Tuesday, December 06, 2005

Dongaria Kondhs come to Bhubaneswar, Public Hearing for Vedanta Aluminium Smelter,High Court bowls for mining corporates etc.

Marriage in the family, so I was too busy to blog till today. Many interesting developments have taken place during the last few days. Dongaria Kondhs came down from Niyamgiri hills to Bhubaneswar to hold a rally against Vedanta. A public Hearing for the Vedanta Aluminium Smelter proposed at Brundamal near Jharsuguda is being organised on 9th December by the Orissa Pollution Control Board, inspite of the Vedanta Alumina refinery being sub-judice.

The Orissa High Court struck down the attempt of the Orissa Government to impose a mineral cess, saying that it violated the constitution. This will mean that the mining corporate mafia will make Rs. 1300 crores more every year (I am sure that is an underestimate). I wonder if the High Court has ever thought about the constitutional rights of the Scheduled Tribes whose lands are being acquired in violation of the Schedule V and the Orissa Scheduled Areas Transfer of Immoval property Regulation, 1956, for the profits of the same mining company. Many people point out that the act seems to have been deliberately worded in order to make the High Court strike it down, allowing the mining company friendly state government to blame the judiciary (saanp bhi mar jaye, lathi bhi na tute). Maybe someone could enlighten us on that.

There was a massive rally in Kalinganagar against displacement by more than 5000 tribals recently. Another large meeting was held against POSCO yesterday near Paradeep against the proposed steel plant. In Kashipur, more than 20 tribal anti-mining activists continue to languish in the jail. Rabindra Jarika, one of the leaders of Kalinganagar movement against industries still continues to be in jail.

Meanwhile, today there were some questions in the Assembly about the industrialistion process, most MLAs asking about the progress of the industry MOUs. One MLA did ask how Bhushan Steel has managed to start its project without obtaining Forest Clearance from MOEF, but the mining Minister cleverly avoided answering this question. The show goes on.

An article on Vedanta in Telegraph is a must read - I have provided it in the end of today's post.

Dongaria Kondhs come to Bhubaneswar

Here is the coverage in Statesman of the Dongaria Kondh Rally in Bhubaneswar on Dec. 5th

Tribals’ protest against Vedanta
Statesman News Service BHUBANESWAR, Dec. 5. — Hundreds of tribals from Rayagada and Kalahandi districts today staged a demonstration in front of the Assembly urging the state government to shelve the proposed alumina plant and bauxite mining project in Lanjigarh area in compliance with the recommendation of the Central Empowered Committee of the Supreme Court. They threatened to continue their movement in exchange of their lives till this “anti-people’’ and “anti-environment” project was withdrawn. The Vedanta Alumina Limited, a joint venture company of Sterlite and the state government, is setting up an alumina plant and a mining project in Lanjigarh area, amidst protest from local tribals, environmentalists and Opposition parties. Dressed in their traditional attire and armed with traditional weapons tribals from the affected areas took out a rally and staged a demonstration in front of the Assembly. The demonstrators were shouting slogans and singing songs in Kui language accompanied by traditional musical instruments. Leaders of the Niyamgiri Suraksha Abhiyan, which is spearheading the anti-alumina plant agitation, said that the proposed project would not only displace thousands of local tribals, depriving them of their livelihood, it would also destroy the fragile eco system of the Niyamgiri hills. The Vanshadhara and the Nagabali rivers emerging from the hills would dry up, leading to drying up of the command area. Rich flora and fauna on the hills would vanish. The primitive Dongria Kondh living in the Niyamgairi hills would be greatly affected, they alleged. The state government has shown undue favours by allowing the Vedanta company to set up an alumina plant and leasing out the bauxite mines in violation of forest laws despite protest from local Dongria Kondhs, they alleged adding that the company and the state government had initiated repressive measures on the agitating tribals. Despite the Central Empowered Committee’s recommendation to stop the project, the state government was forcibly carrying on land acquisition and conniving with the company in its illegal activities, charged the tribals."

Here are some photographs of the rally (courtesy self):

Public Hearing for Vedanta's Aluminium Smelter

Despite the CEC stricture and the fact that their alumina refinery case is sub-judice with the Supreme Court, Vedanta and State Pollution Control Board are going ahead with the hearing on 9th December. Apparently a legal notice has also been served by Mr. Ritwick Dutta on behalf of the petitioner in the case. I just hope that there is strong enough opposition against this smelter and its power plant (5X135 MW), coming up near Hirakud reservoir. This plant would be a tragedy, not only for the displaced (mostly tribals who are cultivating government land, and hence would receive no compensation) but also for the ecology and environment of the Sambalpur region, coming on top of the steel and sponge iron companies which already exist or are under construction. It will also block the connection between Badarama/Ushakothi sanctuary and the vast forests on the North West of Hirakud reservoir. And aluminium plants are notorious for fluoride pollution - one only needs to ask the residents near NALCO's Angul Plant or Hindalco's plant near Hirakud.

The situation in Sambalpur-Jharsuguda belt is rapidly spinning out of control, and I will devote a future posting for the same. However, Sambalpur people really need to wake up - or they will find their land and water poisoned irretreivably. Some people tell me that the apathy in the area is because most of the land is owned by large farmers, who stand to become millionaires with the land compensation. These people provide the local leadership and are on the side of the companies - and the poor and landless who really suffer from displacement have little voice. Its hightime someone got down to organising the people who are really losing out.

High Court Bowls for Mining Companies

Another news item from Statesman

Orised Act struck down
Statesman News Service CUTTACK, Dec. 5. —" In a significant judgment running into more than 100 pages, the Orissa High Court today struck down the Orissa Rural Infrastructure and Socio Economic Development Act-2004.The Act envisaged tax on mineral bearing land by reference to the annual value of the minerals produced and sold in the state. The subject matter of the legislation under Orised Act-2004 is no longer available to the state legislature for legislation as a Central legislation had taken over the regulation of development of mines and mineral development in public interest, the Court observed. “Having been taken over by the Union government since the Central legislation, this subject matter relating to regulation of mines and mineral development is no longer available to the state Legislature for levying fee. This field is fully occupied by the Parliament,” the Division Bench constituting of chief justice Mr SB Roy and Mr Justice MM Das observed while disposing 87 writ petitions. “The incidence of the impugned levy falls squarely on the value of the minerals extracted and it does not bear any direct relationship with land as a unit and hence it is not a tax on land within the meaning of the State List. We are therefore, constrained to reject the case of the state that the impugned levy is a tax on land,” chief justice Mr Roy and Mr justice Das added. The court further observed that the incidence of the envisaged levy under the Orised Act 2004 falls directly on minerals extracted and is also not a tax on mineral rights irrespective of whether the subject of the State List is occupied by Parliament or not. Hence, the impugned levy is beyond the competence of state Legislature. While striking down the Act, the Rules framed, the notification and demand notices issued on the basis of it, the Court directed the state government to refund the taxes or any cess that had been collected from mine lease owners, consumers and buyers. The judgement assumes significance as the state government expected to mop up Rs 1300 crore more revenue for the state every year by enforcing the Act. This was the fourth attempt of the state government in enacting laws more or less on identical lines with the same purpose that has been struck down by the courts. Earlier, the Orissa Mining Areas Development Fund Act, 1952, the Orissa Cess Act, 1962 (amended in 1976) and the Orissa Rural Employment, Education and Production Act, 1992 were struck down by the Supreme Court. The petitions challenging the legislative competence of the Orissa government to pass the Orised Act, 2004 were filed among others by Nalco, Mahanadi Coalfields, Tisco, Tata Refractories, Jindal Steel and Power and Eastern Zone Mining Association."

Well, what can one say? One can only pity this godforsaken State. My suggestion is that Orissa government should increase the lease rent for mining land to Rs. one crore per acre per year in the short term. If that is not feasible stop giving mining leases at all, and cancel the ones existing. If that is not possible, take all the hoodlums that BJD/BJP has nurtured and block all roads and rails used for transporting minerals till the companies cry mother.

In some ways this exposes the largescale loot that is occuring in Orissa. One suspects that the Orissa Government will sit on this judgement and use it as an excuse to pin the blame on the High Court, while enjoying the unofficial "cess" from the mining companies? Are we looking at Mir Jaffars here?

Article in Telegraph, Calcutta
Sunday, November 27, 2005

The Vedanta affair- The nub of the CEC’s report is the issue of forest land NRI tycoon Anil Agarwal expanding his metals empire. But in a remote corner of Orissa, he faces a firestorm that could derail — at least temporarily — his ambitious global gameplan, report Debabrata Mohanty and Anirban Das Mahapatra

The concrete pillars of the conveyor belt for carrying the bauxite ore at Lanjigarh Businessman Anil Agarwal’s is a rags to riches story come to life. He started out in his late teens as a scrap metal trader from Bihar. Today, he’s a billionaire who has almost achieved his ambition of being a key player in the global metals market. His firm, the $1.8 billion Vedanta Resources, is listed on the London Stock Exchange and Agarwal operates from a swanky office in London’s exclusive Mayfair district.

But in a remote corner of Orissa, in one of India’s most backward regions, Agarwal is facing a firestorm that could derail — at least temporarily — his ambitious global gameplan. Several months ago, Agarwal, who’s better known in India as the hardscrabble businessman who built Sterlite Industries, began working round the clock on an $800 million (Rs 3,657 crore) project that includes a giant aluminium refinery and a bauxite mining unit. Bauxite is the raw material used to make alumina, which in turn is converted into aluminium. Incidentally, bauxite prices are currently at a record high internationally. Some $247 million (Rs 1,129 crore) of the $800-million project, which is scheduled to be completed in 2006, has already been spent, according to Vedanta’s website.

But in September a five-member committee appointed by the Supreme Court, called the centrally empowered committee (CEC), submitted a report to the court recommending that the court revoke the environmental clearance granted for setting up the refinery and that Vedanta be directed to stop further work on the project. A ruling is expected in December.

At stake are thousands of crores and the possibility that the project might become unviable if the Supreme Court rules against Vedanta. Against that is the committee’s position that Vedanta has not quite met environmental regulations.

The CEC is a quasi-judicial body the Supreme Court set up in 2002 to look into forest and environment issues. Biswajit Mohanty of the Wildlife Society of Orissa filed an application before the CEC in November 2004 against Vedanta. Environmentalist Prafulla Samantara and a Delhi-based geologist, R. Sridhar, subsequently filed two other applications. The CEC clubbed them together in December and then sent a fact-finding team —which was one of the prayers of the litigants — to the region. The hearings started in February.

In May, Vedanta went to the Supreme Court, asking it to quash the proceedings. But the court ruled that a decision would be taken after the CEC gave its report. The CEC itself visited the area in June this year. It completed and submitted its report in September.

Anil Agarwal is in a piquant position. The refinery’s construction has already begun, but he confronts the prospect of the Supreme Court nixing the project. Vedanta, meanwhile, has not exactly been sitting idle either. Last week, it was set to file a petition in the Supreme Court supporting its position, according to a source at Vedanta subsidiary Sterlite Industries (India).

Among other things, the environmentalists had accused Vedanta of having started work on the projects before environmental clearance had been obtained, something Vedanta has strongly denied. “Some areas of our state which are extremely rich in bio-diversity are sacrosanct and should not be touched. You cannot dig up and mine anywhere you please,” says Biswajit Mohanty, previously known for his campaign to save the endangered Olive Ridley turtles.

Indeed, Anil Agarwal is in a piquant position. The refinery’s construction has already begun. While Sterlite Industries declines to disclose precisely how much money has been spent separately on the bauxite and refinery projects, Agarwal has spent at least 45 per cent of the project’s cost, according to the environmentalists — and confronts the prospect of the Supreme Court nixing the project. Secondly, the project’s alumina, an intermediate product used to make aluminium, will feed Balco’s expansion (half the alumina will go to the group’s captive aluminium plants and about half would be sold to third parties, Agarwal recently told Vedanta shareholders).

What happens if the Supreme Court rules against Vedanta? The London-based company could look at other bauxite ore deposits elsewhere in the state (Karlapat, Kutrumaili, Sasbahumali and Sijimali, for example) or source bauxite from elsewhere. The company told the CEC that if the mineral from the Lanjigarh mine were not available it would obtain bauxite from other sources. But rivals in the aluminium industry argue that this will push up costs. “In projects such as Vedanta’s, the money is mostly paid in advance to sub-contractors,” says a highly placed source at the government-owned National Aluminium Corporation. “So if the Supreme Court bars the company from digging up the Niyamgiri bauxite reserves and asks it to identify an alternative mine, the cost of production and transportation will shoot up and make the project unviable.” Sterlite Industries officials deny this.

Vedanta’s Orissa projects are being implemented by Indian subsidiary Vedanta Alumina Company and comprise a mine near the Niyamgiri hills — which boast of a rich deposit of bauxite — and a refinery at nearby Lanjigarh. The mine area is said to have 150 million tonnes of bauxite, according to the Vedanta web site (75 million tonnes, according to the CEC report) and the project, says the CEC report (a copy of which The Telegraph has), proposes to source three million tonnes of bauxite every year from the mine. As part of the Orissa government’s efforts to develop the region, the state-run Orissa Mining Corporation (OMC) inked a joint venture with Vedanta Alumina for setting up the refinery at Lanjigarh and for the mine. The Vedanta group planned on setting up a 90 MW captive power plant at the site to supply power. The 1.4 million tonnes per annum refinery will initially produce one million tonnes of alumina.

The area is part of Kalahandi, one of India’s poorest districts and infamous across the world for its starvation deaths. Endowed with a green canopy and with fresh-water streams, the unspoilt project area is home to several vulnerable animal species, as many as six of which find a mention in the red data book of the International Union for the Conservation of Nature and Natural Species (IUCN). Besides, a handful of the critically endangered, 6,000-strong Dongaria Kondh tribe live a rudimentary life in the folds of the mountains.

If and when the project gets going, the environmentalists argued before the CEC, it would have many consequences: liquid and gaseous effluent emissions, bright illumination, drilling and the resultant vibration and dust and pollution could affect the flora, fauna, ecology and human population of the area.
The issues involved are complicated, but the nub of the CEC’s report is the issue of forest land — that the MoEF granted environmental clearance for the project on September 22, 2004, on the assumption that no forest land was involved. But at that time a proposal to use nearly 59 hectares of forest land for the refinery had been pending with the ministry. Another proposal to use over 672 hectares of forest land for the mine project is now pending with the ministry.

Much of the argument is centred on the fact that construction of the Vedanta project required the diversion of the 59 hectares of forest land, comprising about 29 hectares of village forest land and about 30 hectares of reserve forest. Company officials say that the land was part of their earlier calculations, but it was out of “abundant caution” that the refinery was finally proposed to be built entirely on non-forest land. The 30 hectares of reserve forest land were apparently diverted to the mining project, for building conveyors and approach roads, for which forestry clearance is still pending.

But the CEC claimed that Vedanta did not disclose the involvement of forest land in the project. Apparently, in June 2002, the collector of Kalahandi district issued a notice for acquiring land for the alumina refinery project, which showed that 118 acre of village forest land was involved in the project. “That effectively indicates that forest area was very much included in the project even before it kicked off,” says a CEC source.
When Sterlite applied for environmental clearance to the MoEF, it said that no forest land was involved in the project and that there was no reserve forest within a radius of 10 km, the CEC report said. Then, in August 2004, the company — in seeking forest clearance — put forward an application for the use of about 59 hectares of forest land. However, the application for the environmental clearance was not modified and was processed on the premises that no forest land was involved.

The MoEF’s actions have been questioned by the CEC as well. “The environmental clearance for the alumina refinery could not have been accorded without taking a decision on the mining component which is an integral part of the project,” notes the report, adding that at the time of granting environmental clearance, “even the proposal under the Forest Clearance Act for the use of forest land for the Niyamgiri bauxite mines had not been filed with the MoEF”. Prodipto Ghosh, secretary, MoEF, refused to comment on the issue, citing its sub-judice status.

Vedanta, in turn, pointed out to the CEC, among other things, that the environmentalists who objected to the project did not attend the public hearings on the projects in February and March 2003 but raised issues after the projects reached a critical state. It also said that it had fully disclosed in documents that forest land lay within a 10 km-radius of the project site, and that it had disclosed that the alumina refinery is located at the foothills of the Niyamgiri hills. “The fact that Niyamgiri hills are reserved forests has been abundantly disclosed in the EIA report,” it said.

The Supreme Court will, undoubtedly, decide on the truth of all these matters. Till then, the man from Bihar who made his millions in Mumbai and now operates out of London’s tony Mayfair will live on the edge.