Is 22 June 2010 a date that simply passed us by? Yes, there were a few murmurs in the media, but did this day get the significance and importance that it deserved? It was, after all, the day that marked the expiry of the Memorandum of Understanding (MoU) between the Government of Orissa and the South Korean major POSCO. Exactly five years back the two had entered into an agreement for setting up of a steel plant, captive port, mining and all related infrastructure facilities, and that had stirred up a huge controversy.

The MoU had promised it all. The state government had assured the company that it will keep the area free of all encumbrances, make sure the raw materials are provided, help procure necessary clearances including single window approvals at the state level. With an anticipated investment of Rs.51,000 crores (USD 12 billion), the Pohang Steel Company (POSCO) was ready to roll its blueprint into reality.

But more importantly, the day also marked a milestone in the determined struggle of the local communities against the project. And looking back at the five years since the signing of the MoU, it would now appear that those communities have prevailed.

History of resistance and approvals

It is reported that POSCO had initially sought to get the status of a Special Economic Zone (SEZ) for the entire set of operations. With a delay in getting this approved, the company began seeking separate approvals for different components listed in the MoU. The first in line were the captive port and the steel plant. The company had made different applications for these two proposals under the Environment Impact Assessment Notification, 2006. However, on 15 April 2007 there was a joint public hearing for both proposals at the Bana Bihari High School ground in Kujang.

Several villagers likely to be impacted by both the projects came and expressed straightforward concerns with the project. Many of these were also recorded in the official minutes of the public hearing. But their voices didn't register very much in the corridors of the Ministry of Environment and Forests (MoEF). Both the captive port and the steel plant were granted environmental clearance soon after, in May and June 2007 respectively.

But establishing the steel plant and the port was not easy - they both met with resistance from the local area from the very beginning. Even though the reactions were mixed (and perhaps continue to be, locally), the formation of the POSCO Pratirodh Sangarsh Samiti (PPSS) and the community organising around it, made a significant difference to the people's movement. The PPSS continues its struggle till date. The land acquisition notices by the district administration were served as early as November 2005. However, all attempts of the local state and company officials were stalled once the area was barricaded for entry. What has followed are myriad stories of repression, attempts at suppression, negotiation and a stiff battle for a right to life and livelihood.

Ironically, even as the local communities continued their resistance; the process of seeking various approvals continued at the central government level. To set up the steel plant and port, 1253 hectares of forest land would need to be diverted for non-forest use. This is a mandatory procedure to be followed as per the Forest Conservation Act, 1980. The grant of clearance would also mean felling of about 2.8. lakh trees. The proposal was considered by the Forest Advisory Committee (FAC) under the MoEF on 9th August 2007. Despite the large numbers involved, this committee recommended the grant of forest clearance for the projects.

But this was not the final word. By a Supreme Court order in operation at that time, the decision of the FAC was then looked into by the court-appointed Central Empowered Committee (CEC). The CEC ordered further enquiry and warned against the grant of clearance.

It is reported that POSCO had initially sought to get the status of a Special Economic Zone for the entire set of operations. When this did not materialise, the company sought separate approvals for different parts of its project. (Above: Sand dune at dhinkia village which has been in the centre of resistance against the posco steel plant. Picture by Kanchi Kohli).

 •  Divide and conquer

What is also interesting is that since the local communities had barricaded the entry of outsiders into the area; the forest clearance had been approved based on an aerial survey. According to Biswajit Mohanty of Wildlife Society of Orissa, who had got information in response to a Right to Information application, "The Posco forest clearance must be the first case in the history of MOEF where the proposal was cleared without verification of the forest cover on the ground. The Regional CCF of MOEF clearly mentions in his note that he could only verify the forest land from the helicopter since law and order situation did not allow him to carry out a ground verification."

At this point of time another dimension of POSCO's piece-meal approach came to light. It had been highlighted by the civil society activists in support of the local struggle that POSCO was yet to acquire clearance for mining. The area in question was the Khandadhar hills in Sundergarh district of Orissa. Even though it is both ecologically and culturally fragile - with 74 per cent of the population in the surrounding area completely dependent on these forests for fuel, fodder, fruits and medicinal plants - it is much sought after for mining. POSCO's plans were delayed here as the area had been earlier assured for prospecting to the Kudremukh Iron Ore Company Limited (KIOCL).

The report of the CEC recognised this, and spoke against the piecemeal diversion of forest land for different projects. But the Supreme Court only picked up a part of the CEC report and ordered on 8 August 2008 that a committee be set up to look at the mitigation measures. Since the court's order did not refuse the forest clearance, it was only subject to the report of this committee and its findings.

Violations of the Forest Rights Act

Even as the clearance juggernaut carried on, and the people's movement continued to face myriad challenges, POSCO could not initiate any project-related work on the ground. In the latest set of approvals, the forest clearance for POSCO was granted in December 2009. But the legality of this too was questionable.

The Scheduled Tribes and Other Forest-Dwellers Recognition of Forest Rights Act, 2006 (henceforth, FRA) provides for settlement of rights by recognising the right of forest-dwellers to occupy, cultivate, use and protect areas within which they were residing before 13 December 2005. The rules for the Act were notified in January 2008. So, the forest clearance for the project could not have been granted till this process of filing claims and conferring rights was initiated and completed. This is especially so because, back in March 2008, the Palli sabha in Dhinkia village had already passed a resolution citing sections of the legislation declaring that they did not consent to any proposed diversion.

Since 30 July 2009, there has also been a circular of the Ministry of Environment and Forests (MoEF) in operation which also seeks the above, not just for POSCO but for all projects coming up before the MoEF for forest clearance. The circular clearly states, "The State/UT Governments, where process of settlement of Rights under the FRA is yet to begin, are required to enclose evidences supporting that settlement of rights under FRA 2006 will be initiated and completed before the final approval for proposals.".

Nonetheless, Within five months, the forest clearance for POSCO was granted without the FRA process in the area being complete. As a compensation, the clearance letter included a condition that the processes under the FRA would need to completed before the clearance became effective.

This and many other violations were brought to the attention of Jairam Ramesh, Minister of Environment and Forests (MoEF). The ministry responded by issuing another note on 8 January 2010 reiterating the condition stipulated in the forest clearance, which says that the rights of the tribal people will need to be settled, prior to the forest clearance being in operation. The question is why did the MoEF not withdraw the clearance which was in contravention to the provisions of another law and its own circular?

'No Extension' clause of MoU

The MoU stands expired on 22 June 2010. It is possible that new modalities are already underway or perhaps even finalised at the state level. But the MoU has a startling clause which states that "no such extension shall be considered unless the Company has made substantial progress on implementation of the project in terms of construction, erection of plant and machinery and investment at site to the satisfaction of the State Government in these five years in implementing the first phase as envisaged in this MoU."

According to the same document the first phase should have meant that 6 MT production of steel should have been commissioned, which has not happened. By the terms of the MoU, therefore, the absence of progress would imply that the MoU cannot be extended. What will be the stand of the state government now? The answer to this will be critical.

For the local opposition to the POSCO project, all these are legalese that will iron themselves out along the way. What matters crucially is that the people resisting remain united in thought and action. Despite differences and tension on the ground, the fact remains that POSCO has not been able to start work on its project for five years. The kudos, almost entirely, go to the struggle on the ground; outside support and delay has strengthened their hands, certainly, but it is the locals themselves who have persevered the most in the face of intense efforts to displace them.