Vedanta’s Orissa project fails to clear environment hurdle - Atasi Das

The Union Government has refused environment clearance to Vedanta Resources’ $ 1.7 billion bauxite mining project at the Niyamgiri hills in Orissa, on August 24, 2010, after a protracted legal battle - bauxite is the prime raw material for production of industrial aluminum.

The London-based $ 7.92 billion worth Vedanta Group had entered into a joint venture with the Orissa Mining Corporation (a state government undertaking) for mining bauxite at the Niyamgiri Hills. The bauxite was meant for supply to Vedanta’s 1-million-tonne Lanjigarh alumina refinery, located at the base of the Niyamgiri Hills. This alumina refinery set up in 2008 has till now been sourcing bauxite mostly from the illegal mines in the neighboring state of Jharkhand-the company had been awaiting the mining lease closer to its Niyamgiri plant, for reducing its operating costs. Prior to the entry of Vedanta, Hindalco Industries Limited owned by the Aditya Birla Group had been the sole buyer of the illegally mined bauxite in the region. (Any type of mining activity needs environmental clearance from the Union ministry and also an approval from the Indian Bureau of Mines).
In 2005, a Memorandum of Understanding (MoU) was signed between the Orissa government and the Vedanta Group, which provided for the setting up of a Vedanta captive power plant and alumina refinery in the state. The MOU had also assured a supply of 150 million tonne of bauxite for the Vedanta Lanjigarh alumina refinery, of which the initial 78 million tonne was to be sourced from the Niyamgiri mines.

Vedanta is a UK-based minerals-to-mining business group promoted by industrialist Anil Agarwal. The group’s flagship company is Vedanta Resources with five main subsidiaries: Sterlite Industries (Maharashtra), Vedanta Aluminium (Orissa), Madras Aluminium (Tamil Nadu), Sesa Goa (Goa) and Konkola Copper Mines (Zambia) respectively. The group presently possesses a 30,000 strong employee-base.

The Union Minister of State for Environment and Forests, Jairam Ramesh has justified the government ruling on Vedanta on the ground of serious violation of the Environment Protection Act, the Forest Conservation Act and the Forest Rights Act by the company. The NC Saxena Committee set up by the Union government has found the instances of legal violations by the company, to be serious and repetitive in nature, with ‘willful concealment of information’. The Committee has even criticised the Naveen Patnaik-led Orissa government for colluding with Vedanta Resources in its bid to obtain government clearance for its bauxite mining project, despite gross violation of the environment and forest laws.
Vedanta has illegally augmented the capacity of its Lanjigarh alumina refinery from 1 million to 6 million tonne in blatant violation of the environment laws. The company has also unlawfully encroached upon around 26 hectares of village forest land, at the base of the Niyamgiri hills and another 85 hectare of forest land under its refinery.
Permission for forest clearance at the Niyamgiri Hills, for the proposed bauxite-mining project has been revoked and Vedanta will now face penal actions for law violation. 
The Saxena Committee report holds that the proposed bauxite mining project at Niyamgiri would have endangered around 7,500sq km of forest land and violated the ‘forest rights’ of the tribal community resident therein-the concerned area lies in the Kalahandi district of Western Orissa, which is home to the primitive Dongria Kondh, Kutia Kondh and Jharania Kondh tribal community, who enjoy special protection rights under the Constitution and have opposed the project since its inception. Congress leader Rahul Gandhi is believed to have thrown in his weight behind the local tribal community on the issue.

Vedanta Resources has denied any wrongdoing on its part and is currently scouting for alternate sources of mineral supply for its refinery in Orissa- the company has been willing to limit its mining operations to 3.5 sq km of the Niyamgiri Range. It had earlier projected that, its proposed bauxite mine would bring in an estimated earning of Rs 1,000 crore annually for the region and would provide employment to around 6,00,000 locals. As on March 31, 2010, Vedanta had pumped in $ 5.4 billion for its aluminium projects based in Orissa.

The Union Ministry’s decision to stall bauxite mining at the Niyamgiri hills is being hailed as a watershed ruling in the Indian industrial scenario-it has ushered in a phase where Green Laws will probably no longer be given perfunctory lip-service. The tribal population is visibly happy at the decision. Decades of uncontrolled mining has displaced the poor tribal people from their forest homeland, without any proper socio-economic rehabilitation and fuelled insurgencies like the Maoist rebellion, while filling the coffers of the industrialists. Mining depletes a land of its mineral resources and degrades the quality of its natural resource base comprising the land, the forests and the water, on which the local population is dependent for survival. Again, modern mining is a capital-intensive mechanized industry, which fails to absorb the unskilled rural population, whose traditional means of livelihood and land it displaces.
In this perspective, some industry leaders have rued the absence of any clear government policy on land acquisition for industrialisation and have cautioned against sinking investor confidence and fund inflow, in the aftermath of the Vedanta mining project derailment-some others have smelled political motive in Rahul Gandhi’s involvement in the issue. Pragmatic business leaders have taken the development as an expected one and have opined that, the industry must learn to operate within the legal framework and not seek to bypass it for profit motive.
A sustainable developmental path with due focus on saving the environment has its inherent challenges, but is rewarding in the long run for a developing country like India, on a high growth trajectory –in the end, we all want an operating framework, where the priorities of the industrial sector and the local population are nicely balanced and our democratic rights are also adhered to.