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India's Steel Mill Approval Defies Pledge to Weigh Environmental Costs

The new $12 billion POSCO steel plant would take up 4,000 acres and displace 22,000 people. Still, India says future foreign investment depends on it

By Ranjit Devraj

Feb 23, 2011

NEW DELHI—India's environment minister, Jairam Ramesh, is fond of saying that the policy of his ministry is to strike a balance between economic development and environmental protection.

But his critics aren't convinced. Currently, they're trying to figure out if the country's ecological needs even entered Ramesh's mind last month when he gave clearance to (POSCO) to build a controversial $12 billion steel mill in India's eastern Orissa state.

To be fair, it was a proposal Ramesh wasn't likely to refuse. The South Korean steel giant was bringing the biggest-ever foreign direct investment (FDI) into India. Word had gone round that it would be seen as a test case for the seriousness of this country's economic liberalization program.

In fact, South Korea's trade minister, Kim Jong-hoon, minced no words during a visit to India in late January when he said that future investments from his country would hinge on POSCO's fate.

Ramesh has himself said that projects like POSCO have considerable economic, technological and strategic significance for a major developing country like India.

Tribal People: 'This Is A Sell-Out'

The 12-million ton capacity plant was originally approved in 2007, but opposition by the largely tribal population of Jagatsinghpur, who stand to lose their traditional farming lands, stalled the project.

The POSCO Pratirodh Sangram Samiti, which has been leading opposition to the steel mill, has vowed to continue resistance. "This is a sell-out. We will continue to fight for our rights," said its leader, Abhaya Sahoo.

According to Sahoo, the project involves handing over some 4,000 acres of land to POSCO and the building of a captive port that will displace some 22,000 people.

The plant would also increase the carbon footprint of the nation's fossil fuel-intensive steel industry, at a time when the government has set a goal to cut the emissions intensity of its economy by 20 to 25 percent by 2020 from 2005 levels.

In India, steel and iron production consumes more energy than any other industrial sector, according to figures from the . Steel plants account for roughly 15 percent of the nation's CO2 emissions from industry, as production has jumped by more than 500 percent over the last three decades. Worldwide, the sector is responsible for about three to four percent of global warming gases.

Ramesh's (MoEF) has addressed some of the opponents' concerns by imposing 18 new environment-related conditions for the building of the steel plant and another 31 for POSCO's shipping port.

One of these is a requirement for a new and comprehensive environment impact assessment (EIA).

Ramesh's ministry has also made it incumbent on POSCO to ensure protection for Olive Ridley Turtle nesting sites, barely 12 miles away. Advocates say this is an improvement, considering that POSCO's original EIA, which was completed more than a half a decade ago, had failed to even mention that the endangered turtle species nested on Orissa's beaches.

Ramesh: 'I Am Not Dr. No'

The greenlight that Ramesh gave POSCO contrasts sharply with the denial he meted out to the UK-based aluminum refinery Vedanta to set up a bauxite mine, also in Orissa. In that case, Ramesh clearly swung toward conservation.

In reviewing the Vedanta mine deal, the MoEF heeded protests from civil society groups in India and abroad on behalf of the Dongaria Kondh tribals of Niyamgiri, who are classified as being among the most primitive groups in the world.

So where does that leave Ramesh? "I am not Dr. No," he told foreign correspondents earlier this month. "I'm not here to stop projects."

The facts support that statement. According to the New Delhi-based Environment Impact Assessment Response Centre, which monitors accountability, Ramesh has so far rejected just six projects brought before the MoEF since he took charge of it in May 2009.  By contrast, he has cleared 535 of the 769 project proposals considered by his agency.  

The lure of the large...

India might better concentrate on solar ovens if they want to improve life quality and slow indoor pollution.

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