Further information about the proposed POSCO Steel plant and its impacts on the People and the Region

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Introduction

On June 22^nd 2005, the state government of Orissa signed a Memorandum of Understanding (MoU) with the Korean steel giant, the Pohang Steel Company (POSCO) [1, 2]. Since then the company has signed more than 40 MoUs with the government. Valued at Rs. 52,000 Crores ($13 Billion), this is India's largest Foreign Direct Investment (FDI) yet, and involves a 12-million ton integrated steel plant, and the construction of a new port for which over 4,500 acres of land has been designated. The proposed steel plant is expected to affect seven villages in three gram panchayats, namely Dhinkia, Nuagaon & Gadakujang, and will allow POSCO to extract 600 million tons of iron ore over the next 30 years.

The terms of the MoUs require the government to recommend, free of encumbrances to POSCO, mining and prospecting licenses, clearances related to matters of forest and environment, and permits for drawing water from the Mahanadi river. In addition, the government has agreed to defend various recommendations made in favor of POSCO in the eventuality of litigation in the appropriate judicial, quasi judicial areas. Similar facilitation of clearances by the state government for all aspects of the project - the steel plant, mines, roads, railways and port - has been agreed upon. In 2006, the project was granted "Special Economic Zone" (SEZ) status, and the Prime Minister issued a statement saying that land acquisition by POSCO must be expedited.

Impact on People

People living adjacent to the mines (Banspal block) will also suffer various health-related effects. [3] The history of Orissa contains many unfortunate precedents where mines have been set up in Fifth Schedule areas (under the 5^th schedule of the Indian Constitution, designated adivasi (indigenous) majority areas are constitutionally protected and alienation of adivasi land is to be prevented in such areas) thus displacing adivasi communities from their forest-based livelihoods. Poor working conditions in the mines have also led to respiratory problems as indicated in the "State of the Environment" report.

The project also requires 286 million liters of water per day [4] which will be extracted from Jobra and Naraj barrages of river Mahanadi, as a result of which the farmers irrigating the lands by the canals of Taldanda, Machhagaon, Birupa of Cuttack, Jagatsinghpur, and Kendrapada district will suffer a great loss. Water extraction in these quantities will also lay additional stress on an already overloaded water system, imposing a threat on water security for the locals, in addition to concerns about water pollution [5].

Impact on Environment

Orissa has some of the largest mass-nesting areas in the world for the Olive Ridley Turtle, an endangered species. The proposed POSCO port site lies between the mass nesting beaches of Gahirmata and Devi River mouth where the offshore waters have a high density of turtles from November to April. In 2007, 130,000 of these animals nested at the beaches along the Gahirmata Marine Sanctuary. The port itself will lie just inland from beaches on which turtle nesting occurs, and less than 30 km from the mass nesting beaches of Devi. Lighting, marine pollution, ship traffic and ancillary development of what is currently largely untouched coastline will pose a long term threat to the species[10]. Similarly, the proposed port will endanger several species of fish in the Jatadhari estuary, additionally impacting the livelihoods of fishing communities.

The project involves the felling over 280,000 trees [6] which will directly affect the dense forest covers in the Gandhamardhan and Malangatoli areas. Mining will also affect the Kandadhar waterfall, a famed tourist destination. The new port might entail erosion , thereby threatening the existing government port in Paradeep [7]. POSCO has applied for environmental clearance for different parts of the project separately rather than as a whole in the hope of expediting clearance.

Implications of SEZ status