___________

Following is an excerpt from a report in Economic Times.

After stopping bauxite mining in Orissa the government now finds itself in a bind on the issue of rehabilitation in Lanjigarh. Corporate-backed developmental activities in the tribal region, one of the most backward places in the country, have come to a standstill following the environment ministry’s ban on mining.

The Anil Agarwal-controlled Sterlite Industries had been ordered by the Supreme Court in August 2008 to spend about 5% of its profit for development activity at Lanjigarh.

Since the environment ministry in August 2010 had barred mining, the rehabilitation package which includes about Rs 10 crore of annual development activity including the building of roads, schools and hospitals, has now been stopped.

"If disbursement from the development fund were to continue, it would imply approval of mining which would be contrary to the ministry’s order," said one person directly involved in the developmental work. On August 30, 2010, the ministry of environment and forests issued a notice barring bauxite mining in Niyamgiri on grounds of violation of environmental norms.

According to the same person quoted earlier, if the government asks Sterlite to stop developmental activity it would amount to contempt of court as it would go against the Supreme Court directive.

"Under our order we suggested rehabilitation package under which Sterlite Industries is required to deposit 5% of annual profits before tax and interest from Lanjigarh project or Rs 10 crore per annum whichever is higher," said the Supreme Court order. "The said project covers both mining and refining. The amount is required to be deposited by Sterlite Industries every year commencing from April 1, 2007. For the above reasons, we hereby grant clearance to the forest diversion proposal," read the order dated August 8, 2008.

… Among the projects which have been left uncertain include a Rs 3 crore hospital and a Rs 1.8 crore tribal school upgradation in the Lanjigarh block.

I hope the central government will consider paying this lost amount of 10 crores/year for developmental activities in that area.

The following are excerpts from an article by Sreenivas Janyala in Indian Express.

… Polavaram dam, a dream project for the state and a potential flashpoint involving its neighbours, Orissa and Chhattisgarh. The idea of the dam was first floated in the early 1940s but it remained a dream for the state government, an ambitious venture that stayed on election manifestos. So for years, the Godavari flowed almost unharnessed, emptying itself into the Bay of Bengal. It was only when Y S Rajasekhara Reddy took charge in the state that the Polavaram project was revived, as part of his Jalayagnam programme.

The 150-feet-high dam, called the Polavaram Indira Sagar Dam, will create a reservoir spreading over the three districts of West Godavari, East Godavari and Khammam. The tail-end of this reservoir is more than 150 km away, touching Bastar in Chhattisgarh and Malkangiri in Orissa. The dam will harness 170 thousand million cubic feet water (tmcft), through two canals that spread out as arms on either side: the right canal which will take 80 tmcft to river Krishna and the left canal, which will help irrigate 7.2 lakh acres in the north coastal Andhra districts and take 23 tmcft to Visakhapatnam, which faces a perennial water shortage. Work on the dam has not yet begun but the cranes are furiously at work on the left and right canals.

The dam, a Rs 11,000-crore project, will be an earth-cum-rock fill structure as the soil isn’t rocky enough for a concrete dam.

The Polavaram dream

For nearly 60 years, Polavaram remained on paper, dogged by controversies of displacement. Now, the state’s neighbours, Orissa and Chhattisgarh, have dragged it to the Supreme Court, saying the dam would inundate several parts of their states. According to government estimates, the dam will submerge villages in the three Andhra districts of West Godavari, East Godavari and Khammam, in Bastar in Chhattisgarh and in Malkangiri, Orissa. Besides, nearly two lakh people will be displaced.

But in a state that’s divided over the Telangana issue, the dam has brought together all political parties, including Chiranjeevi’s Praja Rajyam and Chandrababu Naidu’s TDP. With the Environment Ministry having cleared the project on September 5, the government is in a hurry to start work.

“This is an ambitious project that will solve the irrigation and drinking water problems over a large area. Our relief and rehabilitation package is the best in the country.

… the state government says it wants to finish the project in four years. In its zeal to take the project ahead, the state government has given some lofty assurances to the Centre, including the construction of a 60-km-long, 45-feet-high embankment to prevent flooding in neighbouring states.

The concerns

Like all big dams, Polavaram is dogged by the dam versus displacement problem. Chhattisgarh and Orissa, the two states that are opposed to the dam, say the project will submerge large tracts of tribal and forest land and displace primitive tribals who are dependent on the forests. Both states say that if the project has to go ahead, it has to be redesigned and fresh assessments and estimates made. Both states have also rejected the Andhra Pradesh government’s proposal to construct a 30-km-long embankment at the reservoir’s tail-end to prevent submergence in those states.

Orissa is also upset that the environment ministry has cleared Polavaram when its own big-ticket projects, like Niyamgiri, weren’t.

Orissa says 10 villages in Motu tehsil, nine of them dominated by Koya tribes, will be submerged in Malkangiri district. “A population of 6,000 is going to be affected, which includes Scheduled Tribes and Primitive Tribes. Andhra proposes to build an embankment to prevent these 10 villages from getting submerged. But that is unrealistic. The embankment has to be 30 km long and 45 feet high and has to be constructed inside Orissa. Who is going to acquire land to build this wall? What is the environmental impact? Has any assessment been done? A bigger question is, if an embankment is built, where will rain and flood water go from Orissa’s side? It will end up flooding 100 other villages in Malkangiri,” says Suresh Chandra Mahapatra, Commissioner and Secretary, Water Resources Department, Orissa.

In Konta tehsil of Bastar in Chhattisgarh, 23 villages will be submerged. Bastar Commissioner B Srinivasulu too calls the embankment “a far-fetched idea”.

While there is no political opposition to the dam in Andhra Pradesh, environmentalists and human rights activists are opposed to it, saying it will displace more people than the Sardar Sarovar Project on the Narmada river.

In Andhra, 277 villages in Khammam, East Godavari and West Godavari districts, parts of the Papikonda hills and wildlife sanctuary and 3,000 acres of forest land will go down under. The activists say the livelihood of thousands of Godavari fishermen is at stake and the primitive Koya and Kondareddi tribes in Khammam district would be displaced.

… There are other worries too. The Central Water Commission had approved the design based on initial estimates that the spillway (the structure that provides the controlled release of excess water) could withstand 36 lakh cusecs of flood discharge. It was later revised to 50 lakh cusecs. But recent rainfall trends and flood history predict a peak flood of 80 to 90 lakh cusecs and that could wash the dam away, says T Hanumantha Rao, former chief engineer and UN consultant.

Rao says he is not against the Polavaram project but warns against the flooding. “Andhra needs a project like Polavaram. But large earthen dams are prone to breaches. If the dam overflows, it will cause breaches. Polavaram is located at the end of the river where the peak discharge of the river occurs. Only four other rivers in the world have flood peaks more than Godavari and none of them have earthen dams where such peak flood flows occur,” he says.

Last year, two earthen dams in Andhra developed breaches during the monsoons—Gundlavavu in Warangal and Palamvavu in Khammam district.

Then, there is the debate over the height of the dam. While Orissa and Chhattisgarh are objecting to the proposed 150-feet-high dam, Andhra says the purpose of the dam is defeated if it is anything less.

I don’t have the letter that the Odisha government wrote. But the following excerpts from a report in tathya.in gives some idea.

… However responding to the report, in a letter to the Ministry of Environment & Forest (MOEF), the State Government has said that “it is shocking to note that the Saxena Committee has preferred to discuss in a derogatory manner the issues, which have been considered and adjudicated by the Supreme Court of India.” 

Upendra Nath Behera, Principal Secretary of the Department of Forest & Environment (DOEF) in his letter to the Secretary, MOEF has said that a preliminary study of the report shows that it has raised serious allegations against the State Government. 

It has cast aspersions on the intention of the State Government about implementing the Forest Rights Act (FRA), when the Government of Odisha is credited to be the second best performing state in the country in implementation of FRA. 

The report has asked the MOEF to reject the application of the State Government for diversion of forest land for the above purpose as mining in Niyamgiri will destroy wildlife habitat and it will cause hydrological disaster. 

It has also said that mining will destroy the cultural, religious and economic habitat of the Dongaria Kondhs, who reside in the forest area proposed for diversion. 

The State Government has pointed out that the issues raised by the Saxena Committee were the subject matter of different PILs filed by various activists before the Central Empowered Committee (CEC), which ultimately came up before the Supreme Court. 

In view of the technical issues raised in the applications, the Apex Court had directed MOEF to appoint expert bodies for examining various issues. 

The Wildlife Institute of India, Dehradun had conducted studies on the impact of the mining project on biodiversity and wildlife including its habitat. 

The Central Mine Planning & Design Institute (CMPDI), Ranchi conducted studies on the impact of the mining project on soil erosion, impact of ground vibration on hydrological regime including ground porosity and permeability. 

All these issues were discussed in the Forest Advisory Committee (FAC) on 30 August, 2006, when the project was placed before the Committee for scrutiny. 

Similarly the project was challenged in the Supreme Court on the grounds of violation of FRA. 

After elaborate discussion of the reports of the expert bodies, views of the State Government and MOEF covering all issues relating to ecology, wildlife, hydrology, soil erosion, tribal life and implementation of different environmental laws, the Supreme Court on 23 November, 2007 cleared the project with certain directions. 

On compliance of all the directions of the Apex court, the project was cleared by the Supreme Court on 8 August, 2008. 

The State Government has said that “it is of course, understood that the MOEF has not taken a view on the recommendation of the Committee."

The Government of Odisha in its’ letter has said that “it believe that if a judicious view is taken by the MOEF, most of the findings of the Saxena Committee will not hold water." 

Under this backdrop, the State Government has urged the MOEF to provide an opportunity to present its’ views before taking a final decision in this matter.

Following is from a report in Business Standard.

The joint venture (JV) Company formed between the state owned Orissa Mining Corporation (OMC) and Sterlite Industries India Ltd (SIIL) for mining of bauxite in the Niyamagiri hills in Kalahandi district will be incorporated as a Private Limited Company soon.

.. “The draft memorandum of association (MoA) and Articles of Association (AoA) of the new company has been submitted to OMC for approval. The incorporation of the JV company will be completed shortly after the approval”, P K Panda, vice-president (mines), Vedanta Aluminium Ltd.(VAL) told Business Standard.

The process of incorporation of the Joint Venture company named as “South-West Orissa Bauxite Mining Private Ltd.” has been set in motion after the signing of the modified JV agreement between SIIL and OMC in February this year, paving the way for start of bauxite mining in Niyamgiri hills near Lanjigarh.

Meanwhile, the special purpose vehicle (SPV) namely ‘Lanjigarh Scheduled Area Foundation’ has already been formed and SIIL has deposited Rs 20 crore up to 2008-09 with the SPV for overseeing the all-round development in the Lanjigarh area.

Supreme Court in its judgement on 8 August 2008 cleared mining of bauxite in the Niyamgiri hills located in the Kalahandi district by SIIL following affidavits filed by SIIL, OMC and Orissa government accepting the rehabilitation package suggested by it on 23 November 2007.

While the company has deposited Rs 12 crore for tribal development, another Rs 10 crore is proposed to be deposited with the SPV during 2009-10. As part of its plan for the overall development of the area, the company also intends to provide connectivity to all the villages of Dongria Kandh, which are remotely located.

This is in line with the 5-year development plan drawn up for these villages by the Dongria Kandh Development Authority (DKDA).

Regarding the JV agreement of Vedanta Aluminium Limited (VAL) with OMC for getting the raw material linkage, the apex court had stated that since Vedanta Resources Plc is not an indian company, it will not have any objection if the its indian subsidiary (SIIL) is made the JV partner of OMC.All provisions of the supreme court judgement were incorporated in the modified JV agreement signed by OMC and SIIL

It may be noted, VAL, a Sterlite group company, signed the JV agreement with the OMC on 5 October 2004, for developing bauxite mines at the Niyamgiri hill near Lanjigarh in Kalahandi district and the Khambasi hill in the adjoining Rayagada district. The bauxite was to be used for use in its one million tonne alumina refinery at Lanjigarh.

In http://www.orissalinks.com/orissagrowth/archives/1616 we discussed a report regarding auctioning of minerals. The following article in Sambada illusrtates with numbers that the best way to go would be to decide the winner of the auction based on evaluating the financial and technical bid together and determining which one offers the state the maximum revenue. (Later when time permits I will translate the article into English.)

Following is an excerpt from a report in Pragativadi.

The Supreme Court on Friday cleared the decks for Anil Agarwal promoted Vedanta Resources to mine bauxite from the ecologically fragile Niyamgiri hills for its proposed Rs 4,000-crore alumina project at Lanjigarh in Kalahandi district.

Vedanta had sought clearance for diversion of 660.749 hectare of forest land for mining purposes to feed its alumina plant.

The special forest bench comprising Chief Justice K G Balakrishnan, Justices Arijit Pasayat and SH Kapadia allowed Sterlite to go ahead with bauxite mining.

The application of Vedanta is allowed, the Supreme Court bench said in a statement. 

However, it asked the ministry of environment and forest to proceed in accordance with law.

… Vedanta wants to dig open-cast mines in the Niyamgiri hills located in Kalahandi district near its project area. 

Vedanta promoted Sterlite Industries had sought clearance for diversion of 660.749 hectares of forest land for mining purposes to provide required raw material for its plant.

Following is an excerpt from a report in Pragativadi.

The Supreme Court on Friday permitted South Korean steel major Posco to set up Rs 51,000-crore mega steel plant and captive minor port at Paradip in Jagatsinghpur district.

A special environmental bench headed by Chief Justice K G Balakrishnan allowed Posco India Pvt Ltd, a subsidiary of South Korea-based Posco, to go ahead with its plans.

With this order, the apex court has also cleared forest diversion proposal for the plant site which require 1253.225 hectares of forest land.

The court, while directing the Orissa government to dispose of all the Posco’s applications seeking prospecting licences within four weeks, also asked the state government to send its recommendations to the ministry of environment and forests that would proceed in accordance with law.

The bench also asked the state government to undertake implementation of compensatory afforestation plan under the supervision of a Supreme Court-appointed committee comprising top officials of the state government.

… Posco counsel Mukul Rohtagi contended that the state government-owned Orissa Mining Corporation had agreed to supply uninterrupted iron ore and other minerals for its steel project and had identified mines in the western part of the state, some 300 km away from its project site.

… The company can source raw materials on its own and can buy the same from the open market, he said, adding that the company is not dependent on prospecting licence.

Following is an excerpt from http://www.hemscott.com/news/latest-news/item.do?newsId=53878217759003. 

… India’s Supreme Court set new conditions for the project.

Vedanta’s battle to mine bauxite to feed the refinery in forests considered sacred by indigenous people has been seen as a test case in India, pitting industrial development against the interests of local inhabitants and the environment.

The Supreme Court refused to let the project in the eastern state of Orissa go ahead in its present form on the grounds that it could affect ‘sustainable development’ and asked Vedanta to come back with a new plan.

The court said Vedanta would have to give money for forest destruction, wildlife management and tribal development totalling around 180 mln usd.

Other conditions would include handing over 5 pct of pretax profits annually from its mining projects across India to the Orissa government.

Vedanta would also have to set up a ‘special purpose vehicle’ to ensure that environmental regulations were met, the court said.

Vedanta must file an interim application within eight weeks saying if it agreed to the conditions and the Supreme Court would reconsider the project, the court bench ruled.

Vedanta has been fighting for three years to obtain clearance for open cast mining of vast deposits of bauxite in the densely forested Niyamgiri hills to feed the 900 mln usd alumina refinery it has built nearby.

There was no immediate comment from Vedanta on the court ruling but it has in the past denied any wrongdoing and argued its projects would be welcomed by residents of the desperately poor region.

Following is an excerpt from Pioneer that gives the first reaction from Vedanta officials in Orissa on the supreme court judgment.

Reacting to the judgment, vice-president of Vedanta Alumina Ltd AK Samal said the Supreme Court had reiterated its emphasis on sustainable development but has no objections in principle to mining at Niyamgiri. However, the court has stipulated certain conditions to be complied by the project proponent.

He said the apex court had desired that Sterlite Industries, the flagship company of Vedanta Resources PLC in India, duly enlisted on the Indian Stock Market be a part of the Special Project Vehicle (SPV) for mining at Niyamgiri and Scheduled area development at Lajigarh, where the company’s alumina refinery is located. "We will take all steps to immediately abide by the directions and conditions set out by the SC," he said, adding that the company was still waiting for a copy of the judgment.

Samal said his company was committed to the cause of the social uplift through reasonable industrialisation.

…. Secretary of the Orissa Wildlife Society Biswajit Mohanty, who had filed the petition against the Centre’s decision to allow Vedanta to set up its aluminum refinery and undertake mining activities, said the SC had taken note of their concern. On behalf of the Lok Abhiyan, noted activist Prafulla Samantray had also filed a petition before the Central Empowered Committee (CEC) of the SC.

The social activists filed the petition alleging that if Vedanta was allowed to undertake mining activities, the whole biosphere of Niyamgiri would be affected. The two major rivers, Bansadhara and Nagabali, which originate from the hill, would disappear. Thus it would affect the whole tribal population of the southern parts of the State, they argued.

Taking note of the serious allegation, the CEC had sent a two-member expert team (SK Chadda and SC Shrama) to make a spot inquiry. The team visited Niyamgiri in December 2004. It submitted its report in January 2005. Later, the CEC started the hearing of the petitions. The CEC visited Lanjigarh, where the plant is coming up. It submitted its report to the SC in September 2005, reportedly suggesting that Vedanta should not be allowed to take up mining activities.

The Ministry of Environment and Forests (MoEF) granted environmental clearance for the project on September 22, 2004, and in its letter clearly specified that the source of bauxite for the refinery would be the Niyamgiri mine near Lanjigarh. This led to a furore among environmentalists, who argued that as it came under the Schedule V area of the Constitution, the environment clearance granted by MoEF and forest clearance should be reviewed.

Following is an excerpt from New Indian Express on this.

… the High Court on Wednesday asked the State Government to initiate stringent action against road blockades.

A division bench of Justices B P Das and M M Das directed that the Government make adequate provision in laws for realising the cost of damage caused to public and private property from persons staging road blockades. The recovery can be done under the Orissa Public Demand Recovery Act, the bench stated.

Expressing concern over students’ rising propensity to violence, the court also called for amending the Orissa Education Act so that they can be made accountable for the acts of organising road blockades and causing damage to public or private property. Their acts should be reflected in their conduct certificates, the court said.

Instructions should be issued to school and college authorities to obtain undertakings from parents or guardians that they would pay up for the loss caused by their children or wards while indulging in such activities.

Along with these stern directives, the bench directed the Government to pay Rs 1 lakh compensation to one Chambara Soy of Gobarghati village in Jajpur district for his son’s death. Soy could not take his son to hospital in time due to the Kalinga Nagar road blockade. The amount may be recovered from persons involved in blocking the road, the court said.

The ruling came in response to the petition filed by Soy early this year seeking adequate compensation, action against persons carrying out the blockade and also against officials who did not act on his FIR after his son’s death.

The Home department, Collector and SP of Jajpur have been ordered to take effective steps on the FIR lodged by the petitioner at the Kalinga Nagar police station.

Earlier, in the process of hearing, the court had instructed collectors and SPs in the State to place before it the number of road blockades and such acts organised in their areas between October 1, 2005 and September 30, 2006.

The affidavits filed revealed a total of 523 incidents within the period. Most of the reasons, as examined by the court, were found to be flimsy.