SASI & MZPSG Urge Korean Govt to Seek POSCO Withdrawal From Orissa

MZPSG Announces Intensification of International Solidarity Campaign

For more than five years the people of Jagatsinghpur, Orissa (India) have borne the brunt of an ambitious and reckless project launched by the Pohang Iron and Steel Company (POSCO) of South Korea and the Government of Orissa (GoO). On December 10, 2010, the South Asia Solidarity Initiative (SASI) and the Mining Zone Peoples’ Solidarity Group (MZPSG) will hold a press conference and protest outside the Korean Consulate in New York City urging the Government of the Republic of Korea to intervene positively and seek an immediate withdrawal of POSCO from Orissa. The protest follows close on the heels of two other international actions in recent weeks. In early December, the Association for India’s Development and MZPSG, along with other organizations, moved a petition addressed to the Prime Minister of India demanding immediate scrapping of the POSCO project on grounds of economic infeasibility, violations of law and opposition from the affected people. Around the same time, a group of 50 business professors from across the world wrote to the Minister of Environment and Forests expressing concern at the “gross violations of procedures” and questioning the economic justification of the project.

On June 22, 2005, POSCO signed a memorandum of understanding with the Orissa government to set up an integrated steel plant and captive port in Jagatsinghpur district of Orissa. POSCO’s investment in the project, estimated at $12 billion, was hailed as a harbinger of “prosperity and well-being” to the people of Orissa. However, people in the affected villages realized the danger posed by the project to their livelihoods and mobilized in opposition. Their resistance has been so successful that work is yet to commence on the project. The peoples’ struggle and civil society interventions have also forced the Indian government to reevaluate the clearances issued to the project, and two separate expert committees entrusted with this task have recommended cancellation of the clearances for having violated the forest rights act and environmental regulations.

The project also fails the economic smell test. A recent report by MZPSG, “Iron and Steal: The POSCO-India Story,” notes that the benefits of the project have been grossly exaggerated while the various costs have either been underestimated or ignored. The primary findings of the report include

  • the existence of a thriving agrarian economy in coastal Jagatsinghpur with average annual net yields of over Rs. 40,000 per decimal of land (100 decimals = 1 acre) per year in sharp contrast to the paltry Rs. 11,500 per decimal being offered as one time compensation,
  • gross exaggeration of employment benefits, economic internal rate of return and tax revenues by the Orissa government and POSCO,
  • deliberate and systematic procedural violations for environmental and socio-economic impact assessment by both the Orissa government and POSCO,
  • failure to conduct a socio-economic study to measure the impact of 22,000 people being displaced and more than 50,000 people being affected by the project in coastal Jagatsinghpur and Khandadhar hills.

The economic justification for the project was outlined in a report prepared by the National Council for Applied Economic Research (NCAER) and has since been repeated ad nauseam by the various proponents of the project – ranging from the Orissa government and POSCO to their allies in the media. However, a careful examination of the data shows that the POSCO project will generate less than 2 percent of the direct and indirect jobs claimed in the NCAER report – 17,000 versus the NCAER claim of 970,000 – in the next 5-10 years. “We were absolutely flummoxed by this discrepancy, until we realized that the NCAER report had been funded by POSCO,” said MZPSG collective member Sirisha Naidu.

As a company once owned by the Republic of Korea and operated for the benefit of the people of Korea, and as a company that played a large role in Korea’s rise as an economic power, we believe POSCO has a particular responsibility to be very aware of, and careful about the consequences of its actions when it sets up operations in other countries. In view of the problems outlined above, SASI and MZPSG call upon the Korean government to unequivocally urge POSCO to cancel the proposed steel plant and captive post in Orissa. “While the Indian and Korean governments, as well as POSCO, have marketed the project as symbolizing a new era of bilateral relations, a lasting and enduring friendship between the people of both countries can only be built on a foundation of social justice and mutual respect for human rights. Any trace of coercion, occasioned by the activities of an Indian corporation in Korea or a Korean corporation in India would only sow seeds of suspicion among the people of both nations, so the leaders ought to act responsibly,” observed MZPSG member Girish Agrawal. In this regard, SASI and MZPSG applaud civil society initiatives from Korea, such as those undertaken by the Korean House of International Solidarity for having shone light on human rights abuses occasioned by the POSCO project in India.

The NYC protest marks the intensification of MZPSG’s international solidarity campaign in support of the anti-POSCO people’s struggle. The MZPSG’s Global Defense of Local Democracy campaign was launched with the publication of its report Iron and Steal: The POSCO-India Story in October 2010, and was followed by a collaboration with the Korean House of International Solidarity in the release of the Korean Fact Finding Team Report during the Indian Prime Minister’s recent visit to Korea. In the days to come, MZPSG will build on these actions and initiate:

  1. A “Divest From POSCO Now” campaign aimed at North America based investors in POSCO. While POSCO is a flagship Korean firm, Citigroup, Blackrock, JP Morgan Chase and Warren Buffet are among the top holders of POSCO stock.
  2. Focused public awareness campaign aimed at US and Canadian intellectuals, journalists, policy advocates and development specialists on the consequences of the POSCO project. In the next six months, MZPSG will conduct teach-ins on the POSCO project in several US and Canadian cities focusing on issues of land, livelihood, resource control and environmental destruction.

“Even as it has become incontrovertibly clear that the POSCO project has no leg to stand on, we can’t let up on our solidarity campaigns. As the late human rights activist Dr. K. Balagopal observed, the state doesn’t stop doing something simply because it has been demonstrated to be bad. We want to make it impossible for the Indian and Korean governments, and POSCO, to move ahead with the project. MZPSG and SASI see this issue as amongst the most critical struggles going on in India today which may define who will control the future of the Indian economy,” concluded MZPSG and SASI member Murli Natrajan.


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