Indian steel mill gets green light despite government environment pledge

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 Pohang Iron and Steel Company (POSCO) to build a controversial $12 billion steel mill in India's eastern Orissa state. To be fair, though, 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. 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 Authority of India. 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 Ministry of Environment and Forests (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. 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. Clearly, Ramesh has an eye to the politically possible, says Gopal Krishna, who leads Toxics Watch, a leading environmental and health campaign group. "He is being carefully selective, but has for two decades been an ardent supporter of privatization and liberalization," Krishna told SolveClimate News. "The green part is newer." For instance, while Ramesh and the MoEF have recommended the demolition of "Adarsh," a 31-storey residential tower in the bustling port city of Mumbai, for breaking new Coastal Regulation Zone (CRZ) rules, he will not consider razing the 30-plus other buildings that are in similar violation. "I cannot go about demolishing all that," Ramesh said. "I have to look to the future." Ramesh, whether fairly or unfairly, has at the same time been accused of applying "green tape" to too many projects. The central Reserve Bank of India said in its latest quarterly report from January that a recent dip in FDI appeared to be linked to "environment-sensitive policies." And Prime Minister Manmohan Singh publicly cautioned against turning environmental clearances into a new version of India's famous "license-permit raj." But the MoEF under Ramesh has made institutional breakthroughs that were unthinkable earlier. His Compensatory Afforestation Fund Management plan may actually work to reverse deforestation while ensuring that wastelands are put to good use. The $250 million scheme will pay state governments to reforest nearly 15 million acres over the next five years. Revamped CRZ regulations now address the individual needs of India's maritime states that are strung out over 4,660 miles of coastline — among the longest for any country in the world. The interests of India's states are often in conflict with federal laws, which Ramesh is keen to enforce. A glaring example is that of the New Delhi state government setting up a 2,000-ton waste-to-energy incinerator in a densely populated area without consulting his ministry. "It was never brought before my ministry. It should not have been set up in a residential area. I will do something about it," Ramesh said. Further, Ramesh cannot be faulted for a lack of transparency, a complaint familiar to those who have to deal with India's vast, inefficient and often corrupt government machinery. He has set up a website where all his decisions and initiatives are uploaded regularly for anyone interested in following them. "Each decision is on my website and a matter of public record," he said. "I believe in a democratic, transparent and accountable system that is open to scrutiny by the public, media and non-government organizations." Ramesh has set up green tribunals that give civil society an opportunity to air grievances and has also created independent, professional bodies to appraise and monitor compliance with the rules, rather than leave it to officials in his ministry. "With the public gaze on them, project operators are likely to be more careful and sensitive to local issues," Ramesh said.