Pratirodh Sangram Samithi Jagatsinghpur District Odisha by Leo F. Saldanha and Bhargavi S. Rao Environment Support Group® Environmental, Social Justice and Governance Initiatives May 2011 Tearing through the Water Landscape: Evaluating the environmental and social consequences of POSCO project in Odisha, India; Saldanha, Leo F. and Rao, Bhargavi, S.; Environment Support Group, Bangalore, India, 2011. Photographs: Leo F. Saldanha In the interest of advancing social and environmental justice, this publication may be freely disseminated by any means. A publication of Environment Support Group® Environmental, Social Justice and Governance Initiatives 1572, 36th Cross, Ring Road, Banashankari II Stage Bangalore 560070. India Tel: 91-80-26713559-61 Voice/Fax: 91-80-26713316 Email: [email protected] / [email protected] Web: www.esgindia.org Acknowledgements This publication is a result of Environment Support Group's active support and engagement with the efforts of POSCO Pratirodh Sangram Samithi (PPSS) and that of the peoples of Jagatsinghpur District of Odisha to stop what is certainly amongst the most environmentally, socially and economically destructive projects conceived in recent times in India. Abhay Sahu and Prashant Paikray leading the movement with a host of other key activists have inspired us in this endeavour. Noted film-maker K. P. Sasi was instrumental in ensuring our paths crossed, resulting now in this publication. Ranjan Swain, a key leader of PPSS, whose family is a victim of the 1999 super-cyclone and who is repeatedly punished for his anti-POSCO activities (fighting over 40 false criminal complaints), actively provided a variety of information in support of the research backing this study, and with his family extended warm hospitality during our visit to the project affected villages. Our colleague K. R. Mallesh assisted in the research work and in so many other ways difficult to describe in preparing this publication. Jacob Carlson provided extensive criticisms on the early drafts of this publication, which helped in sharpening the argument and also the narrative. Sudhir Kopparam of Manasu Communications designed this publication. We thank Action Aid – India for supporting the publication of this study, as we do many of our civil society friends and our families who encouraged us in this project. Needless to state, oversights and lacunae are clearly the responsibility of the authors. About this study This study is an effort to deeply enquire into the circumstances and the basis for the approval of the mega POSCO project in Odisha. An array of historical evidence is surveyed to appreciate the rich biodiversity of the Jagatsinghpur region over time and the nature of relationships between communities and forests. On this basis, the environmental and social impact information of POSCO's steel-power-port components is critiqued to expose the fact that regulatory agencies could not have known anything of the short term and long term impacts of the project on the basis of the information that the company supplied to them. This report exposes the disastrous consequences of locating this mega venture in a region known to be the amongst the most vulnerable to frequent cyclonic activity in the world. While the potential devastating consequences of the mining components of the project is noted with grave concern, its impacts have not been reviewed here. This is because the Odisha Government has only indicated that the proposed mines are to be in the Kadadhar hills of Sundergarh district, but has not identified the exact location. This report also does not review the economic impacts of the project for this has been comprehensively achieved in the report of the Mining Zone Peoples' Solidarity Group entitled “Iron and Steal: The POSCO-India Story”.1 Finally, this is an effort to appreciate the strange nature of environmental decision making in India, as it is also a study of the dissembling of Jairam Ramesh who admittedly “under pressure”2 approved the POSCO project thus supporting the comprehensive violation of India's environmental, forest protection and forest rights acts, amongst others. 1 “Iron and Steal: The POSCO-India Story”, Mining Zone Peoples' Solidarity Group, 20 October 2010, accessible at: http://miningzone.org 2 A few days after he finally approved the POSCO project, Jairam Ramesh conceded that he has been under pressure to overlook environmental violations. Source: I have been under pressure to overlook environment violations: Jairam Ramesh, India Today, 7 May 2011, accessible at http://indiatoday.intoday.in/site/story/jairam-ramesh-violated-environment-rules-under- pressure/1/137396.html Contents 1. Facilitating POSCO's entry into India 1 2. Appreciating The Water Landscape 5 3. Politics Of Control Over Land And Resources 9 4. Living In Harmony With Nature, Truly 14 5. Undermining The Human Cost Of The Posco Project 17 6. How Cyclones Define Life In Jagatsinghpur 22 7. The Peculiar Case Of Posco's Environmental and Forest clearances 27 8. Independent Investigations Confirm Fraud In Posco Clearances 36 9. The Making of a 'Rightless People' by Jairam Ramesh 48 10. Not A Final Word 56 11.Endnotes 60 Chapter 1: Facilitating POSCO's Entry into India The proposal of South Korean transnational corporation Pohang Iron and Steel Company (POSCO) to establish in Odisha1 (Orissa) a massive steel-power-port-township project, backed by one of the largest iron ore mining efforts in India, is by far the single largest industrial investments in the world in recent times. With an initial capital outlay of Rs. 51,000 crores (USD 12 billion at 2005 prices), this is also India's single largest foreign direct investment ever. In its eagerness to secure the project for Odisha, amidst competition from other States 2 to win over the investor, the Odisha Government rushed to conclude a Memorandum of Understanding (MOU) with POSCO on 22nd June 20053. soon after the company had expressed interest to invest in India. What the MOU guarantees is a sweetheart of a deal for the Koreans as the State effectively protects POSCO from all business risk. Barring the absence of a sovereign counter-guarantee4, the MOU is a clear demonstration of the subordination of the interests of Odisha and of the country to serve POSCO's international growth and expansion plans, and of its unprecedented profit making venture. Some clauses in Section 6 of the MOU amply demonstrates this: “(xiii) The Government of Orissa will assist the Company in obtaining all clearances, including forest and environmental clearance and approval of the State Pollution Control Board, and the Ministry of Environment and Forest, Government of India under Forest (Conservation) Act, 1980 and Environmental (Protection) Act, 1986 for opening up the iron ore mines, laying roads, constructing township, etc. (xiv) The Government of Orissa agrees to provide all possible assistance to the Company for acquiring mineral concession for limestone and dolomite within the ambit of the MMDR Act and MC Rules.5 (xv) Govt. of Orissa will make best efforts and provide all possible assistance to POSCO for expeditious clearance of applications relating to mining lease and related matters such as forest, environment etc. so as to enable POSCO to start its mining operations in time to synchronise with the commissioning of its steel plant.” There is little need for any State to so bend over backwards in securing the interest and investment from a foreign direct investor as there is no dearth of investment in the iron ore mining and steel sectors today. In fact, mineral extraction is amongst the highest growth sectors in India over the past decade, and there are several public and private investors waiting to invest in a variety of new projects. In addition, banks are willing to extend an endless supply of credit to Indian industry for launching mining and processing of iron ore, given the phenomenal increase in global demand and prices over the past five years. Seen in this context, the POSCO MOU seems to be a rather unnecessary extension of support to an investor in current times. For POSCO, this MOU has been particularly useful in paving the way forward for the project, especially considering that the Odisha Government assured its active involvement in the processing and securing of a variety of statutory clearances. A clear indication of this is in how the location of the steel plant was selected. Upon signing the MOU, POSCO requisitioned 4,004 acres of land in a coastal location for the steel, power and captive port components of its integrated project. Land acquisition is normally the most contentious aspect of industrialisation, especially considering the increasing pressure on productive and fertile land. The company did not have to worry much though as within months of the MOU the Government identified a coastal stretch to locate the project. The selected land were in 8 villages of three Gram Panchayats (GP),6 i.e., Dhinkia and Govindpur villages in Dhinkia GP, Noliasahi, Bhuyanpal, Polanga and Bayanalakanda in Gadakujang GP, and Nuagaon and Jatadhar villages in Nuagaon GP, of coastal Jagatsinghpur district of Odisha. On the productive and fertile lands of these villages would now come up a massive steel plant with a production capacity of 12 million tonnes per annum (MTPA7), which is equivalent to the combined production of the top 6 steel plants of India: Bhilai, Bokaro, Durgapur, Rourkela, Burnpur and Salem8. To support this phenomenal production, a captive 400 MW coal fired thermal power plant would be initially set up, which later would have to be expanded to 1,100 MW to meet the plant's energy requirements. The captive port would be capable of handling 170,000 DTW 9 cargo ships – the largest commercial ships ever built.