Odisha Government’s POSCO Dilemma


By Hemanta Pande: The Government of Odisha and South Korea based Pohang Iron and Steel Company (POSCO) signed a MoU on June 22, 2005 for setting up an integral steel plant with the total capacity of 12 million tones per annum (mtpa) at Paradip in Jagatsinghpur district. The Rs 52,000 crore project includes a captive power plant and a captive minor port.

The entire project complex requires about 1621 hectors of land out of which about 1253 hectors is forest land. On May 17, 2012, the Odisha government and POSCO- India agreed to downsize the capacity of the steel plant to 8mtpa from earlier plan of 12mtpa facility as the required 1621 hectors of land could not be acquired. The June 2005 MoU had already lapsed in June 2011; and it has not been renewed yet.

Even after 7 years of the MoU, the POSCO project has not been able to proceed due to various regulatory hurdles and strong opposition from the local residents. To protest the project, Posco Pratirodh Sangram Samiti (PPSS) was formed in August 2005 under the leadership of Mr. Abhay Sahoo.

There have been allegations that the government has been illegally trying to take lands and forests for the project, in violation of the Forest Rights Act, 2006. The POSCO plant is bound to destroy the complex system of myriad natural creeks, nalas and waterways, to create a vast backwater of Mahanadi and its tributaries especially during the rainy season and floods. The proposed plant is near the Bhitarakanika Mangrove forests (which has now got the status of a sanctuary). Mangroves act as natural protection against coastal cyclones, and destroying these forests will leave Orissa’s coastline vulnerable.

There have also been claims that the project will only benefit the company while displacing more people than it employs. More than 500 villages will be displaced, leaving their inhabitants homeless and landless. Villagers of Dhinkia, Govindpur, Bhuyanpal, Noliasahi, Polanga and Nuagaon would be worst affected as they have to loose their age old livelihood -‘paano dhano meeno’, (betel leaves, rice and fish) in the name of development. These people, whose livelihood and survival is intimately linked to local ecosystems, the land, river and sea, will never be ‘compensated’ for their loss.

In this scenario, government and regulating bodies are in dilemma to uphold the norms and values of the MoU with the largest FDI in our country.

Big POSCO Developments:

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August 8, 2008: SC directed the Ministry of Environment & Forests (MoEF) to start the project ‘in accordance with law.’

December 29, 2009: The Ministry of Environment and Forests (MoEF) declared final clearance for diversion of forest land.

August 2010: The MoEF issued a stop work order in response to the claims of NC Saxena Committee Report.

October, 2010: The Meena Gupta Committee appointed by the Government of India cleared to continue the project but had a divided opinion among the penal members.

May 2, 2011: MoEF withdrew the ‘stop work’ order in favour of POSCO.

March 30, 2012: The National Green Tribunal (NGT) suspended the final 2011 environmental order of the MoEF; a fresh setback to the project.

Meanwhile, Odisha government in its status report to the various ministries of Government of India updated that the state is gradually acquiring land for Posco and is monitoring the law and order situation. It indicated that Posco should begin work on the already acquired land to demonstrate its commitment.

Undoubtedly, projects such as that of POSCO have considerable economic, technological and strategic significance for our country. At the same time the Government and the civil society must address the issue of environment and rehabilitation process in a true letter and spirit as to achieve a sustainable and inclusive growth.

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