Summary of Submission to MoEF Committee

This submission covers four major issues:

  1. Non-compliance with the Relief and Rehabilitation policy:  We conducted new primary research into livelihood issues in Jagatsinghpur district, where the steel project is proposed, and Keonjhar and Sundergarh districts, where mining is proposed.  The key findings are:

    • There is a thriving agricultural economy in the three gram panchayats, comprising 9 villages, which will be displaced by the proposed steel plant. This economy is centered on but not limited to betel vine cultivation. Betel vine cultivation is feasible on very small plots of land and provides a steady, reasonable income both to the owner-cultivators and to wage labourers.
    • This economy and people’s livelihoods are closely related to forest areas – most cultivation occurs on forest land, and people collect minor forest produce and forest products. However, the Forest Rights Act has not been implemented.  The soil of the area and the availability of fresh ground water is uniquely suited for betel cultivation and cannot be replicated in other areas.
    • An estimated 22,000 people will be affected if this economy is destroyed. The R&R package on offer in the steel plant area is not reasonable compensation for the losses that will be suffered by the people.  For instance, the average loss of income for a cultivator exceeds Rs 50,000 per year for every decimal of land under betel vine cultivation, but the latest compensation on offer is a one-time payment of Rs. 11,300 per decimal.
    • An additional estimated 20,000 to 25,000 people from approximately 30 neighboring gram panchayats would suffer loss of their livelihood as fishermen because of the proposed POSCO port. These people are not even referred to in any R&R plan.
    • In the proposed POSCO mining areas, approximately 32 villages, mostly Scheduled Tribes, are dependent on surrounding forests for minor forest produce for consumption and sale. The Forest Rights Act has not been implemented and no R&R has been announced for these areas.
    • POSCO/NCAER have exaggerated the employment claims of the project. A careful breakdown of the much touted 8.7 lakh man years of employment shows only 7000 direct jobs and a maximum of 17,000 direct and indirect jobs in the next 5-10 years. Further, due to issues of skill mobility and mechanization, most of these jobs will not go to the project-affected population.
  2. Erroneous tax projections following SEZ approval: The state government’s claims of the projected tax revenues from the POSCO project appear to be erroneous and grossly misleading. For instance, it is claimed that the project will generate higher corporate taxes with SEZ status than without! The state government appears to be relying entirely on a deeply flawed report by NCAER, a private agency funded in part by POSCO. Given current information, and discounting industry-funded consultants’ flights of fancy, it seems more likely that the project will result in a severe drain on the state exchequer.
  3. Flawed processes followed during EIA notifications and public hearings: Based on the available public record, the EIA process is flawed on many fronts:
    • The project was treated as a series of disconnected parts so that its actual impact was obscured
    • Forest cover has not been verified on the ground, only an aerial survey was done.
    • Coastal Regulation Zone Notification of 1991, which protects fish breeding grounds, has been violated since the area designated for POSCO’s captive port is classified as an “ecologically sensitive area.”
    • Rapid EIAs were performed instead of Comprehensive EIAs in violation of the EIA Notification, 2006, which requires a comprehensive EIA, as does global best practice.
    • No discussion of socio-economic impacts is present in the Rapid EIA being relied on by the government.
    • Public hearing process was vitiated by holding hearing in area far from the affected villages, by the presence of POSCO officials on the dais, and by heavy deployment of police.
  4. Critical threat of environmental degradation being ignored: The EIA and clearance granting process do not take into account many of the critical threats to the environment. These include the possible disappearance of the thriving Paradeep port, an impending water crisis in the Mahanadi delta and Keonjhar mining areas, and severe negative impacts on already threatened wildlife species such as Olive Ridley turtles, dolphins, Royal Bengal tigers and elephants.

Printable version of full submission


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