International Business School Professors express concern at gross violations of procedures

Honorable Mr. Jairam Ramesh
Minister of State (Independent Charge) for Environment and Forests
Paryavaran Bhavan, New Delhi, India.

Dear Sir,

We, the undersigned, are business school professors teaching at various universities around the world.  We are writing to express our concerns regarding the proposed POSCO project in Orissa.  As teachers and researchers, we pay attention to issues concerning the governance of transnational firms, global markets, emerging economies, and international regulations.  Many of us actively follow developments in Asian economies, and have observed the rise of India to prominence over the last few years.

As the global economy grows, we are concerned with the emerging issues relating the environment, both in our own countries and in places around the world.  We are writing to you because it appears that you share some of these concerns.  We are especially heartened by your contention that sustainability on the ecological front is vital for the livelihood of several marginal communities of India.

As part of our on-going work, we had attended a plenary session on the POSCO-India project at the Critical Management Studies Workshop (CMSW) conducted in August 2010 at Montreal at the Academy of Management Conference.  Some of us have followed the subsequent developments, and have recently examined the report produced by the Mining Zone People’s Solidarity Group.  Based on our understanding, we wish to state the following:

  1. We believe that development projects across the world must be preceded by a rigorous socio-economic study, whose cost-benefit analysis must include the impact of this development on the lives and livelihoods of the people who inhabit the affected areas.  According to the MZPSG report, betel vine growers in the POSCO region currently earn the modest sum of Rs. 40,000/year through their sustainable practice of agriculture on a small piece of land (1 decimal or 1/100th of an acre).  The Government of Orissa is offering them what appears to be an unfair compensation in the form of a one-time payment of Rs. 11,500 for each decimal.  We strongly believe that while nation-states seek economic growth, they must not do so at the expense of the future of poor communities and their habitats, especially those from which they derive their livelihood.
  2. The recent reports by the Saxena committee and the MZPSG, and the majority opinion of the POSCO inquiry commission contend that there have been gross violations of procedures leading to significant miscarriage of the Forest Rights Act, the Coastal Zone Notification Act and the Environmental Impact Assessment requirement.  This appears, prima facie, to be a subversion of the Indian legal process, and a violation of the rights of the forest dwellers who will be displaced by the POSCO project.
  3. It is our experience and observation that multinational corporations that seek to appropriate public land for their profit-making activities often overemphasize the benefits of their project for local communities.  The MZPSG report disputes the contention of the Government of Orissa that the POSCO project will create 870,000 jobs in the region.  This figure is based on the report of the National Council of Applied Economic Research (NCAER), but as the national newspaper “The Hindu” reports, POSCO itself was a sponsor of the study and paid NCAER for it, a fact that is not mentioned in the NCAER report.  This constitutes a clear conflict of interest and should be enough to put the findings of the report in serious doubt.

The bottom line is that Government of Orissa intends to take over large tracts of forest land and hand it over to a global mining giant, while displacing communities that have lived there for generations and use the forest sustainably for their livelihood.  Even as India seeks to find a prominent place among the industrialized nations of the world, it must not do so at the cost of democratic norms and constitutional rights, especially those of poor and marginalized communities.

The POSCO India project has become an important symbol of India’s commitment to a sustainable new economic policy.  As such, your actions at this moment are crucial because you could set into motion clear pathways for how India must respond to these issues in the future.

As business school professors based in the US, Canada, Europe and Asia, we will be glad to offer you our assistance if that helps move towards a solution that takes into account issues of environmental and social justice.  You can contact us through the address given below.

The Undersigned


International Business School Professors express concern at gross violations of procedures — 2 Comments

  1. Pingback: MZPSG Newsletter No. 2, Nov 2010 | Mining Zone Peoples' Solidarity Group

  2. Pingback: MZPSG Appeal to TIAA-CREF: Withdraw Support for POSCO’s Human Rights and Environmental Violations | Mining Zone Peoples' Solidarity Group

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